Rex International Holding, the leading oil and gas company, has announced it would be divesting its stakes in two Norway assets. The oil and gas company is selling 30 percent stake in the Rolvsnes discovery in PL338E, PL338C, and 20 percent interest in the Goddo discovery in PL815 to Lundin Norway.
The transaction will be completed in two payments which will involve a cash consideration of $43 million which will be followed by a contingent payment of approximately $2 million within the 12 months of completion of divestment only if no adverse event materialises. Rex revealed that the deal has to still be approved by the concerned government and regulatory authorities.
The deal was finalised on the basis of the unaudited net asset value of the two Norwegian sites which was estimated to be about more than $13 million in September 2018.
Rex plans to use the revenue generated from divestments towards production and exploration activities. The company is planning to begin exploration and production activities in the Norwegian Continental Shelf. Rex also plans to use the proceeds towards maintaining a high stake in its Oman license. The company revealed that the sale is in line with the company’s internal business model which calls for selling of mature assets.
As far as the assets are concerned, the resource capacity of the Rolvsnes site is estimated to be in the range of 14 to 78 million barrels of oil while an exploration well is scheduled to be drilled at the Goddo site in 2019.
Following the divestment, Lime Petroleum, a subsidy of Rex International will continue to hold a 20 percent stake in the Norwegian Sea license and 30 percent interest in two North Sea licenses. The North Sea Licenses are crucial to the company being located in the Utsira High, a region in the Norwegian Continental Shelf where exploration and discovery can be fast-tracked owing to its close proximity to the existing oil and gas production infrastructure.