Rex International

Rex International: ($0.59) Marks first contract with National Oil Company 66.7%-owned Rexonic AG secured a ~US$10m contract from a national oil company to provide its ultrasonic well stimulation technology on selected wells owned by the client. The two-year contract is expected to start end-2014, subjected to arrival of 3rd-party technical components, and should contribute positively to the current FY. The milestone achievement with a National Oil Company reflects a mark of confidence on Rex's proprietary technology, and provides further potential to expand its scope of coverage in the upstream O&G sector. The positive news follows a recent $93.5m private placement held barely two weeks back, which were taken up by prominent investors Alan Wang and Fidelity Worldwide Investment as the cornerstone investors, leading them to become new substantial shareholders. We hypothesize that the recent entry of two respected fund managers as substantial shareholders may lift sentiment in Rex’s shares. Rex is valued at 2.4x P/B.