26th Oct 2007 08:50
Xtract Energy plc26 October 2007 26 October 2007 AIM: XTR XTRACT ENERGY PLC ("Xtract" or the "Company") PROJECT UPDATE - MEO AUSTRALIA Xtract is pleased to refer shareholders to the following press release announcedin Australia yesterday by MEO Australia Limited (MEO). Xtract currently holdsapproximately 21.3% of the issued capital of MEO. "FARMIN TO NORTHWEST SHELF PERMITS Key Points: • MEO farms into three highly prospective Northwest Shelf exploration permits • Permits immediately adjacent to Rankin, Goodwin and Perseus Gasfields • Permits: WA-359-P, WA-360-P AND WA-361-P • Large Zeus feature identified with similar high amplitude bright spots to the reservoir sections of the adjacent Perseus Gasfield MELBOURNE, AUSTRALIA (October 25, 2007) -- MEO Australia Limited (ASX: MEO) ispleased to announce that the Company via its wholly owned subsidiary North WestShelf Exploration Pty Ltd has farmed into three Northwest Shelf offshore permitsoperated by Cue Energy Resources Limited (ASX: CUE). MEO has secured a 60% participating interest in these highly prospective exploration permits via a seismic acquisition option. MEO has agreed to meet the modest seismic acquisition obligations in these permits and has assumed the role as Operator for each permit. In any of these permits, if MEO decides to fund 100% of the cost of a single well, a 70% interest will have been earned. However, if the existing permit holders elect to pay 10% of the cost of a single well in any permit, the MEO interest in that permit would remain at 60%. MEO has carefully reviewed the existing 2D and 3D data, which covers a largeportion of the permits. The permits offer scope for many prospective oil and gasleads. At this stage, the most obvious significant potential appears to be inWA-361-P, immediately northwest of the Perseus Gasfield and on the northern flank of the Goodwyn Gasfield where a thick sequence of interpreted Legendre shoreface and shallow marine sandstones are present in the Keast Graben. A potential stratigraphic trap, Zeus, has been identified, which is thought to bea similar play and analogous to the Perseus Gasfield (12 Tcf) and to the new Woodside Persephone-1 discovery on the eastern flank of the North Rankin Gasfield. Zeus is a Legendre shoreface/shallow marine sandstone play within the faultbounded NNEtrending Keast Graben. The Legendre Formation appears to thicken intothe graben controlled by growth of basin margin syn-depositional faults,thinning onto northern and southern high blocks. Generation and migrationmodelling from Triassic source rocks in the Keast Graben underlying Zeus hasconfirmed a likely petroleum charge mechanism. Zeus has prospective multi-TCF inplace potential of 5 to 15 Tcf over 350 sq km of closure with up to 100 m of netpay. The most encouraging indications are the Company's observations, on theexisting 3D seismic data, of possible development of amplitude-relatedhydrocarbon indicators that are similar to amplitudes observed in the samereservoir gas sands at Perseus. The respective participating interests for the permits prior to drilling wouldbe as follows: Permit MEO Cue Energy Gascorp Exoil (operator) WA-359-P 60% 20% nil 20%WA-360-P 60% 20% 20% nilWA-361-P 60% 20% 20% nil MEO has secured the PGS Australia seismic acquisition vessel, M/V OrientExplorer to acquire approximately 300 sq km of new 3D seismic data. The new dataand selected reprocessing of the existing 3D dataset, followed by AVO (amplitudevariation with offset) and other studies, are expected to further delineate theZeus prospect and a number of other emerging leads in these excitingstrategically located permits. In permits where MEO decides to fund the cost of a well, the drilling is likelyto occur in 2009. MEO has identified a number of commercialization paths for anygas resources confirmed in the permits, including tie-in to nearby under-utilized gas production facilities and/or third party gas supply to new or proposed Northwest Shelf LNG developments requiring additional gas supplies. MEO's acquisition of interests in these Northwest Shelf permits offers the opportunity to significantly broaden the scope of the Company's current upstreamInterests. The permits are located within a proven world-class hydrocarbon province with highly developed production infrastructure. The interests are complementary to the Company's current plans to develop LNG and methanol production projects. MEO is currently drilling the Heron-2 well in the BonaparteBasin permit NT/P68, as part of a multi-well drilling campaign designed to confirm commercial gas resources in sufficient quantities to underpin the development of the Tassie Shoal methanol and LNG production projects." Further information on MEO can be found at www.meoaustralia.com.au. As an ASXlisted company, MEO is not subject to the AIM Rules and the references toresources in this announcement are not reported against a standard nor reviewedby a named "qualified person" as defined and required by the AIM Guindance Notesfor Mining, Oil and Gas Companies. Enquiries please contact: Xtract Energy plc Andy Morrison, CEO +44 (0) 20 7079 1798 Smith & Williamson David Jones +44 (0) 20 7131 4000Corporate Finance Azhic BasirovLimited Scott Harris Stephen Scott +44 (0) 20 7653 0030 Annabel Michie For further Information on Xtract please visit www.xtractenergy.co.uk. About MEO The MEO business plan is centred on the development of gas-to-liquids (GTL)projects in the Australian waters of the Timor Sea, approximately 275 kmnorthwest of Darwin, in an area known as Tassie Shoal. The company has securedAustralian Commonwealth Government environmental approvals for two large-scalemethanol plants (1.8 mtpa) and an LNG plant (3 mtpa) that are valid until 2052. Tassie Shoal is an area of shallow water adjacent to the Evans Shoal gas fieldand is located around 25km east of MEO's exploration permit, NT/P68. MEO mappinghas identified five large structures in NT/P68 two of which were intersected bythe Heron-1 well drilled in 1972, confirming gas columns. The resourcescontained in NT/P68 provides significant valuation upside by potentiallyproviding a feedstock for the GTL projects as an alternative to possible thirdparty gas supply from nearby resources. About Xtract Energy Plc Xtract identifies and invests in a diversified portfolio of early stage energysector technologies and businesses with very significant growth potential. Weaim to work closely with the associated management teams to achieve criticalproject milestones, to finance later development stages and to build andcrystallise value for all shareholders and partners. Xtract is supported by its cornerstone investor, Cambrian Mining Plc (AIM:CBM) adiversified resource investment house which holds 51.6% of its issued sharecapital. A short description of the principal assets of Xtract other than MEO is set outbelow. These assets are either held directly or through wholly ownedsubsidiaries of the Company. Elko Energy Elko is an oil & gas exploration company which has an interest in a 5,370km2exploration and production licence in the Danish North Sea and an investment inDragon Energy Inc, a private Canadian company, with a development project inGansu Province, China. Wasabi Energy Wasabi is a diversified investor in renewable energy and low greenhouse emissiontechnologies, with interests in geothermal waste/heat, uranium exploration inAustralia's Northern Territory and biodiesel investments in Victoria. Central Asian Interests Xtract's Central Asian interests include a production sharing agreement withKyrgyzneftegaz to instigate a water injection project on the Beshkent- Togap oilfield. Xtract also holds interests in several exploration licences in the TashKumyr area and in the Toktogul exploration licence. Oil Shale Xtract has oil shale and related petroleum product exploration rights over mining tenements in the Julia Creek area of Queensland and has recently been granted an exploration permit which gives rights to explore for oil shale in anarea in the South of New Zealand. It is investigating the commercial productionof hydrocarbons (crude oil) from oil shale. Xtract is also available for trading on the open market segment of the FrankfurtStock Exchange (ticker R9X.FSE). This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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