Wednesday, September 25, 2013

Rex International - An edge in exploratory drilling? ( JP Morgan)

Rex International -
S$ 0.925, September 23, 2013
An edge in exploratory drilling?

We recently met up with the management team of Rex International (CEO, Mans Lidgren and COO, Kristofer Skantze). Rex International Holdings (RIH) is an independent oil and gas exploration and production (E&P) company having 15 concessions (10 at time of IPO in July’13) in USA (2), Middle East (4), Norway(6) and Trinidad and Tobago (3) through various joint venture vehicles. Its parent company, Rex Partners, claims to own proprietary and innovative exploration technologies called “Rex Technologies” that mitigates exploration risks and reduces cost of exploration, which RIH has access to and enjoys right to first refusal in all global territories except certain locations.

•What is so unique about Rex Technologies? Management said that Rex Technologies (comprises 3 proprietory technologies, Rex Gravity, Rex Seepage and Rex Virtual Drilling) significantly reduces the need for exploration and appraisal drilling thus reducing risks and costs involved in the exploration process. Management claims more than 50% success rate in exploratory drilling (versus 10-15% for industry). It also said that the use of Rex Technologies enables it to obtain seismic data results much faster. The theory at the base of Rex Virtual Drilling is resonance frequency (Source: North Energy, Rex’s partner).

•RIH’s business strategy: “prove up value then sell oil in the ground”: Management highlights it will look to identify and then acquire new concessions, increase value introducting Rex Technologies, develop concessions and then sell off stakes thereby unlocking capital and value as it sees its advantage limited to exploratory drilling phase. The company will look to add 8-10 concessions (5 added since IPO) alongwith its partners North Energy (in Norway) and Hibuscus Petroleum (Malaysia listed E&P name via its JV, HiRex in Asia-Pacific).

Source/Extract/Excerpts/来源/转贴/摘录: JP Morgan,
Publish date: 24/09/13

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