Rex International Holding - JPM

Asia Pacific Equity Research
23 September 2013
Rex International Holdings

Company Visit Note: An edge in exploratory drilling?
We recently met up with the management team of Rex International (CEO, Mans Lidgren and COO, Kristofer Skantze). Rex International Holdings (RIH) is an independent oil and gas exploration and production (E&P) company having 15 concessions (10 at time of IPO in July13) in USA (2), Middle East (4), Norway(6) and Trinidad and Tobago (3) through various joint venture vehicles. Its parent company, Rex Partners, claims to own proprietary and innovative exploration technologies called Rex Technologies that mitigates exploration risks and reduces cost of exploration, which RIH has access to and enjoys right to first refusal in all global territories except certain locations. What is so unique about Rex Technologies? Management said that Rex Technologies (comprises 3 proprietory technologies, Rex Gravity, Rex Seepage and Rex Virtual Drilling) significantly reduces the need for exploration and appraisal drilling thus reducing risks and costs involved in the exploration process. Management claims more than 50% success rate in exploratory drilling (versus 10-15% for industry). It also said that the use of Rex Technologies enables it to obtain seismic data results much faster. The theory at the base of Rex Virtual Drilling is resonance frequency (Source: North Energy, Rexs partner). RIHs business strategy: prove up value then sell oil in the ground: Management highlights it will look to identify and then acquire new concessions, increase value introducting Rex Technologies, develop concessions and then sell off stakes thereby unlocking capital and value as it sees its advantage limited to exploratory drilling phase. The company will look to add 8-10 concessions (5 added since IPO) alongwith its partners North Energy (in Norway) and Hibuscus Petroleum (Malaysia listed E&P name via its JV, HiRex in Asia-Pacific).
NOTE: THIS DOCUMENT IS INTENDED AS INFORMATION ONLY AND NOT AS A RECOMMENDATION FOR ANY STOCK. IT CONTAINS FACTUAL INFORMATION, OBTAINED BY THE ANALYST DURING MEETINGS WITH MANAGEMENT. J.P. MORGAN DOES NOT COVER THIS COMPANY AND HAS NO RATING ON THE STOCK. Rex International Holdings (Reuters: REXI.SI, Bloomberg: REXI SP)
US$ in mn, Dec year end Revenue Operating Profit Share of profit/loss of Associates Net Profit Net Profit Growth EPS (US$ cents) ROE FY11A 0.0 0.0 -1.5 -1.5 -0.2 n/m FY12A 0.0 -0.5 -3.0 -3.5 -0.4 -3%
Oil & Gas Ajay Mirchandani

AC
(65) 6882-2419 ajay.mirchandani@jpmorgan.com Bloomberg JPMA MIRCHANDANI <GO> J.P. Morgan Securities Singapore Private Limited
Kumar Gaurav
(91-22) 6157-3357 kumar.gaurav@jpmorgan.com J.P. Morgan India Private Limited
REXI.SI, Not Covered

S$ 0.925, September 23, 2013
Share Price Chart

S$
1 0.9 0.8 0.7 0.6 0.5 0.4 30-Jul
9-Aug 19-Aug 29-Aug 8-Sep 18-Sep Rex International FSSTI Rebased
Source: Bloomberg
One-year price performance

1D Absolute (%) Relative (%)
Source: Bloomberg
1M 19% 15%
YTD 85% 86%
9% 9.5%
Company Data
Price Range (till date) Market Cap (S$ mn) Market Cap (US$ mn) Shrs outstanding (in mn) Free Float % Average Volume (30D) in mn FSSTI Index Date of Price
Source: Bloomberg
Source:: Company Reports *Company has no earnings estimates currently
0.5 - 0.925 929 752 977 44.3 16.6 3214 23-Sep-13
See page 28 for analyst certification and important disclosures, including non-US analyst disclosures.
J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. www.morganmarkets.com
Ajay Mirchandani (65) 6882-2419 ajay.mirchandani@jpmorgan.com
Asia Pacific Equity Research 23 September 2013
Quick Overview of RIH

Rex International Holdings is an independent oil and gas exploration and production (E&P) company having concessions in USA, Middle East, Norway and Trinidad and Tobago. The parent company, Rex Partners, claims to own a proprietary and innovative exploration technologies called Rex Technologies that mitigates exploration risks and reduces cost of exploration. Rex Technogies provides higher exploration accuracy than peers and is several times faster compared to current techniques of looking for oil, thus reducing costs. Rex International has been granted an IP License to use this technology. Howeverit cannot use this technology in areas where Rex Partners and its group of companies, has interests in the exploration and production of oil and gas.
Rex Technologies: Is it really unique and a game-changer?

Rex Partners (parent company of Rex International Holdings) claims to have a proprietary technology which decreases the cost as well as risk of exploration significantly. Rex Technologies was developed by the founders of Rex Partners Ltd, Dr Karl Lidgen and Mr Hans Lidgren. The technologies are a) Rex Gravity, b) Rex Seepage c) Rex Virtual Drilling. (More details about its proprietary technology in the Rex Technologies Section)
Rex International entered into partnerships with various players as a result of its successful testing of Rex Technologies.
Rex International claims 100% success in tests conducted at various places with the usage of this technology. According to Rex, it conducted 8 blind tests (i.e. Rex did not have information about the locations) for North Energy, Norway which was confirmed to be 100% accurate. Rex also conducted 4 live tests which were 100% accurate. Later, North Energy entered into a partnership with Lime Petroleum (a 65% owned subsidiary of Rex International) as a result of the tests. The company also carried out blind tests successfully for Hibiscus Petroleum and Fram and consequently entered into partnerships with these companies. (More details regarding tests conducted by Rex Technologies in the Rex Technology: Track record Section.)
Aiming big with strategic tie ups; eye on acquiring assets

Rex International is headquartered in Singapore, but its fields are located around the globe. With a presence in the Middle East, USA, Norway and South East Asia, the company is poised to grow with oil and gas demand growth. Rex International has strategic tie ups with companies in Singapore, Malaysia and Norway and intends to acquire assets with its partners in Norway and SE Asia. Key strategic partners of Rex International include Malaysias Hibiscus Petroleum, Singapore listed Loyz Energy, Norways Fram Exploration and Norways North Energy Rex International holds interest in its Norwegian and Middle East assets through its subsidiary Lime Petroleum. Lime Petroleum is owned 65% by Rex International and 35% by Malaysia's Hibiscus Petroleum. Lime petroleum intends to apply for 8-12 more licenses by end of 2013.
Hibiscus Petroleum partners Rex in 10 out of its 15 assets, plans to secure 5-6 licenses in SE Asia together by 2014
Figure 1: Lime Petroleum Ownership Structure
Source: Hibiscus Petroleum, PL518, 526 and 530 were replaced with PL498, 503B and 616
Rex is also planning to expand its portfolio to South East Asia. In order to achieve this expansion, Rex International has set up a JV with Hibiscus Petroleum known as HiRex Petroleum where Rex International holds a 41% stake. HiRex has begun screening potential drilling locations in mature field and exploration opportunities in Malaysia, Australia, New Zealand, Cambodia, Vietnam, Myanmar and the Philippines and expects to secure interests in five (5) to six (6) licenses in the next 18 months. (More details about Rex-Hibiscus partnership in Key tie up with Hibiscus Petroleum section.)
US production to kick in by end of 2013; T&T producing assets to be acquired

