Investment Update

RNS Number : 0324L

Xtract Energy plc

29 April 2010

 



29 April 2010

AIM: XTR

XTRACT ENERGY PLC

("Xtract" or the "Company")

Investment update - Extrem Energy

Further to the announcement made on 29 March 2010, Xtract Energy Plc ("Xtract" or "The Company") confirms that the production testing operations at the Sarikiz-3 well have now been completed. Sarikiz-3 is part of the planned exploration programme of the on-shore Alasehir licence area in south-west Turkey operated by Extrem Energy AS ("Extrem Energy").

The production test at Sarikiz-3 did not encounter hydrocarbons in recoverable quantities and Extrem Energy does not consider the well to be commercial. Further evidence of a working hydrocarbon system in the basin was gained, and the well results will be combined with recently completed additional seismic to help determine how best to continue the exploration of the licence area. Further updates will be provided as appropriate.

The drilling rig is preparing to suspend the well as a possible future water-injection well. Upon completion of this operation, the rig will be mobilized to the Sarikiz-2 well site to install the pump as previously planned. After establishing pumped production at Sarikiz-2, the rig is scheduled to drill Menekselik-1 in the Adana basin. Further details of the Menekselik-1 target were given in our announcement dated 2 March 2010.

Commenting on the results, Andy Morrison, CEO of Xtract said, "We are disappointed to find that the recent well has failed to unlock the secrets of the Alasehir/Sarikiz field and therefore that further investment may be needed if the technical analysis is shown to justify it."

The above information has been reviewed and approved by Ongun Yoldemir, Managing Director of Extrem Energy, who has a masters degree in geological engineering and worked as an explorationist in the oil and gas sector in the Middle East, Kazakhstan, Azerbaijan, and North Sea, has over 28 years' experience in the resource and energy sector and is a member of the American Association of Petroleum Geologists, European Association of Geologists and Engineers, the Society of Exploration Geophysicists and several related Turkish institutions.

Xtract holds 50% of the equity of Extrem Energy through a wholly-owned subsidiary.

Enquiries please contact:

Xtract Energy	Andy Morrison, CEO	[phone]
Cenkos Securities Plc	Jon Fitzpatrick Ken Fleming Alan Stewart	[phone] [phone]

About Xtract Energy

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.

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.

Extrem Energy AS ("Extrem Energy")

Extrem Energy is an exploration and production joint venture with Merty Energy of Turkey. The JV's aim is to create a new medium-sized oil and gas exploration and production business, initially focused on Turkey where Merty Energy has particular experience and expertise. Extrem Energy has a portfolio of licence interests including the high potential prospect at Candarli Bay in south-west Turkey. Xtract owns 50% of the issued share capital of Extrem Energy.

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 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 60% operating interest in gas-bearing license blocks P1 and P2 in the Dutch North Sea. Xtract owns approximately 50.0% 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 2008-10. 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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