Our Strategy

The Directors believe that the acquisition of the outstanding share capital of Elko Energy Inc strengthens the Group's balance sheet, increasing liquidity in the Enlarged Share Capital and facilitating future decision making with regard to the Danish assets. Elko has operating assets in both the Netherlands and Denmark and having completed the acquisition this expertise is now available to the whole Group. Previous shareholders of Elko gain liquidity through the Xtract shares acquired in the transaction.

Drilling on the 01/11 area is expected to commence in December 2011. Although Elko has sufficient funds to meet its share of the costs under the Danish Joint Operating Agreement, should such drilling be successful the licence partners may wish to extend the planned drilling program and the Directors believe that the Acquisition and Placing will allow them greater flexibility in considering future investment.

The Directors consider that Elko's over-riding royalty interest offers interesting potential in the medium term, whilst the Australian oil shale asset has longer term potential and is being progressed accordingly.

Looking forward, Xtract wishes to invest in further oil and gas development projects. Amongst the Board and the Group's long standing consultants, there is significant experience of exploration, appraisal, commercialisation and development. The objective is to seek assets with technical and/or other challenges, which make potential development projects initially less attractive to larger companies but which nevertheless have the potential to generate high returns for Shareholders.

The Group has maintained its position in both the Kyrgyz Republic and Morocco as the cost of so doing is minimal in terms of time and expenditure. The Kyrgyz Republic is not presently a prime focus for Xtract and may be sold or otherwise disposed of if an appropriate opportunity can be identified. The Company is seeking to arrange a meeting with the representative of the Moroccan Office National des Hydrocarbures et des Mines ("ONHYM") with a view to expanding the scope of the memorandum of understanding currently existing between ONHYM and XOSM.

The Right People

Xtract aims to source talented individuals who can contribute at board and senior management levels, and who have the necessary qualifications, experience, enterprise and motivation to develop and grow early stage assets and businesses. Xtract expects to maintain a small core executive management team on a full time basis and to use its wide network of industry associates to access the necessary skill sets and experience required on a part time or when required basis. Where specific expertise is needed, acknowledged expert consultants are retained. Xtract seeks to develop relationships with internationally recognised industry partners who are best placed to progress early stage assets and businesses along the value chain.