Rex International has not generated any revenue as of now. However, assets in Colorado and North Dakota, USA are set to start production by the end of 2013 generating revenues for the company.
Production is expected to average 3338 bpd in 2013 and 3264 bpd in 2014 from the US assets.
Moreover, the company will acquire producing assets Inniss Trinity and South Erin at Trinidad and Tobago, which currently produces 45bpd and 80bpd respectively, while another asset at Cory Moruga Block, T&T is expected to produce shortly. Rex also intends to acquire mature fields in SE Asia via HiRex Petroleum. Acquisition of producing assets will be a big positive for the company in the near term.
Figure 2: Expected USA production
3500 3000 2500 2000 1500 1000 500 0 2013 Whitewater, Colorado
Source: Company Reports
3338 410
3264 328
1529 209 1320 2014 Williston, North Dakota 2015 2928 2936
Farm out of interest in Middle East

Rex International, which currently holds interests in Middle East assets through its subsidiary Lime Petroleum, intends to farm out part of its interests to raise funds for exploration. (Effective stake of Rex in Middle Eastern Assets can be found in the Company Description Section). The company has entered into discussions with a few potential investors, according to management. Rex mentions that it will carry out its drilling schedule in its Middle East assets with additional funds from the farm outs. Farming out Lime Petroleum's interest is expected to generate positive cash flow for the company, according to management. First well will be drilled in Oman Block 50 in December and in other UAE assets by early 2014.
Rex will look to sell off oil-in-the ground once 1-2 successful wells are discovered
The company re-iterated that its edge (as against competition) lies in minimizing the exploration costs given its higher success rates in knowing where to drill (leading to lesser time spent at exploration stage) and higher exploration success rate of 50% (versus 10-15% seen at traditional E&P companies). Management highlighted that while Rex would need only weeks (instead of years taken by competition) in studying the fields, they also claim their cost would be less than US$100,000 versus millions incurred by traditional E&P companies.
Table 1: Traditional Players vs Rex International
Exploration success rate of finding oil Cost Time Required
Source: Company reports..
Rex International 50% Under US$100,000 4-6 weeks
Traditional Players 10-15% May go in millions 1-3 years
REXs edge lies in exploratory drilling phase not during development drilling Management highlighted that once theyve identified where it is best to drill (for oil), the remaining process of development drilling is commoditized and see no edge there for Rex to retain its presence. Currently management is undertaking a strategy to sell off its entire stake (may look to retain some stake possibly once exploratory drilling is complete) and look to identify other opportunities to invest its technology. As we can see in the table below management presents a case study of potential profit it would generate (net of exploratory drilling costs) on sale of asset.
Table 2: Well Exploration Profit: Low End
Minimum Reservoir size Oil in the ground price Participation Interest Net Revenue Capex Profit
50 MMBbl US$ 5/bbl 20% US$ 50 mn US$10 mn US$ 40 mn
Management believes it is 10-15 years ahead of competition and will continue to maximize the advantage it enjoys over its peers by continually re-cycling its assets and re-investing its proceeds into new assets. Moreover, given its competitive advantage, management does not intend to provide service of this technology but instead retain it and invest in potential under-appreciated / under-valued assets.
Company Description
Aiming big with proprietary technology
Rex International Holdings is an independent oil and gas exploration and production (E&P) company having concessions in USA, Middle East, Norway and Trinidad and Tobago. The parent company, Rex Partners, claims to have a proprietary and innovative exploration technology called Rex Technologies that mitigates exploration risks and reduces cost of exploration and has granted access to Rex International to use these technologies. However, the company has no producing resources as of now, and aims to produce first oil by end of this year from its US assets.
Figure 3: Rex International Map of Assets
Source: Company reports. The company has acquired 2 more assets in Norway.
Figure 4: Rex current position in E&P value chain
Source: Company reports.
Geographical Presence
Figure 5: US assets expected production.
boepd
USA Rex International holds two assets in USA at North Dakota and Colorado each. Fram operates both the oilfields. Rex Oil & Gas entered into the Participation and Exploration Agreement with Fram and Loyz Oil for the US concessions on 28th August 2012. Rex owns a 27.5% interest in these field (through 20% direct interest and 8% interest in Fram); Loyz Oil holds 20% with the rest being held by Fram. Drilling operations have been commenced and the company hopes to achieve first production by end of 2013. A combined 80 wells are to be drilled in the next 2 years. Rex is looking for other potential opportunities in USA and is also reviewing opportunities in Caribbean. Middle East The company holds 4 concessions in the Middle East through Lime Petroleum (where Rex holds 65%, Hibiscus Petroleum 35%) and exploratory drilling is planned in 2013 and 2014. Limes current interest in Middle East concessions can be seen in the table below. Rex International is intending to farm out part of its interest in companies holding the Middle East assets to get funding for further drilling.
Table 3: Drilling Plan for Middle East Assets
FIeld Block 50 RAK North Concession RAK Onshore Concession Sharjah Concession
3500 3000 2500 2000 1500 1000 500 0
3338 410 1529 209 2928 1320 2013 2014 328
3264
2936
2015
Whitewater, Colorado Williston, North Dakota

Source: Company Reports.
Plan 2 wells in 2013 First well in early 2014 First well potentially by end 2014 First well by first half of 2014
Norway The company participates in Norway concessions through its subsidiary Lime Petroleum. The company has 4 concessions, which are all in the exploration phase. On 17 April 2013, Lime Petroleum Norway entered into an agreement with North Energy, whereby North Energy assigned certain of its participating interests in six (6) Norwegian licences to Lime Petroleum Norway for a consideration of NOK28.2mn (~ US$4.9 million). Lime Petroleum Norway intends to replace two (2) of these concessions in or in 2013 with another two (2) concessions of equivalent size On 18th September 2013, award of 2 other licenses PL707 and PL708 in Norway by Lime Petroleum was announced. The company intends to apply for further 8-12 licenses by the end of 2013 with first well estimated to be drilled in 2014. Rex also intends to participate in drilling 3-5 new offshore wells within the next 18 months. Trinidad and Tobago. Rex International will acquire interests in 3 T&T onshore producing blocks at Inniss Trinity, South Erin Block and Cory Moruga Block on 16th August 2013. The current production from these three blocks combined stands at a meager 125bpd and Rex intends drill new wells in these fields. Rex International will invest US$9mn for a 52% stake in Rex Caribbean.
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Figure 6: Concession status
Table 4: Rex International: List of Assets

