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's Sarikiz-3 well comes up dry, moves on to boost Sarikiz-2 production
Xtract Energy (AIM: XTR) said the Sarikiz-3 well at the on-shore Alasehir licence area in Turkey showed no hydrocarbons in recoverable quantiries during testing, and it does not consider the well to be commercial.
The 50% percent owned operator Extrem Energy AS is preparing to suspend the well as a possible future water-injection well. Upon completion of this operation, the rig will be mobilized to the Sarikiz-2 well site to install the pump as previously planned.
Sarikiz-3 reached a total depth of 2,027m on 16 March 2010, wire-line logging was completed on 20 March. Earlier tests encountered oil shows, which were recorded in mud logs at a number of sandstone intervals in depths between 1,340 and 1,970m.
According to Xtract, the well results will be combined with recently completed additional seismic, to help determine how best to continue the exploration of the licence area. "We are disappointed to find that the recent well has failed to unlock the secrets of the Alasehir/Sarikiz field and therefore that further investment may be needed if the technical analysis is shown to justify it", Xtract chief executive Andy Morrison commented.
Sarikiz-2 began production at natural flow rates on 13 January 2010. As previously reported by Xtract, a down-hole production pump will be installed by the Merty rig following the conclusion of drilling and testing operations at Sarikiz-3. Once installed the pump is expected to boost Sarikiz-2 oil production to approximately 350 bbl/day.
Extrem’s next exploration target is located in the Adana basin, on the Siraseki licence in Turkey. Once the company has establishing pumped production at Sarikiz-2, the rig will be mobilised to drill the Menekselik-1 exploration well.
Menekselik-1 is targeting the Aslantis sandstones which were identified from the results of recent seismic and geochemical surveys.
Since Mobil’s commercial oil discovery in 1960 in the Bulgurdag field, located to the northwest, several wells have been drilled in the area, however none have made any further commercial discoveries. Xtract said that Menekselik-1 aims to unlock the undiscovered potential of the basin.
According to Xtract the target structure is a fault bounded anticline, with an estimated area of 14 square kilometres and an expected net productive pay thickness of 30m. The company believes that the target will be found between 1,647-1,703m. Menekselik-1 has a planned total depth of 2010m.
Depending upon hydrocarbon shows and results of the wire-line log analysis, cased-hole testing may be carried out on the Menekselik well, Xtract said. Extrem Energy's preliminary pre-drill ‘P50’ estimate of recoverable hydrocarbons in place is 3.8 million barrels of oil, based on an assumed net productive pay thickness of 30m. In terms of the Menekselik field as a whole, the equivalent estimates are 28.8mbbl of oil or 94bn cubic feet in gas, applying recovery factors of 20% and 70% respectively.
At the end of March, Extrem extended its license over the Candarli Bay area – its other key asset - in Turkey until October 2012 and hired a marketing firm to find a farm-out partner for the project. The extension of the Candarli Bay license, has led to an extension of the drilling commitment date to April 2011.
The license commitments can be extended for a further year if required. Extrem has also entered into a marketing services agreement with Schlumberger’s (NYSE: SLB) IndigoPool, which will now provide marketing and advisory services directed towards finding one or more farm-in partners to explore and appraise the license.
Extrem Energy is Xtract’s exploration and production joint venture with Merty Energy of 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 regarding the evaluation and possible development of an oil shale deposit near Tarfaya.
