RAK Petroleum Public Company Limited, the oil and gas exploration and production company, today announced a record net profit of AED 91.8 million (unaudited) for the quarter ended 30 September 2011 on turnover of AED 107.2 million, after equity accounting for its share of the profit reported by associate company DNO International ASA in which RAK Petroleum owns a 30 percent stake. On a stand-alone basis, RAK Petroleum recorded an operating profit of AED 33.1 million.
“RAK Petroleum shareholders can be pleased that DNO International is contributing its second profitable quarter to our results and that its more positive share price reflects, in part, the market’s favorable outlook for the merger,” said Bijan Mossavar-Rahmani, Chairman of the Board of Directors and Chief Executive Officer of RAK Petroleum.
He said the merger was on track to close in early 2012 with integration planning underway, following specially convened meetings in November at which both groups of shareholders voted in favour of the transaction. Following the merger, the enlarged enterprise, which will include RAK Petroleum’s MENA operating assets, is expected to be dual listed in London in addition to the current Oslo listing of DNO International.
RAK Petroleum-operated fields offshore the Sultanate of Oman produced a daily average of 8,144 barrels of oil and condensate in addition to 35.4 million cubic feet of gas and 620 barrels of LPG during the quarter.
Turning to operations, Mr Mossavar-Rahmani noted that RAK Petroleum had commenced deepening of the Saleh-5 well offshore Ras Al Khaimah on 3 July as a first step toward that field’s redevelopment, but following drilling difficulties, temporarily suspended the well to meet scheduled commitments at the West Bukha and Bukha fields of Block 8, Oman, operated by the Company and in which LG International is a 50 percent partner. The rig is being redeployed to Oman this week and is expected to return to Saleh at the end of 2012 following a three-well drilling program. He also noted that RAK Gas LLC had exercised its back-in rights for 30 percent of the Saleh project by agreeing to pay its prorata share of past and future costs.
At Block 31 onshore Oman, the Wadi Jiffra well was spudded in August and reached total depth of 3,250 metres with positive gas indications during drilling. The well has been temporarily suspended pending permitting for use of oil-based mud and to evaluate a sidetrack to access updip potential.
DNO International recorded a working interest production (including exports from the Tawke field in the Kurdistan Region of Iraq) of 36,773 barrels of oil per day in the third quarter versus 24,956 barrels of oil per day in the third quarter of 2010.
On successful conclusion of the merger, RAK Petroleum will become an energy investment holding company with a 42.8 percent stake in DNO International and retaining its cash holdings. RAK Petroleum will operate out of offices in Dubai and Ras Al Khaimah.