Norway’s Dno Asa acquires Mondoil from RAK Petroleum in stock deal

UAE energy company is expected to be delisted from the Oslo Stock Exchange on October 21

RAK Petroleum will transfer all its Dno shares and $20 million in cash to its shareholders through a UK court-approved capital repayment. Courtesy: AP

Norwegian oil and gas operator Dno Asa has acquired Mondoil Enterprises from UAE-based RAK Petroleum in a stock-for-stock deal.

RAK Petroleum sold a 33.33 per cent stake in Mondoil to Dno Asa in exchange for 78.94 million Dno shares, taking its interest in the Norway-based company to 49 per cent, the company said on Thursday.

RAK Petroleum will transfer all its Dno shares and $20 million in cash to its shareholders through a UK court-approved capital repayment, which is expected to be settled on October 19.

Unlike a regular dividend, which is paid out of a company’s earnings, a capital dividend is a payment that a company makes to its investors drawn from its paid-in-capital or shareholders' equity.

After the completion of the capital repayment, about 10 million of RAK Petroleum’s Class A shares will be subject to the members’ voluntary liquidation, a provision that allows solvent companies to wind up quickly and in a cost-effective way.

Shares of RAK Petroleum, which will be delisted from the Oslo Stock Exchange on October 21, stopped trading on Tuesday.

Oslo-listed Dno holds stakes in onshore and offshore licences at various stages of exploration, development and production in the Kurdistan region of Iraq, Norway, the UK, the Netherlands and Yemen.

As with several international energy companies, Dno has benefitted from a surge in oil and gas prices.

Brent, the benchmark for two thirds of the world’s oil, closed in on a record high of $147 a barrel after Russia’s invasion of Ukraine in February. Although oil has retreated to about $92 a barrel, prices are still up about 10 per cent from October last year.

Dno’s operating profit in the first half of 2022 surged to $317m, from about $127m in the same period a year earlier.