17 July 2009
AIM: XTR
XTRACT ENERGY PLC
("Xtract" or the "Company")
DRILLING UPDATE - Extrem Energy
Further to the announcement made on 6 July 2009, Xtract Energy Plc
("Xtract") is pleased to provide the following update on the progress
of the production test being carried out at Sarikiz-2 by its Turkish
joint venture Extrem Energy A.S. ("Extrem Energy").
Following the successful production test of the interval between
1710-1715m which indicated an oil flow rate of approximately 180
bbl/day, further successful production tests have been completed on
three additional intervals, 1646-1650m, 1652-1657m and
1559.5-1561.5m.
Three shallower sandstone intervals between 1483m and 1549m,
representing 24m of reservoir thickness, remain untested. The
interval between 1544-1549m is expected to be perforated and tested
today with results becoming available over the weekend. Following
this next test a decision will be taken as to which intervals will be
used to form the basis of the initial production from the Sarikiz
field. Once these intervals have been selected, they will be opened
so as to provide combined flow. The initial commercial oil production
is expected to meet or exceed the pre-drill estimate of 500 bbl/day.
Extrem Energy now regards the well as commercial and is proceeding to
the design and construction of the surface facilities to establish
regular oil treatment and sales.
With the benefit of the knowledge gained from Sarikiz-2, Extrem
Energy is now planning the development of the whole field. It is
intended that a further appraisal and production well will be drilled
on the field during 2009 and that production will be increased by
re-entering the abandoned East Sarikiz-1 well which was drilled and
left cased in 2001 by the previous licence-holder. Comparison of the
drilling logs from East Sarikiz-1 indicates the presence of similar
oil-bearing sandstone layers as at Sarikiz-2. These layers were not
tested at the time because the focus then was on a deeper target. The
possibility of these two additional producing wells, together with
the application of production enhancements at Sarikiz-2, gives
confidence that Extrem Energy will be able to grow production levels.
Further progress updates will be provided as appropriate.
All operations are controlled and operated by Merty Energy, Xtract's
joint venture partner in Extrem Energy.
Xtract holds 27% of Extrem Energy and has the option of increasing
its shareholding to 34% by contributing a further investment of
US$1.75m before 5 August 2009.
The above information has been reviewed and approved by Ongun
Yoldemir, Managing Director of Extrem Energy, who has a masters
degree in geological engineering and worked as an explorationist in
the oil and gas sector in the Middle East, Kazakhstan, Azerbaijan,
and North Sea, has over 28 years' experience in the resource and
energy sector and is a member of the American Association of
Petroleum Geologists, European Association of Geologists and
Engineers, the Society of Exploration Geophysicists and several
related Turkish institutions.
Enquiries please contact:
Xtract Energy Andy Morrison, CEO +44 (0)20 3205 1148
Smith & Williamson David Jones +44 (0)20 7131 4000
Corporate Finance Azhic Basirov
Barrie Newton
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
27% of the issued share capital of Extrem Energy and has the option
of increasing its shareholding to 34% before 5 August 2009.
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 35.0% of
Elko's issued share capital.
MEO Australia Ltd ("MEO")
MEO (ASX: MEO) aims to become an integrated Australian Gas-to-Liquids
("GTL") company. In 2008, MEO made significant gas discoveries in the
Australian Timor Sea, in an area of shallow water known as Tassie
Shoal. Early commercialisation of these discoveries is planned
through construction of Liquified Natural Gas ("LNG") and Methanol
plants and export terminals on the off-shore Tassie Shoal. MEO has
already secured Australian Government environmental approvals for two
large scale (1.8 Mtpa) methanol plants and a 3 Mtpa LNG plant on
Tassie Shoal. Xtract owns approximately 3.4% of MEO'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 and Pishkoran exploration
licences in the Kyrgyz Republic. Xtract has entered a farm-out
agreement to fund a seismic and drilling programme for 2008-09.
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.
Wasabi Energy Ltd ("Wasabi")
Wasabi (ASX: WAS) is a diversified investor in traditional and
renewable energy technologies. Amongst its listed assets it holds
approximately 38% of Rum Jungle Uranium Ltd (ASX: RUM) which has
interests in uranium exploration licenses covering some 4,150 sq km
of Australia's Northern Territory and approximately 12.5% of
Greenearth Energy Ltd (ASX:GER) which aims to explore and develop
geothermal resources in Australia and the wider Pacific Rim. Xtract
owns approximately 17.4% of the issued share capital of Wasabi.
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