Investment Update
18th 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 18th March 2011.
"Elko Energy Inc. ('Elko') is pleased to provide this further business development update.
Business Update
Denmark
Elko announced on February 1 2011, that the 02/05 license group had been awarded a new license offshore Denmark, 01/11 License, immediately to the west of the original 02/05 license area. The award was conditional that, amongst others, that exploration activities are coordinated between the 01/11 License and the 02/05 License.
The 02/05 License was granted on October 6, 2005 with a phased six year work program. Phases 1 and 2 have been fulfilled. Phase 3 included a drill or drop decision. As part of the process of applying for the 01/11 License, the 02/05 partners were granted an extension to the 02/05 License Phase 3 drill or drop decision, conditional on the 02/05 License partners having committed to drill an exploration well either in the existing 02/05 License or in an optimal location outside the 02/05 License.
In December 2010 the 02/05 partners applied for a two year extension of the 02/05 License, conditional on award of the adjacent (now the 01/11 License) acreage. Since the work in the 01/11 License and 02/05 License are closely linked, it is most practical that both licenses have the same timelines.
Elko is pleased to announce that the revised 02/05 License has now been extended until January 27, 2013, which corresponds to the Phase 1 deadline in the 01/11 License. Danish Legislation does not allow extension of more than 2 years at a time. If by the end of this extension period the 02/05 License partners want to apply for a further extension, the work program associated with such an extension shall be coordinated with the 01/11 License.
The 01/11 partners have already announced that they intend to drill the 'Luna' well on the 01/11 License area in 2011 through which the partners intend to test the overall Rotliegendes play concept.
The TRACS International Competent Persons Report (CPR) to reflect the new combined 01/11 License and 02/05 License area can be found on the Elko Energy website under the news section. (www.elkoenergy.com)
(Elko has a net 33% working interest in the 01/11 License and in the 02/05 License).
Elko Energy Management Comment
At the time of signing the farm in agreement between Noreco and Elko in May 2010, the 02/05 Joint Venture (JV) partners including the Danish North Sea Fund were aligned in their belief that the optimum location for the first exploration well was in the area to the immediate west of the original 02/05 License. The frontier play concept is focused on the Rotliegendes sandstone which embraces both the Lead A and Luna prospects which may constitute one large geologically coherent entity. The JV has focused on this Rotliegendes play by applying for and being awarded the new 01/11 license whilst relinquishing part of the original 02/05 license.
The extension to the 02/05 license including having the timelines over the two license synchronized, will make coordination of exploration activities across the two licenses more manageable for the partnership.
Further updates regarding the drilling of this well will be provided as appropriate.
Peter Moir
President, March 18, 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:
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Xtract Energy |
Peter Moir, CEO Alan Hume FD
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+44 (0)1372 371071 +44 (0)1372 371071 |
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Cenkos Securities Plc |
Jon Fitzpatrick Beth McKiernan |
+44 (0)207 397 8900 +44 (0)131 220 6939
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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.
This information is provided by RNS