Investment Update

Xtract Energy plc
11 January 2008

11 January 2008                                                         AIM: XTR

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

                       PROJECT UPDATE - MEO Australia Ltd

Xtract refers shareholders to the following press release announced
today (not the 2007 date referred to in the announcement) in Australia by MEO
Australia Ltd ('MEO').

Xtract currently holds approximately 15.7% of the issued capital of MEO.

                            'ASX AND MEDIA RELEASE

                  HERON-2 WELL WEEKLY DRILLING REPORT - No 12

Key Points:

•Preparing to drill 6 inch hole to TD
•Drilling expected to be completed in 5 days
•Planning to run a 4 1/2 inch slotted liner for production testing
•Plover production test scheduled for next week

MELBOURNE, AUSTRALIA (January 11, 2007) - MEO Australia Limited (ASX: MEO)
submits this drilling report for the period ending 1000 hours, January 11, 2007.
The Heron-2 well was spudded at 2230 hours (ACST) on October 12, 2007 in
Exploration Permit, NT/P68.

Open-hole production testing of the Elang/Plover formation commenced on January
3, 2008, focussing on the Plover sands as the primary gas-bearing reservoirs in
the Heron North structure. Due to blockages now confirmed in the well
immediately above the Plover formation, it is regarded likely that only a 15m
section of the higher Elang sand flowed gas to surface during this production
test.

MEO believes that the permeable fracture zones in the better quality deeper
Plover sands, which are likely to be a significant contributing mechanism for
gas to flow at the rates necessary for commercial development, have probably
also been irreversibly blocked by the LCM (loss circulation material) treatment
that was required to stem losses of synthetic mud sustained while drilling the
original 6 inch hole.

Given the encouraging mud log indications while drilling the Plover formation of
possible wet gas (gas with associated LPG and condensate), positive electric log
interpretation and no recorded carbon dioxide in the mud returns, the joint
venture agreed to sidetrack around the blockage to re-drill the Plover gas
charged sands.

The permanent packer (installed for the production test) at the base of the 7
inch liner has been milled out successfully, a whipstock which facilitates the
side tracking of the well has been installed and a hole has been milled through
the side of the 7 inch liner. The rig is currently pulling the milling tools out
of the well and MEO expects to commence drilling the 6 inch hole using a
combined diamond impregnated drill-bit and turbine to optimize the rates of
penetration tomorrow. In order to avoid further significant mud losses, the well
will be drilled with an optimally weighted mud calculated on the recorded
reservoir pore pressure measurements during the production test of the Elang
sands.

At the completion of drilling, a slotted 4 1/2 inch liner will be run, which is
designed to preferentially allow the Plover formation to flow gas during the
planned production test.

Following the Plover production test, the well will be plugged back to the base
of the Darwin formation, the 9 5/8 inch casing will be perforated and the gas
charged zones of the Epenarra structure will be production tested.

Heron-2 is being drilled by Seadrill's West Atlas jack-up rig contracted to MEO
for two firm wells. The Heron-2 well is designed as a vertical well to penetrate
and production test the Epenarra Darwin Formation and the deeper Elang/Plover
Formation of the Heron North structure.

The Heron-1 well drilled by ARCO in 1972 intersected a 52m gas bearing column in
the Darwin Formation (a fractured carbonate reservoir) within the 1,200 square
km mapped closure of the large Epenarra structure. Heron-1 also reached a gas
charged zone in the deeper underlying Elang/Plover horizon, which is a secondary
objective for the Heron-2 well.

The participants in the well and permit are:

TSP Arafura Petroleum Pty Ltd (MEO subsidiary                               45%
Oz-Exoil Pty Ltd (MEO subsidiary)                                           45%
Petrofac Energy Developments Oceania Ltd (Petrofac subsidiary)              10%


C.R. Hart, Managing Director
MEO Australia Limited
NT/P68 Operator'

Further information on MEO can be found at www.meoaustralia.com.au. As an ASX
listed company, MEO is not subject to the AIM Rules and this drilling update has
not been reviewed by a named 'qualified person' as defined and 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]
                               Annabel Michie

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

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.

Xtract is supported by its cornerstone investor, Cambrian Mining Plc (AIM:CBM) a
diversified resource investment house which holds approximately 50.3% of issued
share capital.

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 has recently been
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).




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            The company news service from the London Stock Exchange