Field USA Whitewater Federal production Willston Basin Effective Interest Other participants Onshore/ Offshore Onshore Onshore Field Type Plans and programmes Status
28% (20% direct Loyz Energy (20%), Fram (23%), Others ownership, rest through (30%) 24% ownership in Fram 28% (20% direct Loyz Energy (20%), Fram (23%), Others ownership, rest through (30%) 24% ownership in Fram
Oil Oil
Drilling of the 80 Commitment Wells within 24 months from the date the first well is spudded Production expected in 4th quarter of 2013
Development Development
Middle East RAK North 38.40% (through 65% in Schroder (25%), Hibiscus Petroleum Concession Lime Petroleum) (20%), Others (16%) Sharjah Concession 65% (through 65% in Lime Hibiscus Petroleum (35% Petroleum) RAK Onshore 65% (through 65% in Lime Hibiscus Petroleum (35%) concession Petroleum) Block 50 Oman 42% (through 65% in Lime Hibiscus Petroleum (23%), Others 35% concession Petroleum) 8.10% (through 65% in Lime Petroleum) PL503B/Valberget 8.10% (through 65% in Lime Petroleum) PL616/Skagastol 3.30% (through 65% in Lime Petroleum) PL498/Skagen 3.30% (through 65% in Lime Petroleum) PL 707 6.5% (through 65% in Lime Petroleum) PL 708 6.5% (through 65% in Lime Petroleum) T&T Inniss Trinity Incremental Production Contract South Erin Block 75% Cory Moruga Block 51%
Offshore Offshore Onshore Offshore
Oil Oil Oil Oil
Drilling of first well in early 2014 Drilling of first well by 1H14 Drilling of first well by end of 2014 Drilling of 2 wells in 2013
Exploration Exploration Exploration Exploration
Norway PL503/Valberget
North Energy (20), Skagen (25), Edison International (25) North Energy (20), Skagen (25), Edison International (25) North Energy (15), Skagen (15), Concedo (20), Noreco Norway(20) North Energy (20), Skagen (25), Edison International (25) North Energy (10), PGNIG (25), Edison International (50) Lundin (40), North Energy (10), Lukoil (20), Edison (20)
Offshore Offshore Offshore Offshore Offshore Offshore
Oil Oil Oil Oil Oil Oil Drilling of 3-5 wells in 2013 and 2014
Exploration Exploration Exploration Exploration Exploration Exploration Production/ Exploraion Development Development
Onshore Others 25% Others 49% Onshore Onshore
Oil Oil Oil Multi well campaign to start by end of 2013 or early 2014.
Table 5: Reserves and Resources USA

MMbbl Field Whitewater, Colorado 1P 2P 3P 1C 2C 3C Total Reserves 14.9 20.4 26.5 Total Resources 0.16 0.27 0.38 Rex's share 4.1 5.7 7.4 Rex's Share 0.04 0.07 0.11
Williston Basin, North Dakota

Source: Company reports. 2 fields in US have proven reserves till date.
Table 6: Prospective Resources Middle East

MMbbl Net Unrisked Best Estimate Recoverable Resources (mmboe) 61 426 1420 TBA 1908 Net Risked Best Estimate Recoverable Resources (mmboe) 13 55 248 TBA 316
Field Name RAK North Concession Sharjah Concession Block 50 Concession RAK Onshore Concession Total (Excludes RAK Onshore)
Source: Hibiscus Petroleum.
Table 7: Original Oil in Place (Trinidad and Tobago)

MMbbl Field Name South Erin Block Cory Moruga Block E Inniss Trinity field* Original Oil in Place 20 40 Incremental Production Contract Recoveery Factor 19.5 20
Source: Company Reports *Rex has no working interest as an Incremental Production contract is awarded to them at Inniss Trinity.
Reserves/Resources in Norway are currently undergoing evaluation.
Key Tie up with Hibiscus Petroleum

Hibiscus Petroleum is Malaysias first listed independent oil and gas exploration and production company with assets located in the Middle East, Norway and the AsiaPacific regions. Lime Petroleum Rex International has a close tie up with Hibiscus Petroleum in Norway, Middle East and SE Asia. In 2012, Hibiscus Petroleums wholly owned subsidiary Gulf Hibiscus Ltd signed a deal to acquire a 35% stake in Lime Petroleum, a wholly owned subsidiary of Rex Oil and Gas then.
Rex International intends to farm out some of the stake in Middle Eastern assets soon to secure funds for drilling.
Figure 7: Assets held through Lime Petroleum
Source: Hibiscus Petroleum,
Lime Petroleum is eyeing additional 8-10 new licenses in Norway.
Lime Petroleum has been granted a license by Rex Technology to utilize Rex Technologies for the purpose of exploring and producing oil and the company intends to use it extensively during exploration process in Middle East and Norway. HiRex Petroleum Hibiscus Petroleum tied up with Rex South East Asia, a wholly owned subsidiary of Rex International to form a 50:50 JV company called HiRex Petroleum in Kuala Lumpur, Malaysia. HiRex Petroleum is set up to acquire strategic mature concessions in South East Asia, As part of the JV agreement, HiRex has the right to use the Rex Tehnology package for a period of 5 years with provisions for extension. In June 2013, HiRex signed an agreement to receive a USD10 mn investment from Panama-based company, Triax Ventures Corp in exchange for a 15% stake in the company.
Figure 8: Hibiscus Petroleum Ownership structure
HiRex is targeting 20-40 opportunities to be identified for screening every year, with at least 3 opportunities to be selected for investment per year.
Source: Hibiscus Petroleum,
HiRex has begun screening potential drilling locations in mature field and exploration opportunities in Malaysia, Australia, New Zealand, Cambodia, Vietnam, Myanmar and the Philippines. The company expects to secure interests in 5-6 licenses in the next 18 months as the result of a large seismic data screening process during 2013 and 2014. It expects considerable growth in its concession portfolio over the next 18 months. In Sep 2013, the JV entered into an agreement with Bass Strait Oilof Australia for usage of Rex Technologies in the Gipsland Basin. HiRex and Bass will work together over the next 3 months to reassess the prospectivity and HiRex may then commit to acquiring a 51% participating interest in the permit. The joint venture may commit to drilling an exploration well in the 2014/2015 period.
Figure 9: HiRex Strategy and Targets
Source: Hibiscus Petroleum, VD= Virtual Drilling
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Understanding Oil Formation and accumulation

Oil is found accumulated in thick porous rocks like sandstone or limestone. Movements in the Earth trap oil and natural gas in the reservoir rocks between layers of impermeable rock, or cap rock, such as granite or marble. The movements of rocks include: Folding: Horizontal movements of earth press inward and move the rock layers upward into a fold called anticline. Anticlines are the most common type of traps where oil is found. Faulting: The layers of rock crack and one side shifts upwards or downwards creating a cap of impermeable layer which stops oil from flowing. Pinching out: A layer of impermeable rock is squeezed upward into the reservoir rock.
Conventional techniques of finding oil

As mentioned in the previous section, oil is found trapped in specific geological structures. It is the task of the geologists to find the right source rock, reservoir rock and entrapment. Modern oil geologists examine surface rocks and terrain, with the additional help of satellite images. Geologists also use seismology, i.e creating shock waves that pass through hidden layers and interpret the waves that are reflected back to the surface. In seismic surveys, a shock wave is created by a) Compressed-air gun - shoots pulses of air into the water (for exploration over water) b) Thumper truck - slams heavy plates into the ground (for exploration over land) c) Explosives - detonated after being drilled into the ground (for exploration over land) or thrown overboard (for exploration over water). The shock waves travel beneath the surface of the Earth and are reflected back by the various rock layers. The reflections travel at different speeds depending upon the type or density of rock layers through which they must pass. Sensitive microphones or vibration detectors detect the reflections of the shock waves. Seismologists interpret the readings for signs of oil and gas traps.
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Rex Technologies: the 3 proprietory technologies

