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 says Sarikiz-3 drilling to start before end of December
Energy investor Xtract Energy PLC (AIM: XTR) says its 34% owned JV (joint venture) Extrem Energy is nearing production from the Sarikiz-2 well, while preparation for the drilling of Sarikiz-3 is almost complete with a spud date expected before the end of December.
The necessary logistical, permitting and commercial arrangements for production at Sarikiz-2 are complete after the conclusion of a work-over sequence with Extrem expecting to install a heating system within the next few days to enable natural flow to be established.
The company has temporary delivery arrangements with the Izmir refinery, which will receive early production from Sarikiz-2, based on natural flow until the end of Q1 2010, when full pumped volumes expected to be produced and delivered.
Preparation for the drilling of the Sarikiz-3 well, located 525 metres east of Sarikiz-2, is ongoing with a spud date expected to occur before the end of December. The well will be drilled to a total depth of 1,950 metres, targeting the Alasehir sandstones with the recoverable oil in place estimate at 5.75 mbbl (million barrels) based on an assumed 20% recovery factor.
The well cost is expected to be at about US$3.5 million and the drilling programme is planned on the basis of 45 days.
“Each milestone passed is a first time for the company. The previous disappointment at Alasehir-1 reminded us not to take anything for granted in the oil exploration business, but investment prospects continue to look attractive at Alasehir and across the Extrem portfolio,” said Chief Executive of Xtract Andy Morrison.
Extrem had to suspend testing work on the Alasehir-1 well early last month after encountering worse than expected conditions and eventually decided to drill a new well Sarikiz-3 on the Sarikiz part of the field instead of re-entering East Sarikiz-1, enabling the drilling rig to catch up time lost at Alasehir-1. The company is currently evaluating the possibility of undertaking a 3D seismic survey over the license area.
Shares in Xtract rallied 13% on the news this morning.
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 owns a 34% stake in Extrem, which holds 80% of the Alasehir license.
Xtract also owns 36.8 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.
