Annual Report & Accounts 2007
Unlocking Energy Potential
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www.xtractenergy.co.uk
Unlocking Energy Potential         Annual Report & Accounts 2007 Highlights	 01
Chairman’s	Statement 	 02
Timeline	 04
CEO’s	Review 	 06
Financial	Review 	 13
Directors’	Report 	 15
Corporate	Governance	 	 19
Statement	 of	 Directors’	 Responsibility	 20
Independent	Auditors’	Report 	 21
Consolidated	Income	Statement 	 22
Consolidated	and	Company
Balance	Sheet 	 24
Consolidated	Cash	Flow	Statement 	 25
Notes	to	the	Accounts 	 26
XTRACT ENERGY PLC identifies and 
invests in a diversified portfolio of early 
stage energy sector technologies and 
businesses with very significant growth 
potential. We aim to work closely with 
the associated management teams to 
achieve critical project milestones, to 
finance later development stages and 
to build and crystallise value for all 
shareholders and partners.
Contents
Purpose
Xtract	Energy			 Annual	Report	2007 Highlights
Unlocking Energy Potential
Successful placing in November 2006 raised approximately £5.5 million cash.
Acquisition of 100% of Cambrian Oil & Gas plc.
At 30 June 2007, the share price of key investment, MEO Australia Ltd, had 
increased by 532% since initial Group investment.
Increased holding in Wasabi Energy Ltd to approximately 34.5% 
Strengthened Board including appointment of new CEO.
•
•
•
•
•
Net profit after tax of £7.5 million    
(2005: £0.2 million loss for 12 months)
Market value of listed portfolio  
at 30 June 2007 of £48.6 million 
(2005: nil)
Earnings per share of 1.49p   
(2005: Loss per share 0.21p)
Net assets up £30.6 million to £32.4 million   
(2005: £1.8m)
Xtract	Energy			 Annual	Report	2007 01 2 Xtract	Energy			 Annual	Report	2007
Highlights Chairman’s	Statement
The past eighteen months 
have proven both exciting and 
challenging for Xtract Energy and 
the results achieved during this 
period now place the company in 
a sound and promising position to 
create wealth for its shareholders.
We now hold a diversified and 
strong portfolio of energy assets 
and technologies which, with the 
addition of significant holdings 
in MEO Australia Ltd and Elko 
Energy Inc, now includes five key 
areas of interests.  
We achieved very positive results 
from the initial validation tests of 
Xtract Energy’s oil shale extraction 
technology. These results indicated 
the potential of doubling crude oil 
recovery from our shale oil deposits 
in Australia.
We have also announced several 
new additions to the Board, 
strengthened with individuals who 
have both mining and business 
development experience.  
The company finalised two major 
acquisitions during the period, 
including the acquisition of 
Cambrian Oil & Gas Plc by way of 
scheme of arrangement in mid 2007 
and the purchase of the remaining 
78.3 per cent. of Xtract Oil Ltd in 
February 2006.  A placing of close 
to 110 million ordinary shares 
raising approximately £5.5 million 
cash was finalised in November 
2006 and at this time Xtract Energy 
acquired significant holdings in 
Wasabi Energy Ltd (Wasabi) and 
Aviva Corporation Ltd (Aviva). Both 
of these companies are listed on the 
Australian Stock Exchange (ASX).
In order to simplify our corporate 
structure, it was proposed during 
the financial period to exchange 
Xtract Energy’s Aviva shareholding 
together with an interest in a steel 
making technology, to Wasabi 
for 175 million new shares and 
25 million options in Wasabi. 
This transaction was approved 
by Wasabi shareholders on 2 
August 2007. As a result of this 
transaction, Xtract Energy now 
holds 34.5 per cent. of Wasabi, 
which in turn holds approximately 
18 per cent. of Aviva. 
MEO AustrAliA l td 
MEO Australia Ltd (MEO) is an 
Australian listed company that 
is focused on off-shore gas 
exploration and developing gas-
to-liquids (GTL) projects in the 
Australian waters of the Timor Sea, 
in an area of shallow water known 
as Tassie Shoal. It has secured 
Commonwealth Government 
environmental approvals for two 
large scale (1.8 million tonnes per 
annum (mtpa)) methanol plants 
(50 per cent. interest) and a 3 
mtpa Liquefied Natural Gas plant 
(100 per cent. interest). Tassie Shoal 
is adjacent to the Evans Shoal gas 
field. MEO has successfully farmed 
out some of its interest in NT/P68, 
a nearby exploration permit, in 
order to help fund a critical drilling 
campaign which has commenced 
on schedule in the fourth quarter of 
2007. From a timing perspective, 
we view this as the most advanced 
project in the Xtract Energy portfolio. 
As in any drilling activity there is a 
range of possible outcomes, but 
the existence of 3D seismic and 
the interest of farm-in partners is 
promising. As at 19 October 2007, 
Xtract Energy holds an interest in 
approximately 71.4 million shares in 
MEO, representing approximately 
21.3 per cent. of the issued capital. 
ElkO ENErgy iNc.
Elko Energy Inc. (Elko) is a privately 
held oil and gas exploration company 
which has an interest in a 5,370 km2 
exploration and production licence in 
the Danish North Sea, an interest in a 
gas-bearing block in the Dutch North 
Sea and a majority holding in Dragon 
Energy Inc, a private Canadian 
company, with a 30 per cent. share 
in a producing field in Canada and 
a development project in Gansu 
Province, China. Subsequent to the 
end of the reporting period, Xtract 
Energy increased its interest in Elko 
to 21.8 million shares, representing 
approximately 36.5 per cent. of the 
issued capital.
WAsAbi ENErgy l td
Wasabi is an Australian listed 
company that has a portfolio of 
early-stage energy assets and 
technologies where the upside 
potential is significant. Wasabi’s 
portfolio includes both traditional 
and clean energy investments with 
interests covering coal, uranium, 
biodiesel, geothermal power and 
industrial waste heat recovery. Its 
interests in geothermal and waste 
heat recovery are founded on its 
position as the major shareholder 
of Exergy Inc., the developer and 
owner of patents for the Kalina Cycle 
technology. We see our interest in 
Wasabi as both valuable in its own 
right and as an additional source of 
opportunities for Xtract Energy.
cENtrAl AsiA
Xtract Energy’s Central Asian 
interests include a production 
sharing agreement with 
“We now hold a diversified and strong 
portfolio of energy assets and technologies”.  3 Xtract	Energy			 Annual	Report	2007
Kyrgyzneftegaz to instigate a water 
injection project on the Beshkent- 
Togap oil field. Xtract Energy 
also holds interests in several 
exploration licences in the Tash 
Kumyr area and in the Toktogul 
exploration licence.
Oil shAlE 
Xtract Energy has oil shale 
and related petroleum product 
exploration rights over mining 
tenements in the Julia Creek area 
of Queensland and has recently 
been granted an exploration permit 
which gives the right to explore for 
oil shale in an area in South Island, 
New Zealand. In conjunction 
with Australian research group 
Commonwealth Scientific and 
Industrial Research Organisation 
(‘CSIRO’), the company’s wholly 
owned subsidiary Xtract Oil 
Ltd has continued to develop 
the Xtract technology, being a 
method of processing oil shale 
in the presence of hydrogen and 
solvents, known as supercritical 
solvent extraction. The initial 
validation tests, comprising small 
scale batch extractions of oil from 
the shale, have demonstrated 
that recovery from Xtract Energy’s 
Julia Creek deposits may be much 
higher than could be achieved 
using conventional retort recovery 
techniques. This has resulted in 
a doubling of the oil potential and 
an estimated in situ oil resource of 
over 1.6 billion barrels of oil.
bOArd ANd MANAgEMENt
Xtract Energy continued to 
strengthen the Board with 
individuals who possess significant 
experience in the energy sector. 
I became Executive Chairman 
in July of this year following the 
appointment of Andy Morrison as 
our new Chief Executive Officer. 
Andy has over 25 years experience 
in the energy and related services 
sectors, most recently with The 
BOC Group as a Group Director for 
New Business Development. He 
has an excellent track record in the 
energy sector and we believe he 
can help the company develop and 
implement its future strategy. John 
Conlon joined as a non-executive 
director in January 2007. John 
has a depth of mining experience 
in various locations throughout 
the world, where he has taken 
projects through from feasibility to 
construction and production. 
FiNANciAl rEsults
The Group reported a net profit 
after tax of £7.5 million (2005: loss 
of £0.2 million) and basic earnings 
per share of 1.49p (2005: loss 
per share 0.21p) for the eighteen 
month period. 
Other gains totalling £6.0 million 
resulted from the fair value 
assessment of options held in MEO 
and realised gains from MEO option 
sales during the period. The value 
of these options is now reflected 
in the carrying value of the MEO 
associate investment following their 
conversion into ordinary shares 
in April 2007 at A$0.25. Negative 
goodwill of £5.7 million arose on 
the acquisition of Cambrian Oil & 
Gas plc (COIL) during the period as 
detailed in note 21 to the financial 
statements. The negative goodwill 
is primarily attributable to the 
increase in the fair value of COIL’s 
MEO shares between the date of 
initial investment in MEO, and the 
effective dates of Xtract Energy’s 
business combination with COIL 
(November 2006 and April 2007).
The Group’s net asset position 
increased significantly during the 
period to £32.4 million as a result 
of acquisition activity during the 
period. This strong balance sheet 
position is further supported 
by cash of £1.6 million and an 
MEO investment market value of 
£45.3 million at 30 June 2007.
OutlOOk
During the forthcoming year the 
Board will continue to identify and 
invest in early stage energy sector 
technologies and businesses 
with significant growth potential. 
We aim to work closely with the 
associated management teams to 
achieve critical project milestones, 
to finance later development stages 
and to build and crystallise value for 
all shareholders and partners. 
We believe that the company 
has now invested in a strong 
and promising portfolio with the 
necessary balance between short 
and longer-term growth positions. 
With this platform in place we are 
looking forward to a rewarding and 
successful future.
John newton Chairman
19 October 2007	 We identify opportunities through personal 
relationships and active networking
“The company finalised two major acquisitions during 
the period, including Cambrian Oil & Gas Plc” Xtract	Energy			 Annual	Report	2007
Highlights Timeline
FEbruAry 2006 
The Company completes the 
acquisition of the entire issued share 
capital of Xtract Oil Limited.
sEptEMbEr 2006
Xtract announces that initial validation tests 
have shown that the recovery of light crude 
oil products from the Company’s Julia 
Creek, Australia, shale oil deposits may be 
much higher than could be achieved using 
conventional retort recovery techniques.
August 2006 
Cambrian Mining completes a 
purchase of further shares of the 
Company taking Cambrian Mining’s 
holding over 50% of the issued capital 
of the Company.
July 2006
WH Ireland Limited  
is appointed as the  
Company’s broker.
dEcEMbEr 2006
Xtract completes the purchase of 
53,333,333 ordinary shares in COIL 
from Cambrian Mining. This took its 
holding to approximately 65.5% of the 
issued share capital of COIL at that time.
NOvEMbEr 2006
Xtract places 109,795,800 million new 
ordinary shares of 0.1 pence each at 
5.5 pence per ordinary share through 
its broker W.H. Ireland Limited, raising 
approximately £5.5m cash.
OctObEr 2006
The Company completes the purchase 
of 19.5% of Wasabi Energy Ltd, 18.6% 
of Aviva Corporation Ltd and 28.2% 
of Cambrian Oil and Gas (COIL) from 
Cambrian Mining.
sEptEMbEr 2006
The Directors present  
the Company’s unaudited  
results for the six months  
ended 30 June 2006.
04 Xtract	Energy			 Annual	Report	2007
April 2007
All of the conditions to the scheme 
of arrangement (the “Scheme”) 
between COIL and its shareholders 
are satisfied and the Scheme 
becomes effective.
FEbruAry 2007
The Directors present the Company’s 
interim results for the six months ended 
31 December 2006. 
FEbruAry 2007
The boards of Xtract and COIL 
reach agreement on the terms of a 
recommended proposal for COIL 
shareholders to acquire shares in 
Xtract for shares in COIL by way  
of scheme of arrangement.
JANuAry 2007
John Conlon appointed to 
the board of the Company. 
Mr Conlon is also a director of 
Cambrian Mining plc, Xtract’s 
parent company.
August 2007 
Completion of Wasabi Transaction 
whereby Xtract acquires further shares and 
options in Wasabi Energy increasing its 
holding to approximately 34.5% in return 
for its shareholding in Aviva Corporation. 
This is another step in the consolidation  
of the group structure for Xtract.
July 2007
Andy Morrison appointed as  
Chief Executive of the Company.  
He succeeds John Newton who 
becomes Executive Chairman.
MAy 2007
Xtract announce the further investment 
in MEO increasing its holding at the 
time to approximately 28% of the 
issued capital of MEO.
05 06 Xtract	Energy			 Annual	Report	2007
CEO’s	Review
I am delighted to have joined Xtract 
Energy at such an exciting stage in 
its development. 
I very much look forward to getting to 
know our shareholders, the various 
management teams around the 
world, our partners and our people, 
and most importantly I look forward 
to delivering our shared aspirations. 
kEy dEvElOpMENts
Meo AustrAliA liMited (Meo)
Xtract Energy’s investment 
story in MEO is an example of 
successfully implementing the 
company’s strategy of identifying 
and supporting early stage energy 
sector projects with significant 
growth potential. With the benefit 
of Xtract Energy’s financial and 
strategic support, MEO has been 
able to further develop and progress 
its business plan over the last 
eighteen months.
During the quarter ended 
September 2006, Xtract Energy’s 
wholly owned subsidiary Cambrian 
Oil & Gas plc (COIL) acquired a 
substantial shareholding in MEO 
through on market trades and 
a share placement at A$0.225 
(Australian Dollars) per share. 
Subsequent to this placement, 
and the exercise of approximately 
28.6 million options at A$0.250 
per share in April 2007, COIL 
increased its shareholding in MEO 
and currently holds approximately 
21.3 per cent. 