Rex Partners (which owns Rex International Holdings) claims to own a proprietary technology which makes finding oil and gas easier and cheaper. Rex Technologies were developed by the founders of Rex Partners, Dr Karl Lidgren and Mr Hans Lidgren, and comprises three proprietary innovative exploration technologies: The three technologies owned by Rex are Rex Gravity, Rex Seepage and Rex Virtual Drilling. 1) Rex Gravity Rex Gravity finds areas with suitable geological conditions for hydrocarbon accumulations. Based on satellite gravity data, Rex Gravity measures water surface levels with the aim of finding anomalies in the sub-terrain, which could indicate the presence of hydrocarbons. According to the company, Rex Gravity generates a high resolution anomaly map based on satellite gravity data, by compensating for water depth and additional parameters. The company claims that Rex Gravity is a very cost effective way to screen large areas for hydrocarbons before a major decision is made to acquire seismic data.
Figure 10: Rex Gravity
Figure 11: Rex Gravity vs Traditional technology
Source: Company reports. 12
2) Rex Seepage Rex Seepage is a tool used to spot oil seepages offshore in order to better understand the potential presence of oil reservoirs in the sub-terrain. Based on thermal satellite imaging, the tool is able to provide high resolution and accurate information about oil seepages from beneath the rock strata over many years. The result is a much higher probability of finding areas suitable for closer inspection.
Figure 12: Rex Seepage
The advantage of Rex Seepage as compared to traditional imaging technologies is that it produces high resolution images and these images are obtained through a much larger set of satellite images taken at frequent intervals and over many years, unlike traditional seepage imaging technologies which typically only capture oil seepages in one or a few images per area of interest.
Figure 13: Rex Seepage vs Traditional technology
Source: Company reports. 13
3) Rex Virtual Drilling Traditionally the oil industry uses seismic data to search for oil. Rex Virtual Drilling is a proprietary technology that allows the company to find in details about things such as where the oil is; how deep it lies; how much there is; the quality of the oil. Rex claims that the oil discovery success rate is significantly increased to over 50%, compared to the global average of 10-15 %.
Figure 14: Rex Virtual Drilling
Figure 15: Rex Virtual Drilling vs Traditional Technology
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Rex Technologies Track Record:

Rex International carried out 18 tests during 2012 and 2013 and claims to be 100% successful in the tests. The company estimates worldwide success ratios in exploration drilling using Rex Technologies to be in excess of 50%, which is much higher than the average worldwide and industry-wide exploration success ratio of 10% to 15% According to Rex, it conducted 8 blind tests (i.e. Rex did not have information about the locations) for North Energy, Norway which was confirmed to be 100% accurate. Rex also conducted 4 live tests which were 100% accurate. Later, North Energy entered into a partnership with Lime Petroleum (a 65% owned subsidiary of Rex International) as a result of the tests. The company also carried out blind tests successfully for Hibiscus Petroleum and Fram and consequently entered into partnerships with these companies
Table 8: Results of Rex Technology
Type of Test Blind test Blind test Blind test Blind test Blind test Blind test Live test Live test Live test Live test Live test
Source: Company reports
Location Norway Norway New Zealand India USA (onshore) Norway Ras al-Khaimah Norway Norway Norway Norway
Test Results Correct and verified testing party Correct and verified testing party Correct and verified testing party Correct and verified testing party Correct and verified testing party Correct and verified testing party Correct and publicly published information Correct and publicly published information Correct and publicly published information Correct and publicly published information Correct and publicly published information
Blind tests were based on seismic data provided by the testing party, which was aware of the results of the tests provided, and Rex did not have prior knowledge about the exact location from which the seismic data were taken Live tests were carried out in collaboration with Rexs partners where they analysed seismic data using RexTechnologies prior to the start of drilling campaigns. The company is of the opinion that it is a potential game changer in the E&P industry. Rex International however does not intend to use Rex Technologies as a standalone service to other clients and intends to use it extensively in its own concessions.
96% success rate in predicting dry wells.
Success of Rex Virtual Drilling in North Energy fields

North Energy had analysed 59 prospects using Rex Virtual Drilling over the past two years. Out of the 41 wells which had been drilled since, 35 predictions by Rex Virtual Drilling were spot on. 85 per cent success rate (96 per cent success in predicting dry wells in 24 out of 25 drillings and 69 per cent success in predicting presence of commercial oil in 11 out of 16 drillings)
69% success in predicting locations with commercial oil
Rex Technology Licenses

Rex Technologies (owned by Rex Partners) have granted Rex International Holdings and its subsidiaries Lime Petroleum and HiRex Petroleum an IP License to use the technologies. However, to avoid conflict of interest, Rex Partners does not allow usage of Rex Technologies in areas where Rex Partners or its group of companies has interests in E&P. Rex Partners is currently involved in key operation areas in respect of exploration and production activities in the West Africa region. Rex Partners has granted Lime Petroleum an exclusive license to use Rex Technologies in areas mentioned below, while it has granted Rex International Holdings and HiRex Petroleum a Right to First Refusal in areas where they have been provided licenses.
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Table 9: Rex technology IP Licence agreement

