Xtract Energy PLC (LON:XTR) swung to a net profit of £786,000 in the first half from a loss of £2.2 million a year earlier and said the Luna prospect in Denmark will be drilled in Q3 2011 and Chevron is expected to drill a well on Netherlands Block P2 in Q4.
As of December 31 2011, the end of the period under review, the company had cash of £8.78 million, compared with £6.87 million as of June 30 2010.
Xtract associate Elko Energy has made good progress. It was awarded a new license 01/11 in Denmark covering 1,900 square km, immediately to the west of the original 02/05 license.
Elko completed the Danish asset farm out transaction with Noreco and secured a drilling rig to drill the Luna prospect in Q3 2011.
It also reached a royalty agreement with Chevron for Elko's interests in the P1 and P2 licences in the Netherlands. Elko will receive an overriding royalty up to 5 percnet of the sales value from Chevron gas delivered into the Dutch National Transmission System and Chevron condensate delivered onshore.
Chevron also reimbursed Elko for its past costs incurred in developing these assets. Chevron anticipates drilling the first well on the acreage in Q4 2011.
Xtract chief executive Peter Moir said: “The company continues to direct more focus towards its underlying asset base. Successful progression of the Elko assets encourages management that our approach of enhancing asset value before progressing the assets via structured commercial deals will benefit the company.”
Xtract Energy swings to profit in the first half
Published: 03:22 30 Mar 2011 EDT