27 August 2009
AIM: XTR
XTRACT ENERGY PLC
("Xtract" or the "Company")
Investment update - Extrem Energy
Xtract Energy Plc ("Xtract") is pleased to provide the following
update on operations and development plans at its Turkish joint
venture Extrem Energy A.S. ("Extrem Energy").
Alasehir/Sarikiz Licence (Extrem Energy 80%)
As previously announced, the Sarikiz-2 well has been shut in as a
future production well, with commercial production expected to
commence in October, once the construction of the necessary surface
facilities has been completed.
Following the successful production test, the new well data has been
analysed together with seismic data, logs from the former East
Sarikiz-1 well and GORE geochemical analysis over the licence area.
On the basis of this analysis, the estimated (P50) total oil in place
within the greater Sarikiz structures has been revised upwards to 371
mbbl ("Development pending - Contingent resources" according to SPE
classification). Using a 20% recovery factor (the more conservative
end of the previously announced range), the total recoverable oil in
the Sarikiz field is now estimated (P50) to be 74 mbbl.
In addition to the re-entry of East Sarikiz-1 which was already
announced, analysis of seismic and well logs at the former Alasehir-1
well in the same licence area have also indicated the presence of
commercial oil. It has therefore been decided to re-enter this well
in order to establish production from the Alasehir field. The forward
production drilling programme is now expected to be as follows:
1) Alasehir-1 (re-entry)
2) East Sarikiz-1 (re-entry)
3) Sarikiz-3 (new well)
Upon mobilization of the required drilling equipment the above
programme is expected to commence in early September and continue
through to the end of December 2009.
An estimate of the total oil in place on the Alasehir field will be
made following the production test. Figures for Alasehir will be in
addition to the above estimates.
Formal field development plans and reserve categorisation will be
finalized once commercial production has been established. Production
performance from the initial wells will be analysed to determine the
optimal well configuration to drain the structures over a reasonable
field life of 20-25 years.
Siraseki Licence (Extrem Energy 100%)
The results from seismic and GORE geochemical surveys over the
Siraseki licence area near the Syrian border have now been processed
and have given rise to a new prospect called Menekselik. The
sandstone structure is a fault bounded anticline with an estimated
area of 11.2 square km and an expected pay thickness of 30m. If the
structure contains natural gas, the recoverable gas in place is
estimated to be 94 bcf using a 70% recovery factor. Extrem Energy
intends to drill the prospect in early 2010 following completion of
Sarikiz-3.
Edirne Licence (Extrem Energy 100%)
The additional seismic programme mentioned in the announcement of 3
August was completed on 9 August. The acquisition of GORE geochemical
data commenced on 19 August and is ongoing. The seismic and
geochemical data will be analysed together to identify drilling
targets in this gas-bearing zone. If successful, these targets will
be drill-ready by early 2010. The area is close to existing
downstream infrastructure, so production can be established quickly
in the event of success.
Extrem Energy is also working on plans to appraise and exploit its
off-shore licences in Candarli Bay and the Sea of Marmara.
All operations are controlled and operated by Merty Energy, Xtract's
joint venture partner in Extrem Energy. Xtract holds 34% of Extrem
Energy.
The information above relating to resource estimates has been
provided using the SPE standards and includes the following terms:
"mbbl" (million barrels); "bcf" (billion cubic feet); "P50" (midcase
scenario in relation to reserve expectations)
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
34% 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 35.0% 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 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 12.6% of the issued share capital of Wasabi.
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