RIH IP Licence Any territory in the world save for Morocco, Mauritania, Senegal, Cape Verde, Guinea Bissau, the Gambia, Sierra Leone, Liberia, Guinea, Ivory Coast, Ghana, Togo, Benin, Nigeria, Cameroun, Equatorial Guinea, Gabon, CongoBrazzaville, the Kingdom of Saudi Arabia and the offshore areas associated with these countries Date of RIH IP License Agreement to 31st Dec 2013 Every 12 months from 1 January 2014 US$312,500 Lime Petroleum IP Licence Middle East which includes Bahrain, Egypt, Iran, Iraq, Jordan, Kuwait, Lebanon, Oman, Palestine (Gaza strip and West Bank), Qatar, Saudi Arabia, Syria, Turkey, United Arab Emirates, Yemen and offshore areas associated with these countries Not applicable Not applicable Hourly rate of US$150for project engineer and US$300 for project manager Hourly rate of US$150for project engineer and US$300 for project manager Hourly rate of US$150for project engineer and US$300 for project manager Hourly rate of US$150for project engineer and US$300 for project manager No limit HiRex IP Licence Lime Norway IP Licence
Territories
Brunei, Myanmar, Malaysia, Indonesia, Thailand, Vietnam, Cambodia, the Philippines, Australia, New Zealand and Papua New Guinea and offshore areas associated with these countries
Norwegian Continental Shelf
First licence period Subsequent license period Licence fees for Rex Virtual Drilling (first license period) Licence fees for Rex Virtual Drilling (subsequent license period Licence fees for Rex Seepage
12 months from the date of the HiRex IP License Agreement Every 12 months from 21st March 2014 US$1.25 million
Date of Lime Norway IP License Agreement to 31-Dec13 Every six (6) months from 1 Jan 2014 US$625,000
US$625,000 US$75 per sq km and such charges shall be subject to the same annual increment as the cost for the use of Rex Virtual Drilling US$75 per sq km and such charges shall be subject to the same annual increment as the cost for the use of Rex Virtual Drilling Up to ten (10) analyses (subject to not more than 3 analyses each month Up to 20 analyses (subject to not more than 3 analyses each month Up to 5,000 sq km (subject to not more than 500 sq km for each analysis) Up to 10,000 sq km (subject to not more than 500 sq km for each analysis) Each analysis can have up to 25D lines where each line has upto 3000 shot points Fees to increase on an annual basis after the 2nd annual license period by a rate equivalent to official reported British Virgin Islands inflation rate for preceding previous year plus 3% Fee for each additional analysis is US$125,000. The company has the right to request for up to 10 additional analysis during each license period with 3 months advance notice
US$2.5 million
US$625,000 Charged separately on a case by case basis, where such charges will be pre-approved by Lime Petroleum Norway in writing Charged separately on a case by case basis, where such charges will be pre-approved by Lime Petroleum Norway in writing Up to five (5) analyses (subject to not more than 2 analyses each month) Up to five (5) analyses (subject to not more than 2 analyses each month) Up to 2,500 sq km (subject to not more than 500 sq km for each analysis) Up to 2,500 sq km (subject to not more than 500 sq km for each analysis) Each analysis can have up to 25D lines where each line has upto 3000 shot points Fees to increase on an annual basis after the 4th license period by a rate equivalent to official reported British Virgin Islands inflation rate for preceding previous year plus 3% Fee for each additional analysis is US$125,000 Lime Petroleum Norway has the right to request for up to 5 additional analysis during each license period with 1 months advance notice
Charged separately on a case by case basis, where such charges will be preapproved by HiRex in writing Charged separately on a case by case basis, where such charges will be preapproved by HiRex in writing Up to 20 analyses (subject to not more than 3 analyses each month Up to 40 analyses (subject to not more than 6 analyses each month Up to 5,000 sq km (subject to not more than 500 sq km for each analysis) Up to 10,000 sq km (subject to not more than 500 sq km for each analysis) Each analysis can have up to 25D lines where each line has upto 3000 shot points Fees to increase on an annual basis after the 2nd annual license period by a rate equivalent to official reported British Virgin Islands inflation rate for preceding previous year plus 3%, subject to a maximum increase of 7% pa
Licence fees for Rex Gravity Analysis coverage for Rex Virtual Drilling (first license period) Analysis coverage for Rex Virtual Drilling (subsequent license period) Rex Virtual Drilling 3D coverage (first license period) Rex Virtual Drilling 3D coverage (subsequent license period) Rex Virtual Drilling 2D coverage (if carried out instead of 3D analysis)
No limit
No limit No limit No limit
Adjustments to license fees
Not applicable
Additional analysis
Not applicable
Not applicable
Source: Company reports
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Near Term Producing Assets

USA: North Dakota and Colorado
Table 10: Reserves and Resources
MMbbl Field Whitewater, Colorado 1P 2P 3P 1C 2C 3C Total Reserves 14.9 20.4 26.5 Total Resources 0.16 0.27 0.38 Rex's share 4.1 5.7 7.4 Rex's Share 0.04 0.07 0.11
Williston Basin, North Dakota

Rex Oil & Gas entered into the Participation and Exploration Agreement with Fram and Loyz Oil for the US concessions on 28th August 2012. Rex owns a 27.5% interest in these field (through 20% direct interest and 8% interest in Fram); Loyz Oil holds 20% with the rest being held by Fram. Rex and Loyz Oil are responsible for the implementation of a drilling plan for the wells, which are to be drilled within a period of 24 months commencing from the date the first well was spudded, being 7 May 2013. The drilling campaign will take place first within the North Dakota Concession before commencing within the Colorado Concession.
Figure 16: Locations of USA assets
Table 11: Plan for exploration and development in USA

Exploration Plan Whitewater, Colorado Williston Basin, North Dakota Total
2013 26 4 30
2014 35 5 40
2015 9 1 10
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The company plans to drill a total of 80 wells within 2015, with 70 wells to be drilled in Whitewater, Colorado whereas 10 wells are to be drilled in North Dakota.
Table 12: Production plan (bpd)
Rex International aims to produce a total of 3264bpd from US assets FIeld Whitewater Williston Total
Intended Life 30 Years 10 Years
2013 1320 209 1529
2014 2928 410 3338
2015 2936 328 3264
Planned Capex for US assets

Rex International will spend ~US$18.4mn in the next 3 years in capital expenditure for US assets
Table 13: Capex for Rex's Interest in US assets

Total (US$ mn)
2013 6.4
2014 8.9
2015 3.1
Planned OPEX for US assets

Table 14: Operating expense for Rex's Interest in US assets
Total (US$ mn) US$ per boe
2013 1.6 ---
2014 2.6 7.8
2015 3.6 11.1
Oil Sales Agreement Fram, signed an off-take agreement with Plains Marketing L.P. for all the oil and gas produced in the US Concessions on 22 June 2009. The key terms of the off-take agreement include the following: (i) the price of the crude oil will be based on an arithmetic average of the daily settlement price for the Light Sweet Crude Oil prompt month contract reported by the New York Mercantile Exchange from the first day of the delivery month through the last day of the delivery month, less US$14 per barrel; (ii) payment for the oil purchased will be made by the 20th day of the month following the month of delivery;
(ii)
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Other Assets and Potential acquisitions

Middle East Rex International holds its Middle East concessions through Lime Petroleum in which the company holds a 65% shareholding interest. Rex owns 4 concessions which are operated by Malaysias Hibiscus Petroleum. 1 block is onshore while other 3 blocks are offshore fields.
Figure 17: Locations of Middle East assets
All 4 blocks are currently in the exploration stage and the company plans to drill exploratory well in 2013-14. Moreover, Rex plans to farm out some stake in Lime Petroleum's interest in these fields and intends to raise funds for drilling. The company is currently in talks with potential investors.
Table 15: Target drilling schedule for Middle East Assets
Field Block 50 RAK North Concession RAK Onshore Concession Sharjah Concession
2 wells in 2013 First well in early 2014 First well potentially by end 2014 First well by first half of 2014
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Norway Rex International has interest in 6 licenses in Norway through Lime Petroleum. Of the six licenses, two (2) are located in the southern region of the North Sea, in Central Graben with Ekofisk and Valhall as the best known oil fields in that area. The other two (2) licenses lie 45 kilometres south-east of the famous recent discovery of Johan Sverdrup. Lime Petroleum Norway AS entered into an agreement with North Energy, a company listed on the Oslo Stock Exchange on 17 April 2013, whereby North Energy assigned certain of its participating interests in six (6) Norwegian licences to Lime Petroleum Norway for a consideration of NOK 28.2mn (approximately US$4.9 million).
Table 16: List of Norways assets
Assets PL503/Valberget PL503B/Valberget PL616/Skagastol PL498/Skagen PL 707 PL 708
Interest 8.10% (through 65% in Lime Petroleum) 8.10% (through 65% in Lime Petroleum) 3.30% (through 65% in Lime Petroleum) 3.30% (through 65% in Lime Petroleum) 6.5% (through 65% in Lime Petroleum) 6.5% (through 65% in Lime Petroleum)
Other Partners North Energy (20), Skagen (25), Edison International (25) North Energy (20), Skagen (25), Edison International (25) North Energy (15), Skagen (15), Concedo (20), Noreco Norway(20) North Energy (20), Skagen (25), Edison International (25) North Energy (10), PGNIG (25), Edison International (50) Lundin (40), North Energy (10), Lukoil (20), Edison (20)
Figure 18: Locations of Norways assets
Source: Company reports. 2 other licenses at PL707 and PL 708 were acquired later.
Operations in the Norwegian Licenses are in the preliminary exploration stages and Rex has not commissioned an independent assessment of the resources in the Norwegian Licenses. The company intends to apply for a further eight (8) to 12 licences by the end of 2013, with the first well estimated to be drilled in 2014. Rex also intends to participate in the drilling of three (3) to five (5) new offshore wells within the next 18 months.
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Trinidad and Tobago

