Xtract Energy PLC Announces Operational Update of Drilling in The Netherlands and Denmark

Xtract Energy PLC  announces the following operational update ahead of drilling in the Netherlands and Denmark.

 Netherlands

As previously announced Chevron intends to drill the P2-10 well on the P2 block using the ‘Noble Byron Welliver’ jack up drilling rig. The P2-10 appraisal well targets an existing gas discovery on the P2 block and one of the main objectives is to evaluate commercial hydrocarbon flow rates from an extended reach horizontal well within the Rotliegendes sandstone reservoir. Xtract has an overriding royalty arrangement of up to 5 per cent of sales value from Chevron and TAQA’s share of gas delivered into the Dutch National Transmission System and condensate delivered onshore.

Chevron have advised that the Noble Byron Welliver has completed its current work program in the northern offshore sector of the Dutch North Sea waters and is now being prepared for towing to the P2-10 drilling location. The rig move requires a suitable weather window to undertake the tow and the exact date for the move to location and subsequent positioning for drilling operations has not been confirmed. Chevron would like to complete the rig move as soon as conditions allow. Based on the available information, it is anticipated that the P2-10 appraisal well will be spud around the start of December 2011. The well program is expected to take up to 100 days.

 Denmark

As previously announced, Noreco intends to drill the Luna well on the 01/11 license using the Maersk Resolve jack up drilling rig. The Luna well will be drilled to a depth of 2,250 metres with a reservoir sandstone thickness prognosis of ca. 90m. The Luna prospect is targeting between 35mmbbls – 153mmbbls net resources to Xtract.

The Luna prospect is located in a small half graben with the pinch out edge to the south east of the structure. The Rotliegendes reservoir is thought to have a high probability of being present at this location based on the seismic interpretation. Uncertainty still exists however on which seismic event represents the top reservoir and where the pinch out occurs. In addition to the uncertainty on the pinch out position, there is a possibility that the Rotliegendes does not, in fact, pinch out but continues up dip into Lead A. It is therefore possible that Luna and Lead A are connected and represent one feature. The current well location which targets the Luna prospect was picked in order to maximize the information gathered by the well and is designed to address this uncertainty. The Luna well intends to test the overall Rotliegendes play concept.

The Maersk Resolve is currently drilling on contract to Maersk Oil and Gas in Denmark a short mobilisation distance from the Luna prospect location. Noreco has advised that the Maersk Resolve is now anticipated to be released by Maersk Oil & Gas on 28th December 2011. The rig move will require a suitable weather window to undertake the short tow to the Luna location and subsequent positioning for drilling operations. The move is therefore dependent on weather conditions prevailing during the later part of December. Based on the available information it is anticipated that the Luna exploration well will spud on 30th December 2011. The Luna drilling program is expected to take approximately one month in duration.

Qualified Person

In accordance with AIM Guidelines, Peter Moir, B.Sc. Civil Engineering, M.Eng. Petroleum Engineering, UK Chartered Engineer, President of Elko Energy Inc. and CEO of Xtract Energy plc is the qualified person as defined in the Guidance Notes for Mining, Oil and Gas Companies, February 2010, of the London Stock Exchange, that has reviewed the technical information contained in this press release. Mr Moir has more than 30 years experience in technical, operational and commercial aspects of the E&P business.

About Xtract Energy

Xtract identifies and invests in a portfolio of early stage oil and gas assets and business interests with significant growth potential. The Company aims to work closely with the associated management teams to achieve critical project milestones, to finance early stage asset and business development activity, and then to finance the asset development phase, or if appropriate to crystallise value for all shareholders at a suitable exit point. Xtract aims to achieve returns for our shareholders through access to the significant upside rewards associated with our investments.

[mappress]

Offshore Nieuws Staff, November 24, 2011