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Additional information

Additional	Information
Market:	AIM
Sector:	Oil and Gas Exploration and Production
Epic:	XTR
News:	Latest news
Web Site:	Xtract Energy
Other Articles:	02-03-201012-02-201020-01-2010

Xtract Energy JV Extrem spuds Sarikiz-3 well, expects Sarikiz-2 production this week

Xtract Energy (AIM: XTR) announced that its 34% owned Turkish joint venture Extrem Energy has spudded the Sarikiz-3 well on 10 January and Sarikiz-2 production is expected to commence this week. The Sarkiz field is located on the Alasehir license area in south-west Turkey; Extrem holds a 80% interest in the license.

Sarikiz-3 has a proposed total depth is 1,950m, with the targeted Alasehir sandstones are expected to be encountered between 1,570m and 1,850m. The well has a preliminary pre-drill P50 estimate of 5.75 million barrels of recoverable oil based on a 2 square kilometre area, an assumed net productive pay thickness of 20 metres and a 20% recovery factor. The third Sarikiz well is estimated to cost approximately US$3.5 million, with the drilling programme planned with 45 rig days.

Following the installation of the well-site heating system, the Sarikiz-2 well is expected to commence production this week. Initial production will be based on natural flow with full pumped volumes being produced and delivered by the end of Q1 2010, temporary delivery arrangements are in place with the Izmir refinery.

A newly agreed contract provides for the expansion of the refinery as the Sarikiz field is progressively brought on stream. The required infrastructure will be built by the refinery operator, and Extrem will cover the investment costs from sales of crude oil.

In order to enhance the planning of further wells, Extrem has decided to asses the early production from Sarikiz-2 and the drilling results at Sarikiz-3 before commencing the previously flagged 3-D seismic project over the license area. The seismic project could therefore be carried out in the second half of 2010.

Extrem Energy is Xtract’s exploration and production joint venture with Merty Energy of Turkey.  Extrem Energy has a portfolio of licence interests including the high potential prospect at Candarli Bay in south-west Turkey.

Xtract also owns 50.01 percent of Elko Energy Inc, 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 percent interest on 26 offshore blocks in a 5,400 square kilometres exploration and production licence close to the prolific Central Graben oil field. Elko also holds a 60 percent operating interest in gas-bearing license blocks P1 and P2 in the Dutch North Sea.

Zhibek Resources, 25 percent owned by Xtract, is an oil and gas exploration and production company with a 72 percent interest in the Tash Kumyr and Pishkoran exploration licences in the Kyrgyz Republic.

Xtract's wholly owned subsidiary Xtract Oil Ltd 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 tenement 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.

Finally, Xtract Energy (Oil Shale) Morocco SA is a 70/30 joint venture with Alraed Ltd Investment Holding Company WLL, a company controlled by Prince Bandar Bin Mohammed Bin Abdulrahman Al-Saud of Saudi Arabia. XOSM has signed a Memorandum of Understanding with the Moroccan oil and mining ministry regatrding the evaluation and possible development of an oil shale deposit near Tarfaya.

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