Rex International signed a term-sheet with Norwegian private equity investor Pareto Staur SPV1 AS, providing the company with access to three new onshore exploration & production (E&P) opportunities in the island nation of Trinidad and Tobago. Rex International Holding will invest USD 9 million for a 51.99 per cent stake in Rex Caribbean Oil Company Ltd (Rex Caribbean Oil Company) (Investment), while Pareto Staur will invest USD 6.5 million for a 34.76 per cent stake. The transaction will involve three E&P licenses; namely, the Inniss- Trinity field, the South Erin Block and the Cory Moruga Block E. These assets already have producing discoveries; and Rex will, after completion of the farm-in activities, hold working interest of 75 per cent in the South Erin Block and 51 per cent in the Cory Moruga Block E. Inniss Trinity Field: Inniss-Trinity field was initially developed as two neighbouring fields; the Inniss field first drilled by Shell in 1946 and put on production in 1961 while the Antilles-Trinity field was drilled by Texaco in 1956. Both fields were taken over by Petrotrin in the early 1980s, and were part of several of Petrotrins onshore assets put up for bidding in the 2009 as a production service contract. The Inniss-Trinity field is currently producing an average of 45 bopd with no new wells being drilled since 2009. Rex International has been granted an Incremental Producion Service Contract whereby Rex International will receive a fixed amount for every incremental barrel of oil produced. The South Erin Block has a current production average of about 80 bopd from four shallow wells. The 1,350-acre block, reportedly under-explored, is estimated to have a large potential. The 1ER98 Area which constitutes only a small part of the South Erin Block, is estimated to hold more the 20 MMbbl of Oil in Place (OOIP). An ambitious drilling campaign is planned to start in December 2013 or early 2014. TheCory Moruga Block E field (OOIP of 40 MMbbl) is located in the southern basin, onshore Trinidad. The 7,442-acre block (gross) had 15 wells drilled in the 1950s. The current operator spudded a new well in 2010, and produced at a rate stabilizing above 500 bopd. The well is currently locked in, but will be put on production soon.
Other Potential Areas of Interest:

Asia-Pacific Rex International holds a 41% stake in HiRex Petroleum, a JV between Rex International and Malaysia listed Hibiscus Petroleum. The company has begun screening potential drilling locations in mature fields and exploration opportunities in Malaysia, Australia, New Zealand, Cambodia, Vietnam, Myanmar and the Philippines. Rex International intends to secure 5-6 licenses in the next 18 months as large seismic data screening process will go on in 2013 and 2014. Western Europe Rex International seeks to grow its presence in Western Europe with a particular focus on the UK and Germany.
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Financial History
Rex will generate revenue by the end of 2013 as US fields start producing
Rex International has no producing fields and therefore has generated no revenue till date. However, Rex is expected to generate revenue by the end of this year as US assets start production. Moreover, the company has also acquired producing assets in Trinidad and Tobago which are pending approval.
Table 17: Income Statement of Rex International
in US$ mn Revenue Administration fees and expenses Operating profit Share of profit of jointly controlled entities Share of loss of associates PBT Tax PAT EPS (US cents) No of shares
2011 0.0 1.8 (3.3) (1.5) (1.5) (0.2) 976.7
2012 (0.5) (0.5) (0.7) (2.3) (3.5) (3.5) (0.4) 976.7
Table 18: Profit and Loss of Associates

Interest 65% 49% 24% Associates Lime Petroleum Loyz Rex Drilling Services FRAM 2011 1.81 0.00 (3.30) 2012 (0.64) 0.00 (2.31)
Source: Company reports. FRAM numbers are pro-forma
The company carried out an IPO to raise US$71.2mn and intends to spend ~50% of the proceeds in drilling for new assets, and 22% of the funds in acquiring new oil and gas assets.
Table 19: Distribution of IPO proceeds
Use of IPO proceeds Investment in new oil and gas opportunities Drilling in Middle East concessions Drilling in Norwegian Licenses Repayment of loan General working capital Listing expenses Total
in S$ mn 15.7 12.4 23.6 2.4 12.4 4.8 71.3
Figure 19: Use of IPO proceeds

Listing expenses 7% General working capital 17% Repayment of loan 3% Drilling in Norwegian Licenses 33%
Investment in new oil and gas opportunities 22%
Drilling in Middle East concessions 18%
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Current Financial Position

