Investment Update
(Thomson Reuters ONE) - 20 January 2010AIM: XTR XTRACT ENERGY PLC Investment update - Extrem EnergyFurther to its announcement dated 11 January 2010, Xtract Energy Plc ("Xtract"or "the Company") is pleased to provide the following update on productionoperations at its Turkish associate company Extrem Energy AS ("Extrem").Sarikiz-2 ProductionProduction began on Wednesday 13 January 2010. The average daily natural flowrate has been approximately 60 barrels ("bbl") per day net oil. This isconsistent with management expectations and consistent with the previouslyprojected pumped flow-rate of 350 bbl/day, once the down-hole pump has beeninstalled. Full pumped volumes from Sarikiz-2 are expected to be achieved by theend of Q1 2010. Until then, production is expected to be based on natural flow.The first truck delivery of the crude oil to the Aliaga refinery is scheduledfor the last week of January 2010 or first days of February 2010; a ceremony tobe attended by the Turkish minister for natural resources is planned to mark thecommencement of production at Sarikiz-2.The expected sales price of the crude is the spot price of Arab Medium crude oilless an API Gravity adjustment of approximately US$1 per bbl. There is a stateroyalty payable of 12.5%. Transportation costs are expected to be US$5 per bblwith other variable operating costs estimated at a similar figure. Corporate taxat 20% will be applied once the company is profitable. Withholding tax ondividends payable by Extrem to Xtract is expected to be 5% (see below).Extrem holds 80% of the relevant license. Xtract holds 34% of Extrem.Xtract Energy Spain SLXtract has recently incorporated a wholly owned Spanish holding company, XtractEnergy Spain SL, and is in the process of transferring its entire holding inExtrem to the new company. The insertion of an intermediary company provides thegroup with greater financial flexibility. Spain was selected as the host countrydue to its favorable tax treaty with Turkey.Commenting on the developments, Andy Morrison, CEO of Xtract said, "We aredelighted to note the new milestone reached by Extrem on its journey to become amedium-sized oil and gas exploration and production company. We look forward tobuilding on the important achievement represented by the start of production."The production information above has been reviewed and approved by OngunYoldemir, Managing Director of Extrem Energy, who has a masters degree ingeological engineering and worked as an explorationist in the oil and gas sectorin 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 AmericanAssociation of Petroleum Geologists, European Association of Geologists andEngineers, the Society of Exploration Geophysicists and several related Turkishinstitutions.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 NewtonAbout Xtract EnergyXtract identifies and invests in a diversified portfolio of early stage energysector technologies and businesses with significant growth potential. TheCompany aims to work closely with the associated management teams to achievecritical project milestones, to finance later development stages, and to buildand crystallise value for all shareholders and partners.For further information on Xtract please visit www.xtractenergy.co.ukA short description of the principal assets of Xtract is set out below. Theseassets are either held directly or through wholly owned subsidiaries of theCompany.Extrem Energy AS ("Extrem Energy")Extrem Energy is an exploration and production joint venture with Merty Energyof Turkey. The JV's aim is to create a new medium-sized oil and gas explorationand production business, initially focused on Turkey where Merty Energy hasparticular experience and expertise. Extrem Energy has a portfolio of licenceinterests including the high potential prospect at Candarli Bay in south-westTurkey. 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 interestsin exploration and production licences in the Danish and Dutch North Sea. Itsmajor asset is in the Danish North Sea; an 80% interest on 26 offshore blocks ina 5,400 sq km exploration and production licence close to the prolific CentralGraben oil field. Technical work indicates the potential for significantreserves. Elko also holds a 60% operating interest in gas-bearing license blocksP1 and P2 in the Dutch North Sea. Xtract owns approximately 50.0% of Elko'sissued share capital.Zhibek Resources Ltd ("Zhibek Resources")Zhibek Resources is an oil and gas exploration and production company which hasa 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 programmefor 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 theCompany's oil shale resources in Australia and the technology for oil extractionfrom oil shale resources. Xtract has oil shale exploration rights over miningtenements in the Julia Creek area of Queensland. In addition to evaluating thirdparty technologies, XOL has been developing proprietary technology for thecommercial 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, acompany controlled by His Highness, Prince Bandar Bin Mohd. Bin AbdulrahmanAl-Saud of Saudi Arabia. XOSM has signed a Memorandum of Understanding with theOffice National des Hydrocarbures et des Mines for the purposes of evaluationand possible development of an oil shale deposit near Tarfaya, in the south westpart of Morocco. Xtract currently holds 70% of the joint venture.[HUG#1375167]
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Datum: 20.01.2010 - 05:20 Uhr
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