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).

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.

Xtract Energy (LON:XTR) told investors that the Abu Dhabi National Energy Company has taken a 12 percent stake in blocks P1 and P2 offshore the Netherlands.

The AIM-listed oil firm has an indirect interest in the project which is being run by Chevron. A well is planned in the fourth quarter for the P2 block.

Extract has a 50 percent stake in Elko Energy, who in-turn has a 5 percent overriding royalty over oil and gas sales from the blocks. Elko previously had an equity stake in the licence blocks but in September 2010 it divested the assets, in return for the royalty, in a deal with Chevron.

Chevron also paid Elko €4.3 million in cash for its share of past costs.

The two blocks are owned by a group of firms, comprising Chevron with a 48 percent stake, the Dutch state oil firm Energie Beheer Nederland (EBN) with 40 percent and Abu Dhabi National Energy – via its Dutch subsidiary TAQA Energy – has 12 percent.

Xtract noted that Chevron is planning to drill the P2-10 well, on the P2 block, in the fourth quarter of 2011.This appraisal well is targeting an existing gas discovery and one of the main objectives is to evaluate commercial hydrocarbon flow rates. The well programme is expected to last for up to 100 days.

"We are delighted that another large and respected energy company, which is already active in the Dutch exploration and production business, wishes to participate in the P1 and P2 blocks activity with Chevron and EBN,” Elko chief executive Peter Moir said.

“This increases our confidence in the potential of the acreage and the attractiveness of the royalty arrangement to our shareholders."

Xtract Energy (LON:XTR) has agreed a deal to dispose of its direct interests in it Turkish joint venture company Extrem Energy.

The news comes after the disappointment that Extrem’s Alasehir licence did not achieve commercial production last year. Since then the AIM-listed oil firm has reviewed its position with regards to the asset.

It was subsequently decided that new investors should be brought in to advance the joint venture’s interests.

Xtract and joint venture partner Merty Energy have now agreed a deal with the individual members of the Yoldemir family - the family behind the Merty Energy business.

Merty will now acquire Extract’s 50 percent stake in Extrem in return for royalties - Gross Over Riding Royalty Interest (GORRI) - over Extrem’s licence portfolio. It will get between 6 and 8 percent of the gross hydrocarbon sales revenue.

It will also receive a processing royalty over the licences, capped at US$500,000. Furthermore Xtract will be due payments should Extrem successfully farm-out the licences, this could tot up to US$1.4 million if it is effected for all seven licences.

Meanwhile in a separate statement Xtract told investors that its 50 percent owned associate Elko Energy plans to drill the Luna prospect, offshore Denmark, as early as August.

Elko confirmed that the Luna well will be drilled by the 'Maersk Resolve' jack up drilling unit, which is currently drilling nearby for Maersk Oil and Gas.

The rig is expected to be available in mid August 2011, but Elko said this date could be a few weeks earlier or later depending on the outcome of its current drilling work. 

Once underway the Luna drilling program is expected to take about 1 month.

The Luna well will test the Rotliegendes play concept, having already selected the specific well location on the 01/11 license area.

The prospect is located in a small half graben with the pinch out edge to the south east of the structure. Elko said that the Rotliegendes reservoir is thought to have a high probability of being present at this location, based on the seismic interpretation. 

Additionally Elko confirmed that Chevron, its partner in the Netherlands, is planning to drill its first well on the P2 block in the fourth quarter of 2011. The programme will use the 'Noble Byron Welliver' jack up drilling rig, which will first drill a well for one of Chevron’s other assets nearby in June.

The rig is expected to be available for the P2 Block by September.

The P2-10 appraisal well will target an existing gas discovery on the P2 block, with the main objective of evaluating commercial hydrocarbon flow rates.

Finally Xtract highlighted that the joint Elko-Xtract task force, which has been identifying strategic options to ‘unlock the optimum value for all shareholders’, intends to report its findings in the second quarter.

In September Elko agreed a deal for its two licenses in offshore Netherlands.

In return for its interests in the licenses, Elko will receive an overriding royalty up to 5 percent of the sales value from Chevron’s share of gas and condensate production. On top of that, Chevron will also pay Elko €4.3 million in cash for its share of past costs.

Yesterday, Elko announced that the transaction has now closed.

Xtract shares advanced around 7 percent this morning, and they were last changing hands at 1.875 pence.

Chevron’s first well on the acreage is expected to be drilled in 2011.

“We look forward to the results of the well planned for next year and to a successful ongoing business relationship with Chevron,” Elko chief executive Peter Moir said in September.

