Rex Shows Strong EBITDA, Proft after Tax and Cash Position Development for FY2021

Source: www.gulfoilandgas.com 2/28/2022, Location: Middle East

Rex International Holding Limited, an oil exploration and production company, has announced its financial results for the year ended 31 December 2021 (“FY2021”). For FY2021, the Group recorded revenue of US$158.44 million, mainly from subsidiary Masirah Oil Ltd’s share of the produced oil after the Oman government’s take. This was a 240 per cent increase from revenue of US$46.66 million in the year ended 31 December 2020 (“FY2020”). Profit after tax (“PAT”) of US$78.94 million was recorded in FY2021, corresponding to a result improvement of more than US$94 million, compared to a total loss after tax of US$15.21 million for FY2020. Earnings before interest, taxes, depreciation and amortisation (“EBITDA”) for FY2021 was a positive US$110.18 million.

As at 31 December 2021, the Group’s cash and cash equivalents and quoted investments totalled US$86.91 million (31 December 2020: US$46.30 million); with cash and cash equivalents at US$60.60 million (31 December 2020: US$20.38 million); and quoted investments at US$26.31 million (31 December 2020: US$25.93 million).

Mr Dan Broström, Executive Chairman of Rex, said, “The Group’s revenue in FY2021 was boosted by an increase in the number of oil liftings from seven in FY2020 to 12 in FY2021, and an improvement of the average realised oil price sold from US$34 per barrel in FY2020 to US$67 per barrel in FY2021, against consistent operating costs in Oman. A summary qualified person’s report on the Yumna Field dated 24 February 2022 states that as of 31 December 2021, the Yumna Field had produced 5.772 MMstb of oil. There are also estimated 15% more in 2P reserves, meaning that the field will be in production longer than originally anticipated.”

“Our 91.65 per cent subsidiary Lime Petroleum AS’s acquisition of a 33.84 per cent in the producing Brage Field for US$42.6 million was completed on 31 December 2021, for which US$18.24 million was booked as a bargain purchase of oil and gas properties by way of accounting treatment. Production from the Brage Field of estimated 3,440 barrels of oil equivalent per day net to Lime Petroleum will contribute to the Group’s operating revenue and profit from 1 January 2022. Net 2P Reserves of about 7.3 mmboe from the Brage Field will also be added to Lime Petroleum’s current attributable 2C Contingent Resources of 27.7mmboe. Our producing assets in Oman and Norway, coupled with a strong oil price, bode well for an equally strong 2022,” Mr Broström added.

“The Board will endeavour to maintain strategic and sensible capital management and to create shareholders returns. The current level of oil price and market demand for oil make investments in production and reserves highly attractive if cash flow can be realised in the near term. Such investments, if successful, will further substantially increase shareholder value. The Company therefore has decided to use more of the Company's free cash flow on such near-term investments like our Yumna Field in Oman and Brage Field in Norway. For this reason, the Board is recommending a final dividend of S$0.005 per ordinary share for the financial year ending 31 December 2021, payable in the fourth quarter of 2022. The expected record date and expected payment date will be announced together with the upcoming notice of annual general meeting. The Board may consider paying an interim dividend, subject to the Company’s performance based on the financial results for the half year ending 30 June 2022 (1H FY2022).

“We want the Company to be viewed as a stable yield generator with long-term prospects. The Group believes a sustainable and fixed level of profits can be maintained over time. The objective of the Company’s dividend policy is therefore to pay a regular cash dividend, aiming at the target level of $0.02 per ordinary share per annum, on a quarterly basis, starting from the first quarter of 2023, subject to the profitability of the Company and at the sole discretion of the Board,” he said.


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