RAK Petroleum Public Company, the oil and gas exploration and production company, has signed an agreement with the Ras Al Khaimah Gas Commission (Rakgas) to take a 100 per cent stake in and operatorship of the Saleh field offshore Ras Al Khaimah in exchange for
100,000,000 shares in RAK Education Company (Edark).

RAK Petroleum already holds a 40 per cent interest in the currently non-producing gas and condensate field.

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 per cent participation upon payment of 30 per cent of the well costs.

The Edrak shares were purchased by RAK Petroleum in 2006 at its founding and represent 37 per cent of the outstanding shares of Edrak which is engaged in providing educational and health facilities for foreign universities and hospitals.

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.
 
The Saleh field was discovered by Union Oil Company in 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 from seven producing wells from five platforms.  A total of 109 bn cubic feet of gas and 14.4 m barrels of condensate were produced between1984 and 1988. Small volumes of gas and condensate have been produced intermittently since then. An existing 18 inch, 45 kilometre pipeline links the Saleh field to the Rakgas gas and liquids processing facilities onshore Ras Al Khaimah.

RAK Petroleum Public Company is registered in the Free Trade Zone of Ras Al Khaimah and is operator of seven blocks in the Sultanate of Oman and in the UAE, of which one is in the production phase, three are in the exploration phase, and three are undergoing appraisal for possible development/redevelopment. RAK Petroleum also has a non-operating 30 per cent interest in the Hammamet Offshore licence in Tunisia and a 30 per cent shareholding in the publicly-traded Norwegian oil and gas company DNO International, whose principal producing properties are located in the Kurdistan Region of Iraq and the Republic of Yemen.

The signing ceremony was attended by 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 agreement with Rakgas and the Government of Ras Al Khaimah provides 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.

He said 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.