Completion of sale of Extrem

RNS Number : 9602M

Xtract Energy plc

24 August 2011

 



XTRACT ENERGY PLC

("Xtract" or the "Company")

Completion of sale of Extrem

The Company is pleased to announce that Xtract has today received payment of $100,000 from Merty Energy, Petroleum Exploration, Education and Services Inc. ("Merty") and individual members of the Yoldemir family in consideration for its 50% stake of Extrem Energy AS ("Extrem"), a Turkish joint stock company with a portfolio of licence interests in onshore and offshore Turkey.

Merty, which following the transaction, owns 100% of Extrem, will now be able to fund and progress the licences through farm out with new partners. Xtract is expected to benefit from this strategy in that it will have no further financial liability in relation to Extrem or the Turkish licences but will retain a participation in any successful commercial production by virtue of Merty's assignment to it of a gross over-riding royalty interest in and to all of the oil, gas and other hydrocarbon substances and minerals produced, saved and marketed from certain exploration licences.

The parties agree that the gross overriding royalty interest shall be calculated using the market price for hydrocarbon at the relevant time, after deduction of a 12.5 per cent. royalty payable to the government pursuant to the applicable law.

Enquiries please contact:

Xtract Energy Plc	Peter Moir, CEO Alan Hume FD	[phone] [phone]
Cenkos Securities Plc	Jon Fitzpatrick Alan Stewart	[phone] [phone]
Financial Dynamics	Billy Clegg Edward Westropp Alex Beagley	[phone]

About Xtract

Xtract identifies and invests in a portfolio of early stage oil and gas assets and business interests with significant growth potential. The Company aims to work closely with the associated management teams to achieve critical project milestones, to finance early stage asset and business development activity, and then to finance the asset development phase, or if appropriate to crystallise value for all shareholders at a suitable exit point. Xtract aims to achieve returns for our shareholders through access to the significant upside rewards associated with our investments.

As announced on 21 June 2011, Xtract has offered to acquire all of the issued and outstanding common stock in Elko Energy Inc that it does not already own, for new ordinary shares in Xtract. Subsequently, Xtract sought a suspension of trading in its shares until it is in a position to publish an Admission Document and, thereafter, it will re-apply for admission to AIM. Accordingly, at the request of the Company, trading on AIM for the under-mentioned securities was suspended from 7:30am on 21 June 2011.

For further information on Xtract please visit www.xtractenergy.co.uk

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.

Elko Energy Inc. ("Elko")

Elko is a Canadian registered oil & gas exploration company which has interests in exploration and production licences in the Danish and Dutch North Sea. Its major asset in the Danish North Sea is a 33% working interest in an exploration and production licence 02/05 and a 33% working interest in an adjoining exploration and production licence 01/11, east of the prolific Central Graben oil kitchen. Technical work indicates the potential for significant resources on these combined licenses. Neither of those licences is currently being produced and accordingly no profits are attributable to them. Elko also holds a royalty interest in gas-bearing license blocks P1 and P2 in the Dutch North Sea. Xtract currently owns approximately 50% of Elko's issued share capital.

Zhibek Resources Ltd ("Zhibek Resources")

Zhibek Resources is an oil and gas exploration and production company which has a 72% interest in the Tash Kumyr exploration licence in the Kyrgyz Republic. Xtract has entered a farm-out agreement to fund a seismic and drilling programme for 2008-2011. Xtract owns 25.0% of the issued share capital of Zhibek Resources.

Xtract Oil Ltd ("XOL")

Xtract's wholly owned subsidiary, XOL, 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. In addition to evaluating third party technologies, XOL has been developing proprietary technology for the commercial extraction of liquid hydrocarbon products from oil shale.

Xtract Energy (Oil Shale) Morocco SA ("XOSM")

XOSM is a joint venture with Alraed Limited Investment Holding Company WLL, a company controlled by His Highness, Prince Bandar Bin Mohd. Bin Abdulrahman Al-Saud of Saudi Arabia. XOSM has signed a Memorandum of Understanding with the Office National des Hydrocarbures et des Mines for the purposes of evaluation and possible development of an oil shale deposit near Tarfaya, in the south west part of Morocco. Xtract currently holds 70% of the joint venture.

 

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