Investment Update

Xtract Energy plc
15 January 2008

15 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 in 
Australia today by MEO Australia Ltd ('MEO').

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

                             ASX AND MEDIA RELEASE
                              HERON-2 WELL UPDATE
Key Points:

   •Epenarra Darwin production test brought forward to later this week
   •Drilled 6 inch hole into Elang shale unit at 3967m and encountered
    formation instability
   •Unstable shale unit leads to prudent decision not to continue re-drilling
    the Plover formation in Heron-2

MELBOURNE, AUSTRALIA (January 15, 2008) -- MEO Australia Limited (ASX: MEO)
advises the market that the joint venture partners have decided to cease the
current re-drilling of the Plover formation and bring forward the production
testing of the Epenarra Darwin formation in the Heron-2 well to later this week.
Importantly, this is due to technical issues encountered with the sidetracking
of the well and not because of a changed view of the potential of the Heron
North Plover sands, which would be revisited with a separate well.

Epenarra Production Test:

Pre-drill, the primary objective and most significant hydrocarbon resource
potential to be tested by Heron-2 was the Darwin formation. The production test
to confirm this potential is now imminent.

The results of Heron-2 drilling, electric log and core sample interpretation of
the Darwin formation confirm strong indications of a significant gas
accumulation. A summary of the results through the Darwin formation to date are:

   •gas saturation recorded over entire 50 metres (3109m - 3159m) of facies C;
   •no carbon dioxide (CO2) recorded by mud gas detection systems while
    drilling;
   •initial mud log indications while drilling suggest gas wet with
    associated liquid hydrocarbons;
   •positive primary porosity in facies C ranging between 5% and 12%;
   •data interpreted from the Sonic Scanner shows four major open fracture
    sets were encountered which are the primary mechanism for gas to flow;
   •multiple open secondary fractures were noted in the side-wall core
    samples, and 
   •in the absence of a full diameter core, fracture permeability
    in facies C is inferred in the multi-darcy range, which would ordinarily
    indicate that any gas present should flow at a satisfactory rate.

The well is currently being plugged back to just below the Darwin formation at
3200m. A production packer will be set in the 9 inch casing at 3080m, the
production test string will be run and the well is scheduled to be perforated
and flowed later this week.

MEO and Petrofac look forward to the results of the production test of the
Epenarra Darwin formation.

Plover formation to be re-drilled:
With regard to the Plover formation, in accordance with the Heron-2 update of
Friday, January 11, a sidetrack was undertaken and drilling of the 6 inch hole
had commenced. However, on Sunday January 14, after drilling into the Elang
shale unit, approximately 3 metres horizontally away from the previous borehole
at 3967m, the drilling bit became stuck when the now unconsolidated shale unit
collapsed around the drill string.

It is apparent that the rapid reduction in pressure (drawdown and other
operations) during the open-hole production testing of the Elang/Plover
formation caused a collapse of the Elang shale unit into the well. This
prevented the deeper Plover sands contributing to the flow and appears to have
disturbed the shale formation in the vicinity of the original wellbore.

Contrary to the joint venture's pre-drill expectation that the Plover sands of
Heron North would most likely contain low quality, high CO2 gas, Heron-2 has
provided sufficient log data to indicate that in fact a higher quality and more
valuable hydrocarbon resource may be present warranting further production
testing. However, the joint venture believes it would be neither prudent nor
economic to attempt to continue re-drilling and testing of the Plover formation
in Heron-2 in such close proximity to the original wellbore. Therefore, in order
to properly appraise the Heron North Plover sands, a new well will be required.

It should be noted that the Heron-2 well design attempted to appraise cost
effectively both the Darwin and Elang/Plover formations. Ideally, these two
formations would have been appraised in separate wells. Heron-2 has provided
excellent modern data and confirmed pore pressures for both the Flamingo and
Plover formations, which will enhance well and casing design preparations for
the anticipated re-drilling of the Heron North Plover formation.

Accordingly, before commencing detailed planning of future drilling, a number of
geoscientific studies based on the Heron-2 findings are planned, including:

   •biostratigraphy to accurately age the Elang and Plover sands;
   •fluid inclusion analysis to establish charge history;
   •gas analysis to confirm quality and condensate gas ratios;
   •well bore stability studies to explain the Elang shale instability, and
   •source rock analysis to assist in modelling the hydrocarbon charge to
    explain the apparently vastly better gas quality of the Plover sands
    compared to the Elang sands.

It is expected that the studies will take a few months to complete. The
following table provides a summary of the Elang/Plover formation findings to
date:

Interpreted  Drilled   Thickness Mud log      Porosity &   Production
Sections     depth(m)  (m)       observations permeability testing

Elang sand   3946 -    15        Dry gas,     Poor         Approx. 6 MMscf/day:
             3961                high                      dry gas, CO2
                                 CO2

Elang shale  3961 -    19        N/A          N/A          N/A
             3980

Upper Plover 3980 -    101       Wet gas, nil Good         No
sand         4081                CO2                       contribution
                                                           to test
                                                           (blockage)

Plover       4081 -    38        N/A          N/A          N/A
siltstone    4119

Lower Plover 4119 -    63        Wet gas, nil Good         No
sand         4182                CO2                       contribution
             (current                                      to test
             TD)                                           (blockage)

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 Limited  10%
subsidiary)

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             David Jones                 [phone]
Corporate 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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