In its full year report to 30 June, Xtract recognised that there were the usual exploration and appraisal risks associated with drilling in 2011, but noted that it has created a set of potentially valuable assets in Denmark, Netherlands and Central Asia with the Denmark and Netherlands assets offering “considerable upside potential in the success case”.

The company noted the “gradually improving investment conditions” in the oil and gas sector, driven by a recovery in oil prices that supports the financing of good quality exploration and development projects.

As the investment climate improved during the period, Xtract increased its holdings in Turkey operating Extrem Energy and Elko to 50% and 50.2% respectively.

The operational highlights included Elko’s farm-out of the 02/05 licence in Denmark to Noreco, which will pay US$1 million on completion.

Post farm in, the total net attributable prospective resources to Elko are 936 million barrels under an oil scenario.

After the period, Elko and Noreco applied for an adjoining area immediately to the west of the 02/05 licence area.

Also post-period, Chevron (NYSE:CVX) purchased Elko's Dutch licences in Blocks P1 and P2, where an independent report identified un-risked best estimate net attributable hydrocarbon gas to Elko of 280 billion cubic feet (bcf) contingent resources and of 291 bcf prospective resources.

Chevron will pay €4.3 million in cash at completion plus Elko will receive an overriding royalty of up to 5% of the sales value from Chevron hydrocarbons.

A review of the Turkish business, its assets and license portfolio is currently underway and will be reported upon shortly, said Xtract.

“A further business review is in progress involving the independent directors of Xtract and Elko in which the two companies have agreed to form a joint task force to identify the strategic options open to both companies.

“The end goal is to unlock the optimum value for all shareholders in both companies,” said chairman of Xtract John Newton.

Xtract pledged to maintain “an appropriate balance between a strong growth orientation and the need for an acceptable risk profile”.

On the financial side, pre-tax losses were reduced from £16.8 million to £12.5 million a year earlier, while losses per share fell from 2.24 pence to 1.47 pence.

The group’s net cash position increased from £3.18 million at 30 June 2009 to £6.87 million at the end of the period.

The company has also announced that chairman John Newton will move from an executive role to a non-executive one after the annual general meeting (AGM) in December, while Susan Wickerson has resigned from the board effective 1 October.

Newton said the company now had the capabilities on the board to replace those he had brought within his executive remit.

New finance director Alan Hume has over 25 years of financial experience in the oil and gas service and energy sector, having held financial and commercial roles with blue chips and JV (joint venture) start-ups alike.

Hume has served as Chief Financial Officer (CFO) of Elko Energy for the past 2 years and will continue in that role.

Hume has also been a director at several UK and Turkish companies.

Xtract identifies and invests in a diversified portfolio of early stage energy sector technologies and businesses with significant growth potential.

The company owns 50% of exploration and production JV Extrem Energy in Turkey and 50% of Elko.

Extrem has a portfolio of licence interests including the high potential prospect at Candarli Bay in south-west Turkey.

Elko’s main asset is a 33% interest on 26 offshore blocks in a 5,400 square kilometre (sq km) exploration and production licence close to the prolific Central Graben oil field in the Danish North Sea.

Technical work has indicated the potential for significant reserves.

The agreement with Chevron covers Elko’s licenses in Blocks P1 and P2 offshore the Netherlands.

In return for its interests in the block, Elko will receive an overriding royalty up to 5% of the sales value from Chevron equity gas delivered into the Dutch National Transmission System and Chevron equity condensate delivered onshore.

On top of that, Chevron will pay Elko €4.3 million in cash for its share of past costs.

The first well on the acreage is expected to be drilled in 2011.

Elko said the deal is beneficial to its shareholders, who can now participate in the Dutch exploration and production business.

“We are delighted to conclude this deal and believe it offers an excellent outcome for Elko shareholders."

“We look forward to the results of the well planned for next year and to a successful ongoing business relationship with Chevron,” said Elko chief executive of Elko Peter Moir.

Elko simultaneously announced that hat the 02/05 license group, which comprises Norwegian Energy Company, Danish North Sea Fund and Elko, have submitted an application for an adjoining area immediately to the west of the 02/05 licensed area.

The application is made in the same working interest percentages as in the 02/05 license, namely operator Noreco 47%, DNSF 20%, Elko 33%.

Back in June, Elko released a resource update, which put its attributable prospective resource in Denmark stands at 3,557 billion cubic feet (bcf) of gas or 936 million barrels of oil (mbo).

On the Dutch acreage, the contingent resources for the 5 confirmed discoveries have been estimated at 280bcf of un-risked net attributable hydrocarbon gas, with a commercial chance of success ranging from 40% to 75%.

The prospective resources for the 6 key prospects in the exploration portfolio have been put at 291bcf un-risked net attributable hydrocarbon gas.