Tuesday, July 23, 2013

Singapore Stock to Watch- Rex International Holdings

Rex To Raise $85.3m From Catalist IPO
Rex International Holdings, an exploration and production player, launched its initial public offering (IPO) on 22 July 2013 with a public offer of 2.5 million shares at $0.50 per share. Including over-allotment, the company expects to place out 168 million shares and raise proceeds up to $85.3 million. Debt free barring for a $2.4 million loan from a controlling shareholder, Rex will use most of the net IPO proceeds for active drilling programmes in the Middle East and Norway, as well as direct investments in new oil and gas opportunities and general working capital. Rex’s business is modeled to reduce its exposure to the expensive and time-consuming costs spanning from the acquisition of licences to exploration and development of oil wells. The Swedish oil and gas group essentially partakes in ventures with already secured exploration and production licences through utilisation of its leading-edge technology in exchange for an equity stake.

Significance: Rex plans to drill two offshore wells in its Oman concession later this year and the first well in each of its other two offshore concessions in the Middle East next year. Its recently started 80-well onshore drilling in the US, while in Norway it will drill three to five new offshore exploration wells as well as grow its licence portfolio. First oil production for its US assets in North Dakota is expected in 4Q13.

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