Investment update

Xtract Energy plc
21 January 2008

21 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 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 UPDATE

Key Points:

   •Epenarra Darwin production test unsuccessful
   •Joint Venture reviewing option to P&A or suspend Heron-2
   •Positive findings support eventual further testing of Heron North Plover
    sands
   •Joint venture currently selecting next well location
   •Gas recovery from Elang sands warrants Retention Licence application

MELBOURNE, AUSTRALIA (January 21, 2008) - MEO Australia Limited (ASX: MEO)
advises the market that the production testing of the Epenarra Darwin formation
in the Heron-2 well failed to produce hydrocarbons to the surface.

The Darwin formation was perforated and treated with two acid wash procedures,
which are often required to produce from fractured carbonate reservoirs. Despite
this, and the evidence from electric logs of the presence of some significant
fractures in the perforated section, the well failed to flow to the surface.

As previously advised the joint venture remains optimistic that a significant
hydrocarbon resource was encountered in the Heron North Plover formation. The
Heron-2 well provided sufficient modern log data to indicate that a good quality
conventional sandstone reservoir and hydrocarbon resource is present warranting
further drilling and production testing. However, before commencing detailed
planning of future drilling to test Heron North, a number of geoscientific
studies based on the Heron-2 data are essential. Given the positive indications
to date, the joint venture is currently considering the suspension of Heron-2 to
allow re-entry at a later date to re-drill the Plover formation in Heron North.

Open-hole production testing of the Elang/Plover formation commenced on January
3, 2008. While it has been confirmed that the Plover sands did not contribute to
the recorded flow due to blockages in the well immediately above the formation,
the Elang sands did flow gas to surface at a maximum rate exceeding 6 MMscf/day.
This hydrocarbon flow to surface supports an application for a retention licence
application over the Heron North structure to secure the resource until further
appraisal can be completed. An application is under consideration by the joint
venture partners.

The joint venture is presently reviewing the Heron-2 data before selecting the
second well location, which will be drilled next. Three sites have been approved
by the authorities, including Heron-3B which targets the Darwin formation
significantly down-dip from the Heron-2, Heron-3C which targets the Heron South
structure expected to contain similar quality Plover reservoirs as Heron-2, and
the wildcat Blackwood-1 which also has Plover reservoirs as its target.

Heron-2 was drilled by Seadrill's West Atlas jack-up rig contracted to MEO for
two firm wells. The Heron-2 well was 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 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 subsidiary)      10%

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

Commenting on the announcement, Andy Morrison, CEO of Xtract said, 'News that
the Epenarra/Darwin production test was not successful is obviously
disappointing, particularly coming on top of the technical difficulties that
prevented the testing of the promising Plover reservoir last week. The positives
arising from the Heron-2 well are the much better than forecast gas quality and
reservoir permeability in the Plover reservoir and therefore improved prospects
for successful commercialization in the end. We continue to believe that Xtract
can benefit from exposure to MEO even though it seems likely that the appraisal
time frame will now extend for several more months. We will provide investors
with further updates as they are released by MEO'.

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 50.13% of the
issued share capital of the Company.

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).



                      This information is provided by RNS
            The company news service from the London Stock Exchange