RAK Petroleum signed an agreement with the Ras Al Khaimah Gas Commission(Rakgas) to take a 100 percent stake in and operatorship of 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 percent interest in the currently non-producing gas and condensate field.
Today's signing ceremony was attended by His Highness Sheikh Saud Bin Saqr Al Qasimi, Crown Prince and Deputy Ruler of the Emirate of Ras Al Khaimah, Bijan Mossavar-Rahmani, Chairman and Chief Executive Officer of RAK Petroleum and RuurdSybrenAbma,Chief Operating Officer, Rakgas as well as directors and officers of RAK Petroleum.
"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 AlQasimi.
"This Exchange Agreement with Rakgas and the Government of Ras Al Khaimahprovides 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.
In outlining the Company's redevelopment plans for the field, Mossavar-Rahmani noted that RAK Petroleum had recently completed a fresh look at the Saleh field through new reservoir studies and 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 thisfield," said Mossavar-Rahmani.
The Saleh field was discovered by Union Oil Companyin 1964 but an appraisal well drilled by Gulf Oil Company in 1982 led to the development of the field and startup of production in January 1984. Production came fromsevenproducing wells from fiveplatforms. A total of 109 billion cubic feet of gas and 14.4 million barrels of condensate were produced between1984 and1988. Small volumes of gas and condensate have been produced intermittently since then. An existing 18 inch, 45 kilometer pipeline links the Saleh field to the Rakgas gas and liquids processing facilities onshore Ras Al Khaimah.
The Company 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 percent participation upon payment of 30 percent of the well costs.
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