Table 20: Balance Sheet
Balance Sheet Investment in jointly controlled entities Investment in associates Plant and equipment Intangible exploration and evaluation assets Investment in subsidiary Total non current assets Cash and Cash Equivalents Debtors and Prepayments Total Current Assets Total Assets Trade and Other payables Convertible Loans Loans from related corporation Total current liabilities Total Liabilities Share Capital Merger Reserve Capital Reserve Accumulated profit (loss) Total Equity
4Q12 7.4
7.4 0.0 7.4 -0.3 0.0 -1.9 -2.2 -2.2 1.0 4.1 0.4 0.6 6.1
1H13 7.9 33.2 0.0 2.4 0.0 43.5 21.9 2.3 24.3 67.8 -0.8 -27.9 -1.9 -30.6 -30.6 33.5 4.1 1.1 -1.5 37.2
In March 2013, the company entered into a share swap agreement with FRAM Exploration ASA. Under the terms of the agreement, the company issued 101,792,531 of its own shares as consideration for shares in Fram. This resulted in the Company acquiring a 24% equity interest in Fram. In April 2013, the company issued convertible loans to investors. The terms of the convertible loan agreements are such that the loans will be converted into ordinary shares of the company upon the listing on a recognized stock exchange. A total cash consideration of US$28,734,164 was received.
Table 21: Cash Flow Statement
Cash Flow Statement Loss from income tax Adjustments for Depreciation in Furniture Share of loss in associates Share of loss in jointly controlled entities Operating profit before working cap changes Trade and other payables Debtors and prepayments Net cash from operating activities Purchase of plant and equipment Purchase of exploration and evaluation assets Investments in jointly controlled entities and associates Net cash from investing activities Financing activities Prepaid IPO costs Proceeds from convertible loan holders Cash contribution from founders Cash from financing activities Net change in cash Beginning Cash Ending Cash
1Q13 -1.4 0.0 0.0 1.1 -0.3 0.0 -0.1 -0.4 0.0 0.0 0.0 0.0 0.0 0.0 0.7 0.7 0.3 -0.3 0.0
2Q13 -0.7 0.0 0.3 0.2 -0.2 -0.1 0.0 -0.3 0.0 -1.7 -2.1 -3.7 -2.2 27.9 0.0 25.7 21.7 0.3 21.9
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History
6 June 2011: Rex Oil & Gas entered into a concession agreement with the Government of Sharjah in relation to the right to explore and produce hydrocarbons from the Sharjah Concession. Rex later assigned its rights to its subsidiary Zubara. 10 June 2011: Lime Petroleum was incorporated under the laws of British Virgin Islands. 26 August 2011: Lime Petroleum Ltd. acquired a 59.0% interest in Dahan. Dahan owns the entire concession right to RAK North Concession in Ras al-Khaimah. 30 August 2011: Lime Petroleum Ltd. acquired a 74.0% interest in Masirah which holds entire participating interest in Block 50 Oman Concession. 28 August 2012: Rex Oil & Gas entered into the Participation and Exploration Agreement with Fram and Loyz Oil in relation to the US Concessions. 21 March 2013: Rex oil and Gas and its wholly-owned subsidiary, Rex South East Asia, entered into the HiRex Shareholders Agreement with Orient Hibiscus, Hibiscus Petroleum and HiRex in respect of a joint venture between Hibiscus Petroleum and our Group for joint venture entity, HiRex. 21 March 2013: Entered into a share swap with the Fram Shareholders, pursuant to which Rex holds 24% of the issued share capital in Fram 17 April 2013: Lime Petroleum Norway AS entered into an agreement with North Energy, a company listed on the Oslo Stock Exchange, whereby North Energy assigned certain of its participating interests in six (6) Norwegian licences to Lime Petroleum Norway for a consideration of NOK 28,233,000 (approximately US$4.9 million) 18 June 2013: HiRex signed an agreement to receive a USD10 mn investment from Panama-based company, Triax Ventures Corp in exchange for a 15% stake in the company 10 July 2013: Rex Oil & Gas converted into a public limited company and its name was changed to Rex International Holding Limited. 22 July 2013: Invitation for IPO opened, and closed on 29th July 2013. The company planned to raise US$71mn via IPO. 30 July 2013: Started trading on Singapore Exchange with a price of US$0.5/share. 17 Aug 2013: Rex International inks term-sheet with Norway's PE firm Pareto Staur granting Rex access to 3 Trinidad and Tobago assets. 18 Sep 2013:Lime Petroleum to acquire 10% stake in 2 Norway assets PL 707 and PL 708from North Energy. 20 Sep 2013: Bass Strait Oil Company signs agreement with HiRex to use Rexs technology for exploration opportunities in Australia. HiRex has an option to acquire 51% stake in the asset if exploration is successful.
Figure 20: Rex International Ownership
%
Others 34%
Figure 21: Rex International since IPO

S$
1 0.9 0.8 Rex Partners 57% 0.7 0.6
Schroders PLC 9%
0.5 0.4 30-Jul-13 9-Aug-13 19-Aug-13 29-Aug-13 8-Sep-13 18-Sep-13
Source: Bloomberg, As of 23 Sep 2013.
Source: Bloomberg
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Experienced Management Personnel

Table 23: Key Management personnel for Rex International
Name Mans Lidgren Designation Chief Executive Officer Profile Mr Lidgren graduated from Lund University in Sweden with a Bachelor of Science and a Master of Science, both in Business Administration and Economics in 1999 and 2000 respectively. From 2002 to 2007, he joined his family business in private investments where he was a business analyst in 2002, and subsequently a merger and acquisitions manager in 2003 and 2004. From 2005 to 2007, he assumed the position of senior investment manager in his familys business, and carried out portfolio management, liaison with partner banks and private equity transactions. Mr Lidgren subsequently joined Credit Suisse in January 2008 as a vice president of business development and, among others, managed his own client portfolio, acted as a broker for sourcing of new business and pre-screened business proposals under the private banking division. After leaving Credit Suisse in August 2009, Mr Lidgren re-joined his familys business where he was chief financial officer until August 2011. He later joined Lime Petroleum Plc from August 2011 to December 2012, and took on the roles of interim chief executive officer and director. Mr Lidgren joined Rex in January 2013 as Chief Executive Officer. Mr Kristofer Skantze is Groups Chief Operating Officer where he is responsible for the Groups overall operations, including the integration of new business development plans into the Groups operations. Prior to joining Rex, Mr Skantze was the head of sales and marketing at HeiQ Materials AG from 2007 to 2012, a privately-owned textile chemical company. From 2000 to 2007, Mr Skantze held various positions within the Anoto Group AB, a Swedish high-tech company. Mr Skantze was the business development manager of Anoto Inc. at Boston from 2005 to August 2007, where he managed the partner network and was responsible for all new North American customers. Mr Skantze held positions of key account manager, technical project manager and project manager in sales and business development at Anoto Group AB in Lund in Sweden from 2000 to 2005, where he also invented and filed for several patents of which at least nine were granted. Mr. Skantze obtained a Masters degree in Engineering Physics from the Faculty of Engineering of University of Lund in Sweden. Mr Knutsson joined Rex International in 2011 as the Chief Financial Officer of its subsidiary, Lime Petroleum Plc, and was subsequently appointed the Companys Chief Financial Officer in 2013. Prior to joining Rex, Mr Knutsson was the Chief Financial Officer of the Prestando Group since 2009, a supplier of pressed high-grade steel parts to the automotive industry in Europe and the USA. Between 2006 and 2009, Mr Knutsson was managing director of A Clean Partner International AB, a company which develops and sells cleaning substances to industries in Sweden and other Nordic countries. Mr Knutsson graduated from the University of Lund in Sweden with a degree in Business Administration with International Orientation. Mrs Lina Berntsen obtained a Master of Science in Chemical Engineering from the University of Lund in Sweden in 2007. Mrs Berntsen started work with a biotechnology company, Chemel AB, from 2004 to 2006. She was the marketing coordinator in Chemel AB and also worked on product development. From 2008 to 2010, Mrs Berntsen worked as a development engineer in Gambro Lundia AB, a global medical technology company, where she was responsible for product development and design control relating to dialysis technology. After her stint at Gambro Lundia AB, Mrs Berntsen joined Rex Oil & Gas as the Rex Virtual Drilling specialist and oversaw the operations and co-ordinated analyses in relation to the use of Rex Virtual Drilling, until 2011. She later left to join Equus Consulting AB which she partly-owns. Equus Consulting AB is in the business of advanced mathematical analysis and Mrs Berntsen provided consultancy services to Rex as a technology specialist from 2011 to 2012. In 2012, Mrs Berntsen re-joined Rex where she continued working as the Rex Virtual Drilling specialist to Lime Petroleum Norway. Dr Karl Lidgren is the Non-Executive Director and was appointed to the Board of Directors on 1 May 2013. Dr Lidgren graduated from Lund University in Sweden in 1970 with a degree in Economics. Upon graduation, he taught in Lund University until 1972 before taking on the role of an investigator for the Swedish Government from 1972 to 1980. He concurrently obtained a Doctor of Philosophy from Lund University in 1976 in Economics. Dr Lidgren taught in Lund University as a Professor from 1980 until his retirement in 2000. Dr Lidgren founded Rex Partners with his brother, Mr Hans Lidgren, and Mr Svein Kjellesvik. Dr Lidgren and Mr Hans Lidgren have, since the 1980s, utilised satellite altimeter data in oil exploration activities which enabled major oil and gas findings. Mr Kjellesvik has a Masters degree in Applied Geophysics from the Norwegian Institute of Technology (NTH) in Trondheim, Norway (received in 1973).Starting as a Seismic Processing Geophysicist in Stavanger in 1975, Kjellesvik has held leading positions in Schlumberger's seismic division. He has also been the President of their Global Marine Seismic Division. Kjellesvik has played leading roles in key innovations in the seismic industry which includes multi-cable 3D seismic, 4 component seismic, and seismic 4D. He has also served at the corporate headquarter of Schlumberger. Since retiring from Schlumberger in 2002, Kjellesvik has been an independent entrepeneur. Since 2008, Svein as been involved in the start-up of Rex Oil & Gas and Lime Petroleum.
Kristofer Skantze
Chief Operating Officer
Ake Knutsson
Chief Financial Officer
Lina Bernsten
Chief Technology Officer
Dr Karl Lidgren
Non Executive Director
Svein Kjellesvik
CEO, Lime Petroleum
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Figure 23: Rex International Corporate Structure
Source: Company
26
Rex International Holdings: Summary of Financials (US$ mn)

