Xtract Energy (LON:XTR) this afternoon announced that the Luna well, in Denmark, is about to be completed, however it did not encounter hydrocarbons.

The company explains that the well’s objective was to test the overall Rotliegendes play concept over the 01/11 and 02/05 licences. 

On AIM, Xtract shares shed 0.62p, or 35 per cent, to trade at 1.3p each.

In a stock market statement it said the well location was picked in order to maximize the information gathered by the well and was designed to address a number of play uncertainties. 

It adds that the extensive amount of new data obtained from drilling will now be analysed and integrated into the overall Rotliegendes play model.

Xtract has a 33 per cent stake in the licence 01/11, via its wholly owned subsidiary Elko Energy. The project is operated by Noreco and the Danish North Sea Fund is the other partner.

During the next few months Xtract Energy (LON:XTR) will be focusing on the company’s North Sea projects, where it plans to drill two wells in Denmark and the Netherlands in the final quarter of the year.

The firm, which released its interim results for the six months to June 30 this afternoon, has an interest in offshore Denmark through its Elko Energy subsidiary, which Xtract has now finished acquiring.

Elko Energy holds a 33-per cent working interest in two exploration licences there and these licences cover a combined area of 3,638 square kilometres. According to Xtract, they offer P50 un-risked  prospective resources of 747 million barrels of oil.

The partners in Denmark have already selected a location for the first well, to be called Luna. Xtract said the well will be drilled to test the Rotleigendes play in an optimum position for reservoir quality, thickness and hydrocarbon charge in the combined prospective area.

In the Netherlands, also offshore, Elko Energy and Elko Exploration hold interests on the P1 and P2 blocks operated by Chevron. Chevron plans to drill an appraisal well on block P2 during the fourth quarter of 2011 with its main objective being to evaluate commercial hydrocarbon flow rates from an extended-reach horizontal well within the Rotleigendes sandstone reservoir. This well programme is expected to last 100 days.

After making an offer in June to acquire outstanding shares that Xtract did not already own in Elko Energy, the firm has now completed the acquisition of the business. Meanwhile, Xtract has also disposed of its 50-per cent holding in Extrem Energy.

“We are very happy to have now completed the acquisition of Elko Energy Inc. and the disposal of our interest in Extrem Energy AS,” said Peter Moir, Xtract’s chief executive. “These transactions allow management to more effectively focus on core business areas moving forward. We are excited about our future prospects, particularly in the North Sea where we have two wells being drilled in the next quarter.”

The firm made a net loss of £1.2 million during the first half, compared with a £10.3 million loss in H1 2010. Meanwhile, cash on its balance sheet at the end of June stood at £4.6 million (December 31 2010: £8.8 million).

Xtract Energy (LON:XTR) moved a step closer to acquiring the whole of its 50 per cent owned associate Elko Energy after the Canadian firm’s shareholders approved the deal yesterday.

In June Xtract made an offer to acquire all the remaining Elko shares that it does not already own through a share based transaction. Xtract offered seven of its shares for every Elko share.

With the support of Elko’s directors, who own shares in the company, and another major investor Xtract already had acceptances worth 66.4 per cent of the shares in issue.

This morning Xtract confirmed that all resolutions were passed in a special meeting of shareholders in Toronto yesterday, thereby approving the takeover.

Although incorporated in Canada, Elko explores for oil and gas in offshore Denmark. The firm is involved in two licences there.

Its Licence 02/05, located off the west coast of Denmark in water depths of approximately 40 metres and covering 5,372 square kilometres, contains part of two structural elements: the East North Sea High and the Horn Graben in the east. Licence 01/11 is located immediately to the west of 02/05.

Both assets were independently evaluated in February 2011, with three substantial leads identified that could be charged with either oil or gas.

“We have focused our time on rebalancing the asset portfolio of the company and the acquisition of Elko is the logical next step in this process,” Xtract chief executive Peter Moir said in June. 

“Xtract has a clear vision and solid strategy to create a platform for sustainable growth with significant near term operational upside potential for shareholders."

Xtract Energy (LON:XTR) has offered to acquire all of the shares in Canada’s Elko Energy that it does not already own. The company’s shares have been suspended during the completion of the transaction – which is deemed a reverse takeover under Alternative Investment Market rules.

Xtract said that it was offering seven of its shares for every Elko share. Currently, Elko has just over 100 million shares in issue, of which 49,975,000 are owned by Xtract.

Xtract said it had received commitments to vote in favour of the acquisition from the directors of Elko who own shares in the Toronto-based company and from major shareholder who together with Xtract’s own holding represent 66.4 percent of the shares in issue.

Although incorporated in Canada, Elko explores for oil and gas in offshore Denmark. The firm is involved in two licences there.

Its Licence 02/05, located off the west coast of Denmark in water depths of approximately 40 metres and covering 5,372 square kilometres, contains part of two structural elements: the East North Sea High and the Horn Graben in the east. Licence 01/11 is located immediately to the west of 02/05.

Both assets were independently evaluated in February 2011, with three substantial leads identified that could be charged with either oil or gas.

“We have focused our time on rebalancing the asset portfolio of the company and the acquisition of Elko is the logical next step in this process,” said Peter Moir, Xtract’s chief executive. “Xtract has a clear vision and solid strategy to create a platform for sustainable growth with significant near term operational upside potential for shareholders.  The board looks forward to completion of the acquisition and the re-admission of Xtract as an operating company on AIM.”

Xtract Energy (LON: XTR) has contracted energy and resources consultant Worley Parsons to provide a technical study to show how it might exploit oil shale in the Julia Creek tenements in Queensland, Australia.

Worley Parson is a leading provider of professional services to resource and energy sector companies, and its task will involve studying the various technologies that are currently being used and developed around the world to extract hydrocarbons from oil shale.

The study, which is expected to be complete towards the end of 2011, is aimed at assisting Xtract in reviewing the commercial options available for the exploitation of its oil shale resources, as well as making these attractive to potential commercial partners.

Xtract Oil Ltd (XOL), a wholly-owned subsidiary of Xtract, holds mineral rights over 2.1 billion barrels of indicated and inferred resources at Julia Creek.

But after the Queensland government in 2008 announced a 20-year moratorium on a proposed oil shale development in the Whitsunday coastal region of the state, as well as a two-year review period for oil shale developments throughout the state, XOL took the decision to scale back significantly its projected investment in the development of oil shale technology.

Today’s news suggests that Xtract believes the mood towards the development of shale oil in Queensland is set to improve.

Xtract also has an involvement in shale oil in Morocco where its 70 percent-owned XOSM joint venture is looking at evaluating and possibly developing an oil shale deposit near Tarfaya, in the south west of the country.

At 8:25am Xtract’s shares were trading for 2.94 pence each.