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SP Angel | Prince Frederick House | 35‐39 Maddox Street | London | W1S 2PP | United Kingdom SP Angel Corporate Finance LLP is authorised and regulated by the Financial Conduct Authority. Registered in England No. OC317049. Registered Office: Prince Frederick House, 35‐39 Maddox Street, London W1S 2PP.
Oil & Gas Flash Note
Rex International Holding REXI SP S$0.62
BUYS$1.10
NAV: Overall $mmCore 233Appraisal & Development 73Exploration 788Total 1,095Per share S$1.10 From Current Price 77%
Simpler, Stronger and More Active & Focused The summer has been an active time for the Company. The sale of its interest in Innis
Trinity in Trinidad has sharpened the focus, while the acquisition of Rex Technology
simplifies the structure significantly. The recent fundraising, where is raised ~$75mm,
provides it with sufficient cash resources to execute it’s near to medium term strategy.
Technology Ownership Simplifies the Offering
One of Rex’s key differentiating factors was it application of Rex Virtual Drilling (“RVD”)
in the exploration phase, which it had excluding access to, providing certain shareholder
interests are maintained, etc. Consequently, news the acquisition of the technology
simplifies this area significantly, and eliminates what hitherto has been an area of
confusion for investors.
Fundraising Provides Balance Sheet Strength and Corporate Flexibility
The recent fundraising is timely (see below) and provides two things to the Company,
namely: (i) balance sheet strength, which given that the funding markets are not fully
open, a dollar on the balance sheet is worth more than a dollar to third parties outside
the Company; and (ii) corporate flexibility, whether it is in the shape of activity on their
own acreage, or farming in to a third party’s acreage, it provides them with the ability to
pick and choose, and be more aggressive in their pursuit of terms, which is good for
shareholders.
Activity Increasing & More Focused
As we enter the closing stages of 2014, the drilling programme starts to accelerate, with
the focal points (for us) being Norway and the Omani appraisal well. However, this is not
the only activity, as there will be a significant amount of activity right across the portfolio,
in all their jurisdictions.
Valuation – $1,095 (S$1.10)
While RIH’s asset value has increased overall to $1,095mm, the per share valuation has
been adjusted to S$1.10, which reflects the increased number of shares in issue. We are
reiterating our BUY recommendation, but adjusting our target price to S$1.10.
YE Dec ($mm unless stated) 2013 2014E 2015E 2016E
Production (mm boe) ‐ ‐ ‐ ‐
Revenues ‐ ‐ ‐ ‐
Operating costs (7.79) (7.79) (7.79) (7.79)
EBITDA (7.79) (7.79) (7.79) (7.79)
PBT (8.56) (8.24) (8.40) (8.34)
Net Income (8.56) (8.24) (8.40) (8.34)
EPS ($) (0.01) (0.01) (0.01) (0.01)
Source: Company & SP Angel
Stock Data
Ticker (EXCHANGE) REXI SP
Share Price: S$0.62
Market Cap: S$783mm
EV: S$665mm
Price Chart
Research Zac Phillips +44 20 3470 0481 [email protected]
Sales Richard Parlons +44 20 3470 0472 [email protected] Jody Downes +44 20 3470 0471 [email protected] www.spangel.co.uk
Rex International Holding – Simpler, Stronger and More Active & Focused September 2014
2 SP Angel
Research Disclosures
Zac Phillips Zac has in excess of 17 years’ experience in Oil & Gas and finance, working for companies
such as BP, Chevron, Merrill Lynch and ING Barings, where he undertook finance or finance
related roles. Given his Chemical Engineering degree and PhD, Zac’s career has focused on
the economics of investment, and its assessment, on a range of projects from process
change implementation, to operating plants and companies.
Zac’s extensive Oil & Gas financial and technical experience has ably lent itself to the
valuation of exploration and producing Oil & Gas assets, especially where complex financial
structures define companies’ access to the economic benefits of ownership. Latterly, Zac
was the CFO to Dubai World’s Oil & Gas business (DB Petroleum), with responsibility for risk
management, valuation and the authoring of investment proposals. During this time, Zac
valued in excess of 152 transactions with a combined transaction value of in excess of
$35bn.
Zac has an Honours Degree in Chemical Engineering from Wales and a PhD in Chemical
Engineering from Bath University. He is a member of the Society of Petroleum Engineers,
Institute of Chemical Engineers and the Association of International Petroleum Negotiators;
Zac is also an Approved Person under the Financial Conduct Authority in the United
Kingdom.
+44 (20) 3470 0481
Rex International Holding – Simpler, Stronger and More Active & Focused September 2014
SP Angel 3
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SP Angel Corporate Finance LLP is a company registered in England and Wales with company number OC317049 and its registered office is SP Angel Corporate Finance LLP, 35 – 39 Maddox Street, London W1S 5PP United Kingdom. SP Angel Corporate Finance LLP is Authorised and Regulated by the Financial Conduct Authority whose address is 25 The North Colonnade, Canary Wharf, London E14 5HS and is a Member of the London Stock Exchange plc.
SP Angel Corporate Finance LLP definition of research ratings:
Expected performance over 12 months
Buy ‐ Expected return of greater than +10% Hold ‐ Expected return from ‐10% to +10% Sell ‐ Expected return of less than ‐10%
Rex International Holding – Simpler, Stronger and More Active & Focused September 2014
SP Angel Corporate Finance LLP
Prince Frederick House
35‐39 Maddox Street
London, W1S 2PP
United Kingdom
Tel: +44 20 3463 2260
Fax: +44 020 7629 1341
SP Angel Corporate Finance LLP is authorised and regulated by the Financial Conduct Authority. Registered in England No. OC317049. Registered Office: Prince
Frederick House, 35‐39 Maddox Street, London W1S 2PP.
SP Angel Contact List
Sales
Jody Downes +44 20 3470 0471 [email protected]
Richard Parlons +44 20 3470 0472 [email protected]
Research
Zac Phillips +44 20 3463 5039 [email protected]
Corporate Finance
Richard Hail +44 20 3470 0483 [email protected]
