RAK Petroleum snaps up Saleh field

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RAK Petroleum has signed an agreement with the Ras Al Khaimah Gas Commission (Rakgas) to take a 100 per cent stake in the Saleh field offshore the Emirate of Ras Al Khaimah in exchange for 100,000,000 shares in RAK Education Company (EDRAK).

RAK Petroleum already holds a 40 per cent interest in the currently non producing gas and condensate field. “We are pleased to have RAK Petroleum strengthen its commitment to development of the offshore oil and gas sector of Ras Al Khaimah,” said Sheikh Saud Bin Saqr Al Qasimi.

“This exchange agreement with Rakgas and the government of Ras Al Khaimah provides us with an expanded presence in an area where we have considerable experience and heritage, while refocusing RAK Petroleum’s balance sheet on our core business,” said Bijan Mossavar-Rahmani, Chairman of the Board of Directors and Chief Executive Officer of RAK Petroleum. RAK Petroleum recently completed a fresh look at the Saleh field through new reservoir studies and said it was encouraged to revisit the opportunities for rejuvenation of the field.

“Advances in technology as well as in oil and gas prices have regenerated our interest in the remaining potential of this field,” said Mossavar-Rahmani. The company has said it expects to begin redevelopment of the Saleh field in the first half of 2011 by deepening an existing well to the Thamama reservoir.

As part of the exchange agreement, Rakgas is being offered a back-in right, exercisable during a three-month window following completion of the first Saleh well, for a 30 per cent participation upon payment of 30 per cent of the well costs.

The EDRAK shares were purchased by RAK Petroleum in 2006 at its founding. They represent 37 per cent of the outstanding shares of EDRAK which is engaged in providing educational and health facilities for foreign universities.

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