The MEO business plan is centred 
on the development of gas-
to-liquids (GTL) projects in the 
Australian waters of the Timor Sea, 
approximately 275 km northwest 
of Darwin, in an area known as 
Tassie Shoal. The company has 
secured Australian Commonwealth 
Government environmental 
approvals for two large-scale 
methanol plants (1.8 mtpa) and an 
LNG plant (3 mtpa) that are valid 
until 2052. 
Tassie Shoal is an area of shallow 
water adjacent to the Evans Shoal 
gas field and is located around 25km 
east of MEO’s exploration permit, 
NT/P68. MEO has identified five 
large structures in NT/P68 and has 
estimated that the total potential gas 
in place of the permit’s prospects 
and leads could exceed 14 tcf. Two 
of these structures were intersected 
by the Heron-1 well drilled in 1972, 
confirming gas columns. The 
resources potentially contained in 
NT/P68 provide significant valuation 
upside by potentially providing a 
feedstock for the GTL projects as an 
alternative to existing third party gas 
supply from nearby resources.
tAssie shoAl Gtl ProJects MEO’s Tassie Shoal GTL projects 
which have been designed to share 
infrastructure, logistic support 
systems, provide significant process 
synergies and many operational 
advantages. Tassie Shoal provides 
an enviable offshore location, 
not only in terms of development 
economics, but also proximity to 
rapidly expanding markets and 
strong demand for GTL products 
such as methanol and LNG in North 
East Asia. 
The Tassie Shoal Methanol Project 
(TSMP) proposes the phased 
construction of two 1.8 mtpa 
methanol plants, and includes:
Natural gas supply pipelines from 
the sub sea gas production well 
heads to Tassie Shoal; 
Methanol production plant and 
utilities mounted on a concrete 
gravity base structure (GBS), 
which also contains methanol 
storage tanks; 
Accommodation and control 
platform adjacent to the 
production facilities connected 
by bridge-link; and
A single point mooring (SPM) 
system for loading methanol into 
export tankers.
MEO and Air Products and 
Chemicals, Inc. continue to develop 
the TSMP under the terms of the 
joint development agreement 
executed in 2004.
MEO’s proposed Tassie Shoal LNG 
Project is designed to have the 
capacity to produce 3 mtpa of LNG 
and includes:
Natural gas pipelines from 
the supply gasfield and the 
associated gas production 
facilities; 
Conventional nickel steel LNG 
tank constructed on a gravity 
base structure (GBS), sited in an 
approximate seawater depth of 
14 metres;
LNG process module constructed 
on a self installing platform;
Open sea jetty or Calm Buoy 
system for loading LNG into 
export tankers; and
Seawater cooling system for LNG 
production process. 
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Arrival into Darwin harbour of the West Atlas jack-up rig 07 Xtract	Energy			 Annual	Report	2007
Appraisal of gas resources  
in NT/P68
Heron-1 (drilled in 1972) 
encountered a 52 metre gas-
bearing zone within the Darwin 
Formation on the Epenarra 
structure, which is a broad, flat 
anticline with a mapped closure 
exceeding 1,200 km
2
. MEO has 
estimated a potential gas-in-
place Contingent Resource of 
5.6 tcf (P50) for Epenarra. MEO 
has successfully completed the 
acquisition of new 3D seismic data 
over Epenarra. MEO estimates 
a further 5.5 tcf (P50) gas in 
place Contingent Resource in the 
underlying Heron North and Heron 
South Elang/Plover Formation 
structures. The 3D seismic data 
displays a flat event in the Elang/
Plover Formation that MEO believes 
may be indicative of the gas-water 
contact. The maximum gas column 
height within these structures is 
estimated at over 300 metres. 
Heron-1 intersected a gas charged 
sand towards the base of the well 
in the deeper structures. MEO 
intends drilling up to three wells 
(Heron-2, Heron-3 and potentially 
Blackwood-1) in the permit area. A 
new jack-up rig (the West Atlas) has 
been contracted to undertake the 
appraisal drilling which commenced 
as expected in October 2007.
Note: MEO defines “P50” as a 
probabilistic indicator used to 
quantify contingent and prospective 
resources where the low risk 
estimate is assessed as P90, the 
mean estimate is assessed as 
P50 and the high risk estimate is 
assessed as P10 in the relevant 
category. MEO defines “Contingent 
Resource” as those resources 
which relate to quantities of 
petroleum (oil or gas) which are 
estimated, on a given date, to be 
potentially recoverable from a known 
accumulation but which are not 
currently considered to be proven or 
commercially recoverable. 
As an ASX listed company, MEO 
is not subject to the AIM Rules 
and the references to Contingent 
Resources and resources are not 
reported against a “Standard” nor 
reviewed by a “qualified person” as 
defined and required by the AIM 
Guidance Note for Mining Oil & 
Gas companies.
New farm-in partner
In addition to its equity raising 
activities during the year, MEO 
was able to secure a farm- in 
partner to provide additional 
funding and technical expertise 
for the current drilling programme. 
Petrofac Resources Limited 
(Petrofac) farmed into NT/P68 
by agreeing to meet 25 per cent. 
of the well programme appraisal 
drilling costs to earn a 10 per 
cent. interest, with an option to 
increase the interest to 15 per 
cent. by funding 37.5 per cent. of 
the well costs.
Petrofac has also been granted 
an option to participate in the 
proposed Tassie Shoal GTL 
projects at the same equity 
participation level as the NT/P68 
farm-in. Petrofac’s participating 
interest in the methanol project 
would reduce Air Product’s 50 
per cent. interest (MEO will retain 
its current 50 per cent. interest). 
Petrofac’s participating interest 
in the LNG project would reduce 
MEO’s current 100 per cent. 
interest. Petrofac would earn its 
interests in the GTL projects by 
contributing to the initial front-end 
engineering and design (FEED) 
costs and paying a net profit 
interest royalty to MEO from the 
Petrofac share of the project’s 
eventual operating profits.
Petrofac brings strong engineering, 
procurement, construction and 
operational expertise to the 
NT/P68 joint venture ahead of the 
drilling programme. Following the 
completion of the 2007 drilling 
campaign and approval of the 
2008 work program, Petrofac will 
assume the role of permit operator 
to manage the subsequent 
full appraisal of any resources 
confirmed in the permit and would 
operate the eventual upstream 
hydrocarbon production facilities.
MEO has been a very successful 
investment to date for shareholders 
in Xtract Energy. Clearly, the drilling 
programme currently underway 
will be critical to the future value of 
the MEO business and we will be 
watching developments eagerly.
ElkO ENErgy iNc. (ElkO)
As at the end of the reporting 
period, Xtract Energy had an 
interest in approximately  
32 per cent. of the issued capital 
of Elko (which is held through 
wholly owned subsidiary COIL), a 
Canadian oil and gas exploration 
company formed in 2005. Elko’s 
exploration and appraisal activities 
are guided by a management team 
with many years of technical and 
commercial experience in the oil 
and gas industry. Elko’s area of 
focus covers North West Europe, 
North Africa and the Middle East.
In October 2005, Elko acquired 
an 80 per cent. interest in a 
5,370 km
2
 exploration and 
production license in close 
We balance traditional energy assets 
with new energy opportunities
“I am delighted to have joined Xtract Energy at such 
an exciting stage in its development”
Chief Executive Officer Xtract	Energy			 Annual	Report	2007 0
CEO’s	Review	 continued
proximity to the prolific Central 
Graben in the Danish North Sea. 
The licence covers 26 Danish 
licence blocks with a 6 year 
exploration term and 30 years for 
exploitation. Elko is an approved 
offshore operator in Denmark and 
has set up a Danish subsidiary 
to hold the licence. The current 
partnership is Elko (80 per 
cent.) and Nordsoen – a Danish 
government entity (20 per cent.). 
Elko has undertaken a programme 
of technical work that has 
confirmed the presence of eight 
structures with substantial potential 
reserves. Drilling is expected to be 
carried out in 2008. 
In early 2007, Elko applied for 
two off-shore blocks in the Dutch 
sector of the North Sea, both 
of which contain a number of 
drilled and tested gas bearing 
structures. Block P1 has now 
been awarded to a consortium in 
which Elko will be the operator 
and will retain 33 per cent. 
interest. Award of adjacent Block 
P2 is pending and discussions 
continue to secure additional 
acreage. The known gas 
discoveries were not developed 
by the original licencees for 
reasons likely to include low gas 
prices, low per well productivity, 
the carbon dioxide content of 
gas and better projects available 
to license holders at the time. 
Gas prices are now significantly 
higher, per well productivity has 
been resolved in adjacent block 
K17 through the use of modern 
horizontal drilling techniques 
and carbon dioxide removal 
has become proven offshore 
technology. Elko’s Dutch license 
partner Horizon Energy Partners 
BV was involved in the K17 
development project.
The development of both the 
Danish and Netherlands interests 
will require significant funding over 
the coming years. We believe 
that Elko’s technical expertise 
and Xtract Energy’s experience 
in fund-raising will be a powerful 
combination that will help deliver 
the projects and secure superior 
returns to shareholders.
In addition to its exploration assets, 
Elko owns 51 per cent. of Dragon 
Energy Inc. (Dragon), a private 
Canadian company. Dragon’s 
principal assets are a 30 per cent. 
share of the producing Kotaneelee 
gas field in Canada and a joint 
venture agreement in respect of the 
Ma-Ling oilfield in Gansu province, 
China. Most of the effort to date has 
been spent in obtaining the necessary 
permits at regional and national 
level to commence with operations. 
This process has taken much longer 
than expected, but efforts are 
underway to move the permit 
process forward during next year.
Subsequent to the period end, 
Xtract Energy (through COIL) 
participated in a private equity 
placement in Elko, following which 
COIL increased its total holding to 
21.8 million shares, representing 
approximately 36.5 per cent. of 
the issued capital of Elko.
WAsAbi ENErgy liMitEd 
(WAsAbi)
Xtract Energy currently holds 
approximately 34.5 per cent. 
of Wasabi, an Australian listed 
company with interests in both 
traditional and clean energy 
technologies and businesses. In 
many ways Wasabi can be seen as a 
microcosm of Xtract Energy, and has 
been going through a similar period 
of restructuring. There are a number 
of developments that we consider to 
be particularly promising.
Global Geothermal Ltd (GGL)
In August 2007, Wasabi completed 
a number of agreements leading to 
the formation of GGL, a joint 
venture with AMP Capital Partners 
LLC (AMP), a U.S. based private 
equity fund. Under the terms of the 
agreements, GGL acquired from AMP 
a Delaware corporation, Recurrent 
Engineering LLC, that is focused on 
the delivery of highly efficient 
geothermal and waste heat power 
stations and technology and which 
was granted an option over Wasabi’s 
shareholding in Exergy Inc, owner of 
rights over the patented Kalina Cycle 
technology for which Recurrent 
Engineering is world wide licensee. 
Kalina Cycle technology has been 
developed since the 1980’s with 
numerous patents now in force 
worldwide. The Kalina Cycle is a 
process for converting heat to 
electrical power more efficiently and 
effectively than previous processes, 
using an ammonia/water mixture 
instead of water (Rankine Cycle) or 
organic fluids (Organic Rankine 
Cycle). It can be implemented using 
standard electrical power generation 
and refrigeration equipment  Xtract	Energy			 Annual	Report	2007 09
components as evidenced by the 
various Kalina power plants that have 
had operating experience to date.
These transactions bring together 
the necessary component parts 
to create a world-scale business 
and we look forward to its 
development during the next 
year. Wasabi’s current interest in 
GGL is 70 per cent..
Rum Jungle Uranium Ltd  
(Rum Jungle)
Wasabi’s subsidiary Rum Jungle 
is focused on exploration for 
economic uranium deposits in a 
variety of geological settings in the 
Northern Territory of Australia.  Rum 
Jungle’s approach to exploration 
is based on the known geological 
and geophysical characteristics of 
major uranium deposits like Ranger, 
Jabiluka and Rum Jungle and 
sedimentary style deposits, such as 
Angela.  Potential also exists for the 
presence of economic precious and 
base metal deposits associated 
with uranium mineralisation or, 
indeed, separate from uranium, 
providing further upside potential.
Rum Jungle’s exploration rights 
include Exploration Licenses 
24917 (Alice Springs) and 24939 
(Woolner Dome), acquired during 
the period. Due diligence was 
conducted on the Woolner Dome 
tenement, including reprocessing 
geophysical images obtained 
from data acquired after the most 
recent uranium exploration carried 
out in a joint venture between E.Z./
Peko and CRA in the late 1970’s. 
Rum Jungle completed a detailed 
airborne magnetic and radiometric 
survey around the Woolner Dome 
in early 2007 and plans to expand 
the survey area. Consultant 
geophysicists have identified 
several prospective structural 
targets and drilling is expected to 
commence in December 2007. 
Wasabi Energy announced the 
intention to list Rum Jungle on the 
Australian Stock Exchange, ASX, 
on 1 June 2007 and a prospectus 
has recently been issued to raise 
up to A$12 million (of which 
A$8 million is underwritten). 
Rum Jungle intends to use the 
funds raised from the offer to 
fund exploration projects and as 
working capital. The Northern 
Territory provides the dual 
opportunity of exploring in an 
area containing large uranium 
deposits as well as providing a 
stable environment offering secure 
development opportunity.
Aviva Corporation Ltd (Aviva)
Wasabi currently owns 
approximately 18 per cent. of 
Aviva, a company listed on the 
Australian Stock Exchange.
Following the deregulation 
of the Western Australian 
power industry in March 2006, 
prospects for Aviva have 
improved considerably. Aviva has 
positioned itself as an integrated 
energy company providing 
long-term certainty for the coal 
producers and power generators.
In February 2007, Aviva made its 
first international move, signing 
an agreement to enter into a joint 
venture over the Mmamantswe 
coal deposit in Botswana. A 
drilling programme targeting 600 
metres  began in June 2007. Aviva 
is confident that its integrated 
energy strategy can be translated 
successfully to Southern Africa. 
In addition to these three interests, 
Wasabi has an active pipeline of 
promising businesses in areas 
such as biodiesel and clean coal 
technologies. Whilst recognising 
that not all early stage businesses 
will ultimately succeed, we believe 
that Wasabi will continue to 
develop strongly, to the benefit of 
Xtract Energy shareholders.
cENtrAl AsiAN iNtErEsts 
Xtract Energy’s Central Asian 
interests are held through its 
wholly owned subsidiary COIL. 
