Extraction Technology Update

Xtract Energy plc
06 September 2006

6 September 2006

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

Xtract announces that initial validation tests have shown that the recovery of
light crude oil products from the Company's Julia Creek, Australia, shale oil
deposits may be much higher than could be achieved using conventional retort
recovery techniques.

The tests are being conducted by the Australian national research organisation,
the CSIRO, and by the Monash University under research agreements entered into
with Xtract. They are aimed at testing the Julia Creek oil shales in a solvent
extraction process.

The initial validation tests, comprising small scale batch extractions of oil
from the shale, have demonstrated that recovery from Julia Creek shales would be
in order of 150 litres of light crude oil per tonne of shale. Earlier
conventional retorting experiments indicated that the conversion of kerogen to
oil yielded about 74 litres of oil per ton of shale.

Applying this rate of yield increase to the yields of 50 - 65 litres per tonne
used earlier this year in the Company's admission document in relation to
certain of the Company's Julia Creek leases results in estimated in-situ shale
oil resources of over 1.6 billion barrels of oil.

Julia Creek oil shale contains about 19% by weight of the hydrocarbon precursor,
kerogen.

These small scale bench tests are believed by the Company to be very encouraging
and to justify larger scale validation testing. Research is continuing in order
to optimise operational temperatures, pressures and feed size. In addition,
larger scale batch tests are scheduled to prepare for developmental, continuous
oil extraction tests.

International consulting engineers, Worley Parsons, have been appointed by
Xtract to prepare a feasibility study for the application of the solvent
extraction process for the production of oil from the Company's Julia Creek oil
shales.

Enquiries:

Xtract
Sue Wickerson 020 8466 0406
Director

The information contained in this announcement has been reviewed and approved by
Dr. John Shirley, (Managing Director of Xtract Oil Limited) who has a BSc and
PhD in Geophysics from the University of Tasmania and is a member of the
Australian Society of Petroleum Engineers.





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