Xtract Energy provides the following update on a number of aspects of the development of its Turkish joint venture Extrem Energy A.S.

A further interpretation of the seismic data over the Sarikiz oil field has been completed to incorporate the well data obtained during the successful drilling of Sarikiz-2. The structure is now mapped as a fan-delta body with an area of 4.0km2 which is approximately double the area previously assumed. Although Sarikiz-2 encountered a combined reservoir thickness of 75m, it is prudently estimated that the average thickness over the full 4.0km2 will be 50m. On these bases, the estimated total oil in place (P50) is increased to approximately 158mbbl. The recovery factor away from the Sarikiz-2 well location is unknown, but is expected to be in the range 20-35%. The total estimated recoverable oil from the field is therefore in the range 32-55mbbl.

With respect to the Sarikiz-2 well itself, the previously announced estimates continue to apply. Based only on the producible area from the well at 0.3 km2, the oil in place is estimated (P50) to be 16.5mbbl. With the expected recovery factor in this area at 35%, the recoverable oil in place from the single well is estimated to be 5.8mbbl.

Extrem Energy holds an 80% economic interest in the Alesehir/Sarikiz licence. The remaining 20% is held by Petrako Petrol Gas and Industrial Co.

The drilling rig for the production test is expected to mobilize to the field by the end of March 2009 and to commence testing in the second half of April. The testing of the 12 levels of sandstone will take approximately one month. The daily production rate achieved will be used to determine the number of wells to be drilled in the field and the capacity of the surface facilities required. Production from the well is expected to be at least 500b/d. Laboratory reports indicate good quality 33.5 API crude oil.

In addition to developing its plans for Sarikiz, Extrem Energy is conducting a 2-D seismic acquisition campaign over its Siraseki licence area in south eastern Turkey. As at 15 March 2009, 29.7km out of a projected 182km of seismic lines had been acquired, representing approximately 18.3% completion of the project. It is expected that further drilling targets will be identified following acquisition and interpretation of the data. Extrem Energy holds a 100% economic interest in the Siraseki licence.

All operations are controlled and operated by Merty Energy, Xtract's joint venture partner in Extrem Energy.

Xtract currently holds 20% of Extrem Energy and has the option of increasing its shareholding to 34% by contributing a further investment of US$3.5m before June 2009.

Tags: Xtract Energy