COIL is managed from Australia 
with offices in Bishkek, the capital 
of the Kyrgyz Republic, and in the 
regional Kyrgyz city of Kochkor 
Ata, which is also the operational 
base for the company’s partner, 
Kyrgyzneftegaz, the national 
Kyrgyz oil company. COIL’s 
interests in the Kyrgyz Republic 
are held by a further wholly owned 
subsidiary Zhibek Resources Plc 
(Zhibek) and include:
a 72 per cent. interest in JSC 
KNG Hydrocarbons (KNG-
HC), which holds a number 
of exploration licences in the 
Kyrgyz Republic; 
1.
We strategically manage the investment cycle
2D Seismic over Pishkaran prospect, Central Asia 10 Xtract	Energy			 Annual	Report	2007
CEO’s	Review	 continued
We nurture projects from concept to reality
a 100 per cent. direct interest in 
the Toktogul exploration licence in 
the Kyrgyz Republic; and 
a production sharing 
agreement, between Zhibek 
and Kyrgyzneftegaz, to develop 
a water injection project for 
increasing oil recovery at the 
Beshkent- Togap Field. 
In 2005, KNG-HC acquired 
approximately 100km of 2D seismic 
data over previously identified 
prospects and leads in the Tash 
Kumyr exploration concession. A 
further 55km of 2D seismic data 
was acquired in late 2006. A revised 
structural interpretation of the 2D 
seismic data has been completed 
for both the shallow and deeper 
layers. The structural depth map for 
the deeper underthrust Paleogene 
shows improved definition of 
the KNG-HC’s primary South 
Karagundai prospect in the south 
west region of the map. The crest of 
this prospect is shown as occurring 
at about 3200 metres and will require 
2.
3.
a well to be drilled to approximately 
4,000 metres to test this prospect. 
This is considerably deeper than 
previously anticipated. The greater 
depth will mean higher drilling costs 
than originally anticipated. 
A revised structural interpretation 
of the South Karagundai prospect 
and other exploration prospects 
and leads was completed after 
55 km of 2D seismic data and 
additional Gore Surveys were 
acquired in late 2006. Improved 
definition of the South Karagundai 
prospect has been achieved. This 
prospect remains the prime focus 
for COIL’s forward exploration 
programme and future drilling.
Several lines of 2D seismic were also 
run over the Pishkaran prospect to 
test the quality of seismic data that 
might be possible over the older rock 
sequence in this area and over a 
large positive Gore Survey anomaly 
over major parts of this prospect. 
In late 2006, a Gore Survey was 
completed over the Toktogul 
structure. A number of areas show 
positive indications of hydrocarbon 
presence at depth within the 
bounds of the large surface mapped 
Toktogul anticline.
A pilot water injection project 
commenced operations in  
May 2006. Water is injected into 
selected wells to displace oil in 
the reservoir towards adjoining oil 
production wells. Two oil wells have 
been converted to water injection 
wells and other facilities installed to 
source water for injection. 
gOld ExplOrA tiON, MExicO 
Xtract Energy also holds a  
100 per cent. interest in 
Sermines de Mexico S.A. 
de C.V. which owns mineral 
exploration and development 
rights in three concessions in 
the California-Sonora Gold Belt 
in Sonoro Province, Mexico.  
The concessions include gold 
mineralisation located in the 
historic Esperanza goldfield 
which has not been the subject 
of modern exploration but is the 
location of untested anomalous 
gold geochemistry as determined 
by regional exploration surveys 
conducted during the mid-1990’s.  
Xtract Energy has commenced 
sampling and surveying 
programmes which may lead to drill 
testing of prospective targets.
Oil shAlE
Xtract Energy’s wholly owned 
subsidiary Xtract Oil Ltd has 
acquired oil shale and related 
petroleum product exploration rights 
Ian Ennis (COIL Director), Ongun Yoldemir (Merty Energy), Andy Morrison 
(CEO) and Neale Taylor (COIL Director) in the Kyrgyz Republic. 11 Xtract	Energy			 Annual	Report	2007
over twelve mining tenements in 
the Toolebuc-Julia Creek area of 
Queensland. (See ‘Julia Creek Oil 
Shale Project’ map on the right). 
The Julia Creek oil shale deposits 
are known to contain substantial 
quantities of kerogen which can 
be converted to oil. The oil shale 
deposits located within EPM’s 
14803 and 14806, at the location 
known as ‘The Pit’, were subject to 
detailed evaluation by CSR Limited 
(1968-1988) and more recently, in 
the early 1990’s, by CRA Exploration 
Limited. The investigations provided 
geological and analytical data to 
support in-situ resource calculations 
in an independent report by Nolan 
(Geology and Resources of Oil Shale 
within Intermin Farm-in Area, Julia 
Creek, North-western Queensland, 
Oct 2005) indicating up to 410 
million barrels of oil in situ extractable 
by conventional retorting methods 
and having an average Fischer 
Assay analysis of 74 litres /tonne.
GHD Pty Ltd in their report titled 
‘Julia Creek Independent Geological 
Assessment’ dated 9 January 2006, 
evaluated EPM 14806 beyond ‘The 
Pit’ area and identified a substantial 
area where the oil shale is close to 
the surface but below the oxidation 
zone and which is sufficiently well 
drilled to determine an additional 
inferred resource estimated as 415 
million barrels of shale oil in situ.  
Wide spaced drilling demonstrates 
that further extensive deposits of oil 
shale are present in the project area 
with Fischer Assay testing indicating 
in-situ oil levels ranging from 30 to 
110 litres per tonne as determined 
on dry oil shales.
The combined shale oil inferred 
resource in these two contiguous 
areas is estimated as 825 million 
barrels in situ. 
The oil shale at Julia Creek is a 
40-50 million year old sedimentary 
rock that contains kerogen, a 
solid hydrocarbon precursor. The 
hydrocarbon component can be 
extracted through a heating process 
(known as retorting), which results 
in the release of hydrocarbons as 
vapour. When the vapour cools, it 
becomes liquid oil and gas. 
Xtract Oil Ltd together with 
Monash University and the 
Commonwealth Scientific and 
Industrial Research Organisation 
of Australia (CSIRO) has designed 
and is operating an experimental 
programme to carry out 
extractions using representative 
oil shale samples and assess the 
key risks inherent in the process. 
Both Monash and CSIRO have 
the demonstrated capability to 
work on a project of this type and 
have an extensive track record 
of industry participation and in oil 
shale related research.
Initial validation tests have 
shown that the recovery of 
light crude oil products from 
the Julia Creek deposits may 
be much higher than could be 
achieved using conventional 
retort recovery techniques. The 
initial solvent extraction tests 
have demonstrated that recovery 
from Julia Creek shales could 
be approximately twice that as 
indicated by Fischer Assays.
This results in a doubling of the 
oil potential and an estimated in 
“Julia Creek oil shale deposits are known 
to contain substantial quantities of 
kerogen which can be converted to oil” 12 Xtract	Energy			 Annual	Report	2007
situ oil resource of over 1.6 billion 
barrels of oil (see table above).
Xtract Energy has also been granted 
an exploration permit encompassing 
the Nevis Valley oil shale deposits 
located in South Island, New 
Zealand. The permit, EP 40-805 
(10,450 ha), includes locations 
of known oil shale occurrences. 
The area will be investigated 
to determine the economic 
significance of the deposits.
The in-situ resources are the 
tonnage of oil shale, with a 40 l/t. 
cut-off and the theoretical quantity 
of shale oil which is within that 
tonnage of oil shale. The resources 
are categorised into:
Indicated Resources – comprise 
most of The Pit area because 
drill-hole spacing is usually one 
kilometre or between one and 
about 1.5 kilometres.  Correlation 
of the oil shales and main 
stratigraphic units is possible 
down-dip, from east to west 
across the area but trends are not 
uniform along a cross-section.  
The variation between bores 
is such that further information 
is required to increase the 
confidence of estimation of the 
quantity of oil shale present.   
The sub-crop of the oil shale 
units beneath the weathered 
zone require further delineation 
for accurate determination of 
oil shale resources.  Additional 
points of observation and/or more 
detailed assessment of variation 
°
of the oil shale units would be 
expected to raise the resources 
to Measured Resources category.
Inferred Resources - marginal 
to and down-dip from the 
Indicated Resources.  The 
present borehole spacing of two 
kilometres or more is sufficient 
only to prove the existence 
of oil shale at the localities 
and to infer the thickness 
and yield.  The continuation 
of those properties between 
the points of observation can 
only be inferred. Additional 
observation may be expected 
to increase the confidence level 
of the estimation of the in-situ 
resources and to raise at least 
portion of these resources to 
Indicated status.
Within those areas of oil shale 
resources, the density of oil shale is 
assumed to be 1.85 tonnes per cubic 
metre (t/m3) when dry; the same 
basis used for reporting oil yield.  The 
thicknesses and oil yields have been 
weighted over those areas to provide 
the averages quoted.  
The assessment conducted 
by Nolan & Associates Pty Ltd 
has verified the thickness and 
degree of continuity of the oil-
bearing strata and has allowed 
for categorization of Oil Shale and 
Shale Oil Resources according to 
the Australasian Code for Reporting 
of Exploration Results, Mineral 
Resources and Ore Reserves –  
The JORC Code – 2004 Edition.  
°
Note: the information relating to 
Julia Creek and oil shale has been 
reviewed and approved by Dr. John 
E Shirley, (Managing Director of 
Xtract Oil Limited) who has a BSc 
and PhD in Geophysics from the 
University of Tasmania, over 40 
years experience in the resources 
and energy sector and is a member 
of the Society of Petroleum 
Engineers.
lOOkiNg FOr WArd
The company has assembled a 
very promising portfolio of interests. 
Not only do these assets have 
quantifiable current value, but in 
MEO, Elko Energy and Oil Shale, 
there are realistic scenarios that 
offer investors considerable upside 
potential over the short, medium 
and longer-term. We continue to 
benefit from a strong flow of potential 
deals arising from our links to our 
major shareholder Cambrian Mining 
Plc and from our own independent 
prospecting. As existing investments 
mature, and subject to our screening 
criteria, we will be in a position to 
reinvest in new and exciting assets 
and technologies.
ANdy MOrrisON
Chief Executive Officer
19 October 2007
CEO’s	Review	 continued
Estimated combined indicated and inferred shale oil resource based  
on Fischer Assays 825 million barrels of oil
Estimated combined indicated and inferred shale oil resource based on 
increased oil extraction as indicated by Xtract’s supercritical  
solvent extraction test work 1.6 billion barrels of oil
Unlocking Energy Potential 13 Xtract	Energy			 Annual	Report	2007
prOFit ANAlysis
The Group reported a net profit after 
tax of £7.5 million (2005: loss of 
£0.2 million) and basic earnings per 
share of 1.49p (2005: loss of 0.21p) 
for the eighteen month period.
Net profit includes other gains 
totalling £6.0 million resulting from 
the fair value assessment of options 
held in MEO Australia Limited (MEO) 
and realised gains from MEO option 
sales during the period. The value 
of these options is now reflected 
in the carrying value of the MEO 
associate investment following their 
conversion into ordinary shares in 
April 2007. 
Negative goodwill of £5.7 million 
arose on the acquisition of 
Cambrian Oil & Gas plc (COIL) 
during the period as detailed in 
note 21 to the financial statements. 
The negative goodwill is primarily 
attributable to the increase in 
the fair value of COIL’s MEO 
shares between the date of initial 
investment in MEO, and the 
effective dates of Xtract Energy’s 
business combination with COIL 
(November 2006 and April 2007).
Administrative and operating 
expenses of £2.1 million for the 
eighteen months were in line with the 
increased activity during the period.
Financial	Review
Financial Summary Table 18 months 
30 June 2007 
(£million)
12 months 
31 December 2005 
(£million)
consolidated income result (for the period/year)
Administrative and operating expenses 2.12 0.22
Other gains and losses 5.97 -
Negative goodwill 5.73 -
Profit / (Loss) after tax 7.47 (0.22)
Earnings / (loss) per share 1.49p (0.21)p
consolidated balance sheet position (as at)
Intangible assets – Mining rights & exploration expenditure 11.60 0.08
Investments – in associates 23.82 0.41
Investments – available for sale 3.21 -
Cash 1.58 1.32
Total assets 41.07 1.83
Total equity 32.38 1.77
Total equity – number of issued shares (million) 704.23 199.09
l isted portfolio information (as at 30 June 2007)  
at Market value £million
MEO Australia (ASX:MEO) 77,116,814 shares 45.34
Wasabi Energy (ASX:WAS) 81,511,422 shares 1.34
Aviva Corporation (ASX:AVA) 12,300,000 shares 1.87
Total market value of  portfolio 48.55 14 Xtract	Energy			 Annual	Report	2007
AcquisitiON ANd  
iNvEstMENt Activity
In February 2006 the company 
acquired all the issued capital of 
Xtract Oil Limited (that it did not 
previously own) in consideration 
for £0.8 million in cash and 57.5 
million shares in the company, a 
total consideration of £4.9 million.
The company also acquired all the 
issued capital in COIL in two stages. 
Purchase consideration comprised 
144.1 million shares and £4.7 million 
in cash and debt (£13.6 million in 
total) with 100 per cent. control 
achieved on the effective date of the 
approved scheme of arrangement 
being 23 April, 2007.
Other Group investment activity 
during the period included the 
purchase of 77,116,814 shares in 
MEO (ASX:MEO) at a cost of £7.3 
million; and 81,511,422 shares 
in Wasabi Energy Limited (ASX:
WAS) and 12,300,000 shares in 
Aviva Corporation (ASX:AVA) at a 
combined cost of £2.42 million.
iNcOME tAx
The effective tax rate of the Group 
for the period was 19 per cent.. 
Current income tax liabilities of 
£0.70m at 30 June 2007 relate to 
estimated Australian company tax 
payable on MEO option disposals 
during the period.
Equity
The company raised £5.5 million in 
cash from the issue of 109.8 million 
shares at 5.5p in November 2007. 
Proceeds from the share issue were 
used for general investment and 
working capital purposes.
