Investment update

7 May 2009 AIM: XTR XTRACT ENERGY PLC ("Xtract" or the "Company") INVESTMENT UPDATE - MEO Australia Limited ("MEO") Xtract refers to the following announcement released today in Australia by MEO. "ASX AND MEDIA RELEASE Major Project Facilitation (MPF) Status granted for Tassie Shoal projects MELBOURNE, AUSTRALIA (7th May, 2009) -- MEO Australia Limited (ASX: MEO) advises that the Federal Government's decision to renew Major Project Facilitation status for the Tassie Shoal Methanol Project and the Timor Sea LNG Project will help in new plans to develop these projects. CEO and Managing Director of MEO Australia, Jürgen Hendrich, said the decision by the Minister for Infrastructure, Transport, Regional Development and Local government, the Hon Anthony Albanese, showed confidence in MEO's plans to develop Tassie Shoal as a hub for the commercialisation of surrounding gas fields. "Our projects involve positioning pre-built production and storage facilities on Tassie Shoal. The methanol plant and LNG storage tank will be built on concrete gravity structures which will be towed to the site and water ballasted to rest on the shoal while the small footprint LNG plant will be pre-built on a self erecting platform." said Jürgen. "Tassie Shoal has many benefits for this type of development. It is an area of shallow water in undisputed Australian waters about 275 kilometres north-west of Darwin and is surrounded by approximately 25 Tcf of undeveloped gas fields within a 150 km radius." While much of this surrounding stranded gas is medium to high CO2 (10 - 25%), the methanol project will use a process which operates most efficiently with a feed gas stream containing 25% CO2. MEO's Tassie Shoal will have environmental benefits in that the Methanol process will absorb CO2 which would normally be vented from the LNG component of the project. In effect, it will act as a carbon sink and therefore reduce its carbon footprint. The CO2 is converted into methanol of which around 80% is used to produce highly stable end use products such as adhesives, fabrics, paints and silicones, effectively sequestering the CO2 into methanol derivative products. Several companies with undeveloped gas resources in the region would be able to benefit from utilising MEO's Tassie Shoal project as a development hub. It has the potential to provide an integrated solution which not only avoids the billion dollar expense of a pipeline to Darwin and the technological uncertainties of floating LNG but also can also effectively deal with the CO2 in their gas. While MEO propose that the LNG and Methanol production modules and storage tanks will be manufactured in Asia and transported to Tassie Shoal, many of the ancillary components could be manufactured in Australia. MEO has estimated that the Australian content of the projects' components could be as high as A$200 million. The operation of the projects would be staffed from Darwin and each would generate approximately 110 direct full time jobs. Darwin would also act as the supply centre for the projects, with goods and services being supplied to the projects by boat and helicopter. Ancillary services associated with the projects would offer considerable opportunities for the participation of local businesses in Darwin. It is estimated that each project would generate up to 500 local jobs during the construction stage. The development of upstream facilities would generate a similar number of jobs during the construction. "The Tassie Shoal projects have the potential to markedly increase Australia's export income," said Jürgen Hendrich. Hand-in-hand with MPF is Tassie Shoal's environmental credentials. MEO has already secured the necessary environmental approvals to install and operate two 1.75 Mtpa methanol plants and one 3.0 Mtpa LNG plant at Tassie Shoal. "As well as the potential to utilise gas from other companies, we are progressing with plans to develop our own gas resources in the NT/P68 permit which is immediately adjacent to Tassie Shoal. Drilling the Blackwood-1 and Heron-2 wells in this permit both led to gas discoveries in 2008," said Jürgen Hendrich. "MEO is currently in the process of farming out a portion of our 90-100% interest in NT/P68 to fund the drilling of additional wells in the permit in 2010." "All this points to an exciting future for the development of Tassie Shoal." Jürgen Hendrich Managing Director & Chief Executive Officer MEO Australia Limited" A copy of the MEO announcement referred to above with additional information attached, is available on the Australian Stock Exchange website: www.asx.com.au Further information on MEO can be found at www.meoaustralia.com.au. As an ASX quoted company, MEO is not subject to the AIM Rules and the information contained in this announcement 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 Andy Morrison, CEO +44 (0)20 3205 1148 Smith & Williamson David Jones +44 (0)20 7131 4000 Corporate Finance Azhic Basirov Scott Harris Ian Middleton +44 (0)20 7653 0030 James O'Shaughnessy 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. MEO Australia Ltd ("MEO") MEO (ASX: MEO) aims to become an integrated Australian Gas-to-Liquids ("GTL") company. In 2008, MEO made significant gas discoveries in the Australian Timor Sea, in an area of shallow water known as Tassie Shoal. Early commercialisation of these discoveries is planned through construction of Liquified Natural Gas ("LNG") and Methanol plants and export terminals on the off-shore Tassie Shoal. MEO has already secured Australian Government environmental approvals for two large scale (1.8 Mtpa) methanol plants and a 3 Mtpa LNG plant on Tassie Shoal. Xtract owns approximately 11.6% of MEO's issued share capital. 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 in 26 offshore blocks in a 5,400 sq km exploration and production licence close to the prolific Central Graben oil field. Technical analysis carried out to date 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 35.0% of Elko's issued share capital. 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 20% of the issued share capital of Extrem Energy and has the option of increasing its shareholding to 34% before 30 June 2009. 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. Wasabi Energy Ltd ("Wasabi") Wasabi (ASX: WAS) is a diversified investor in traditional and renewable energy technologies. Amongst its listed assets it holds approximately 38% of Rum Jungle Uranium Ltd (ASX: RUM) which has interests in uranium exploration licenses covering some 4,150 sq km of Australia's Northern Territory and approximately 12.5% of Greenearth Energy Ltd (ASX:GER) which aims to explore and develop geothermal resources in Australia and the wider Pacific Rim. Xtract owns approximately 17.4% of the issued share capital of Wasabi. 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 and Pishkoran exploration licences in the Kyrgyz Republic. Xtract has entered a farm-out agreement to fund a seismic and drilling programme for 2008-09. Xtract owns 25.0% of the issued share capital of Zhibek Resources. ---END OF MESSAGE--- This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
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