Lime Norway, Lundin Participates in First Well in Norway

Rex International Holding Limited together with its subsidiaries, the “Group”), announced that its jointly-controlled entity, Lime Petroleum Norway AS (“Lime Norway”) has signed an agreement with Lundin Petroleum Norway AS (“Lundin”) to acquire a 30 per cent stake in licence PL338C in the North Sea, Norway.

The transfer of the 30 per cent stake is pending regulatory approval. The North Sea licence is operated by Lundin and an exploration well in the licence was spudded by the semi-submersible Island Innovator on 15 February 2015.

The prospect to be drilled, named Gemini, is located about 10 km from the Edvard Grieg production platform. Lundin has estimated gross unrisked prospective resources of 93 mmboe (P50) with a chance of geological success of 24 per cent (Source: Lundin Petroleum’s Corporate Presentation, February 2015), in Paleocene aged sandstones in a stratigraphic pinch-out trap.

Mr Måns Lidgren, Chief Executive Officer of Rex International Holding, said, “The window of opportunity to farm-in to the licence came up very recently. Rex Virtual Drilling scans of the Gemini prospect drilling location have strongly indicated the presence of hydrocarbons, confirming conventional geological findings. We are very pleased to be working with Lundin, a highly respected operator, and are excited to be participating in a licence that has just been spudded. A discovery in the prospect would be further validation of Rex Virtual Drilling as an effective de-risking tool in oil exploration.”

Following the transfer of the 30 per stake in the licence to Lime Norway and other pending transactions, Lundin’s stake will be 50 percent and OMV (Austria’s largest listed industrial company), 20 per cent. Lime Norway is a wholly-owned subsidiary of Lime Petroleum Plc. Lime Petroleum Plc is a jointly-controlled entity in which the Company holds a 65 per cent indirect stake.

By virtue of Rex Virtual Drilling, Lime Norway was accorded Pre-qualified Petroleum Company status in Norway in February 2013, allowing it to receive a cash tax refund of 78 per cent of exploration costs annually. With capital injections totalling USD 23 million made by the shareholders of Lime Petroleum Plc in November 2013 and January 2014, as well as with the NOK 300 million financing facility secured from Skandinaviska Enskilda Banken AB, Lime Norway has adequate financing to fulfil its work commitments for at least the next one year.

Rex International Holding’s general investment criteria for offshore concessions is a potential of about 50 million barrels of oil in each concession.