DNO's board approves merger with RAK Petroleum

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DNO International Boards of Directors approved the merger of RAK Petroleum's oil and gas operating companies into DNO International in exchange for DNO International shares.

The transaction values DNO International at US$1.64 billion corresponding to NOK 9.50 per share and RAK Petroleum's subsidiaries at US$250mn. Upon completion of the merger, RAK Petroleum will own 40 per cent of the share capital of DNO International up from 30 per cent currently.

The transaction is contingent upon government approvals and affirmative votes by shareholders of both companies, with closing expected around yearend.

"For RAK Petroleum shareholders, this is an important first step towards building more transparency in the share value. The merger will also provide exposure to a more diversified portfolio of MENA oil and gas assets -- including world class reserves in the Kurdistan Region of Iraq -- through the ownership of the 40 per cent stake in the enlarged DNO International entity," said Bijan Mossavar-Rahmani, Chairman of the Board of Directors and Chief Executive Officer of RAK Petroleum.

"An eventual London listing anticipated in 2012 by DNO International in addition to the Oslo listing should offer greater access to global investors and capital, which in turn, should provide opportunities for additional investment and growth," Mossavar-Rahmani added.

The combined entity will have approximately 630 staff and offices in Oslo, London, Erbil, Sana'a, Dubai, Ras Al Khaimah and Muscat, with plans for a Tunis presence in 2012.

DNO International will continue to be headquartered in Oslo. Post merger, RAK Petroleum expects to maintain small administrative offices in Ras Al Khaimah and Dubai to manage its portfolio of investments.

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