Independent oil exploration and production company Rex International Holding, which is a key indirect shareholder in Masirah Oil Limited — the holder of a 100 per cent interest in Block 50 offshore Masirah — says it is in negotiations for the farm-out of a portion of its share in the concession.
The move, according to the Singapore-based firm, is aimed at, among other objectives, raising finance to drill an appraisal well targeting a potentially promising petroleum system discovered in the 17,000 sq km Block in early 2014.
Rex International and its subsidiaries together hold indirectly a 92.24 per cent in Masirah Oil Limited, which owns the Block 50 licenc e. Prospective hydrocarbon resources in the concession were estimated at around 4,700 mmboe (million barrels of oil equivalent) in 2012.
An ongoing development programme targeting Block 50 is currently focused on the GA South#1 discovery, which uncovered evidence of an active petroleum system — the first off the Sultanate’s eastern seaboard. Manarah-1, a second well drilled in Q1 2016, confirmed the presence of a source rock and a working petroleum system in Block 50. Evaluation of the development programme for GA South#1 is ongoing and will run until Q1 2018, the company said.
“Should the evaluation be positive, an appraisal well is targeted to be drilled before the end of 2018. Should the appraisal well be successful, the Company will target production from GA South#1 as soon as practically possible. To reduce its holding risks to be in-line with its internally defined exposure levels and to garner financing for the drilling of the appraisal well, Rex is in negotiations to farm out a percentage of the concession,” Rex Group noted in a statement.
In addition to its goal to create value from its discovery assets in Oman and elsewhere (notably Norway), Rex International is also targeting substantially higher revenue during 2018 and beyond by marketing its proprietary Rex Virtual Drilling (RVD) technology, crediting with enabling the Block 50 discovery. The game-changing technology has been billed as the world’s first direct hydrocarbon detector using seismic data, which literally enables the Group to ‘see oil in the ground’ by pinpointing the location of oil reservoirs in the sub-surface.
Commenting on the Group’s ‘value creation’ strategy, Dan Broström, Executive Chairman of Rex International Holding, said: “We are optimistic about the gradual turnaround of the oil price and are pleased that at today’s oil price, our assets both in Norway and Oman, when developed, will give a significant contribution to Rex’s value. Our planned activities in Norway and Oman are maturing according to plan with value creation for the Company going forward. This window of opportunity to achieve production at an economically viable breakeven price is much better than it has been for the last three years due to the current higher prices for oil and lower costs for services. Coupled with marketing efforts for RVD, we are targeting to achieve higher revenue from 2018 and onwards.”
Conrad Prabhu
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