International News
Qatar First Investment Bank acquires stake in Kuwaiti Energy Qatar First Investment Bank (QFIB) announced the acquisition of a $16 million stake in Kuwait Energy Company, a Middle Eastern independent oil and gas exploration and production company headquartered in Kuwait. The stake was acquired from an existing shareholder and marks QFIB’s second investment in the oil and gas sector. Established in Kuwait in August 2005, Kuwait Energy has a proven track record of successes in oil and gas fields in the MENA region, has been profitable each year since inception and has increased production and reserves each consecutive year. Recently, it announced it had signed gas development contracts for the Siba and Mansuriya gas fields in Iraq. The company is focused on growth in the Middle East and North Africa region, where it has been successful in Egypt, Yemen and Oman, and has oil and gas assets in Ukraine, Latvia, Russia and Pakistan. Commenting on the deal, Abdulla bin Fahad Bin Ghorab Al
Marri, QFIB Chairman said, “This is our second investment in the oil and gas sector. We could not have selected a better opportunity. Kuwait Energy fits perfectly with our strategy of investing in growing companies with outstanding management. Kuwait Energy has already established itself as a leading player, with strong positions in promising markets such as Egypt and Iraq. Furthermore, Kuwait Energy’s operations in the MENA and Eurasia markets provide a unique gateway to access niche opportunities which we aim to capitalize on.” Dr. Manssour Aboukhamseen, Kuwait Energy Deputy Chairman said, “We are pleased to welcome QFIB to Kuwait Energy as a shareholder and advisor. QFIB has an excellent reputation as a leading investment bank in the region and enjoys a strong shareholder base. We aim to make the most of QFIB’s sectorial expertise, deep understanding of the MENA region and extensive network for further fund raising activities in the future.”
DNO, RAK Petroleum enter merger agreement RAK Petroleum PCL, (RAK Petroleum), the oil and gas exploration and production company, and Norway’s DNO International ASA (DNO) signed a heads of agreement to merge RAK Petroleum’s Middle East and North Africa (MENA) operating subsidiaries into DNO in exchange for DNO shares to be issued to RAK Petroleum. The agreement provides the basis of negotiation of definitive merger documents, including an integration agreement. It is intended that the transaction will be structured as a merger of two Norwegian subsidiaries of DNO and RAK Petroleum in accordance with Chapter 13 of the Norwegian Public Companies Act. The merger terms were proposed by DNO management last week and endorsed by the boards of directors of both companies on Sunday, with the RAK Petroleum directors of DNO abstaining from discussion and voting during the
DNO deliberations. Definitive agreements, once reached, will be presented to the shareholders of DNO and RAK Petroleum at separate extraordinary general meetings for final approval. “There is a compelling logic in combining the DNO and RAK Petroleum operating assets to build a first rank independent MENA upstream operator,” said Bijan MossavarRahmani, Chairman of the Board of Directors and Chief Executive Officer of RAK Petroleum PCL. Mossavar-Rahmani was also voted in as Chairman of the Board of DNO at the June 9, 2011 annual shareholders’ meeting of that company. “The opportunities for growth for MENA oil and gas companies with regional experience, strong assets and geographic diversity have never been better,” he added. The headquarters of the enlarged company will remain in Oslo, Norway; opera-
tions offices will be located in the Kurdistan Region of Iraq, Yemen, the United Arab Emirates, Tunisia and Oman. DNO is considering listing the merged company on the London Stock Exchange in addition to the Oslo listing. A listing in London is expected to contribute to extended coverage of the company’s shares, attract interest from a broader range of MENA focused investors and provide a solid platform for follow on merger and acquisition activity. It is expected that, on merger closing, RAK Petroleum will hold a total ownership interest in DNO of approximately 40%. RAK Petroleum currently holds a 30% share in DNO. The number of shares to be issued by DNO to RAK Petroleum in consideration for the RAK MENA subsidiaries will be set by the parties based on relative evaluations of DNO and the RAK MENA business.
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Petroceltic discovers gas in South Eastern Algeria
Petroceltic, in association with its partner Sonatrach, issued an operational update on its Isarene permit (Blocks 228 & 229a) in the Illizi Basin in southeastern Algeria. Petroceltic operates the permit with a 56.625 % interest, Sonatrach holds a 25% interest, and Enel holds 18.375% interest, pending final Government of Algeria ratification, which is expected later this year. Well AT-6, the third well in the current appraisal campaign on the Ain Tsila gas discovery was drilled to a total depth of 2085m and has successfully logged gas in the main Ordovician reservoir. The well is currently being suspended in preparation for testing with a rigless testing unit following completion of the testing program currently underway at AT-5. The AT-6 well is a vertical well targeting a broad culmination in the southeastern region of the Ain Tsila Field outside the 3D seismic survey area, approximately 17 km southeast of the AT-4 well location. The principal objective of the well was to extend the proven gas in place and to test the reservoir quality towards the mapped southeastern limit of the field. The well commenced drilling on June 9, 2011 and reached a total depth of 2085m on July 5, ahead of schedule and within budget. The Ordovician reservoir was encountered as expected with good gas shows and a full suite of logs was run. Initial log interpretations indicate a gross Ordovician reservoir interval of 168m, and a net pay interval of 45m. This confirms the
extension of the field at this significant step-out from the previously drilled wells. Following suspension of AT-6, the Dalma rig will move to drill a further vertical appraisal well in the far southwestern section of the field, AT-7, which is expected to commence drilling operations in late July. As for the AT-5 well test, rigless well testing operations have recently commenced at the AT-5 well site, following minor delays associated with the arrival of certain personnel and equipment to the site. AT-5 was drilled with a 376m horizontal section through a fractured “pop-up” feature in the Ordovician reservoir. Depending on the results of initial testing, the program is likely to include hydraulic fracturing of some of the reservoir zones to enhance gas flow rates. A second rig, the KCA Deutag T-211 rig, has mobilized to the Isarene permit and is currently rigging up to drill well AT-8 at a location in the north of the field. The AT-8 well is expected to spud in mid July and is a vertical well targeting a structural popup feature similar to AT-5. The well objective is to test for significant additional gas in place as well as potentially accessing fracture features identified on seismic testing. With the addition of a second rig, the current six well delineation program is expected to be complete by year-end in time for the preparation of the Final Discovery Report for submittal to the Algerian authorities.