As detailed in note 20 to the financial 
statements, a further 395.3 million 
shares were issued during the period 
to fund various acquisition and 
investment activities.
cAsh pOsitiON ANd gOiNg 
cONcErN bAsis
The Group’s net cash position was 
£1.6 million with no borrowings 
outstanding at 30 June 2007.
After making enquiries, the directors 
have formed a judgement, at the 
time of approving the financial 
statements, that there is a 
reasonable expectation that the 
Group has adequate resources to 
continue in operational existence 
for the foreseeable future. For this 
reason the directors continue to 
adopt the going concern basis in 
preparing the financial statements.
subsEquENt EvENts
On 2 August 2007, the company 
was issued with 175 million new 
ordinary shares in Wasabi Energy 
Ltd (Wasabi) together with 25 million 
options exercisable on or before 
30 June 2008 at a price of A$0.03 
per Wasabi share (ASX:WAS) in 
exchange for 12.3 million ordinary 
shares in Aviva Corporation, 
together with an interest in a steel 
making technology. Following this 
transaction the company holds 
256,511,422 Wasabi ordinary 
shares (representing approximately 
34.5 per cent. of Wasabi’s issued 
share capital). As a result, Wasabi 
will be an associate of the Group, 
previously recorded as an available 
for sale investment. 
On 24 September 2007, the 
company announced a further 
investment of US$2.0 million in Elko 
Energy Inc (Elko) through a private 
placement. Pursuant to the private 
placement, the company’s wholly 
owned subsidiary COIL received 
4 million new common shares in 
Elko at a cost of US$0.50 each 
in cash. Following the placement 
and the issue of an additional 
300,000 common shares to COIL 
in consideration for a due diligence 
fee payable by Elko to COIL, 
COIL’s total holding represents 
approximately 36.5 per cent. of the 
issued capital of Elko, previously  
32 per cent..
On 28 September 2007, the 
company announced that it reduced 
its interest in MEO from 22.8 per 
cent. to 21.3 per cent. of MEO’s 
issued capital. COIL sold 5 million 
shares in MEO at A$1.10 per share 
for cash. Following this disposal 
COIL retains 71,366,814 shares in 
MEO representing 21.3 per cent. of 
the issued capital of MEO.
Financial	Review	 continued 15 Xtract Energy   Annual Report 2007
The directors present their report together with the financial statements for the 18 month period ended 30 June 2007.  
PrinciP al activities and Business review Xtract Energy identifies and invests in a diversified portfolio of early stage energy sector technologies and businesses with very significant 
growth potential. We aim to work closely with the associated management teams to achieve critical project milestones, to finance later 
development stages and to build and crystallise value for all shareholders and partners.
A detailed review of the business of the Group during the year and an indication of likely further developments may be found in the Chairman’s 
Statement, (page 2) the CEO’s Review (page 6) and the Financial Review (page 13). The directors are pleased with the progress to date.
Risks and Uncertainties are discussed on pages 17-18 of this Director’s Report.
results and dividends The net profit for the Group for the period 1 January 2006 to 30 June 2007 amounts to £7,472,000. 
No dividends were paid or proposed by the Directors in either the current or previous periods.
PerFOrMance The key indication of performance of the Group is the extent of its success in identifying, acquiring, progressing and divesting investments in 
projects so as to build shareholder value. At this stage in its development, the Group’s performance is not readily measured using quantitative key 
performance indicators, however, a qualitative summary of performance in the period is provided in the Chairman’s Statement and CEO’s Review.
suBstantial interests in share caPital 
Since the Disclosure and Transparency Rules of the FSA (the ‘DTR’) came into force, the Company has been notified or is aware of the 
following significant holdings of voting rights in its shares:
Shareholder Number of shares % of Issued capital
Cambrian Investment Holdings Limited 363,256,048 51.58
RAB Special Situations 36,400,000 5.17
Lehman Brothers International (Europe)  21,700,000 3.08
directOrs The names and biographical details of the Directors are set out below. Robert Annells was appointed on 11 November 2004, Susan Wickerson 
on 9 November 2004, John Newton on 10 March 2006, John Conlon on 4 January 2007 and Andy Morrison on 9 July 2007. 
Mr Carl Layden was appointed a Director on 22 October 2004 and resigned on 1 January 2007.
andy MOrrisOn, 
aged 46, Chief exeCutive OffiCer (NOmiNatiONs COmmittee member)
Mr Morrison has over 25 years experience in the energy and related services sectors, most recently with BOC Group as a Group Director for 
New Business Development. Prior to BOC Andy was employed by BG Group and Shell in various strategic and business development roles.
JOhn newtOn,
aged 60, exeCutive ChairmaN 
Mr Newton has a background in international stock broking, accounting and corporate finance and has been a director of a number of quoted 
companies in Australia and Canada. He has maintained a continued involvement in the Australian and International financial sector as an 
investment adviser and consultant.
rOBert J. annells cP a, asia, 
aged 67, NON-exeCutive direCtOr (remuNeratiON aNd audit COmmittee member)
Mr Annells is a qualified accountant and was a member of the Australian Stock Exchange.  His experience includes extensive provision of 
corporate investment advice to the business and resource industries. Mr Annells is a director of the emerging Australian petroleum and mineral 
resource companies Gippsland Offshore Petroleum Limited, Rum Jungle Uranium Ltd and Greenearth Energy Ltd and Chairman of Lakes Oil 
N.L. and Minotaur Exploration Ltd, which are quoted on the Australian Stock Exchange.
susan wickersOn,
aged 59, NON exeCutive direCtOr (remuNeratiON, NOmiNatiONs aNd audit COmmittee member)
Miss Wickerson spent 15 years with a medium size accounting practice, setting up and running both a new registrars division and a 
management services company.  For the last 17 years Miss Wickerson has been running her own successful company which provides 
accounting and taxation services, company secretarial and financial management services to a wide range of clients, both corporate and 
private. Miss Wickerson acts as a finance director of various non-listed companies. 
Directors’ Report 16 Xtract Energy   Annual Report 2007
JOhn cOnlOn,
aged 67 , NON exeCutive direCtOr
Mr Conlon has been involved in the mining industry since 1972, when he formed Webcon Equipment Inc, a company that supplies milling 
and mobile equipment worldwide. In 1980 he purchased a part share in Graham Mining, a mining contracting company involved in mine 
development in northern Canada. In 1995 he formed Driftech Inc, a company engaged in the business of repairs and manufacturing mining 
equipment. Mr Conlon is a director of several companies including Western Canadian Coal Corporation and Cambrian Mining Plc.
carl e. layden,
aged 62, resigNed 1 JaNuary 2007
Mr Layden is a graduate from the Bendigo School of Mines (1966) and has a broad experience spanning 38 years in geological and 
geophysical exploration and project evaluation and development of gold, base metal and industrial mineral deposits. Mr Layden is the principal 
of Qualrex Pty Ltd, a mineral and energy resources consulting practice providing expertise to the exploration and mining industries in Australia, 
Indonesia, southern Africa, China, Mongolia, the Pacific Rim and South America. Mr Layden was previously a director and secretary of Molopo 
Australia Limited, a mineral resource investment company, the Exploration Manager of Paringa Mining and Exploration Company plc, and the 
Principal Geologist for Minops Pty Ltd, which was the mineral exploration operator for The Moonie Oil Company Limited. More recently  
Mr Layden was Managing Director of Gawler Gold and Mineral Exploration N.L., which invested in gold exploration in Australia and Mexico.
directOrs reMuneratiOn The Company remunerates the directors at a level commensurate with the size of the Company and the experience of its directors. The 
Remuneration Committee consists of Robert Annells and Susan Wickerson. They have reviewed the directors’ remuneration and believe it 
upholds the objectives of the Company with regard to this issue.
The remuneration paid to the directors of the Company for the 18 month period ended 30 June 2007 was £149,552 (including consulting fees). 
With effect from 21 March 2005 (or in respect of John Newton 10 March 2006, John Conlon 4 January 2007 and Andy Morrison 9 July 2007), 
the following remuneration was agreed with the directors:
Director Annual Salary Consulting Fees
Robert Annells £4,000 None
Andy Morrison £150,000 None
Sue Wickerson £4,000 £330/day (for time spent in addition to attending board meetings) 
John Newton £60,000 None
Carl Layden £4,000 £330/day (for time spent in addition to attending board meetings)
John Conlon £4,000 None
As at the date of this Directors’ Report, there has been no change in the fees set out above since 30 June 2007.
In addition the directors hold options as set out in the statement of Directors’ Interests. 
Under Andy Morrison’s service contract, he is eligible for an annual incentive bonus which can be comprised of a cash payment, shares or 
share options.  This bonus shall consist of:
a cash sum equal to or greater than 50 per cent. of his basic salary (£150,000) for the year in question to be paid if he reaches or exceeds  
the performance target for that year as determined by the Board and/or the Remuneration Committee, and as agreed with Mr Morrison, and 
notwithstanding the service of notice of termination of his service agreement by either party save for certain circumstances including but not 
limited to gross misconduct or persistent breach of obligations;
such share options as the Board and/or Remuneration Committee, in its absolute discretion, may from time to time determine, at a level 
appropriate to a company of Xtract Energy’s nature and in line with the share options awarded to the other management/directors taking into 
consideration the other incentive compensation; 
such further bonus to be determined by the Board and/or the Remuneration Committee and based on the performance of the Company’s 
share price, the Company’s profitability and Mr Morrison’s performance.
Mr Morrison’s entitlement to receive bonuses is subject to him being employed as and when such incentive bonuses become payable.
On 21 March 2005 the Company and Qualrex Pty Ltd entered into an agreement engaging Qualrex Pty Ltd to provide technical consultancy 
services to the Company.  Carl Layden is a director and shareholder of Qualrex Pty Ltd and will be the person supplying the services under the 
agreement.  The Consultancy Agreement has been extended and shall terminate on 19 June 2008 unless extended by mutual consent. The 
Company has agreed to pay Qualrex Pty Ltd a monthly fee of £1,200 for the services provided under the agreement on up to four days per 
month with any extra days of services being charged at £300 per day.  
a)
b)
c)
Directors’ Report continued 17 Xtract Energy   Annual Report 2007
directOrs’ indeMnities 
The Company maintains directors’ and officers’ liability insurance which gives appropriate cover for legal action brought against its directors. 
The Company has also provided an indemnity for its directors, which is a qualifying third party indemnity provision for the purposes of section 
309B of the Companies Act 1985.
directOrs’ service cOntracts All directors’ remuneration agreements run for an initial 12 months from 31 March 2005 (or in respect of John Newton, 10 March 2006, John 
Conlon 4 January 2007 and Andy Morrison 9 July 2007) and continue until terminated by either party upon 6 months notice (one months notice 
for John Conlon and 12 months notice for Andy Morrison). The Company may not terminate Mr Annell’s appointment without the prior approval 
of the Shareholders in general meeting. In accordance with the Company’s Articles, at forthcoming Annual General Meetings at least one third 
of the directors are required to resign by rotation. 
directOrs’ interests The directors who held office at 30 June 2007 
have the following interests in the Company:
1 January 2006 (in the case of John Newton and  
John Conlon, as at the Date of Appointment) 30 June 2007
Ordinary Shares Warrants Ordinary Shares Warrants
Robert Annells – 1,000,000 – 2,500,000
John Conlon (appointed 04/01/07) – – – ‑ Sue Wickerson – 1,000,000 – 1,750,000
John Newton* (appointed 10/03/06) – – – 1,750,000
*John Newton was appointed as a director on 10 March 2006. John Newton is a trustee and beneficiary of Drawone Superannuation Fund which holds 
9,000,000 ordinary shares  (representing 1.28 per cent. of the Company’s issued ordinary share capital) and 9,000,000 warrants. These are in addition to the 
1,750,000 warrants that he holds in his own name as set out above.
No Director had any interest in any of the Company’s subsidiaries at the beginning (or if later, the date of their appointment) or end of the reporting period.
Further details of the options in the Company can be found in note 25 of the Accounts on pages 48-50.
Both as at the date of John Conlon’s appointment as a Director of the Company and as at 30 June 2007, he held 911,000 shares in Cambrian Mining Plc (the 
Company’s holding company). Subsequent to the end of the reporting period, John Conlon was issued 1,000,000 options in Cambrian Mining Plc. No other 
Director had any interest in Cambrian Mining Plc at the  beginning (or if later, the date of their appointment) or end of the reporting period.
On 9 July 2007 Rob Annells, John Newton and Sue Wickerson were issued 500,000 options each and John Conlon was issued 1,000,000 options in Xtract 
Energy. All of these options are exercisable for a three year term and expire on 8 July 2010.
On 9 July 2007, Andy Morrison was issued with 3,000,000 options in Xtract Energy exercisable as follows:
(a) 1,000,000 Options shall be exercisable for a period of 3 years commencing on 9 July 2007 at an exercise price of 8p per Share (subject to price adjustment 
as a result of alterations in the share capital of the Company);
(b) 1,000,000 Options shall be exercisable for a period of 3 years commencing on the first anniversary of 9 July 2007 at an exercise price of 10p per Share 
(subject to price adjustment as a result of alterations in the share capital of the Company); and 
(c) 1,000,000 Options shall be exercisable for a period of 3 years commencing on the second anniversary of 9 July 2007 at an exercise price of 12p per share 
(subject to price adjustment as a result of alterations in the share capital of the Company).
As at 19 October 2007, Andy Morrison also holds 500,000 shares in the Company.
cOrPOrate GOvernance A statement on Corporate Governance is set out on page 19.
envirOnMental resPOnsiBility The Company recognises that the Group’s exploration and development activities require it to have regard to the potential impact that it and its 
subsidiary companies may have on the environment. Wherever possible, the Company ensures that all related companies are encouraged to 
comply with the local regulatory requirements with regard to the environment.
risks and uncertainties  
The principal risks facing the Company are set out below. Risk assessment and evaluation is an essential part of the Group’s planning and an 
important aspect of the Group’s internal control system.
geNeral aNd eCONOmiC risks:
contractions in the world economies or increases in the rate of inflation resulting from international conditions; movements in the equity and 
share markets in Australia, the United Kingdom and throughout the world; 
movements in global equity and share markets and changes in market sentiment towards the resource industry;
currency exchange rate fluctuations and, in particular, the relative prices of the Australian dollar and the UK Pound; 
adverse changes in factors affecting the success of exploration and development operations, such as increases in expenses, changes in 
government policy and further regulation of the industry; unforeseen major failure, breakdowns or repairs required to key items of plant and 
equipment resulting in significant delays, notwithstanding regular programs of repair, maintenance and upkeep; and unforeseen adverse 
geological factors or prolonged weather conditions.
