Investment Update

1 September 2008
AIM: XTR
                          XTRACT ENERGY PLC
                     ("Xtract" or the "Company")

                  INVESTMENT UPDATE - Merty Energy

Further to the announcement made on  16 July 2008, Xtract Energy  Plc
('Xtract') is  pleased to  announce the  completion of  a  definitive
agreement with  Merty Energy,  Petroleum Exploration,  Education  and
Services Inc ('Merty')  of Turkey  regarding an investment  in a  new
exploration and production joint venture. Xtract and Merty, together,
aim to  create  a  new  medium-sized  oil  and  gas  exploration  and
production business  initially focused  on  Turkey, where  Merty  has
particular expertise and experience.

Under the terms of the agreement, the parties have agreed to create a
new Turkish company in which Xtract and Merty will initially have 20%
and 80% interests respectively. Further to Xtract's initial
investment of US$1.5 million made in July, Xtract has agreed to
invest an additional US$3.5 million to fund the initial work
programme of the new company and Merty will apply for the transfer of
a portfolio of seven licence interests currently owned by Merty into
the joint venture company. Xtract has the option to increase its
shareholding in the new company to 34% by contributing a second
tranche of US$3.5 million before 30 June 2009.

The seven licence interests to be transferred to the new company
include 100% interests in offshore licences at Candarli Bay and in
the Sea of Marmara and onshore licences at Edirne and Siraseki plus
an 80% interest in an onshore licence at Alasehir/Sarakiz. The
remaining 20% of the Alasehir/Sarakiz licence will continue to be
owned by Turkish company, Petrako Petrol Gas and Industrial Co.

The first joint venture well in the Alasehir/Sarakiz licence area is
on schedule for drilling in October 2008. The intention of the new
company is that the lower risk onshore developments at
Alasehir/Sarakiz and at Edirne will provide early oil and gas
revenues that will largely enable the company to develop the offshore
licences, including the very exciting prospect at Candarli Bay.

Further announcements on the joint venture and its drilling plans
will be made as appropriate.

About Merty

Merty is an oil and gas company that owns 18 exploration licences in
several basins of Turkey. It has successfully discovered new gas
fields in a licence where it is the operator. It also provides
consulting, support and operations services to parties operating in
the hydrocarbon, geothermal, coal and ore exploration, production and
asset development sector in Turkey, the Middle East and the CIS
countries.  It has local and international technical expertise in all
aspects of hydrocarbon exploration.

Merty's services include:

  * Geological, Geophysical, Geochemical and Petroleum Engineering
    Services
  * Acquiring Oil and Gas Exploration and Production Licences, Oil
    and Gas Production Fields
  * Assisting Oil and Gas Companies in Exploration and Production
  * Assisting Mining Companies in Exploration and Production
  * Data Acquisition and Interpretation for Exploration and
    Production
  * Environmentally Friendly and Efficent Energy Solutions
  * Oilfield and Office Logistics, including Shipping and
    Transportation
  * Strategy Planning
  * Geotechnical Services
  * Environmental Studies
  * Coal Bed Methane Feasibility Studies

For further information on Merty please visit www.mertyenergy.com
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]
                             Ian Middleton


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.

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 was
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).

---END OF MESSAGE---