UAE-based Rak Petroleum Public Company said its merger with Norway’s DNO International was on track for close in early next year after the company won approval from its investors.

The Ras Al Khaimah-based company said its shareholders voted overwhelmingly in favour of the merger at a specially convened meeting after a solid backing from DNO investors.

The transaction values DNO International at $1.64 billion corresponding to NOK 9.50 per share, while RAK Petroleum’s Mena operating subsidiaries are being valued at $250 million.

“I am pleased that both sets of shareholders recognize the synergy in this transaction and have voted to combine operations,” said Bijan Mossavar-Rahmani, chairman and chief executive officer of RAK Petroleum Public Company and executive chairman of DNO International.

“We can now get back to the business of growing the combined entity and creating shareholder value,” he stated. 

'Since RAK Petroleum already has a 30 per cent stake in DNO, the additional 153.4 million consideration shares will boost its holding in DNO to 42.8 per cent,' he remarked.

However, RAK Petroleum has agreed to return its holding to 30 per cent in a manner at its discretion before the end of 2012, he added.

The enlarged DNO International, he said, will have a diversified Mena portfolio with significant working interest reserves and production as well as regional roots and an experienced team of international management to help realize value.

The number of shares to be issued was determined through a relative valuation process based on an independent assessment of both companies’ oil and gas assets by international petroleum consultants DeGolyer & MacNaughton and preparation of Competent Person’s Reports.

Based on the consultants' June 30 working interest basis figures, DNO´s net remaining proven and probable reserves was 355 million barrels of oil equivalent in Kurdistan Region of Iraq and Yemen, while RAK Petroleum’s net remaining proven and probable reserves consisted of 52 million barrels of oil equivalent in Oman and the UAE.

The combined entity will have 630 employees with offices in Oslo, London, Erbil, Sana’a, Dubai, Ras Al Khaimah, Tunis and Muscat.-TradeArabia News Service