Xtract Regulatory News (XTR)

1 Sep 2006 13:00

Xtract Energy plc01 September 2006 1 September 2006 XTRACT ENERGY PLC ("Xtract" or the "Company") Purchase of investments by Xtract Xtract announces that it has agreed to acquire substantial shareholdings inCambrian Oil & Gas plc ("COIL"), Wasabi Energy Limited ("Wasabi") and AvivaCorporation Limited ("Aviva") from Cambrian Mining plc ("Cambrian") andCambrian's wholly owned subsidiaries Deepgreen Minerals Corporation Limited andCambrian Investment Holdings Limited. The total consideration payable (which isbased on the closing market values as at 30 August 2006 of the shares beingacquired, all of which are quoted) for these investments is approximately £3.8million which is being satisfied by the issue to the respective sellers ofconvertible unsecured loan notes totalling approximately £3.3 million (the "LoanNotes") and a payment of £450,000 in cash to Cambrian. Information on COIL COIL was formed in March 2004 and acquired its first oil and gas exploration andproduction assets in March 2005 when it was admitted to AIM; these are locatedin the Kyrgyz Republic. In July 2006, COIL agreed to invest up to £1.7 millionin Methanol Australia Ltd., a gas-to-liquids business based in Australia whichis quoted on the ASX market. As at 31 December 2005, COIL's net assets were £3.8 million and its loss beforetax for the six months then ended was £0.3 million. COIL raised £1.5 million ina placing in July 2006 and its current market capitalisation is £4.7 million. Xtract is to acquire 44,630,769 ordinary shares in COIL (representing 28.2% ofCOIL's issued ordinary share capital) and warrants over an additional 22,844,994ordinary shares (15,000,000 exercisable at 3p per share and 7,844,994exercisable at 7p per share) for a total consideration of approximately £1.3million (approximately £0.9 million in Loan Notes and £450,000 in cash). Information on Wasabi Wasabi is quoted on the ASX market. Wasabi has an investment in Exergy Inc., aUS-based business which owns a technology for the generation of electricity fromgeothermal and waste heat. Wasabi also has interests in a Canadian coal miningproject at Lillyburt, two uranium exploration licences in Australia and anAustralian company specialising in developing bio diesel production plants andin marketing the fuel. As at 31 December 2005, Wasabi's net assets were £1.0 million and its lossbefore tax for the six months then ended was £0.1 million. Wasabi's currentmarket capitalisation is £4.2 million. Xtract is to acquire 81,511,422 ordinary shares in Wasabi (representing 19.5% ofWasabi's issued ordinary share capital) for a total consideration ofapproximately £0.8 million in Loan Notes. Information on Aviva Aviva is quoted on the ASX market. The Company's main business is an iron, coaland cogeneration project in western Australia. As at 31 December 2005, Aviva's net assets were £1.3 million and its loss beforetax for the six months then ended was £0.2 million. In January 2006, Avivaraised £0.6 million in a placing. Aviva's current market capitalisation is £8.6million. Xtract is to acquire 61,500,000 ordinary shares in Aviva (representing 18.6% ofAviva's issued ordinary share capital) and options over 10,000,000 Aviva sharesexercisable at a price of A$0.10 per share for a total consideration ofapproximately £1.6 million in Loan Notes. Note: the accounting information shown above has been extracted from theunaudited interim accounts of the companies concerned and the marketcapitalisation figures are based on share prices at the close of business on 30August 2006. Amounts reported in Australian dollars have been translated at anexchange rate of A$2.49/£1. The Loan Notes carry interest at a rate of 2% over LIBOR and are repayable inSeptember 2008. In the event that the Company issues new shares in a placing, theLoan Notes may be converted at the option of the noteholder into ordinary sharesof Xtract at the placing price. Cambrian holds 55.2% of Xtract's issued ordinary shares and, as a result, theAcquisition represents a related party transaction under the rules of AIM. Thedirectors of Xtract consider, having consulted with the Company's nominatedadviser, Smith & Williamson Corporate Finance Limited, that the terms of thetransaction are fair and reasonable insofar as its shareholders are concerned.The Acquisition will significantly extend the range of Xtract's energy andresource related investments beyond its existing oil shale and gold mininginterests. Enquiries: XtractSue Wickerson 020 8466 0406Director Smith & WilliamsonAzhic Basirov 020 7131 4000David Jones 020 7131 4000 This information is provided by RNS The company news service from the London Stock Exchange