Wednesday 5 October 2022

RAK Petroleum posts net profit of $54.8m for 2017

LONDON, April 30, 2018

RAK Petroleum, the Oslo-listed oil and gas investment company, recorded a consolidated net profit of $54.8 million for the year 2017 as against a net loss of $7.3 million in 2016.

At 31 December 2017, total cash and cash equivalents of the company stood at $3.4 million and including its wholly-owned subsidiaries stood at $23.8 million. The company’s bank debt was $30.6 million, drawn from a $32.7 million lending arrangement with a leading bank in the United Arab Emirates.

The Group’s profit was impacted by the Receivables Settlement Agreement which caused the book value of DNO’s property, plant and equipment to increase by $556.0 million, the estimated fair value of that agreement. The Group’s performance was further impacted by the impairment tests carried out at 31 December 2017,a statement said.

The impairment testing resulted in an impairment of the goodwill held in the Group’s accounts related to the DNO investment by $160.0 million, as detailed further in Note 13 of the Consolidated and Parent Financial Statements, since the Receivables Settlement Agreement partially realised the value that had been attributed to goodwill previously.

Impairment testing of the Foxtrot International investment carrying amount resulted in a reversal of impairment of $11.2 million as detailed in Note 14 of the Consolidated and Parent Financial Statements.

During 2017 the Group repaid in full its loan of $25.0 million (draw down at 31 December 2016 of $5.1 million) with DNB Bank ASA.

Looking ahead to 2018, DNO plans to increase year on year Kurdistan operational spend by more than 50 percent up to $250 million with plans to drill a further four wells at the Tawke field, complete the Tawke-48 well which reached target depth in February 2018 and drill a further six wells in the Peshkabir field with the expectation to double production at Peshkabir to 30,000 bopd by mid-year 2018.

DNO is also initiating engineering studies for injection of Peshkabir gas for enhanced oil recovery at the Tawke field. Further development and production data will enhance knowledge of the fields and reserves estimates.

In Oman, DNO operates the country’s only producing offshore fields, Bukha and West Bukha, at Block 8 with gross production during 2017 of 4,484 boepd. DNO plans to relinquish the asset prior to expiry of the current licence term in January 2019.

In Yemen, political instability has meant the Block 47 license remains in force majeure with the development of the Yaalen field on hold. At Block SL18 onshore Somaliland, a geological field survey and an environmental impact assessment have been conducted, in addition to gravity-magnetic survey. Further work on the Tunisian licenses is under review. – TradeArabia News Service

Tags: DNO | RAK Petroleum | 2017 profit |

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