Rex International Holdings -
What is Rex International's recently announced Joint Venture of Rexonic all about? - Company Visit Note
Rex International hosted an analyst briefing yesterday with the management team of Ogsonic AG with whom Rex has recently formed a Joint Venture called Rexonic. We met with the founding members of Ogsonic AG, namely CEO Andreas Karl Kuhne and CTO, Peter Spenger and Rex Intl’s COO, Kristofer Skantze.
■ What is Rexonic all about?:
Rexonic enjoys a proprietary well stimulation technology (founded by Ogsonic) which helps increases oil production for clogged wells which is environmentally friendly (no use of chemicals but only ultrasound). The JV Company, Rexonic, will own the technology which uses ultrasound to break down production wellbore debris such as wax, paraffin and salt deposits, and increases the flow of oil into the wellbore.
Rex says the technology can increase oil production by 30 to 380%. Rex International sees this product solution as complementary to its Rex Virtual Drilling (RVD) as it can use RVD to identify which wells would be better targeted.
■ Background of Ogsonic and understanding capability of technology:
Management highlighted it was formed in 2008 and currently enjoys relationships with 3 major NOCs including two in Central & South America and one in Asia. They further add this technology can be used on onshore as well as offshore wells and highlighted 4 examples of production improvement (see Figure 2 & 3). They claim to be the only player to successfully demonstrate well stimulation via ultra sound usage (rather than traditional sue of chemicals).
With an opportunity of 700,000+ wells and market size of US$21 billion, management sees significant market potential, highlighting they will have revenue visibility till 2016.
They also claim even though they are manpower dependent (need team on the ground at the well site) and see limited risk of “brain drain” as they
(a) build components across different locations and
(b) people at the well site can only operate the resonator.
■ Updates from Rex International:
Management flagged that the results for Oman drilling (1st well) expected before Christmas and 2nd one 40 days later. They are also looking to drill 6-7 wells (for other concessions) in 2014. Please read our detailed September CVN dated Sept. 23rd on Rex for more details.
Publish date: 15/11/13