RAK Petroleum, the oil and gas exploration and production company, today announced net operating profits of US$5,172,600 (unaudited) for the quarter ended 31 March 2011, on turnover of $17,151,257. After equity accounting for its share of the loss reported by associate company DNO International ASA in which RAK Petroleum owns 30 percent, net earnings for the quarter were $1.606 million.
“During the first quarter, RAK Petroleum posted continued positive operating results and steady production averaging 9,000 barrels of oil and condensate and 33 million cubic feet of gas per day while making preparations to drill four new wells, deepen an existing well and fracture and test still another well,” said Bijan Mossavar-Rahmani, Chairman of the Board of Directors and Chief Executive Officer of RAK Petroleum.
The drilling program will begin in June and continue through the summer of 2012, he noted, and includes three development wells on Block 8 offshore Oman (50 percent operated interest with balance held by Korea’s LG International), an exploration well on Block 31 onshore Oman (100 percent) and deepening of an existing well on Saleh field, offshore Ras Al Khaimah (100 percent) as a first step towards full field redevelopment.
Also in June, RAK Petroleum plans to re-enter and re-frack the Zad-2 well on Block 47 onshore Oman (50 percent operated interest with balance held by Spain’s Repsol Exploracion SA). The well was drilled and completed earlier this year with good gas shows in the Amin sandstones though insignificant flow was obtained at the surface.
On 28 April, Company concluded an exchange agreement with RAK Gas LLC for the remaining 60 percent of RAK B field offshore Ras Al Khaimah in exchange for a legacy stake in RAK Airways PJSC shares held since the airline’s inception.
“In addition to our own core operations, our strategic investment in DNO International will provide significant value for our shareholders over time,” said Mossavar-Rahmani, who joined DNO International’s Board of Directors in March.
DNO International is a publicly traded Norwegian oil and gas company with assets predominantly in the Middle East (Kurdistan Region of Iraq and Yemen) and posted an unaudited net loss of US$11.89 million (NOK 65.4 million) for the quarter. These losses do not take into account payments due for exports of oil from the Tawke field in the Kurdistan Region of Iraq during the first quarter; a “cash advance” of $110 million in respect of these exports was announced by the authorities last week.
During the quarter, DNO International reported a working interest production of 39,945 barrels of oil per day from its operations in Iraq and Yemen, boosted by significantly higher production from the Tawke field (55 percent operated interest) following an agreement between Baghdad and Erbil to allow exports from February 2011. DNO International’s working interest production in the first quarter of 2010 was 12,442 barrels of oil per day.
