Investment Update

RNS Number : 6719D

Xtract Energy plc

28 March 2011

 



28^th March 2011

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 Friday 25^th March 2011.

"Elko Energy Inc. ('Elko') is pleased to provide this further regular update on the ongoing development of the Elko business. 

Business Update

Denmark

Elko announced on May 31 2010 that an agreement had been finalized under which the Norwegian Energy Company ASA (Noreco) would farm in to the 02/05 License. The transaction was subject to a number of approvals and conditions.

On February 1 2011, Elko announced that the 02/05 license group had been awarded a new license offshore Denmark, 01/11License, immediately to the west of the original 02/05 license area. Elko subsequently announced on March 21 2011 that the revised 02/05 License had been extended until January 27, 2013.

The 01/11 partners have already announced that they intend to drill the 'Luna' well on the 01/11 License area through which the partners intend to test the overall Rotliegendes play concept.

Elko is pleased to advise that all approvals and conditions pertaining to the 02/05 farm in agreement have now been satisfied and that this agreement has closed on March 23 2011. Noreco has paid Elko circa USD 1.1 million in cash for its share of past costs.

Elko is also pleased to advise that a latest generation jack up drilling rig has been secured to drill the Luna well in Q3 2011. Further updates regarding the drilling of this well will be provided as appropriate.

Elko has a net 33% working interest in the 01/11 License  and in the 02/05 License.

Peter Moir

President, March 25 2011"

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, CEO Alan Hume FD	[phone] [phone]
Cenkos Securities Plc	Jon Fitzpatrick Beth McKiernan	[phone] [phone]

About Xtract Energy

Xtract identifies and invests in a portfolio of early stage oil and gas assets and business interests with significant growth potential. The Company aims to work closely with the associated management teams to achieve critical project milestones, to finance early stage asset and business development activity, and then to finance the asset development phase, or if appropriate to crystallise value for all shareholders at a suitable exit point. Xtract aims to achieve returns for our shareholders through access to the significant upside rewards associated with our investments.

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 in the Danish North Sea is a 33% working interest in an exploration and production licence 02/05 and a 33% working interest an adjoining exploration and production license 01/11, close to the prolific Central Graben oil kitchen. Technical work indicates the potential for significant resources on these combined licenses. Elko also holds a royalty 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 2008-2011. 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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