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° 18 Xtract Energy   Annual Report 2007
fuNdiNg risk:
Xtract Energy or the companies in which it has invested may not be able to raise, either by debt or further equity, sufficient funds to enable 
completion of planned exploration, investment and/or development projects.
COmmOdity risk:
Commodities are subject to high levels of volatility in price and demand. The price of commodities depends on a wide range of factors, most 
of which are outside the control of the Company. Production costs depend on a wide range of factors, including commodity prices, capital 
and operating costs in relation to any operational site. 
explOratiON aNd develOpmeNt risks:
Exploration and development activity is subject to numerous risks, including failure to achieve estimated mineral resource, recovery and 
production rates and capital and operating costs.
Success in identifying economically recoverable reserves can never be guaranteed. The Company also can not guarantee that the compa-
nies in which it has invested will be able to obtain the necessary permits and approvals required for development of their projects.
Some of the countries in which the Company operates have native title law which could affect exploration activities. The companies in which 
the Company has an interest may be required to undertake clean-up programs resulting from any contamination from their operations or 
to participate in site rehabilitation programs which may vary from country-to-country. The Group’s policy is to follow all necessary laws and 
regulations and is not aware of any present material issues in this regard.
internal cOntrOls 
The Board recognises the importance of both financial and non-financial controls and has reviewed the Company’s control environment and 
any related shortfalls during the year. The Company has undergone, and continues to undergo, significant expansion and development which 
requires commensurate and ongoing development in the Company’s financial reporting procedures and internal controls. Whilst they are aware 
that no system can provide absolute assurance against material misstatement or loss, continuing reviews of internal controls will be undertaken 
to ensure that adequate internal controls are implemented and that they operate effectively.
relatiOns with sharehOlders 
The Board is committed to providing effective communication with the shareholders of the Company, with significant developments 
disseminated through stock exchange announcements. The Board see the annual general meeting as a forum for communication between the 
Company and its shareholders and encourages their participation in its agenda.
GOinG cOncern After making enquiries the directors have a reasonable expectation that the Company has adequate resources to continue in operational 
existence for the foreseeable future.  On this basis they continue to adopt the going concern basis in preparing the financial statements.
creditOr PayMent POlicy It is the Company’s policy to settle the terms of payment with suppliers when agreeing the terms of the transaction so as to ensure that 
suppliers and the Company are aware of those terms and abide by them. The number of days’ purchases outstanding for payment by the 
Group at the year end was 29.
POlitical and charitaBle dOnatiOns No political contributions or donations for political purposes or charitable donations were made during the period.
extraOrdinary General MeetinG
The Company will hold an extraordinary general meeting by the end of January 2008 to lay the annual accounts before the shareholders and to 
deal with any other business for the consideration of the shareholders. The Company will distribute due notice of the meeting with full details of 
the business to be considered at that meeting.
auditOrs Each of the persons who is a director at the date of approval of this Annual Report confirms that:
so far as the director is aware, there is no relevant audit information of which the company’s auditors are unaware; and
the director has taken all the steps that he/she ought to have taken as a director in order to make himself/herself aware of any relevant audit 
information and to establish that the company’s auditors are aware of that information.
This confirmation is given and should be interpreted in accordance with the provisions of s234ZA of the Companies Act 1985.
Deloitte and Touche LLP have expressed their willingness to continue in office as the auditors and a resolution to reappoint them will be 
proposed at the next extraordinary general meeting of the Company.
By Order of the Board
Dated: 19 October 2007
andy MOrrisOn 
Chief Executive Officer
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Directors’ Report continued 19 Xtract Energy   Annual Report 2007
The Board recognises the importance of sound corporate governance commensurate with the size of the Company and the interests of 
shareholders. The Company is not required to comply with the Combined Code on Corporate Governance issued by the Financial Reporting 
Council. However as the Company grows, the Directors intend that it should develop policies and procedures which reflect the Combined Code 
so far as is practicable, taking into account the size and nature of the Company.
the BOard OF directOrs The Board of Directors currently comprises five members, two executive directors and three non-executive directors including the Executive 
Chairman, Mr John Newton. The Directors have significant experience in the evaluation, acquisition and development of mineral and energy 
resource projects and the management of such investments, quoted and unquoted, both in the UK and overseas.
BOard MeetinGs 
The Board will meet as and when required and ordinarily meets every two months, to provide effective leadership and overall management of 
the Company’s affairs through the schedule of matters reserved for its decision. This includes the approval of the budget and business plan, 
major capital expenditure, acquisitions and disposals, risk management policies and the approval of the financial statements. Formal agendas, 
papers and reports are sent to the Directors in a timely manner, prior to the Board Meetings. The Board delegates certain of its responsibilities 
to the board committees which have terms of reference as listed below.
All Directors have access to the advice of the Company Secretary who is responsible for ensuring that all Board procedures are followed. Any 
Director may take independent professional advice at the Company’s expense in the furtherance of his duties.
cOrPOrate GOvernance Practices 
The Company has adopted a Share Dealing Code that applies to Directors, senior management and any employee who is in possession of 
‘inside information’. All such persons are prohibited from trading in the Company’s securities if they are in possession of ‘inside information’.
The Board has established Remuneration, Audit Committees and Nominations Committee. The Remuneration Committee is made up of Robert 
Annells and Susan Wickerson and is responsible for reviewing the performance of the executive directors and for setting the framework and broad 
policy for scale and structure of their remuneration taking into account all factors which it shall deem necessary. The Remuneration Committee 
will also determine allocations of share options and is responsible for setting any performance criteria in relation to the exercise of options granted 
under any share option schemes adopted by the Company. The Audit Committee is made up of Robert Annells and Susan Wickerson and 
monitors the integrity of the Company’s annual and interim financial statements. The committee also monitors and reviews the effectiveness of 
the management and the external auditors on accounting and internal control matters and recommends the appointment of, and reviews the 
fees of, the external auditors. The Nominations Committee is made up of Andy Morrison and Sue Wickerson and has responsibility for identifying, 
evaluating and recommending candidates to join the Board and make recommendations on Board composition and balance.
 
Corporate Governance 20 Xtract Energy   Annual Report 2007
The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to 
prepare the financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. 
The financial statements are required by law to be properly prepared in accordance with IFRSs as adopted by the European Union and the 
Companies Act 1985.  
International Accounting Standard 1 requires that financial statements present fairly for each financial year the Company’s financial position, 
financial performance and cash flows.  This requires the faithful representation of the effects of transactions, other events and conditions in 
accordance with the definitions and recognition criteria for assets, liabilities, income and expenses set out in the International Accounting 
Standards Board’s ‘Framework for the preparation and presentation of financial statements’.  In virtually all circumstances, a fair presentation 
will be achieved by compliance with all applicable IFRSs.  However, directors are also required to:
properly select and apply accounting policies;
present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information; 
provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the 
impact of particular transactions, other events and conditions on the entity’s financial position and financial performance; and
make an assessment of the Company’s ability to continue as a going concern.
The directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position 
of the Company and enable them to ensure that the financial statements comply with the Companies Act 1985. They are also responsible for 
safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s 
website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in 
other jurisdictions.
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Statement of Directors’ Responsibilities 21 Xtract Energy   Annual Report 2007
Independent Auditors’ Report to the Members of Xtract Energy plc
We have audited the group and parent company financial statements (the ‘’financial statements’’) of Xtract Energy Plc for the 18 months ended 
30 June 2007 which comprise the Group Income Statement, the Group Statement of Recognised Income and Expense, the Group and Parent 
Company Balance Sheets, the Group Cash Flow Statement, the Parent Company Cash Flow Statement and the related notes 1 to 27. These 
financial statements have been prepared under the accounting policies set out therein. 
This report is made solely to the company’s members, as a body, in accordance with section 235 of the Companies Act 1985.  Our audit work 
has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditors’ report 
and for no other purpose.  To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company 
and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
resPective resPOnsiBilities OF directOrs and auditOrs The directors’ responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and International 
Financial Reporting Standards (IFRSs) as adopted by the European Union are set out in the Statement of Directors’ Responsibilities.
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards 
on Auditing (UK and Ireland).
We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance with the 
Companies Act 1985.  We also report to you whether in our opinion the information given in the Directors’ Report is consistent with the financial 
statements. The information given in the Directors’ Report includes that specific information presented in the Chairman’s Statement, the 
Operational Review and the Finance Review that is cross referred from the Business Review section of the Directors’ Report.
In addition we report to you if, in our opinion, the company has not kept proper accounting records, if we have not received all the information and 
explanations we require for our audit, or if information specified by law regarding directors’ remuneration and other transactions is not disclosed.
We read the other information contained in the Annual Report and consider whether it is consistent with the audited financial statements. 
We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial 
statements. Our responsibilities do not extend to any further information outside the Annual Report.
Basis OF audit OPiniOn We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An 
audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an 
assessment of the significant estimates and judgments made by the directors in the preparation of the financial statements, and of whether the 
accounting policies are appropriate to the group’s and company’s circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide 
us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused 
by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the 
financial statements.
OPiniOn In our opinion:
the financial statements give a true and fair view, in accordance with IFRSs as adopted by the European Union, of the state of the group’s 
and the parent company’s affairs as at 30 June 2007 and of the group’s profit for the 18 months then ended;
the financial statements have been properly prepared in accordance with the Companies Act 1985; and
the information given in the Directors’ Report is consistent with the financial statements.
seP arate OPiniOn in relatiOn tO iFrs As explained in Note 2 to the group financial statements, the group in addition to complying with its legal obligation to comply with IFRSs as 
adopted by the European Union, has also complied with the IFRSs as issued by the International Accounting Standards Board.
In our opinion the group financial statements give a true and fair view, in accordance with IFRSs, of the state of the group’s affairs as at  
30 June 2007 and of its profit for the 18 month period then ended.
delOitte & tOuche llP
Chartered Accountants and Registered Auditors 
London, UK.
19 October 2007
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° 22 Xtract Energy   Annual Report 2007
Note
Period ended 
30 June 2007
   £’000
Year ended
31 December 2005
£’000
Administrative and operating expenses (2,124) (221)
Share of results of associates 14 (362) (24)
Other revenue 4 66 –
Gain on disposal of fixed assets 4 10 –
Operating loss (2,410) (245)
Investment revenue 4 99 25
Finance costs 8 (128) –
Other gains and losses 4 5,968 –
Negative goodwill on acquisition of subsidiary 21 5,730 –
Profit / (loss) before tax 9,259 (220)
Tax expense 9 (1,787) –
Profit / (loss) for the period / year 7,472 (220)
Attributable to:
Equity holders of the parent 6,284 (220)
Minority interest 1,188 –
7,472 (220)
Net gain / (loss) per share
Basic (pence) 10 1.49 (0.21)
Diluted (pence) 10 1.29 (0.21)
The Group’s profit/(loss) relates entirely to continuing operations in both periods.
Consolidated Income Statement
18 months ended 30 June 2007 23 Xtract Energy   Annual Report 2007
Consolidated and Company Statements of Recognised Income and Expenditure
Group Company
Note
Period ended
30 June  2007 
£’000
Year ended
31 December 2005 
£’000
Period ended
30 June  2007 
£’000
Year ended
31 December 2005 
£’000
Gains on revaluation of available‑for‑sale 
investments taken to equity 20 782 – 782 –
Revaluation of intangible assets –  
acquisition of subsidiaries 20 962 – – –
Exchange differences on translation  
of foreign operations 20 (18) – – –
Tax on items taken directly to equity 20 (235) – (325) –
Net income recognised directly in equity 1,491 – 457 –
Profit / (loss) for the period / year 20 7,472 (220) (907) (170)
Total recognised income  
and expense for the period / year 8,963 (220) (450) (170)
Attributable to:
Equity holders of the parent 7,775 (220) (450) (170)
Minority interests 1,188 – – –
8,963 (220) (450) (170)
18 months ended 30 June 2007 24 Xtract Energy   Annual Report 2007
Group Company
Note
As at
30 June 2007 
£’000
As at
31 December 2005 
£’000
As at
30 June 2007
£’000
As at
31 December 2005
£’000
Non-current assets
Intangible assets 11 11,601 81 406 17
Property, plant and equipment 12 231 – 2 –
Investments in associates 14 23,818 412 – 436
Investments in subsidiaries 13 – – 19,101 85
Financial assets 15 3,206 – 3,206 –
Loans to subsidiaries – – 980 –
Deferred tax asset 17 312 – – –
39,168 493 23,695 538
Current assets
Inventories 16 – – –
Financial assets 15 9 – 9 –
Trade and other receivables 16 293 13 83 21
Cash and cash equivalents 16, 23 1,582 1,321 952 1,318
1,900 1,334 1,044 1,339
Total assets 41,068 1,827 24,739 1,877
Current liabilities
Trade and other payables 18 375 59 119 59
Current tax liabilities 18 698 – – –
1,073 59 119 59
Net current assets 827 1,275 925 1,280
Non-current liabilities
Deferred tax liabilities 17 7,616 – 235 –
Total liabilities 8,689 1,334 354 59
Net assets 32,379 1,768 24,385 1,818
Equity
Share capital 19, 20 704 199 704 199
Share premium account 20 23,800 1,756 23,800 1,756
Share based payments reserve 20 411 33 411 33
Available for sale reserve 20 547 – 547 –
Revaluation reserve 20 962 – – –
Exchange translation reserve 20 (18) – – –
Retained earnings 20 6,064 (220) (1,077) (170)
Equity attributable to equity  
holders of the parent 32,470 1,768 24,385 1,818
Minority interest 20 (91) – – –
Total equity 32,379 1,768 24,385 1,818
The financial statements were approved by the board of directors and authorised for release on 19 October 2007. They were signed on its 
behalf by Andy Morrison, Director                                                
Consolidated and Company Balance Sheets
As at 30 June 2007 25 Xtract Energy   Annual Report 2007
Group Company
Note
Period ended
30 June 2007 
£’000
Year ended
31 December 2005 
£’000
Period ended
30 June 2007 
£’000
Year ended
31 December 2005 
£’000
Net cash used in operating activities 22 (1,634) (74) (769) (74)
Investing activities
Interest received 4 99 25 99 25
Government grants 4 66 – – –
Purchase of property plant and equipment 12 (65) – (2) (21)
Disposal of property plant and equipment 11 – – –
Acquisition of intangible assets (282) (21) (69) –
Disposal of trading investments 2,326 – – –
Purchase of trading investments 15 (406) – (406) –
Acquisition of associates 14 (2,973) (436) – (436)
Acquisition of subsidiaries, net of cash 
acquired 21 (149) (82) (2,796) (85)
Net cash used in investing activities (1,373) (514) (3,174) (517)
Financing activities
Interest paid (80) – (128) –
Proceeds on issue of shares – placing 19 5,500 2,010 5,500 2,010
Proceeds on issue of shares – warrants 19 1,004 – 1,004 –
Proceeds received on exercise  
of options in subsidiary 21 639 – – –
Short term loan repayments (3,436) – (1,489) –
Loans to subsidiaries – – (992) –
Share issue expenses (354) (101) (354) (101)
Net cash from financing activities 3,273 1,909 3,541 1,909
Net increase in cash  
and cash equivalents 266 1,321 (366) 1,318
Cash and cash equivalents  
at beginning of period/year 1,321 – 1,318 –
Effect of foreign exchange rate changes (5) – – –
Cash and cash equivalents  
at end of period / year 1,582 1,321 952 1,318
Consolidated Cash Flow Statements
period ended 30 June 2007 26 Xtract Energy   Annual Report 2007
1. General inFOrMatiOn Xtract Energy plc is a company incorporated in the United Kingdom under the Companies Act 1985. The address of the registered office 
is 27 Albemarle Street, London W1S 4DW. The nature of the Group’s operations and its principal activities are set out in the Chairman’s 
Statement, CEO’s Review and Financial Review.
