Rex International Holding Limited

Norway

One of the main areas of focus for the Company is Norway as it is a matured market with high activity with reputed operators, attractive fiscal policies and good quality seismic data to be analysed with Rex Virtual Drilling. A lot of Norway’s oil production occurs in the North Sea and smaller amounts in the Norwegian Sea. In recent times, new exploration and production activity is occurring in the Barents Sea.^[15]

After the 2015 APA round, the Group has interest in 24 concessions in Norway – 11 in the North Sea, 8 in the Norwegian Sea and 5 in the Barents Sea.

Oman

Oman is the largest oil producer in the Middle East that is not part of OPEC. According to the US Energy Information Administration (EIA) Oman had 5.5 billion barrels of estimated proved oil reserves as of January 2014. Oman’s 5.5 billion barrels of proved oil reserves rank seventh in the Middle East, and 23rd in the world.^[16] Located in the East of the Gulf of Masirah, Block 50 Oman is one of the first concessions secured by the founders of Rex International before IPO. The discovery is significant as it is the first offshore discovery in the area after 30 years of exploration activity. Block 50 spans approximately 17,000 km^{2 [17]} This discovery won Masirah Oil, the Offshore Discovery of the Year award for discovering hydrocarbons in its second offshore exploration well in Block 50 Oman.^[18]

Oman

On 4 February 2014, an oil discovery was announced in Block 50 Oman. The second exploration well that was drilled in the concession had successfully reached the well target depth of more than 3,000m into the Cambrian formation. Hydrocarbons were discovered in several formations with good oil sample extracted.^[19]

Block 50 Oman was one of the first concessions secured by the founders of Rex International Holding before the Company’s IPO. The Company’s founders were involved in Lundin Petroleum’s (then known as International Petroleum Corporation (IPC)) commercial oil discovery in the Bukha field, offshore Oman in 1986.

The oil discovery in Block 50 Oman in 2014 is significant as it is the first offshore discovery east of Oman, after 30 years of exploration activity in the area. The discovery won the ‘Offshore Discovery of the Year’ award, one of six awards presented in conjunction with the launch of the Oil & Gas Year Oman 2014 energy report, produced by publisher Wildcat International, in partnership with the Ministry of Oil and Gas and OPAL (Oman Society for Petroleum Services).

During a 48-hour test, hydrocarbons were flowed to the surface and the well achieved light oil flow rate of up to 3,000 stock tank barrels per day (stb/d) with no water production.

In March 2014, the Ministry of Oil and Gas of Oman approved Masirah’s entry into the Second Phase of the Minimum Work Obligation, with the fulfilment of the commitments specified in the Exploration and Production Sharing Agreement (EPSA) for this phase.

The concession is 17,000 square kilometres.^[20] The area explored so far (where the previous two drillings were made) is only a couple of hundred square kilometres. Hence, the Company believes there to be promising remaining potential in the block.

Norway

On 22 December 2015, the Company announced that the drilling of exploration well, Rolvsnes, in the North Sea licence PL338C, in which Lime Petroleum Norway AS participated, has been completed as an oil discovery.

A production test (DST) was performed in this close to vertical exploration well, achieving a production rate of 315 barrels of oil per day through a 36/64" choke. The moderate flow rate seems to be caused by limited communication between the reservoir and the wellbore. A frac and injection test was carried out, giving a stable injection rate of some 6,000 barrels per day. Further studies will be done to incorporate all the findings and establish future planning.

The operator Lundin gave a total gross resource estimate in the range of 12 to 46 million barrels of oil equivalents^[21]

With the use of Rex International Holding’s proprietary Rex Virtual Drilling technology, the Company identified the key risks associated with the Rolvsnes well to be the irregular porosity and permeability distributions in the unconventional weathered and fractured basement reservoir. This was also the first time that RVD was applied in this kind of rocks. Building on the thorough and innovative G&G work by operator Lundin, Rex International Holding undertook its own independent prospect analysis. The good alignment of conventional G&G prognoses and those of RVD, which identified this discovery, is testament to RVD’s role as a powerful tool in reducing exploration risks.^[22]

PL338C is held by operator Lundin at 50 per cent, Lime Norway at 30 per cent and OMV (Norge) at 20 per cent.^[23] Lime Norway also has 30 per cent participation in the nearby licences PL544 and PL410, all operated by Lundin.