Boards hope that Deloitte’s warning never makes it onto the page. The financial statements for the year ended December 31, 2025, bore a scar from the auditors’ serious doubts about the group’s ability to continue as a going concern. a $94.4 million capital shortfall. a US$81.3 million net current liability position. a yearly net loss of US$152.7 million. numbers that are extremely difficult to explain once they are written down.

It turns out that one subsidiary is responsible for the majority of the damage. In 2025, Lime Petroleum Holding, the Norwegian division that had long been the group’s glamorous asset, reported a capital deficit of US$152.8 million and a net loss of US$128.3 million. The discrepancy between the balance sheet Rex is currently giving investors and the narrative it previously told them is difficult to ignore. The acquisitions made in 2021 and 2022, the interests in Iving and Evra, the Brage field, and the Yme field were all expected to develop into something more stable. something lucrative. Rather, debt is growing.

Currently, the group has US$248.7 million in loans and borrowings. Senior secured bonds associated with Lime Petroleum Holding account for a portion of that, with a carrying value of US$224.9 million. Another US$23.4 million is issued through Jasmine Energy, another wholly owned subsidiary. Lime Petroleum hired legal and financial counsel in February to oversee what it refers to as a thorough debt restructuring.

Bondholders had consented to postpone a minimum liquidity covenant until the end of March and allow the company to postpone US$5 million in interest payments a month prior. Bondholders received a summons to discuss the potential for interim liquidity funding on March 16. In the documents, the word “expedited” is used. When things are going well, that word hardly ever appears.

The tone of management is, of course, measured. The board claims that by providing funding, stability, and operational know-how, it “may play a part” in Lime Petroleum Holding’s recovery. It has submitted to the advisers a proposed plan that is not legally binding. It asserts that it is still appropriate to prepare the financial statements on a going concern basis.

The phrase is “believing that a successful restructuring will keep Lime Petroleum Holding operating.” It appears that investors are less persuaded. The market may be pricing in outcomes that the board is not yet prepared to identify, as indicated by the share price collapse.

Rex had been raising funds earlier in the year, prior to the arrival of the auditor’s report. It announced a placement in late January that was expected to generate S$7.6 million through approximately 40.1 million new shares and 13.19 million treasury shares at S$0.143 each, which was already 8.9% less than the mainboard trading average of S$0.157 at the time.

The placement was made by BB Special Opportunities Fund and Eagle Harbor Multi-Strategy Master Fund, both of which were recommended by Nursery Road Capital Management. One-for-one warrants that could be exercised for S$0.177 were attached. After expenses, net proceeds of approximately S$7.3 million were designated for general corporate purposes. It sounds more like the first warning tremor in retrospect than regular fundraising.

There’s a more comprehensive point to consider. Everyone in the industry is aware that oil companies go through cycles. Following a 4.7% decline, Brent crude was recently hovering around US$99.60 per barrel, and the market is keeping an eye on the Middle East ceasefire negotiations for indications of additional supply coming online.

However, the price of oil isn’t the main cause of Rex’s issues. They are about a subsidiary that grew too big for the parent company to handle comfortably and about debt that accrued more quickly than production could pay it off. It was intriguing, perhaps even prophetic, to diversify into drone technology through Xer Technologies and cancer treatment through Moroxite T AB, but it was never going to close a US$94 million gap.

It seems like the Rex story is being rewritten in real time, not by the company, as you watch this develop. Bondholders, auditors, and the silent math of a malfunctioning balance sheet are all rewriting it. It is still genuinely unclear if the restructuring will save it, or if Brage and Yumna will continue to pump enough for the numbers to turn. It’s evident that the share price of Rex International, which was formerly a small wager on Nordic oil and Omani offshore success, is now a gauge of something more precarious. A business is attempting to persuade the market that there is still time.

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