11th Jan 2008 10:50
Xtract Energy plc11 January 2008 11 January 2008 AIM: XTR XTRACT ENERGY PLC ("Xtract" or the "Company") PROJECT UPDATE - MEO Australia Ltd Xtract refers shareholders to the following press release announcedtoday (not the 2007 date referred to in the announcement) in Australia by MEOAustralia Ltd ("MEO"). Xtract currently holds approximately 15.7% of the issued capital of MEO. "ASX AND MEDIA RELEASE HERON-2 WELL WEEKLY DRILLING REPORT - No 12 Key Points: •Preparing to drill 6 inch hole to TD•Drilling expected to be completed in 5 days•Planning to run a 4 1/2 inch slotted liner for production testing•Plover production test scheduled for next week MELBOURNE, AUSTRALIA (January 11, 2007) - MEO Australia Limited (ASX: MEO)submits this drilling report for the period ending 1000 hours, January 11, 2007.The Heron-2 well was spudded at 2230 hours (ACST) on October 12, 2007 inExploration Permit, NT/P68. Open-hole production testing of the Elang/Plover formation commenced on January3, 2008, focussing on the Plover sands as the primary gas-bearing reservoirs inthe Heron North structure. Due to blockages now confirmed in the wellimmediately above the Plover formation, it is regarded likely that only a 15msection of the higher Elang sand flowed gas to surface during this productiontest. MEO believes that the permeable fracture zones in the better quality deeperPlover sands, which are likely to be a significant contributing mechanism forgas to flow at the rates necessary for commercial development, have probablyalso been irreversibly blocked by the LCM (loss circulation material) treatmentthat was required to stem losses of synthetic mud sustained while drilling theoriginal 6 inch hole. Given the encouraging mud log indications while drilling the Plover formation ofpossible wet gas (gas with associated LPG and condensate), positive electric loginterpretation and no recorded carbon dioxide in the mud returns, the jointventure agreed to sidetrack around the blockage to re-drill the Plover gascharged sands. The permanent packer (installed for the production test) at the base of the 7inch liner has been milled out successfully, a whipstock which facilitates theside tracking of the well has been installed and a hole has been milled throughthe side of the 7 inch liner. The rig is currently pulling the milling tools outof the well and MEO expects to commence drilling the 6 inch hole using acombined diamond impregnated drill-bit and turbine to optimize the rates ofpenetration tomorrow. In order to avoid further significant mud losses, the wellwill be drilled with an optimally weighted mud calculated on the recordedreservoir pore pressure measurements during the production test of the Elangsands. At the completion of drilling, a slotted 4 1/2 inch liner will be run, which isdesigned to preferentially allow the Plover formation to flow gas during theplanned production test. Following the Plover production test, the well will be plugged back to the baseof the Darwin formation, the 9 5/8 inch casing will be perforated and the gascharged zones of the Epenarra structure will be production tested. Heron-2 is being drilled by Seadrill's West Atlas jack-up rig contracted to MEOfor two firm wells. The Heron-2 well is designed as a vertical well to penetrateand production test the Epenarra Darwin Formation and the deeper Elang/PloverFormation of the Heron North structure. The Heron-1 well drilled by ARCO in 1972 intersected a 52m gas bearing column inthe Darwin Formation (a fractured carbonate reservoir) within the 1,200 squarekm mapped closure of the large Epenarra structure. Heron-1 also reached a gascharged zone in the deeper underlying Elang/Plover horizon, which is a secondaryobjective for the Heron-2 well. The participants in the well and permit are: TSP Arafura Petroleum Pty Ltd (MEO subsidiary 45%Oz-Exoil Pty Ltd (MEO subsidiary) 45%Petrofac Energy Developments Oceania Ltd (Petrofac subsidiary) 10% C.R. Hart, Managing DirectorMEO Australia LimitedNT/P68 Operator" 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 this drilling update hasnot been reviewed by a named "qualified person" as defined and required by theAIM Guidance Note for Mining, Oil and Gas Companies. Enquiries please contact: Xtract Energy plc Andy Morrison, CEO +44 (0) 20 7079 1798 Smith & Williamson Corporate David Jones +44 (0) 20 7131 4000Finance Limited Azhic Basirov Scott Harris Stephen Scott +44 (0) 20 7653 0030 Annabel Michie For further Information on Xtract please visit www.xtractenergy.co.uk 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 approximately 50.3% of issuedshare capital. A short description of the principal assets of Xtract is set out below. Theseassets are either held directly or through wholly owned subsidiaries of theCompany. MEO Australia MEO is focused on developing gas-to-liquids ("GTL") projects in the Timor SeaAustralia, in an area of shallow water known as Tassie Shoal. It has securedCommonwealth Government environmental approvals for two large scale (1.8 Mtpa)methanol plants (50 per cent. interest) and a 3 Mtpa LNG plant (100 per cent.interest) which are adjacent to the Evans Shoal gas field. 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 ShaleXtract has oil shale and related petroleum product exploration rights overmining tenements in the Julia Creek area of Queensland and has recently beengranted 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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