Drilling Update

4 December 2008

AIM: XTR

                          XTRACT ENERGY PLC
                     ("Xtract" or the "Company")

                           DRILLING UPDATE

Further to the announcement made on 26 November 2008, Xtract provides
the following update on the Sarikiz-2  well in Turkey which is  being
drilled on behalf of Extrem Energy A.S. ("Extrem Energy").

The well was  spudded at  1930hrs on Friday  31 October  2008. As  at
0800hrs on  26 November,  drilling  was in  progress  at a  depth  of
1,454m. Subsequently, at  1,478m, 3  cones of the  drilling bit  were
broken and became  detached in  the well. This  was due  to a  sudden
lithology change upon  entering  into  hard  sandstones  of  Alasehir
formation from very soft clays of Adala formation.

To recover the  cones (junk) a  new string was  prepared and  drilled
with junk basket. While working with  the junk basket, core from  the
sandstones of the Alasehir formation was recovered together with some
pieces of metal from the cones of  the bit. The cores taken from  the
sandstone contained high API  oil and showed  bright yellow to  white
fluorescence.  The  sandstone  layer  extended  25m  from  1,478m  to
approximately 1,503m. This  is an additional  sandstone layer to  the
one previously  tested  during  the drilling  by  Sarikiz-1,  so  the
existence of oil in it  provides possible upside potential. The  main
reservoir sands are expected to be encountered between 1,640m and the
target depth.

After 3 days  of recovery  operations, normal  drilling restarted  at
0430hrs on 2 December. As at  0600hrs on 4 December, normal  drilling
was going on at  1,542m. Sandstones are  inter-bedded with the  marls
and clays of the Alasehir  formation. The programmed target depth  of
the well is 1,800m +/-50m which is  now expected to be reached on  or
before Sunday 7 December.   Depending on the drilling results,  first
production could be expected in the first half of 2009.

The rig is operated by Guney Yildizi of Turkey.

Xtract currently holds a 20%  interest in Extrem  Energy and has  the
option of  increasing  its  shareholding to  34%  by  contributing  a
further investment of US$3.5m before June 2009.

Further progress updates will be provided as appropriate.

The above  information  has  been  reviewed  and  approved  by  Ongun
Yoldemir, Managing  Director  of Extrem  Energy,  who has  a  masters
degree in Geological engineering and  worked as an explorationist  in
the oil and sector  in  the middle east, Kazakhstan, Azerbaijan,  and
north sea, has over 28 years'  experience in the resource and  energy
sector and  is a  member  of the  American Association  of  Petroleum
Geologists, European  Association of  Geologists and  Engineers,  the
Society of  Exploration  Geophysicists and  several  related  Turkish
institutions.

Enquiries please contact:


Xtract Energy      Andy Morrison, CEO  [phone]

Smith & Williamson David Jones         [phone]
Corporate Finance  Azhic Basirov

Scott Harris       Ian Middleton       [phone]
                   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  13.9% 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 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 33% operating interest in gas-bearing license blocks  P1
and P2 in  the Dutch North  Sea. Xtract owns  approximately 35.4%  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. XOL  is also  developing proprietary  technology for  the
commercial extraction of liquid  hydrocarbon products from oil  shale
which could partially address the global decline of conventional  oil
reserves with significant  environmental benefits  and higher  yields
over previously employed extraction methods.

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 19.4% 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.

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