MUSCAT: Masirah Oil Ltd (MOL), which has signed an Exploration & Production Sharing Agreement (EPSA) with the Omani government for Block 50 offshore Oman’s east coast, has announced that its key shareholder Rex Oman Ltd, has increased its stake in MOL from approximately 61.76 per cent to 72.03 per cent.
This follows the completion of the allocation made on March 7, of Rex Oman’s subscription of 3,908 new MOL shares at $1,426 per share, for a total amount of $5,572,808, as capital injection into MOL. Rex Oman is an indirect wholly-owned subsidiary of Rex International Holding Limited, a Singapore-listed oil and gas company.
Prior to the Capital Injection, Rex has an effective interest of 61.76 per cent in MOL through direct interests of 57.06 per cent and 6.4 per cent in MOL held respectively by Rex Oman and Lime Petroleum Plc (Lime), the Company’s 65 per cent indirectly held jointly-controlled entity.
MOL issued 4,000 new shares at $1,426 per share to raise an aggregate amount of $5,704,000. The remaining new MOL shares were subscribed by Petroci, an existing shareholder of MOL. The MOL subscription was open to all shareholders of MOL of which only Petroci and Rex Oman decided to participate.
The Capital Injection was necessary to allow MOL to pursue its drilling activities and continue its operations in Oman, as well as for general working capital requirements; and was fully satisfied in cash by Rex Oman and fully funded by proceeds raised from the Company’s share placement which was completed in September 2014 (the 2014 Placement). Details on the use of proceeds from the 2014 Placement are contained in a separate announcement made today.
The issue price of $1,426 per MOL share was arrived at on a willing seller willing buyer basis, taking into consideration MOL’s unaudited net assets value/net tangible asset value of $88.7 million as at December 31, 2015 and its growth potential, given that it is the operator and 100 per cent owner of the Block 50 Oman concession, which is further elaborated in the ensuing paragraph. MOL has in February 2016, started a drilling campaign in the Block 50 Oman concession.
“The Board considers the Capital Injection to be in the interest of and beneficial to the Group as MOL is the operator and holds 100 per cent ownership in the close to 6,564 square miles (17,000 square kilometres) Block 50 Oman concession, which has been identified as one of the Group’s main focus going forward. The Board is of the view that MOL has high potential for growth, as the discovery made in the concession in early 2014 was the first offshore discovery east of Oman, after 30 years of exploration activity in the area,” it said in a press statement.
During a 48-hour test, hydrocarbons were flowed to the surface and the well achieved light oil flow rate of up to 3,000 stock tank barrels per day (stb/d) with no water production.
Pursuant to the completion of the Capital Injection, Rex Oman now holds 9,668 MOL shares, representing approximately 69.06 per cent direct interest in the enlarged issued and paid-up share capital of MOL. Lime and Petroci hold the remaining 4.57 per cent and 26.37 per cent interest in the enlarged issued and paid-up share capital of MOL, respectively. Accordingly, the Group’s effective interest in MOL has increased from approximately 61.76 per cent to 72.03 per cent.
