SINGAPORE: Rex International Holding Limited, a technology-driven oil company, has announced that the operator, PGNiG Upstream Norway has completed drilling of an exploration well and an appraisal well on the Shrek prospect in the Norwegian Sea licence as an oil and gas discovery.

PGNiG’s preliminary estimates place the size of the discovery between 3 and 6 million standard cubic metres (Sm3) or about 19 and 38 million barrels of recoverable oil equivalents. The discovery would be assessed as a possible tie-back to the Skarv Floating Production Storage and Offloading (FPSO) facility.

Rex’s 90 percent subsidiary Lime Petroleum is a participant of these wells. Lime had on 21 June 2019, signed an agreement with DEA Norge to acquire 30 percent interests in the two licences. Regulatory approval for the transfer of interests has been obtained in September 2019, and the transfer, which is set to be completed on 31 October 2019, will be effective from 1 January 2019 (a standard practice for licence transactions in Norway).

Dan Broström, Executive Chairman of Rex International Holding, said, “We are very pleased with the drilling result of the Shrek prospect in PL838, just a few months after the Group’s success with monetising the Rolvsnes discovery and related assets for a cash consideration of USD 43 million and a contingent payment of a further USD 2 million upon no adverse event materialising within a 12-month period from the completion date in May 2019. We have based our decision to farm-in on interpretation from Rex Virtual Drilling and our own geological & geophysical studies. With this discovery, we will have the option to participate in moving towards production, or to repeat our proven business model in Norway to farm-in, find oil, monetise and recycle capital, as we have done with the Rolvsnes discovery.”

Both wells were drilled by the Deep sea Nordkapp semi-submersible drilling rig. These are the first and second wells drilled. The operator, PGNiG, has a 40 percent interest, while AkerBP holds a 30 percent interest in the licence. The licence was awarded in February 2016 in the Awards in Predefined Areas (APA) 2015.

Edited by Kazim Rizvi