Last checked at 24 Aug 2010 10:10
24 August 2010
AIM: XTR
XTRACT ENERGY PLC
("Xtract" or the "Company")
Investment Update
Further to the announcement made on 11 August 2010, Xtract provides the following update on the status of the Sarikiz-2 well operated by its Turkish business Extrem Energy AS ("Extrem Energy").
Following removal of the downhole pump for mechanical repairs, attempts were made to re-establish production under natural flow from the Sarikiz-2 well. However the reservoir inflow performance of the well has deteriorated to the point where only small volumes of formation water with a trace of oil were produced. Following discussions between Xtract Energy and Extrem Energy regarding the status of the Sarikiz-2 well, it has been reluctantly concluded that there is no realistic prospect of achieving commercial oil production from this well, with or without pumping. It has been therefore decided to plug and abandon the well.
As previously noted, the initial promise of this well to produce commercial oil has not been fulfilled. The evidence for a working petroleum system and good quality sands at Sarikiz remains but the complex reservoir geology precludes immediate identification of an effective reservoir trap for the oil generated. Further evaluation will be undertaken to quantify the work program that would be needed to confirm the commercial potential of the greater Sarikiz area.
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.
Commenting on the update, Peter Moir, CEO of Xtract said, "We are disappointed with the outcome from the Sarakiz-2 well given the initial promise for commercial oil production. Xtract are conducting a comprehensive review of our Turkish business, its assets and license portfolio and we expect to provide an update on this review later this year".
Enquiries please contact:
| Xtract Energy | Peter Moir, Director | +44 (0)137 237 1071 |
| Cenkos Securities Plc | Jon Fitzpatrick Ken Fleming Alan Stewart | +44 (0)207 397 8900 +44 (0)131 220 6939
|
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.