Statement re. Suspension

RNS Number : 7836I

Xtract Energy plc

21 June 2011

 



21June 2011

AIM: XTR

XTRACT ENERGY PLC

("Xtract" or the "Company")

Temporary Suspension of Shares

Highlights

·     Xtract has offered to acquire the remaining share capital of Elko Energy Inc for new ordinary shares in Xtract

·     No cash consideration

·     In line with the AIM rules, Xtract's shares will be suspended during the transaction

·     On completion of the transaction, the Company will no longer be an investing company and will apply for re-admission to AIM as an operating company

Xtract announces that it has offered to acquire all of the issued and outstanding common stock in Elko Energy Inc ("Elko") that it does not already own, for new ordinary shares in Xtract, on the basis of seven Xtract shares for every Elko share ("the Acquisition"). Presently Elko has 100,010,049 common shares in issue of which 49,975,000 are owned by Xtract.

The transaction will result in Xtract issuing 350,245,343 new ordinary shares to the holders of Elko common stock.  In addition Elko has warrants and options outstanding representing, in total, 8,277,500 which will be converted into rights over Xtract shares on similar terms. Prior to the Acquisition Xtract has 914,965,026 ordinary shares in issue.

The Acquisition is being effected by way of a plan of arrangement under the Business Corporations Act (Ontario) and is subject to, inter alia, approval by both two-thirds of the Elko shareholders voting at the specially convened general meeting including Xtract and its affiliates and a simple majority of Elko shareholders voting at the meeting, excluding Xtract and its affiliates. Xtract has received commitments to vote in favour of the Acquisition from the directors of Elko who own Elko common shares and major shareholders and these together with its own holding represent 66.4% of the shares in issue. The Acquisition will also be subject to approval by the Ontario Superior Court of Justice.

Following receipt of preliminary court approval, a circular setting out, inter alia, the offer will be delivered to the Elko shareholders in advance of the meeting. Subject to the completion of the Acquisition, Xtract will be issuing new ordinary shares which will require the approval of the Xtract shareholders at a general meeting to be held in early August 2011.

The Acquisition of the issued and to be issued shares in Elko will mean that Xtract will no longer be considered as an investing company. Under the AIM Rules the transaction is deemed to be a reverse takeover.  Xtract has sought a suspension of trading in its shares until it is in a position to publish an Admission Document and, thereafter, it will re-apply for admission to AIM. Accordingly, at the request of the Company, trading on AIM for the under-mentioned securities will be suspended from 7:30am on 21 June 2011.

.

Ordinary Shares of 0.1p each fully paid

(914,965,026)(GB00B06QGC57)

An Admission document that will include a notice convening a general meeting to consider the Acquisition and the related issue of shares will be posted to Xtract shareholders in the coming weeks.

The Directors are also considering the future funding requirements of the enlarged business and resolutions in that regard may be proposed at the same general meeting

Peter Moir, Chief Executive of Xtract Energy, commented:

"We have focused our time on rebalancing the asset portfolio of the Company and the acquisition of Elko is the logical next step in this process.  Xtract has a clear vision and solid strategy to create a platform for sustainable growth with significant near term operational upside potential for shareholders.  The Board looks forward to completion of the Acquisition and the re-admission of Xtract as an operating company on AIM."

-Ends-

Enquiries please contact:

Xtract Energy Plc	Peter Moir, CEO Alan Hume FD	[phone] [phone]
Cenkos Securities Plc	Jon Fitzpatrick Alan Stewart	[phone] [phone]
Financial Dynamics	Billy Clegg Edward Westropp Alex Beagley	[phone]

About Xtract

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")

Following execution of heads of terms it is anticipated that in the near term Xtract will enter into a fully termed Assignment Agreement and associated Royalty Agreement pursuant to which Xtract will hold a royalty interest over the license portfolio currently owned by Extrem Energy, onshore and offshore Turkey.

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 in an adjoining exploration and production licence 01/11, close to the prolific Central Graben oil kitchen. Technical work indicates the potential for significant resources on these combined licenses. Neither of those licences is currently being produced and accordingly no profits are attributable to them. Elko also holds a royalty interest in gas-bearing license blocks P1 and P2 in the Dutch North Sea. Xtract currently owns approximately 50% 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.

 

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SRSURSBRAKANUAR