Global Oil Shale Group Limited is pleased to announce that it has entered into a Heads of Terms with regard to progressing Xtract Energy PLC’s (“Xtract”) oil shale tenements at Julia Creek in Queensland, Australia. Xtract is an AIM listed independent energy company with interests in North Sea oil & gas exploration and oil shale.


The transaction envisages that GOS will have the potential to earn a controlling interest in the Julia Creek tenements by funding and undertaking a three year work program covering exploration, development and engineering activities relating to the exploitation of the Julia Creek oil shale tenements for oil production. Completion of the transaction is subject to the conduct of due diligence by both parties and other conditions precedent which are considered normal for this type of transaction.


Both parties anticipate that preparation of the detailed work program and negotiations leading to binding agreements will be completed within three months and exclusivity arrangements are in place for that period.


Petri Karjalainen, Executive Chairman of Global Oil Shale Group Limited commented:

“Global Oil Shale Group is evaluating a number of the world’s oil shale resources that can provide us with the opportunity for large scale, long-term commercial shale oil production.


“Xtract’s oil shale tenements in Julia Creek, with approximately 2 billion barrels of shale oil resources, provide us with a large scale and potentially long term opportunity for oil shale processing. GOS appreciates the opportunity and we are looking forward to co-operation with Xtract over the coming months as we develop our plans and testing for oil production at Julia Creek.


“Our team of oil shale specialists has significant experience in oil shale development in Queensland, in respect of both geology and engineering and we believe that capabilities are well suited for Xtract and the Julia Creek resource.


Commenting on this transaction Peter Moir, CEO of Xtract, stated:

“The challenge for the exploitation of Julia Creek is one of economic resources, technology / know-how and access to significant capital. Julia Creek contains oil shale and other minerals making it a valuable resource.


“The study work that we commissioned Worley Parsons to undertake guided Xtract towards selection of the most suitable extraction methodologies and to recommend options that might allow value to be realised from the Julia Creek asset. The Worley Parsons report noted that the Galoter type retorting process, which has been developed over many years in Estonia and Russia, probably offers the best solution. The Galoter process has been undergoing further development in recent years and is the world’s most used oil shale processing system.


“In line with our strategy, Xtract seeks partners to progress our assets towards exploitation and, in the case of Julia Creek, we seek a joint venture partner who has experience in mining and the technology required for shale oil production. GOS brings considerable knowledge and experience of the oil shale business from both Estonia and Australia. As such, GOS represent a potential partner of choice for Xtract in our desire to progress Julia Creek.


“Xtract has been in discussions with GOS for some time and I am very pleased that we have managed to progress our cooperation to this next stage by the signing of the Heads of Terms. I look forward to working with Petri Karjalainen and his experienced team.”


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.


For more information contact:


Petri Karjalainen – Executive Chairman
Tel: + 44 7811 200 885 Email: pk@globaloilshale.com


Anton Eiguine – Investors Relations
Tel: + 44 1534 88 6644 Email: ase@globaloilshale.com