Rex International Holding Issues Critical Update on Lime Petroleum Holding’s Operations and Strategic Review

Key Points from the Report

• First Oil Achieved at AK-2H Well, Sèmè Field, Benin: Lime Petroleum Holding AS (LPH), a subsidiary of Rex International Holding, has successfully achieved first oil from the AK-2H well in Block 1, Sèmè Field, Benin. Production is expected to commence within the next two weeks.
• Technical Complications and Increased Costs: The drilling operations faced significant technical complications, resulting in materially higher drilling costs and a production delay exceeding three months.
• Adverse Financial Impact: The unexpected increase in costs and production delays have had a material adverse effect on LPH’s financial position.
• Strategic and Financial Review Initiated: LPH has engaged ABG Sundal Collier as financial advisor, and Arntzen Grette as legal counsel, to undertake a comprehensive strategic and financial review. All alternatives are being explored, including potential mergers or asset transactions, amendments to existing debt facilities, and broader financial restructuring.
• Active Dialogue with Stakeholders: LPH is currently in discussions with creditors, suppliers, and other key stakeholders to seek solutions, with further updates to be provided as appropriate.
• Risk of Default: If a timely and comprehensive recapitalisation or restructuring solution is not achieved, LPH may be unable to meet its financial obligations as they fall due. There is no assurance that the strategic review will result in a transaction or outcome outside a formal restructuring proceeding.
• Forward-Looking Statements: The release contains forward-looking statements about expected production, financial condition, strategic alternatives, and potential restructuring outcomes. These statements are subject to risks and uncertainties.

Details Investors and Shareholders Must Know

• Material Financial Risk to LPH: The financial distress at LPH, stemming from increased costs and production delays, is a significant concern. The adverse effect on LPH’s financial position is explicitly noted as “material,” which may impact Rex International Holding’s consolidated financials due to its ownership.
• Potential Price-Sensitive Developments: The ongoing strategic and financial review could result in major corporate actions, including mergers, asset sales, debt restructuring, or even a formal restructuring proceeding. Any of these outcomes are likely to be price sensitive and may affect Rex International Holding’s share value.
• Risk of Insolvency: The explicit warning that LPH may be unable to meet its financial obligations unless a recapitalisation or restructuring solution is found is a critical risk. Investors should be aware of the possibility of insolvency or significant restructuring, which could have repercussions for the parent company.
• Shareholder Caution Advised: The company advises shareholders and potential investors to exercise caution when trading in Rex International Holding shares given the uncertainties and ongoing review.
• Disclosure Obligations: Rex International Holding has committed to updating the market in accordance with Singapore Exchange (SGX-ST) rules should any material developments occur.
• Geographical and Operational Overview: Rex International Holding is a multinational E&P company with interests in Norway, Germany, Oman, and Benin, holding operatorship for assets in Oman, Benin, and Germany. The Group uses proprietary Rex Virtual Drilling technology for hydrocarbon identification.
• Forward-Looking Risks: The company highlights risks including general industry and economic conditions, interest rate trends, cost of capital, capital availability, competition, shifts in demand, changes in operating expenses, government policies, and the availability of financing as material factors that could impact future performance.

Potential Impact on Share Price

The operational update and strategic review announcement are highly material and could significantly affect Rex International Holding’s share price. The financial distress at its subsidiary, Lime Petroleum Holding, introduces the possibility of insolvency or substantial restructuring. Investors should note that the outcomes of the ongoing review—such as mergers, asset sales, amendments to debt facilities, or formal financial restructuring—are likely to be price sensitive. The explicit warnings regarding the risk of default and the inability to meet financial obligations underscore the seriousness of the situation.

Conclusion and Shareholder Guidance

Shareholders and potential investors are urged to monitor further updates closely and exercise caution when trading Rex International Holding shares. The company will continue to update the market as required by SGX-ST rules. Investors uncertain about their actions should consult their legal, financial, tax, or other professional advisers.

Disclaimer

This article contains projections and forward-looking statements reflecting the company’s current views with respect to future events and financial performance. These statements are based on estimates and assumptions that are subject to risks, uncertainties, and business, economic, and competitive contingencies, many of which are outside the company’s control. Actual results may differ materially from those expressed in forward-looking statements. Investors should not place undue reliance on these statements and are advised to consult professional advisers before making investment decisions.

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