Investment Update

24 Dec 2007 07:56

Xtract Energy plc24 December 2007 24 December 2007 AIM: XTR XTRACT ENERGY PLC Further US$6 million Investment in Elko Energy Inc Xtract Energy PLC ("Xtract" or "the Company") is pleased to announce that it hasmade a further investment of US$6 million in Elko Energy Inc ("Elko") through adirect private placement. As a consequence of this investment, Xtract's wholly owned subsidiary, XtractInternational Ltd (formerly Cambrian Oil and Gas Plc), has received 12 millionnew common shares in Elko at a cost of US$0.50 per share.. The placement wasmade in parallel with an additional brokered private placement of approximately24.2 million new shares to a number of other institutional investors by Elko atthe same price per share. Following both of these private placements, Xtract Energy, through itssubsidiary Xtract International Ltd, now holds approximately 33.8 million commonshares in Elko, representing approximately 35.2% of the total issued capital ofElko. As part of the placement terms, Xtract International Ltd will receive a cashcommission of 6% in lieu of brokerage and 480,000 warrants valid for 12 monthsand exercisable at US$0.60 per share. These terms are in line with the termsagreed between Elko and Canadian brokers Jennings Capital Inc. and CormarkSecurities Inc. for the brokered placement of the additional shares to the otherinvestors involved in the transaction. Andy Morrison, CEO of Xtract, commented: "This parallel fund-raising by Elko is an important milestone in the growth ofthe company and will enable it to significantly advance the development of itsDutch and Danish North Sea interests during 2008. The Dutch assets substantiallyunderpin the value of Elko whilst the Danish acreage holds some of the mostexciting remaining exploration prospects in the North Sea, with enormous upsidepotential Through its major shareholding position in Elko, Xtract Energy Plc offersinvestors immediate access to this otherwise unlisted opportunity". Enquiries please contact: Xtract Energy plc Andy Morrison, CEO +44 (0) 20 7079 1798 Smith & Williamson David Jones +44 (0) 20 7131 4000Corporate Finance Ltd Azhic Basirov Scott Harris Stephen Scott +44 (0) 20 7653 0030 Annabel Michie For further Information on Xtract please visit www.xtractenergy.co.uk About Elko Energy Elko Energy Inc ('Elko') is a Canadian oil and gas exploration company formed in2005. Elko has an 80 per cent interest in a 5,370 km2 exploration and productionlicense in close proximity to the prolific Central Graben in the Danish NorthSea. The licence covers 26 Danish licence blocks with a 6 year exploration termand 30 years for exploitation. Elko is an approved offshore operator in Denmarkand has set up a Danish subsidiary to hold the licence. The current partnershipis Elko (80%) and Nordsoen - a Danish government entity (20%). In early 2007, Elko applied for two off-shore blocks in the Dutch sector of theNorth Sea, both of which contain a number of drilled and tested gas bearingstructures. Block P1 has now been awarded to a consortium in which Elko will bethe operator and will retain 33% interest. Award of adjacent Block P2 is pendingand discussions continue to secure additional acreage. In addition to its exploration assets, Elko owns 51% of Dragon Energy Inc.("Dragon"), a private Canadian company. Dragon's principal assets are a 30%share of the producing Kotaneelee gas field in Canada and a joint venture inrespect of the Maling oil field in Gansu province, China. About Xtract Energy Plc Xtract identifies and invests in a diversified portfolio of early stage energysector technologies and businesses with very significant growth potential. Weaim to work closely with the associated management teams to achieve criticalproject milestones, to finance later development stages and to build andcrystallise value for all shareholders and partners. Xtract is supported by its cornerstone investor, Cambrian Mining Plc (AIM:CBM) adiversified resource investment house which, together with its wholly ownedsubsidiary Cambrian Investment Holdings Ltd, holds approximately 50.34% of theissued share capital of the Company. A short description of the principal assets of Xtract (other than Elko Energy)is set out below. These assets are either held directly or through wholly ownedsubsidiaries of the Company. MEO Australia MEO is focused on developing gas-to-liquids ("GTL") projects in the Timor SeaAustralia, in an area of shallow water known as Tassie Shoal. It has securedCommonwealth Government environmental approvals for two large scale (1.8 Mtpa)methanol plants (50 per cent. interest) and a 3 Mtpa LNG plant (100 per cent.interest) which are adjacent to the Evans Shoal gas field. Wasabi Energy Wasabi is a diversified investor in renewable energy and low greenhouse emissiontechnologies, with interests in geothermal waste/heat, uranium exploration inAustralia's Northern Territory and biodiesel investments in Victoria. Central Asian Interests Xtract's Central Asian interests include a production sharing agreement withKyrgyzneftegaz to instigate a water injection project on the Beshkent- Togap oilfield. Xtract also holds interests in several exploration licences in the TashKumyr area and in the Toktogul exploration licence. Oil ShaleXtract has oil shale and related petroleum product exploration rights over mining tenements in the Julia Creek area of Queensland and has recently been granted an exploration permit which gives rights to explore for oil shale in an area in the South of New Zealand. It is investigating the commercial production of hydrocarbons (crude oil) from oil shale. Xtract is also available for trading on the open market segment of the FrankfurtStock Exchange (ticker R9X.FSE). This information is provided by RNS The company news service from the London Stock Exchange