The Company has changed its accounting reference date to 30 June in order to align with its ultimate parent company, Cambrian Mining 
plc. It has therefore prepared consolidated financial statements for the 18 month period (“Period”) ended 30 June 2007. The comparative 
information relates to the year ended 31 December 2005 and is therefore not entirely comparable.
These financial statements are presented in pounds sterling. Foreign operations are included in accordance with the policies set out in 
note 2. At the date of authorisation of these financial statements, the following Standards and Interpretations which have not been applied 
in these financial statements were in issue but not yet effective:
IFRS 7 financial instruments: disclosures; and the related amendment to ias 1 on capital disclosures
IFRS 8 Operating segments
IFRIC 7 applying the restatement approach under ias 29 financial reporting in hyperinflationary economies
IFRIC 8 scope of ifrs 2
IFRIC 9 reassessment of embedded derivatives
IFRIC 10 interim reporting and impairments
IFRIC 11 ifrs 2 – group and t reasury share t ransactions
IFRIC 12 service Concession agreements
IFRIC 13 Customer loyalty programmes
IFRIC 14 the limit on a defined benefit fund, minimum funding requirements and their interaction 
The directors anticipate that the adoption of these Standards and Interpretations in future periods will have no material impact on the 
financial statements of the Group except for additional disclosures on capital and financial instruments when the relevant standards come 
into effect for reporting periods commencing on or after 1 January 2007.
2. siGniFicant accOuntinG POlicies basis Of aCCOuNtiNg
These financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and IFRIC 
interpretations and with those parts of the Companies Act 1985 applicable to companies reporting under IFRS. Accordingly, the Group 
complies with all IFRS, including those adopted for use in the European Union. The financial statements have been prepared under the 
historical cost convention modified for certain items carried at fair value, as stated in the accounting policies. A summary of the more 
important accounting policies is set out below.
pareNt ONly iNCOme statemeNt
Xtract Energy plc has not presented its own income statement as permitted by section 230 (3) of the Companies Act 1985. The loss for 
the period is £907,000.
basis Of CONsOlidatiON
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its 
subsidiaries) made up to 30 June each year. Control is achieved where the Company has the power to govern the financial and operating 
policies of an investee entity so as to obtain benefits from its activities.
Minority interests in the net assets of consolidated subsidiaries are identified separately from the Group’s equity therein. Minority interests 
consist of the amount of those interests at the date of the original business combination and the minority’s share of changes in equity since 
the date of the combination. Losses applicable to the minority in excess of the minority’s interest in the subsidiary’s equity are allocated 
against the interests of the Group only to the extent that the minority has a binding obligation and is able to make an additional investment 
to cover the losses.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective 
date of acquisition or up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with 
those used by the Group.
All intra-group transactions, balances, income and expenses are eliminated on consolidation.
Notes to the Consolidated Financial Statements
period ended 30 June 2007 27 Xtract Energy   Annual Report 2007
2. siGniFicant accOuntinG POlicies (cOntinued)
busiNess COmbiNatiONs 
The acquisition of subsidiaries is accounted for using the purchase method. The cost of the acquisition is measured at the aggregate of the 
fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange 
for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree’s identifiable assets, liabilities and 
contingent liabilities that meet the conditions for recognition under IFRS 3 are recognised at their fair value at the acquisition date.
Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business 
combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after 
reassessment, the Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities exceeds the 
cost of the business combination, the excess is recognised immediately in income statement as “negative goodwill on acquisition”.
The interest of minority shareholders in the acquiree is initially measured at the minority’s proportion of the net fair value of the assets, 
liabilities and contingent liabilities recognised.
iNvestmeNts iN assOCiates
An associate is an entity over which the Group is in a position to exercise significant influence, but not control or joint control, through 
participation in the financial and operating policy decisions of the investee. Significant influence is the power to participate in the financial 
and operating policy decisions of the investee but is not control or joint control over those policies.
The results and assets and liabilities of associates are incorporated in these financial statements using the equity method of accounting 
except when classified as held for sale. Investments in associates are carried in the balance sheet at cost as adjusted by post-acquisition 
changes in the Group’s share of the net assets of the associate, less any impairment in the value of individual investments. Losses of the 
associates in excess of the Group’s interest in those associates are not recognised.
Any excess of the cost of acquisition over the Group’s share of the fair values of the identifiable net assets of the associate at the date of 
acquisition is recognised as goodwill. Any deficiency of the cost of acquisition below the Group’s share of the fair values of the identifiable 
net assets of the associate at the date of acquisition (i.e. discount on acquisition) is credited in profit or loss in the period of acquisition.
Where a Group company transacts with an associate of the Group, profits and losses are eliminated to the extent of the Group’s interest in 
the relevant associate. Losses may provide evidence of an impairment of the asset transferred in which case appropriate provision is made 
for impairment.
reveNue reCOgNitiON
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and 
services provided in the normal course of business, net of discounts, VAT and other sales-related taxes.
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the 
rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount.
fOreigN CurreNCies 
The individual financial statements of each Group company are presented in the currency of the primary economic environment in which 
it operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each 
Group company are expressed in pound sterling, which is the functional currency of the company, and the presentation currency for the 
consolidated financial statements.
In preparing the financial statements of the individual companies, transactions in currencies other than the entity’s functional currency 
(foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, 
monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. 
Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when 
the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in profit or loss 
for the period. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in profit or loss for 
the period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised 
directly in equity. For such non-monetary items, any exchange component of that gain or loss is also recognised directly in equity.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations are translated 
at exchange rates prevailing on the balance sheet date. Income and expense items are translated at the average exchange rates for the 
period, unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the date of transactions are 
used. Exchange differences arising, if any, are classified as equity and transferred to the Group’s translation reserve. Such translation 
differences are recognised as income or as expenses in the period in which the operation is disposed of.
Notes to the Consolidated Financial Statements
at 30 June 2007 continued 28 Xtract Energy   Annual Report 2007
2. siGniFicant accOuntinG POlicies (cOntinued)
fOreigN CurreNCies (continued)
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity  
and translated at the closing rate.
Where a monetary item forms part of a net investment in a foreign operation, exchange differences are recognised in equity.
purChase Of shares iN CONtrOlled eNtity
The cost of the incremental acquisition is measured at the aggregate of the fair value of assets given at the date of exchange, liabilities 
incurred or assumed, and equity instruments issued by the Group in exchange for shares purchased in a controlled entity plus any costs 
directly attributable to the transaction. The identifiable assets, liabilities and contingent liabilities of a controlled entity are recognised at fair 
value at the date of the acquisition, but only to the extent of the incremental proportion of equity acquired.
Any goodwill arising on the purchase of shares in a controlled entity is recognised as an asset and initially measured at cost, being the 
excess of the additional cost of shares over the increase of the Group’s interest in the net fair value of the identifiable assets, liabilities  
and contingent liabilities recognised.
If the increase in the Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities exceeds  
the cost of the shares purchased, the excess is recognised immediately in the income statement as negative goodwill.
t axatiON
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it 
excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable 
or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the 
balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the 
financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance 
sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are 
recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be 
utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the 
initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor 
the accounting profit.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. 
Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which 
case the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities 
and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and 
liabilities on a net basis.
prOperty, plaNt aNd equipmeNt aNd iNtaNgible assets
Oil and gas properties and leases
The costs of oil and gas properties and leases include the cost of acquiring and developing oil and gas properties and leases, together 
with any costs reclassified from intangible exploration and evaluation. Oil and gas properties and leases are amortised from the 
commencement of production in proportion to the ratio of production in the period to remaining reserves as at the start of the period.
intangible exploration and evaluation expenditure assets
The costs of exploration properties and leases, which include the cost of acquiring prospective properties and exploration rights, are 
capitalised as intangible assets. Exploration and evaluation expenditure is capitalised within exploration and evaluation properties until  
such time that the activities have reached a stage which permits a reasonable assessment of the existence of commercially exploitable 
reserves when they are transferred to oil and gas properties and leases. Capitalised exploration and evaluation expenditure is assessed  
for impairment in accordance with the indicators of impairment as set out in IFRS 6 Exploration for and Evaluation of Mineral Reserves.  
In circumstances where a property is abandoned, the cumulative capitalised costs relating to the property are written off in the period.
Notes to the Consolidated Financial Statements
at 30 June 2007 continued 29 Xtract Energy   Annual Report 2007
2. siGniFicant accOuntinG POlicies (cOntinued)
Other property, plant and equipment
Other tangible fixed assets are recorded at cost, net of accumulated depreciation. Depreciation is provided on all such tangible fixed 
assets at rates calculated to write off the cost or valuation of each asset on a straight-line basis over its expected useful life or the life of the 
relevant licence, whichever is less, as follows:
Average life in years
Office and computer equipment  3-5
Plant and machinery   7-20
Until they are brought into use, fixed assets and equipment to be installed are included within assets under construction.
The cost of maintenance, repairs and replacement of minor items of tangible fixed assets are charged to the income statement as incurred. 
Renewals and asset improvements are capitalised. Upon sale or retirement of tangible fixed assets, the cost and related accumulated 
depreciation are eliminated from the financial statements. Any resulting gains or losses are included in the income statement.
Other intangible assets
Intangible assets acquired separately from a business are carried initially at cost. An intangible asset acquired as part of a business 
combination is recognised outside goodwill if the asset is separable or arises from contractual or other legal rights and its fair value can be 
measured reliably.  Expenditure on internally developed intangible assets, excluding development costs, is taken to the income statement 
in the year in which it is incurred. Expenditure relating to clearly defined and identifiable development projects is recognised as an intangible 
asset only after all the following criteria are met:
the project’s technical feasibility and commercial viability can be demonstrated;
the availability of adequate technical and financial resources and an intention to complete the project have been confirmed; and
the correlation between development costs and future revenues has been established.
Following initial recognition, the historic cost model is applied, with intangible assets being carried at cost less accumulated amortisation 
and accumulated impairment losses. The carrying value of intangible assets is reviewed for impairment whenever events or changes in 
circumstances indicate the carrying value may not be recoverable. 
impairmeNt Of taNgible aNd iNtaNgible assets exCludiNg gOOdwill
At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any 
indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated 
in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other 
assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. An intangible asset with  
an indefinite useful life is tested for impairment annually and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows 
are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and 
the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the 
asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless the 
relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised 
estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been 
determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is 
recognised as income immediately, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment 
loss is treated as a revaluation increase.
researCh aNd develOpmeNt expeNditure
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
iNveNtOries
Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials, and where applicable, direct labour 
costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Cost is calculated 
using the weighted average method. Net realisable value represents the estimated selling price less all estimated costs of completion and 
costs to be incurred in marketing, selling and distribution.
°
°
°
at 30 June 2007 continued
Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements
at 30 June 2007 continued
30 Xtract Energy   Annual Report 2007
2. siGniFicant accOuntinG POlicies (cOntinued)
fiNaNCial iNstrumeNts
Financial assets and financial liabilities are recognised in the Group’s balance sheet when the Group becomes a party to the contractual 
provisions of the instrument.
t rade receivables
Trade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective 
interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in the income statement when there 
is objective evidence that the asset is impaired. The allowance recognised is measured as the difference between the asset’s carrying 
amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.
investments
Investments are recognised and derecognised on a trade date where a purchase or sale of an investment is under a contract whose terms 
require delivery of the investment within the timeframe established by the market concerned, and are initially measured at cost, including 
transaction costs.
Investments are classified as either held-for-trading or available-for-sale, and are measured at subsequent reporting dates at fair value. 
Where securities are held for trading purposes, gains and losses arising from changes in fair value are included in net profit or loss for 
the period. For available-for-sale investments, gains and losses arising from changes in fair value are recognised directly in equity, until 
the security is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognised in equity is 
included in the profit or loss for the period. Impairment losses recognised in profit or loss for equity investments classified as available-for-
sale are not subsequently reversed through profit or loss. Impairment losses recognised in profit or loss for debt instruments classified as 
available-for-sale are subsequently reversed if an increase in the fair value of the instrument can be objectively related to an event occurring 
after the recognition of the impairment loss.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily 
convertible to a known amount of cash and are subject to an insignificant risk of changes in value.
financial liabilities and equity
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity 
instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities.
t rade payables
Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method.
equity instruments
Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
derivative financial instruments
The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates. The Group continues to 
assess the use of foreign exchange forward contracts to hedge these exposures. The Group does not use derivative financial instruments 
for speculative purposes.
