Xtract Energy has announced the completion of the first round of talks with Merty Energy, Petroleum Exploration, Education and Services Inc of Turkey regarding a proposed investment in a new exploration and production joint venture. Xtract and Merty, together, aim to create a new medium-sized oil and gas exploration and production business initially focused on Turkey, where Merty has particular expertise and experience.
In this first stage, Xtract has agreed to provide US$1.5 million of secured interim finance to enable Merty to obtain drilling equipment for the first proposed joint venture well in the Alesehir/Sarakiz prospect which is scheduled for first drilling in October 2008.
Following this agreement, Xtract and Merty intend to negotiate and enter into definitive agreements for the proposed new joint venture company. In the event that definitive agreements are not entered into by 31 August 2008, the interim finance will become repayable by Merty by 30 September 2008.
