Investment Update

16 September 2008

AIM: XTR

XTRACT ENERGY PLC
("Xtract" or the "Company")

INVESTMENT UPDATE - Merty Energy

Further to the announcement made  on 1 September 2008, Xtract  Energy
Plc is pleased to provide more information about the first well to be
drilled in Turkey with its  new joint venture partner, Merty  Energy,
Petroleum Exploration, Education  and Services Inc.  ("Merty").   The
well, to be  known as  SARIKIZ-2, is to  be drilled  on the  Alasehir
Exploration Licence number AR/PTK-MER/3846  that was issued to  Merty
and its  partner Petrako  Petrol Gas  and Industrial  Co. in  October
2004.  Subject  to satisfactory  establishment of  the joint  venture
company and completion of the licence transfer process, the new joint
venture company  will then  hold  an 80%  interest in  the  licence.
Xtract will  initially  hold a  20%  interest in  the  joint  venture
company and has the option of  increasing its shareholding to 34%  by
contributing a further investment of US$3.5m.

The Alasehir Basin is a small  tertiary clastic basin located in  the
XVII-Izmir District of South-West Turkey, in an industrial area.  The
basin has a sedimentary succession of 3000-4500m thick and created by
large rifting faults and has a geothermal gradient that causes  early
maturation of  hot shales.   The  reservoir is  lower-middle  Miocene
clastics, which are also thought to provide the source.  There are  2
discoveries Alasehir  and Sarikiz,  both drilled  by the  state-owned
Turkish Petroleum  Corporation in  1999  (31 and  37 API  oil).   The
basement contains  metamorphosed Paleozoic-Mesozoic  aged  sediments.
 The reservoirs have porosities of  18-25%, and permeabilities up  to
3-10md.  Clayey zones  and shales within  the Alasehir Formation  and
Hamamdere Formation provide effective  seals.  The two prospects  are
defined by 2D seismic grid shot with a line spacing of  approximately
600m.  The traps are located  in down dip reservoirs sealing  against
the bounding faults.  The Sarikiz prospect to be drilled by SARIKIZ-2
is estimated to  have an  area of  2.0km2 and  10 or  more meters  of
reservoir thickness.  There  are an  estimated 16mbbls  oil in  place
with an expected recovery factor of 20%.  (Source of geological data:
Merty).

All contracts for  the drilling  of SARIKIZ-2  are now  in place  and
construction of the  drilling site  commenced on  15 September  2008.
 The well is expected to spud on or before 13 October 2008.  The  rig
is operated  by  Güney 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.

Other licences  within the  portfolio to  be transferred  to the  new
joint venture company are:

Candarli Bay
AR/MER/4219
XVII-Izmir District
Granted 08 Oct 2006

Siraseki
AR/PTK-MER/4144
XIII-Hatay District
Granted 12 Mar 2006

Marmara Sea 1
AR/MER/4328
XVII-Izmir District
Granted 06 Sep 2007

Marmara Sea 2
AR/MER/4397
I-Marmara District
Granted 06 May 2008

Marmara Sea 3
AR/MER/4398
I-Marmara District
Granted 06 May 2008

Edirne 2
AR/MER/4346
I-Marmara District
Granted 06 Sep 2007

The joint venture  is currently shooting  high-resolution seismic  in
the Edirne 2 licence  area which is believed  to contain a number  of
shallow gas accumulations.   If successful, these  will be  developed
during 2009.

Note: As an unquoted company, Merty  is not subject to the AIM  Rules
and  the  statements  in  this  announcement  relating  to  reserves,
resources  and  drilling  results  do  not  contain  the  information
required by the AIM Guidance Note for Mining, Oil and Gas Companies.


Enquiries please contact:


Xtract Energy plc            Andy Morrison, CEO [phone]

Smith & Williamson Corporate David Jones        [phone]
Finance Limited              Azhic Basirov

Scott Harris                 Stephen Scott      [phone]
                             Ian Middleton


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

For further information on Merty please visit www.mertyenergy.com


About Xtract Energy Plc

Xtract identifies and  invests in  a diversified  portfolio of  early
stage energy sector technologies and businesses with very significant
growth  potential.  We  aim  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 is focused on developing  gas-to-liquids ("GTL") projects in  the
Timor Sea Australia,  in an  area of  shallow water  known as  Tassie
Shoal. It has secured Commonwealth Government environmental approvals
for two  large  scale  (1.8  Mtpa)  methanol  plants  (50  per  cent.
interest) and a 3 Mtpa LNG  plant (100 per cent. interest) which  are
adjacent to the Evans Shoal gas field.

Elko Energy
Elko is an oil & gas exploration  company which has an interest in  a
5,370km2 exploration and production licence  in the Danish North  Sea
and an investment in Dragon  Energy Inc, a private Canadian  company,
with a development project in Gansu Province, China.

Wasabi Energy
Wasabi  is  a  diversified  investor  in  renewable  energy  and  low
greenhouse  emission  technologies,  with  interests  in   geothermal
waste/heat, uranium exploration in Australia's Northern Territory and
biodiesel investments in Victoria.

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.

Oil Shale
Xtract has oil shale and related petroleum product exploration rights
over mining tenements in the Julia Creek area of Queensland and was
granted an exploration permit which gives rights to explore for oil
shale in an area in the South of New Zealand.  It is investigating
the commercial production of hydrocarbons (crude oil) from oil shale.

Xtract is also available  for trading on the  open market segment  of
the Frankfurt Stock Exchange (ticker R9X.FSE).

About Merty

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

---END OF MESSAGE---