www.xtractenergy.co.uk
Xtract Energy identifies and invests in a portfolio of early stage oil and gas assets and business interests with significant growth potential. We aim to engage closely with the associate management teams to achieve project milestones, finance early stage asset and business development activity, and then finance the asset development phase, or if appropriate, crystallise value for all shareholders at a suitable exit point. We aim to achieve returns for our shareholders through access to the significant upside rewards associated with our investments.
Xtract Energy Plc (‘Xtract’) was established in 2004 (as then Resmex Plc) and its shares were admitted to trading on AIM at the end of March 2005.
Xtract Energy reshuffles portfolio to focus on most promising investments
Energy investor Xtract Energy PLC (AIM: XTR) reported on the results for the full year ending 30 June, saying it has swung to losses as revenues narrowed amid “dramatically changed” market conditions, while reaffirming its focus on investments that are likely to pay off sooner to reduce cash burn.
Revenues for the period amounted to £124,000 compared to last year’s revenues of £207,000, made up entirely from interest on bank deposits. The group posted a pre-tax loss of £23.83 million after making a £144,000 profit in 2008.
Xtract Energy has switched focus to investments in “more promising areas” to reduce cash burn, placing the technology development of subsidiary Xtract Oil into hibernation and ending its involvement in the water injection project and farming out 75% of the exploration venture in Kyrgyzstan to Santos in exchange for commitments to fund up to US$8.5 million of its 2009-10 exploration programme. The group said the substantial transformation in its operations occurred amid “dramatic changes in market conditions.”
“The move away from being essentially a passive investment company to one with more active involvement in its assets was achieved more quickly than was foreseen last year. Although much has been done to position the Company for the future, the transformation is as yet incomplete. The prize for getting it right can be substantial, even in these more challenging post-boom times,” said Chief Executive of Xtract Energy Andy Morrison.
The group highlighted some of the accomplishments made during the period, including a more promising oil discovery than expected at its Turkish JV (joint venture) Extrem Energy’s first on-shore well in its Alasehir license area, which it said had the potential to become the cornerstone of its portfolio.
Post-period developments included the successful production testing at Satikiz-2 with commercial production expected to commence in Q4 2009, the disposal of its remaining MEO holdings for A$7 million and the ale of its interest in Wasabi Energy for A$1.38 million. The company has also increased its stakes in Extrem Energy and Elko to 34% and 36.8% respectively.
Extrem Energy has 100% interests in offshore licenses at Candarli Bay and in the Sea Of Marmara and onshore licenses at Edirne and Siraseki and an 80% interest in an onshore license at Alasehir in Turkey. Elko Energy operates the largest offshore exploration license in Denmark with an area of 1.3 million acres, which offers unrisked net prospective resources of 1.8 billion barrels oil or 8.4 Tcf (trillion cubic feet) of gas. Elko owns 80% of the license.
