REX American Resources Corp. Secures Funding to Accelerate Offshore Drilling in Oman

REX American Resources Corp. (NYSE: REX), a U.S.-based energy company with a diversified portfolio that includes ethanol production, distillers grains, and real‑estate leasing, has announced the successful issuance of a $25 million senior secured bond. The capital will be deployed to launch a three‑well drilling campaign at the Yumna field in Oman’s Block 50, a move that signals the company’s intent to broaden its upstream footprint and enhance oil flow rates.

Key Transaction Highlights

  • Bond Structure: $25 million in senior secured bonds with a three‑year maturity, issued under the auspices of Jasmine Energy Ltd. (JEL), a subsidiary of Singapore’s Rex International.
  • Proceeds Allocation: Funds will finance drilling operations at the Yumna field and support general corporate purposes for Masirah Oil, an indirect 87.5 % subsidiary of JEL.
  • Strategic Rationale: The Yumna field has proven reserves and a high potential for increased production, positioning REX to capitalize on favorable oil price dynamics while diversifying beyond its traditional ethanol and grain businesses.

Market Context

The global oil market remains in a phase of gradual recovery, with Brent crude prices hovering above $80 b/d and OPEC+ maintaining a cautious stance on production cuts. In this environment, REX’s move to secure dedicated offshore capital underscores a broader industry trend of leveraging debt to fund high‑yield upstream projects, especially in regions where production costs are comparatively lower.

Forward‑Looking Perspective

  • Operational Synergies: REX’s existing logistics and supply‑chain capabilities, honed through its ethanol and grain operations, will streamline the procurement of drilling equipment and support services in the Gulf region.
  • Financial Positioning: With a market cap of approximately $1.07 billion and a P/E ratio of 21.88, the company remains well‑positioned to service its new debt while maintaining flexibility for further expansion.
  • Risk Management: The secured nature of the bonds mitigates default risk, and the three‑year tenor aligns with the expected payback period of the Yumna drilling campaign.

Conclusion

REX American Resources Corp.’s bond issuance and subsequent offshore drilling initiative demonstrate a calculated expansion into the oil sector, leveraging its financial strength and operational expertise. By aligning its capital structure with a high‑return project in Oman, REX is poised to enhance shareholder value while navigating the evolving dynamics of the global energy market.