The use of financial derivatives is governed by the Group’s policies approved by the board of directors, which provide written principles on 
the use of financial derivatives.  
Derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risks and 
characteristics are not closely related to those of host contracts and the host contracts are not carried at fair value, with gains or losses 
reported in the income statement.
share-based paymeNts
The Group issues equity-settled share-based payments to certain directors and officers and service providers. Equity-settled share-based 
payments are measured at fair value (excluding the effect of non market-based vesting conditions) at the date of grant. The fair value 
determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, 
based on the Group’s estimate of shares that will eventually vest and adjusted for the effect of non market-based vesting conditions.
Where the value of the goods or services received in exchange for the share-based payment cannot be reliably estimated the fair value 
is measured by use of the Black-Scholes model. The expected life used in the model has been adjusted, based on management’s best 
estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations. Notes to the Consolidated Financial Statements
at 30 June 2007 continued
31 Xtract Energy   Annual Report 2007
2. siGniFicant accOuntinG POlicies (cOntinued)
OperatiNg leases
Leases where the lessor retains a significant portion of the risks and benefits of ownership of the asset are classified as operating leases 
and rentals payable under operating leases are charged in the income statement on a straight line basis over the lease term.
bOrrOwiNg COsts
Borrowing costs are recognised in the income statement in the period in which they are incurred.
gOverNmeNt graNts
Government grants towards research and development costs are recognised as income over the periods necessary to match them with 
the related costs and are deducted in reporting the related expense.
lOaNs aNd bOrrOwiNgs
Loans are initially measured at fair value less directly attributable transaction costs. After initial recognition, interest bearing loans are 
subsequently measured at amortised cost using the effective interest method. Interest payable is accrued in the income statement using 
the effective interest rate method.
3. critical accOuntinG JudGeMents and key sOurces OF estiMatiOn uncertainty CritiCal JudgmeNts iN applyiNg the grOup’s aCCOuNtiNg pOliCies
In the process of applying the Group’s accounting policies, which are described in note 2, management has made the following 
judgements that have the most significant effect on the amounts recognised in the financial statements (apart from those involving 
estimations, which are dealt with below).
impairment of intangible assets 
The assessment of intangible assets for any indications of impairment involves judgement. If an indication of impairment exists, a 
formal estimate of recoverable amount is performed and an impairment loss recognised to the extent that carrying amount exceeds 
recoverable amount. Recoverable amount is determined as the higher of fair value less costs to sell and value in use. The calculation of 
recoverable amount requires an estimation of the value in use of the cash-generating units to which the intangible assets are allocated. 
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that 
reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash 
flows have not been adjusted.
key sOurCes Of estimatiON uNCertaiNty
The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported for 
assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. The nature of 
estimation means that actual outcomes could differ from those estimates. The key sources of estimation uncertainty that have a significant 
risk of causing material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
share-based payments
The estimation of share-based payment costs requires the selection of an appropriate valuation model and consideration as to the inputs 
necessary for the valuation model chosen. The Group has made estimates as to the volatility of its own shares, the probable life of options 
granted and the time of exercise of those options. The model used by the Group is the Black-Scholes model. 
measurement of fair value for held for trading and available for sale assets.
The estimation of fair value for held for trading assets and available for sale assets is determined based on quoted market prices for assets 
where quoted market prices exist. For share options held that are not traded on an open market and therefore have no quoted market 
price, an appropriate valuation model is required to be selected and consideration given to the inputs required for that model. In calculating 
the fair value of share options held by the Group, the Black-Scholes model has been adopted.
fair values recognised in business combinations
The estimation of fair values of oil and gas exploration rights and production licences rights and any associated property, plant and 
equipment acquired in business combinations involves estimates over the quantities of minerals that may be recovered and the technical 
and commercial feasibility of extraction, which may be highly uncertain. Generally, fair values assigned to exploration and evaluation assets 
are limited so as not to generate negative goodwill where there is significant uncertainty over the estimates of fair value.  Notes to the Consolidated Financial Statements
at 30 June 2007 continued
32 Xtract Energy   Annual Report 2007
4. revenue and Other Gains and lOsses An analysis of the Group’s revenue and other gains and losses is as follows:
Group
Period ended
30 June 2007 
£’000
Year ended
31 December 2005 
£’000
Other operating revenue:
– Research and development grants 
i)
66 –
Investment revenue:
– Interest on bank deposits 99 25
Total revenue 165 25
Other gains and losses – Trading investments:
– Realised gains on sale of held for trading investments 1,233 –
– Unrealised gains on held for trading investments 5,091 –
– Loss on dilution from subsidiary share issue (see note 21) (356) –
5,968 –
Gains on disposal of fixed assets 10 –
Total other gains and losses 5,978 –
government grants received in relation to research and development expenditure on oil shale extraction technologies in australia. i) Notes to the Consolidated Financial Statements
at 30 June 2007 continued
33 Xtract Energy   Annual Report 2007
5. seGMent inFOrMatiOn busiNess segmeNts
For management purposes, the group is currently organised into two operating divisions – oil & gas exploration, evaluation and 
development and oil shale exploitation. These divisions are the basis on which the group reports its primary segment information.
Principal activities are as follows:
Oil & gas exploration, evaluation and development – of the Group’s interests in Kyrgyzstan and the Danish North Sea.
Oil shale exploitation – including development of technology to produce refinery-acceptable crude oil from the kerogen contained in oil 
shale, with the aim of commercial production from shale and related petroleum product exploration rights over mining tenements in the 
Julia Creek area of Queensland and an area in the South of New Zealand.
Segment information about businesses is presented below. 
period ended 30 June 2007
Oil & Gas exploration 
and production
£’000
Oil shale exploitation
£’000
Consolidated
£’000
Segment revenue – – –
Segment result (335) (395) (730)
Unallocated corporate expenses (1,394)
Share of results of associates (362)
Other operating revenue 66
Gains on disposal of fixed assets 10
Operating loss (2,410)
Investment revenue 99
Finance costs (128)
Other gains and losses 5,968
Negative goodwill on acquisition of subsidiary 5,730
Profit before tax 9,259
Tax (1,787)
Profit after tax 7,472
Other information
Capital additions – intangible assets 198 389 587
Capital additions – other intangible unallocated assets 15
Capital additions – intangible assets acquired on acquisition of subsidiaries 2,098 8,820 10,918
Capital additions –property, plant and equipment 41 22 63
Capital additions – other property, plant and equipment unallocated 2
Capital additions – property, plant and equipment acquired  
on acquisition of subsidiaries 178 – 178
Depreciation and amortisation 6 5 11
Balance sheet
Assets
Segment assets 3,033 8,740 11,773
Interests in associates 23,818
Financial assets 3,215
Other unallocated corporate  assets 2,262
Consolidated total assets 41,068
Liabilities
Segment liabilities 137 15 152
Unallocated corporate liabilities 8,537
Consolidated total liabilities 8,689
°
° Notes to the Consolidated Financial Statements
at 30 June 2007 continued
34 Xtract Energy   Annual Report 2007
5. seGMent inFOrMatiOn (cOntinued)
busiNess segmeNts (CONtiNued)
year ended 31 december 2005
Oil & Gas exploration 
and production
£’000
Oil shale exploitation
£’000
Consolidated
£’000
Segment  revenue – – –
Segment result – – –
Unallocated corporate expenses (221)
Operating loss (221)
Share of results of associates (24)
Investment revenue 25
Finance costs –
Loss before tax (220)
Tax –
Loss after tax (220)
Other information
Capital additions – unallocated intangibles – – 102
Depreciation and amortisation – unallocated – – 21
Balance sheet  
Assets
Segment assets – – –
Interests in associates 412
Other unallocated corporate assets 1,415
Consolidated total assets 1,827
Liabilities
Segment liabilities – – –
Unallocated corporate liabilities 59
Consolidated total liabilities 59
geOgraphiCal segmeNts
The group’s operations are located in Europe (including UK), Central Asia, and Australia. 
The following table provides an analysis of the group’s revenue by geographical market, irrespective of the origin of the goods/services.
period ended 30 June 2007
Europe  
(including UK) 
£’000
Central Asia
£’000
Australia
£’000
Total of segments
£’000
Segment revenue – – – –
Segment assets 1,466 1,567 8,740 11,773
Capital additions 17 2,677 9,216 11,910
year ended 31 december 2005
Europe  
(including UK) 
£’000
Central Asia
£’000
Australia
£’000
Total of segments
£’000
Segment Revenue – – – –
Segment assets – – – –
Capital additions – – – –
In the year ended 31 December 2005, there were no revenues, assets or additions in any geographic segment. Notes to the Consolidated Financial Statements
at 30 June 2007 continued
35 Xtract Energy   Annual Report 2007
6. PrOFit/(lOss) FOr the PeriOd / year
Profit/(Loss) for the period / year has been arrived at after charging/(crediting):
Period ended
30 June 2007 
£’000
Year ended
31 December 2005 
£’000
Net foreign exchange losses/(gains) 39 (1)
Research and development costs 269 –
Depreciation of property, plant and equipment 11 –
Share based payments expense (see note 25) 152 79
Staff costs (see note 7) 230 12
Research and development grants (see note 4) (66) –
Gain on disposal of property, plant, and equipment (10) –
auditOr’s remuNeratiON 
Period ended
30 June 2007 
£’000
Year ended
31 December 2005 
£’000
The analysis of auditors’ remuneration is as follows:
Fees payable to the Group’s current auditor for the audit of the Group’s annual accounts 80 –
Fees payable to the Group’s previous auditor for the audit of the Group’s annual accounts for 
the year ended 31 December 2005 19 15
Total audit fees 99 15
Fees payable to the Group’s previous auditor and its associates for other services:
– other services relating to taxation 2 –
– other assurance services relating to interim reviews 33 –
Total non-audit fees 35 –
134 15
7. staFF cOsts The average monthly number of employees (including executive directors) was:
Period ending
30 June
2007
Year ending
31 December
2005
No. No.
Corporate 4 2
£’000 £’000
Their aggregate remuneration comprised:
Salaries and fees 230 12
8. Finance cOsts Period ending 
30 June 2007 
£’000
Year ending
31 December 2005 
£’000
Interest on bank overdrafts and loans 80 –
Interest on convertible loan notes 48 –
128 – Notes to the Consolidated Financial Statements
at 30 June 2007 continued
36 Xtract Energy   Annual Report 2007
9. t ax Period ended
30 June
2007 
£’000
Year ended 
31 December
2005 
£’000
Current tax 698   –
Deferred tax (note 17) 1,089 –
1,787 –
Corporation tax is calculated at 30 % (2005: 30 %) of the estimated assessable profit for the year.
Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions. 
The Group tax charge for the period/year can be reconciled to the profit/(loss) per the income statement as follows:
Period ended
30 June 2007 
£’000
Year Ended
31 December 2005 
£’000
Profit / (loss) before tax: 9,259 (220)
Tax at the UK corporation tax rate of 30% (2005: 30%) 2,778  (66)
Tax effect of expenses not deductible in determining taxable profit / (loss) 45 31
Tax effect of utilisation of tax losses not previously recognised 682 35
Tax effect of non‑taxable negative goodwill (1,718) –
Tax expense for the period / year 1,787 –
10.  earninGs Per share
Period ended
30 June 2007
£’000
Year ended
31 December  2005
£’000
Earnings/(loss) for the purposes of basic and diluted earnings per share (“EPS”) being net 
profit/(loss) for the period attributable to equity holders of the parent 6,284 (220)
Number Number
Weighted average number of ordinary shares for purposes of basic EPS 420,569,934 102,744,761
Effect of dilutive potential ordinary shares  – options and warrants 67,143,088 –
Weighted average number of ordinary shares for purposes of diluted EPS 487,713,022 102,744,761
Where a loss has occurred, basic and diluted earnings per share are the same because the outstanding share options and warrants 
are anti-dilutive.
11. intanGiBle assets
grOup
Total
£’000
At 1 January 2005 –
Additions 81
At 1 January 2006 81
Additions 602
Acquired on acquisition of subsidiaries 10,918
At 30 June 2007 11,601
COmpaNy 
Total
£’000
At 1 January 2005 –
Additions 17
At 1 January 2006 17
Additions 389
At 30 June 2007 406
Costs of exploration and evaluation are capitalised and carried forward during the exploration and evaluation stage. No amortisation is 
charged prior to the commencement of production. Notes to the Consolidated Financial Statements
at 30 June 2007 continued
37 Xtract Energy   Annual Report 2007
12. PrOPerty, Plant and equiPMent grOup
Plant and machinery
£’000
Office and computer 
equipment
£’000
Total
£’000
Cost
At 1 January 2005 and 31 December 2005 – – –
At 1 January 2006 – – –
Additions 48 17 65
Acquisition of subsidiary 178 – 178
Disposals – (1) (1)
At 30 June  2007 226 16 242
Accumulated depreciation and impairment
At 1 January 2005 and 31 December 2005 – – –
At 1 January 2006 – – –
Charge for the year 6 5 11
At 30 June 2007 6 5 11
Carrying amount
At 30 June 2007 220 11 231
At 31 December 2005 – – –
COmpaNy
Office and Computer 
Equipment
£’000
Total
£’000
Cost
At 1 January 2005 and 31 December 2005 – –
At 1 January 2006 – –
Additions 2 2
Disposals – –
At 30 June  2007 2 2
Accumulated depreciation and impairment
At 1 January 2005 and 31 December 2005 – –
At 1 January 2006 – –
Charge for the year – –
At 30 June 2007 – –
Carrying amount
At 30 June 2007 2 2
At 31 December 2005 – –
13. suBsidiaries Interests in subsidiaries
Company
£’000
At 1 January 2005 –
Additions 85
At 1 January 2006 85
Additions 19,016
At 30 June 2007 19,101 Notes to the Consolidated Financial Statements
at 30 June 2007 continued
38 Xtract Energy   Annual Report 2007
13. suBsidiaries (cOntinued)
Details of the Company’s subsidiaries consolidated at 30 June 2007 are as follows:
Name
Place of Incorporation 
and Operation
Date controlling 
interest acquired
Proportion of 
ownership & voting  
power held %
Principal Activities
Sermines de Mexico S.A. de C.V. Mexico 08/08/05 100 Mining exploration
Xtract Oil Limited Australia 17/02/06 100 Mining exploration and 
technology development
Cambrian Oil & Gas plc UK 15/11/06 100 Holding Company 
Zhibek Resources plc i) UK 15/11/06 100 Oil & gas exploration, 
development and 
production 
CSJC KNG Hydrocarbons ii) Kyrgyz Republic 15/11/06 72 Oil & gas exploration
CSJC Zhibek Hydrocarbons ii) Kyrgyz Republic 15/11/06 85 Oil & gas exploration
 interest held through wholly owned subsidiary Cambrian Oil & gas plc, acquired on 15 November 2006. 
 interest held through wholly owned group on acquisition of Cambrian Oil plc on 15 November 2006.
