Investment Update
2 October 2008
AIM: XTR
XTRACT ENERGY PLC
("Xtract" or the "Company")
MERTY ENERGY INVESTMENT UPDATE
Further to the announcement made on 16 September 2008, Xtract Energy
Plc ("Xtract") is pleased to provide a further update on developments
in Turkey with its new joint venture partner, Merty Energy, Petroleum
Exploration, Education and Services Inc. ("Merty").
Xtract has today paid the final installment of US$1.5m in respect of
the agreed initial work programme and has therefore completed the
agreement that gives it a 20% interest in the joint venture company.
Xtract has the option of increasing its shareholding in the joint
venture to 34% by contributing a further investment of US$3.5m before
June 2009.
Formally registered as Extrem Energy Petroleum Exploration,
Production, Education and Services A.S., the company will be known in
English as Extrem Energy A.S. ("Extrem Energy"), which will be the
name used in future announcements.
Now that Extrem Energy has been registered, focus will turn to the
process of formally transferring the agreed portfolio of licence
interests to the company.
The drilling plans for the first joint venture well SARAKIZ-2 remain
as previously announced. The well is expected to spud on or before 13
October 2008. The rig is operated by Gney Yildizi of Turkey. The
target is in the interval of 1500-1700m in depth, which is expected
to be reached within 25-30 days. Depending on the drilling results,
first production could be expected in the first half of 2009.
Further progress updates will be provided as appropriate.
Enquiries please contact:
Xtract Energy plc Andy Morrison, CEO +44 (0) 20 7079
1798
Smith & Williamson Corporate David Jones +44 (0) 20 7131
Finance Limited Azhic Basirov 4000
Scott Harris Ian Middleton +44 (0) 20 7653
James O'Shaughnessy 0030
For further information on Xtract please visit www.xtractenergy.co.uk
About Merty Energy
Merty is an oil and gas company that owns 18 exploration licences in
several basins of Turkey. It has successfully discovered new gas
fields in a licence where it is the operator. It also provides
consulting, support and operations services to parties operating in
the hydrocarbon, geothermal, coal and ore exploration, production and
asset development sector in Turkey, the Middle East and the CIS
countries. It has local and international technical expertise in all
aspects of hydrocarbon exploration.
Merty's services include:
* Geological, Geophysical, Geochemical and Petroleum Engineering
Services
* Acquiring Oil and Gas Exploration and Production Licences, Oil and
Gas Production Fields
* Assisting Oil and Gas Companies in Exploration and Production
* Assisting Mining Companies in Exploration and Production
* Data Acquisition and Interpretation for Exploration and Production
* Environmentally Friendly and Efficient Energy Solutions
* Oilfield and Office Logistics, including Shipping and
Transportation
* Strategy Planning
* Geotechnical Services
* Environmental Studies
* Coal Bed Methane Feasibility Studies
About Xtract
Xtract identifies and invests in a diversified portfolio of early
stage energy sector technologies and businesses with significant
growth potential. The Company aims to work closely with the
associated management teams to achieve critical project milestones,
to finance later development stages, and to build and crystallise
value for all shareholders and partners.
A short description of the principal assets of Xtract is set out
below. These assets are either held directly or through wholly owned
subsidiaries of the Company.
MEO Australia ("MEO")
MEO (ASX: MEO) aims to become an integrated Australian Gas-to-Liquids
("GTL") company. In 2008, MEO made significant gas discoveries in
the Australian Timor Sea, in an area of shallow water known as Tassie
Shoal. Early commercialisation of these discoveries is planned
through construction of Liquified Natural Gas ("LNG") and Methanol
plants and export terminals on the off-shore Tassie Shoal. MEO has
already secured Australian Government environmental approvals for two
large scale (1.8 Mtpa) methanol plants and a 3 Mtpa LNG plant on
Tassie Shoal. Xtract owns approximately 14.2% of MEO's issued share
capital.
Elko Energy ("Elko")
Elko is a Canadian registered oil & gas exploration company which has
an interest in exploration and production licences in the Danish and
Dutch North Sea. Its largest asset is in the Danish North Sea; an 80%
interest on 26 offshore blocks in a 5,400 sq km exploration and
production licence close to the prolific Central Graben oil field.
Technical work indicates the potential for significant reserves. Elko
also holds a 33% operating interest in gas-bearing license blocks P1
and P2 in the Dutch North Sea. Xtract owns approximately 35.4% of
Elko's issued share capital.
Oil Shale
Xtract's wholly owned subsidiary, Xtract Oil Ltd, is focused on the
development of the Company's oil shale resources in Australia and the
technology for oil extraction from oil shale resources. Xtract has
oil shale exploration rights over mining tenements in the Julia Creek
area of Queensland with total indicated and inferred resources in
place of 2.12 billion bbls. Xtract is also developing proprietary
technology for the commercial extraction of liquid hydrocarbon
products from oil shale which could partially address the global
decline of conventional oil reserves with significant environmental
benefits and higher yields over previously employed extraction
methods.
Wasabi Energy
Wasabi Energy is a diversified investor in traditional and renewable
energy technologies. It holds approximately 38% of Rum Jungle
Uranium Ltd (ASX: RUM) which has interests in exploration licenses
covering some 4,150 sq km of Australia's Northern Territory and has
entered into agreements which will give it rights to explore for
uranium over a further 3,330 sq km. Xtract owns approximately 19.4%
of the issued share capital of Wasabi Energy.
Central Asian Interests
Xtract's Central Asian interests include a production sharing
agreement with Kyrgyzneftegaz to instigate a water injection project
on the Beshkent-Togap oil field. Xtract also holds interests in
several exploration licences in the Tash Kumyr area and in the
Toktogul exploration licence.
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