Xtract Regulatory News (XTR)

8 Jan 2010 10:25



08 January 2010

AIM: XTR

XTRACT ENERGY PLC

("Xtract" or the "Company")

Investment update - Elko Energy

Xtract Energy Plc ("Xtract") is pleased to announce that it has entered an agreement with Oakville Capital ET, LLC ("Oakville"), which is the second largest shareholder of Elko Energy Inc. ("Elko") after Xtract. Under the terms of the agreement, Xtract will acquire Oakville's entire holding in Elko, amounting to 13,200,000 ordinary shares, being approximately 13.2% of the issued stock of Elko. The consideration is comprised of a cash payment of US$1,342,000 and one new Xtract share for every Elko share. The transaction is scheduled to complete on 11 January 2010 at which time application will be made for the 13,200,000 new Xtract shares to be admitted to trading on AIM and this is expected to become effective on 15 January 2010.

Commenting on the transaction, Andy Morrison, CEO of Xtract said, "This further acquisition of Elko shares represents another step in the transformation of the company from a passive investor into one with more active involvement with its underlying assets".

Following completion, Xtract's holding in Elko will be 49,975,000 ordinary shares, representing approximately 50.02% of the issued capital of that company, and there will be a total of 824,965,026 Xtract ordinary shares in issue.

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 36.8% of Elko's issued share capital. For the year ended 31 December 2008, Elko made a loss of US$7.0m and had net assets of US$15.2m.

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.