Investment Update

RNS Number : 6061K

Xtract Energy plc

22 April 2010

 



22 April 2010

AIM: XTR

XTRACT ENERGY PLC

("Xtract" or the "Company")

Investment update - Elko Energy

Xtract Energy Plc ("Xtract") notes below the Shareholder Update which was issued by Elko Energy Inc ("Elko Energy") to its shareholders on Wednesday 21 April. Xtract currently owns approximately 50.0% of the issued capital of Elko Energy.

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

Business Update

1) Netherlands

Elko have met with the Dutch Ministry of Economic Affairs (MEA), who regulate the Dutch offshore exploration licenses, and the MEA are satisfied with the significant progress that has been achieved by Elko on blocks P1 and P2. The MEA have agreed that the date when the work program commitment has to be made for the second phase of the P1/P2 exploration licenses, can be postponed until October 1, 2010.

The reprocessing of previous 3D seismic to Pre Stack Depth Migration (PSDM) on block P2 is now complete and shows greatly improved seismic definition and imaging over the existing discoveries and previously identified prospects. Subsequent remapping of the eastern part of the block has revealed several large undrilled structures, each with a high geological chance of success.

Elko believe that the potential for these new prospects to have a lower CO₂ content than on the P1-FA discovery (which contains over 30% CO₂) makes the P2 block an attractive farm in opportunity. Elko are continuing constructive discussions with several industry parties about participating in the next exploration phase on blocks P1 and P2.

Elko have commissioned an independent Competent Persons Report on the existing discovered gas reservoirs and identified prospects on blocks P1 and P2 in order to quantify the hydrocarbon resource base. 

2) Denmark

Elko have met with the Danish Energy Agency (DEA), who regulate the Danish offshore exploration licenses, and the DEA have agreed that the date when the work program commitment has to be made for the third phase of the 02/05 exploration license, can be postponed until  July 2010.

Following the remarketing of our 02/05 Danish license Elko are now in discussions with industry parties about participating in the next exploration phase on the license which will require a well to be drilled by October 2011.

Elko have commissioned an independent Competent Persons Report on the recently identified Chalk prospect and previously identified Rotliegendes sandstone prospects on license 02/05 in order to quantify the hydrocarbon resource base. 

Given the positive developments outlined above, I remain optimistic that the license areas in Denmark and Netherlands can be progressed to the next phase.

Peter Moir

President, April 21 2010"

Qualified Person

In accordance with AIM Guidelines, Peter Moir, B.Sc. Civil Engineering, M.Eng. Petroleum Engineering, UK Chartered Engineer and President of Elko Energy Inc is the qualified person as defined in the Guidance Note 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	Andy Morrison, CEO	[phone]
Cenkos Securities Plc	Jon Fitzpatrick Ken Fleming Alan Stewart	[phone] [phone]

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.

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 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 60% operating 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 2008-10. 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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