Profit and Loss Statement Revenue Operating Profit Share of Profit/Loss of Associates Profit Before Tax Tax Profit After Tax Shares outstanding EPS FY11 0.0 0.0 (1.5) (1.5) 0.0 (1.5) 977 (0.2) FY12* 0.0 (0.5) (3.0) (3.5) 0.0 (3.5) 977 (0.4) Cash Flow Statement Profit for the period Share of (gain)/loss of jointly controlled entities Share of loss of associates Increase in operating Payables (+) Increase in operating payables due to related corporation Waiver of debt by equity holders Net cash generated by operating activities Cash from investing activities Proceeds from conversion of convertible loan instruments Proceeds from issue of shares Cash from financing activities Net change in cash Beginning Cash Ending Cash Ratio Analysis ROE ROA Assets/Equity Sales Growth Net Profit Growth Net Debt to Equity FY11 1.8 (1.8) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 FY11 n/m n/m n/m n/m n/m n/m FY12* (3.5) 0.7 2.3 0.1 0.0 0.4 0.0 0.0 28.7 54.6 83.3 83.3 0.0 83.3 FY12* -2.9% -2.8% 1.02 n/m n/m (0.69)
Balance Sheet Investment in jointly controlled entities Investment in associate Total non current assets Cash and cash equivalents Total Current Assets Total Assets Other payables Current Liabilities Non Current Liabilities Total Liabilities Share Capital Merger Reserve Capital Reserve Retained Earnings Total Equity
FY11 5.9 0.0 5.9 0.0 0.0 5.9 0.0 0.0 0.0 0.0 0.0 4.1 1.8 5.9
FY12* 7.4 33.1 40.5 83.3 83.3 123.8 2.2 2.2 0.0 2.2 116.4 4.1 0.6 121.6
Source: Company Reports *FY12 accounts are pro forma and assumes that IPO, FRAM share swap and convertible bonds have taken place before 31st Dec 2012.
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Rex International Holding - JPM

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Rex International Holding - JPM

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Asia Pacific Equity Research

Rex International Holdings

Oil & Gas Ajay Mirchandani

REXI.SI, Not Covered

Share Price Chart

9-Aug 19-Aug 29-Aug 8-Sep 18-Sep Rex International FSSTI Rebased

One-year price performance

YTD 85% 86%

Source:: Company Reports *Company has no earnings estimates currently

0.5 - 0.925 929 752 977 44.3 16.6 3214 23-Sep-13

Ajay Mirchandani (65) 6882-2419 ajay.mirchandani@jpmorgan.com

Asia Pacific Equity Research 23 September 2013

Quick Overview of RIH

Rex Technologies: Is it really unique and a game-changer?

Aiming big with strategic tie ups; eye on acquiring assets

Ajay Mirchandani (65) 6882-2419 ajay.mirchandani@jpmorgan.com

Asia Pacific Equity Research 23 September 2013

Figure 1: Lime Petroleum Ownership Structure

US production to kick in by end of 2013; T&T producing assets to be acquired

Ajay Mirchandani (65) 6882-2419 ajay.mirchandani@jpmorgan.com

Asia Pacific Equity Research 23 September 2013

Farm out of interest in Middle East

Rex International 50% Under US$100,000 4-6 weeks

Traditional Players 10-15% May go in millions 1-3 years

50 MMBbl US$ 5/bbl 20% US$ 50 mn US$10 mn US$ 40 mn

Ajay Mirchandani (65) 6882-2419 ajay.mirchandani@jpmorgan.com

Asia Pacific Equity Research 23 September 2013

Figure 4: Rex current position in E&P value chain

Source: Company reports.

Ajay Mirchandani (65) 6882-2419 ajay.mirchandani@jpmorgan.com

Asia Pacific Equity Research 23 September 2013

3500 3000 2500 2000 1500 1000 500 0

3338 410 1529 209 2928 1320 2013 2014 328

Whitewater, Colorado Williston, North Dakota

Ajay Mirchandani (65) 6882-2419 ajay.mirchandani@jpmorgan.com

Asia Pacific Equity Research 23 September 2013

Figure 6: Concession status

Source: Company reports.

Table 4: Rex International: List of Assets

Offshore Offshore Onshore Offshore

Oil Oil Oil Oil

Exploration Exploration Exploration Exploration

Offshore Offshore Offshore Offshore Offshore Offshore

Onshore Others 25% Others 49% Onshore Onshore

Ajay Mirchandani (65) 6882-2419 ajay.mirchandani@jpmorgan.com

Asia Pacific Equity Research 23 September 2013

Table 5: Reserves and Resources USA

Williston Basin, North Dakota

Table 6: Prospective Resources Middle East

Table 7: Original Oil in Place (Trinidad and Tobago)

Reserves/Resources in Norway are currently undergoing evaluation.

Ajay Mirchandani (65) 6882-2419 ajay.mirchandani@jpmorgan.com

Asia Pacific Equity Research 23 September 2013

Key Tie up with Hibiscus Petroleum

Figure 7: Assets held through Lime Petroleum

Source: Hibiscus Petroleum,

Lime Petroleum is eyeing additional 8-10 new licenses in Norway.

Ajay Mirchandani (65) 6882-2419 ajay.mirchandani@jpmorgan.com

Asia Pacific Equity Research 23 September 2013

Figure 8: Hibiscus Petroleum Ownership structure

Source: Hibiscus Petroleum,

Source: Hibiscus Petroleum, VD= Virtual Drilling

Ajay Mirchandani (65) 6882-2419 ajay.mirchandani@jpmorgan.com