Investment Update

Xtract Energy plc
08 January 2008

8 January 2008                                                          AIM: XTR

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

                       PROJECT UPDATE - MEO Australia Ltd

Xtract refers shareholders to the following press release information announced
in Australia by MEO Australia Ltd ('MEO'). Xtract also notes that trading in 
MEO's shares on the ASX has resumed following the publication of the
announcement below.

Xtract currently holds approximately 15.7% of the issued capital of MEO.

                                  'ASX RELEASE

                              HERON-2 WELL UPDATE

MELBOURNE, AUSTRALIA (January 8, 2008) - MEO Australia Limited (ASX: MEO)
advises the market that Cyclone Helen interrupted testing operations for
approximately 48 hours and the joint venture partners are now continuing to test
the Elang/Plover formation in the Heron-2 well.

The following table summarizes the interpreted geological sections below the 7
inch casing shoe.

Interpreted      Drilled depth (m)     Thickness   Mud log        Relative mud
Sections                                 (m)       observations   losses

Elang sand           3946 - 3961         15        Dry gas, high  Low
                                                   CO2

Elang shale          3961 - 3980         19        N/A            N/A

Upper Plover
sand                 3980 - 4081        101        Wet gas, nil   Medium
                                                   CO2
Plover
siltstone            4081 - 4119         38        N/A            N/A

Lower Plover
sand                 4119 - 4182
                     (current TD)        63        Wet gas, nil   High
                                                   CO2
Estimated GWC
and mapped
spill point          4260m

To date, only the Elang sand (15m) is believed to have flowed gas to surface. As
observed on the mud gas logs through this section where only methane (C1) and
carbon dioxide (CO2) was recorded, the recovered gas is dry and high in CO2. The
preliminary maximum flow rate through a 26/64 inch choke in this poor quality
Elang sand was estimated at 6 MMscf/day.

The mud gas logs through the better quality Plover formations sands (164m)
recorded high values of C1 to C5, indicative of wet gas readings, and no CO2.
While drilling the Plover formation, the well experienced the most significant
losses of synthetic based mud (SBM) (1,180 bbls) in zones of extensive
fracturing. Subsequent LCM (loss circulation material) treatment stopped the
excessive mud losses but effectively inhibited the Plover formation's
permeability.

Based on the inhibited Plover permeability, the quality of the produced gas and
the volume of drilling fluids recovered on testing, the well test consultants
believe that only the Elang sand has so far contributed to the current gas flow.

The Elang sand appears to be isolated from the underlying Plover sands by the
Elang shale unit, which would explain the significant difference in mud gas
readings, pore pressure variation and possible gas quality.

The rig progressed with well clean-up activities, particularly focussing on the
Plover sands where the LCM treatment appeared to have blocked the permeable
fracture zones. The rig recovered the production test string and ran into the
hole with the drilling pipe and a 2 3/8 inch stinger passing through the packer
in the 7 inch liner in order to reach and clean the bottom of the borehole. A
blockage has been encountered at the base of the Elang formation, at the
transition of the 8 1/2 inch and 6 inch hole, possible a combination of cement
plug material, collapsed siltstone, SBM and LCM. This blockage in combination
with the LCM treatment of the Plover is now believed to have stopped the Plover
sands from flowing.

Forward plans:

The substantial losses of the expensive and limited onboard stock of synthetic
based mud in the lower Plover sands caused the premature cessation of drilling.
The rig will now mill out the packer and drilling will resume to sidetrack
around the blockage (at 4025m) to drill a fresh Plover sand section and to
deepen into the better sands observed in the lower Plover. The well will be
drilled with a water based mud and lower mud weight (to reduce the risk of
further mud losses). At the completion of drilling, a slotted 4 1/2 inch liner
will be run and the Plover formation will be production tested.

At the completion of the Plover test, the well will be plugged back to the base
Darwin formation, the 9 5/8 inch casing will be perforated and the gas charged
zones of the Epenarra structure will be production tested.

MEO remains optimistic that a significant, quality hydrocarbon resource is
present in the Plover formation and believes that based on regional geological
correlations and 3D seismic interpretation, further good quality gas saturated
sands, remain to be drilled below the current TD (4182m) at this location.'

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 50.3% of issued
share capital.

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