Investment Update

RNS Number : 0035T

Xtract Energy plc

21 September 2010

 



21^st  September 2010

AIM: XTR

XTRACT ENERGY PLC

("Xtract" or the "Company")

Investment Update

Xtract Energy Plc ("Xtract") notes below the Shareholder Update which was issued by Elko Energy Inc. ("Elko Energy") to its shareholders on Monday 20th September 2010.

"Elko Energy Inc. ('Elko') provides this further regular update on the ongoing development of the Elko business.

Netherlands

Elko is pleased to announce that Elko Energy B.V. and Elko Exploration B.V. have entered into an agreement relating to its licenses in Blocks P1 and P2 offshore the Netherlands with Chevron Exploration and Production Netherlands B.V. ("Chevron").  In consideration for all of their interests in the Blocks, Elko will receive an overriding royalty up to 5% of the sales value from Chevron equity gas delivered into the Dutch National Transmission System and Chevron equity condensate delivered onshore.

Chevron anticipates drilling the first well on the acreage in 2011.

Under the terms of the arrangement, Chevron will also pay Elko, Euro 4.3 million in cash for its share of past costs.

This transaction and transfer of operatorship is subject to closing conditions and regulatory approvals typical of transactions of this nature.

Dutch state entity Energie Beheer Nederland B.V. ("EBN") participates for forty percent (40%) in the current Exploration licenses for Blocks P1 and P2, through an Agreement of Cooperation. 

Elko Energy B.V and Elko Exploration B.V. are wholly owned subsidiaries of Elko Energy Inc.

Commenting on the update, Peter Moir, CEO of Elko said, "We are delighted to conclude this deal and believe it offers an excellent outcome for Elko shareholders, who can participate in the Dutch exploration and production business through this arrangement with Chevron. We look forward to the results of the well planned for next year and to a successful ongoing business relationship with Chevron".

Denmark

Elko is also pleased to announce that the 02/05 license Group, which comprises Norwegian Energy Company ("Noreco"), Danish North Sea Fund ("DNSF") and Elko have submitted an application for an adjoining area immediately to the west of the 02/05 licensed area.  The application is made in the same working interest percentages as in the 02/05 license, namely Noreco 47% and operator, DNSF 20%, Elko 33%.

Further updates regarding this application will be provided as appropriate."

Qualified Person

In accordance with AIM Guidelines, Peter Moir, B.Sc. Civil Engineering, M.Eng. Petroleum Engineering, UK Chartered Engineer, President of Elko Energy Inc. and CEO of Xtract Energy plc is the qualified person as defined in the Guidance Notes for Mining, Oil and Gas Companies, February 2010, of the London Stock Exchange, that has reviewed the technical information contained in this press release. Mr Moir has more than 30 years experience in technical, operational and commercial aspects of the E&P business.

Enquiries please contact:

Xtract Energy	Peter Moir, Director	[phone]
Cenkos Securities Plc	Jon Fitzpatrick Beth McKiernan	[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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