SP Angel adjusts REX International's value to $1.10
Analyst: Zac Phillips
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.
One of Rex’s key differentiating factors was its application of Rex Virtual Drilling (“RVD”) in the exploration phase, which it had exclusive access to, providing certain shareholder interests are maintained, etc. Technology Ownership Simplifies the Offering
Consequently, news of the acquisition of the technology simplifies this area significantly, and eliminates what hitherto has been an area of confusion for investors.
(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.
Recent story: REX target $1.27; VALUETRONICS attractive at 3.3X PE