Information relating to acquisition of subsidiaries during the period is included in note 21.
All of these subsidiaries have been consolidated for the period of ownership.
14. interests in assOciates Details of the Group’s associates at 30 June 2007 are as follows:
Group Company
As at 
30 June 2007
£’000
As at 
31 December 2005
£’000
As at 
30 June 2007
£’000
As at 
31 December 2005
£’000
Opening balance 412 – 436 –
Acquired on acquisition of subsidiary (a) 10,093 – – –
Revaluation on acquisition of minority interest 3,481 – – –
Investment in associate – 436 – 436
Exercise of options in associate (b) 2,973 – – –
Transferred from trading investments (c) 7,628 – – –
Transferred to investment in subsidiary (d) (407) – (436) –
Share of associates losses for the period (362) (24) – –
23,818 412 – 436
Fair value of shares in associates acquired during the period on acquisition of subsidiary (see note 21).
Cost of exercising options in associate.
Fair value of options transferred from held for trading assets on exercise of options at (b).
During the period to 30 June 2007 Xtract Oil Limited (an associate in 2005) became a 100% owned subsidiary of Xtract and the 
investment in associates cost was transferred to be included in the acquisition cost of the subsidiary. See note 21 for further details.
Name
Place of Incorporation 
and Operation
Date associate 
interest acquired
Proportion of 
ownership & voting  
power held %
Principal Activities
MEO Australia Limited i) Australia 15/11/06 24 Oil & gas exploration
Elko Energy Limited i) Canada 15/11/06 32 Oil & gas exploration
interest held through wholly owned subsidiary Cambrian Oil & gas plc, acquired on 15 November 2006.
Aggregated amounts relating to associates
As at 
30 June 2007 
£’000
As at 
31 December 2005 
£’000
Total assets 39,175 156
Total liabilities 773 –
Revenues 378 –
Loss (1,707) (111)
The fair value of the Company’s associate investment in MEO Australia Limited at 30 June 2007 is £45.3 million. This fair value is based on 
the closing ASX market price of MEO Australia Limited shares (ASX:MEO) at balance date.
i)
ii)
a)
b)
c)
d)
i) Notes to the Consolidated Financial Statements
at 30 June 2007 continued
39 Xtract Energy   Annual Report 2007
15. Financial assets
Group Company
Available-for-sale investments 
As at 
30 June 2007
£’000
As at 
31 December 2005
£’000
As at 
30 June 2007
£’000
As at 
31 December 2005
£’000
Opening balance – – – –
Acquired during the period 2,424 – 2,424 –
Movement in fair value (a) 782 – 782 –
3,206 – 3,206 –
Fair value of available for sale investments is based on the listed market share price at 30 June 2007.
Group Company
Trading investments 
As at
 30 June 2007
£’000
As at 
31 December 2005
£’000
As at 
30 June 2007
£’000
As at 
31 December 2005
£’000
Opening balance – – – –
Other 9 – 9 –
Purchased during the period 406 – 406 –
Acquired on acquisition (a) 3,639 – – –
Disposals (b) (1,093) – – –
Fair value increase (c) 5,082 – – –
Transferred to investments in associates (d) (7,628) – – –
Transferred to investment in subsidiary  
on acquisition of subsidiary (e) (406) – (406) –
9 – 9 –
Fair value of share options acquired during the period on acquisition of subsidiary. See note 21 for further details.
Fair value of share options transferred to the income statement upon disposal during the period.
Fair value increase in trading investments during the period. Fair value has been calculated using the Black-Scholes model.
Fair value of share options transferred to investments in associates upon exercise of options.
As part of the acquisition of the minority interest of COIL, warrants held by Xtract in COIL were cancelled and the value of the warrants 
was included as part of the costs of acquisition. Refer to note 21 for further detail.
16. Other Financial assets
t rade and other receivables 
Group Company
As at
30 June 2007
£’000
As at 
31 December 2005
£’000
As at
30 June 2007 
£’000
As at
31 December 2005 
£’000
Other debtors 189 1 80 9
Prepayments 104 12 3 12
293 13 83 21
The directors consider that the carrying amount of trade and other receivables approximates their fair value.
Cash and cash equivalents
Group Company
As at
30 June 2007
£’000
As at
31 December 2005
£’000
As at
30 June 2007 
£’000
As at
31 December 2005 
£’000
Cash held and on deposit 1,582  1,321 952 1,318
Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original maturity of three months or 
less. The carrying amount of these assets approximates their fair value.
a)
a)
b)
c)
d)
e) Notes to the Consolidated Financial Statements
at 30 June 2007 continued
40 Xtract Energy   Annual Report 2007
17. deFerred tax Group Company
As at
30 June 2007
£’000
As at
31 December 2005
£’000
As at
30 June 2007 
£’000
As at
31 December 2005 
£’000
Deferred tax assets 312 – – –
Deferred tax liabilities (7,616) – (235) –
(7,304) – (235) –
The following are the major deferred tax liabilities and assets recognised by the Group and movements thereon during the current and 
prior reporting period.
Group 
Available for sale 
investments
£’000
Investment in 
associates
£’000
Intangible assets 
£’000
Investments held for 
trading
£’000
Total
£’000
Charge to income – (110) – 1,199 1,089
Charge to equity 235 – – – 235
Acquisition of subsidiary – 3,334 2,646 – 5,980
As 30 June 2007 235 3,224 2,646 1,199 7,304
Company 
Available for sale 
investments
£’000
Total
£’000
Charge to income – –
Charge to equity 235 235
Acquisition of subsidiary – –
At 30 June 2007 235 235
At the balance sheet date, the Group has available unused tax losses of £3.2million (2005: £0.1million) available for offset against future 
profits. No related deferred tax asset has been recognised due to the unpredictability of future profit streams. Losses may be carried 
forward indefinitely and will be recoverable if suitable taxable profits arise in future periods. 
18. Other Financial liaBilities trade aNd Other payables 
Group Company
As at
30 June 2007 
£’000
As at
31 December 2005 
£’000
As at
30 June 2007
£’000
As at
31 December 2005
£’000
Trade creditors and accruals 325 59 74 59
Current tax payable (see note 9) 698 – – –
Amounts due to related parties (see note 26) 50 – 45 –
1,073 59 119 59
The directors consider that the carrying amount of trade payables approximates to their fair value. Notes to the Consolidated Financial Statements
at 30 June 2007 continued
41 Xtract Energy   Annual Report 2007
19. share caPital 
Company Authorised:
As at
30 June 2007
£’000
As at 
31 December 2005
£’000
1,000,000,000 (2005:1,000,000,000) ordinary shares of £0.1p each 1,000 1,000
Issued and fully paid:
This comprises issued and fully paid ordinary shares of £0.1p each Number of shares £’000
At 1 January 2006 199,088,550 199
Issued for access to mining tenement rights (a) 32,000,000 32
Share consideration for Xtract Oil Limited at 7p per share (b) 57,471,250 57
Shares issued as payment for services (c) 250,000 2
Share consideration for Cambrian Oil and Gas plc at 6.375p per share (d) 29,090,909 29
Share consideration for Cambrian Oil and Gas plc at 5.675p per share (e) 115,016,676 115
Conversion of loan note at 5.5p per share (f) 61,113,291 61
Placing at 5.5p per share (g) 109,795,800 109
Issue for warrants exercised at 1p per share (h) 100,400,000 100
At 30 June 2007 704,226,476 704
Consideration for the assignment of mining tenements in Australia from Intermin Resources Limited.
On 17 February 2006, the Company issued 57,471,250 shares of 0.1p each valued at £4,022,988 based on the market value of  
7p per share, as part consideration for acquiring 78.3% of the issued share capital in Xtract Oil Limited (note 21).
250,000 shares of 0.1p each issued as consideration to brokers for services in relation to acquisition of Xtract Oil Limited. 
On 15 November 2006, the Company issued 29,090,909 shares of 0.1p each valued at £1,854,545 based on the market value of 
6.375p per share, as consideration for the purchase of 53.3 million shares in Cambrian Oil and Gas plc (“COIL”) from Cambrian Mining 
Plc. Refer to note 21 for the detailed disclosures relating to this business combination.
On 23 April 2007 the company issued 115,016,676 shares of 0.1p each valued at £6,527,196 based on the market value of 5.675p, as 
consideration to COIL shareholders (other than Xtract) for the acquisition of all minority interest owned COIL shares by way of scheme 
of arrangement under section 425 of the Companies Act 1985 (the “Scheme”).  Under the terms of the Scheme, COIL shareholders 
received 9 new Xtract shares for every 10 COIL shares. The consideration forms the cost of the acquired shares in COIL (note 21).
On 21 September 2006 the Company entered into a convertible loan arrangement in settlement of the purchase of shareholdings 
from the Company’s ultimate parent company Cambrian Mining Plc and its subsidiaries. The value of the loan of £3.4 million, including 
interest payable of £48,498, was converted into 61,113,291 new ordinary shares of 0.1p each at the placing price of 5.5p a share on  
17 November 2006. There were no additional costs associated with the convertible loan issue or subsequent conversion.
On 22 November 2006 the Company completed a placing and open offer of 109,795,800 new ordinary shares of 0.1p each at 5.5p per 
share generating proceeds of £6,038,769, before expenses. These comprised £5,500,000 cash plus £538,769 in relation to 9,785,800 
shares placed with Cambrian Mining Plc settled by way of offset against short-term loan amounts due to Cambrian Mining Plc.
During the period 100,400,000 new ordinary shares of 0.1p each were issued and allotted following the exercise of warrants in the 
Company.  The exercise price was 1p per share issued.
The company has one class of ordinary shares which carry no right to fixed income.
uNlisted warraNts
Shares issued as a result of warrants exercised generated cash proceeds of £1,004,000 during the period. After exercises and further 
grants during the period, the following warrants remain outstanding at 30 June 2007:
 Issued 29 March 2005    –  33,688,550 exercisable at 1p per share
 Issued 29 March 2005   – 50,000,000 exercisable at 2p per share
 Issued 29 March 2005   –  3,000,000 exercisable at 1.5p per share
 Issued 24 April 2006   –  5,000,000 exercisable at 5.5p per share
 Issued 22 November 2006   –  7,213,475 exercisable at 5.5p per share
 Issued 1 January 2007 to 30 June 2007  – 600,000 exercisable at 6p per share 
a)
b)
c)
d)
e)
f)
g)
h) Notes to the Consolidated Financial Statements
at 30 June 2007 continued
42 Xtract Energy   Annual Report 2007
19. share caPital (cOntinued)
Each one of the above warrants vested immediately and expires within three years of issue, entitling the holder to one fully paid share in 
the Company upon payment of the warrant exercise price per share.
In addition to the above, in April 2007 Xtract issued shares in exchange for all minority owned shares in COIL. As part of this transaction 
231,150 COIL options exercisable at 5p, 6,150,000 COIL options exercisable at 7p and 1,500,000 COIL warrants exercisable at 3p 
continue in accordance with their terms except that COIL option and warrant holders are entitled to receive Xtract shares upon exercise 
of such options and warrants on the basis of 9 new Xtract ordinary shares for every 10 COIL shares which the option or warrant holder is 
entitled to under the terms of the option or warrant.
20. recOnciliatiOn OF chanGes in equity 
Group
Share 
capital
£’000
Share 
premium 
account
£’000
Share
based 
payments
reserve
£’000
Available 
for sale 
reserve
£’000
Revaluation 
reserve
£’000
Foreign
currency
translation 
reserve
£’000
Retained 
earnings
£’000
Minority
Interest
£’000
Total Equity
£’000
At 1 January 2005    – – – – – – – – –
Balance on incorporation – – – – – – – – –
Issue of shares 199 1,857 – – – – – – 2,056
Share based payments 
expense – – 33 – – – – – 33
Share issue expenses – (101) – – – – – – (101)
Loss for the period – – – – – – (220) – (220)
At 31 December 2005 199 1,756 33 – – – (220) – 1,768
Issue of shares 505 22,641 – – – – – – 23,146
Share based  
payments expense – – 378 – – – – – 378
Share issue expenses – (597) – – – – – – (597)
Gain on revaluation 
of available for sale 
investments – – – 782 – – – – 782
Deferred tax on  
revaluation of available  
for sale investments – – – (235) – – – – (235)
Revaluation on acquisition 
of subsidiaries – – – – 962 – – – 962
Exchange differences  
on translation – – – – – (18) – – (18)
Minority interest arising  
on acquisition of subsidiary – – – – – – – 5,007 5,007
Issue of shares  
by subsidiary – – – – – – – 995 995
Acquisition  
of minority interest – – – – – – – (7,281) (7,281)
Profit for the period – – – – – – 6,284 1,188 7,472
At 30 June 2007 704 23,800 411 547 962 (18) 6,064 (91) 32,379 Notes to the Consolidated Financial Statements
at 30 June 2007 continued
43 Xtract Energy   Annual Report 2007
20. recOnciliatiOn OF chanGes in equity (cOntinued)
Company
Share capital
£’000
Share premium 
account
£’000
Share based
 payments 
reserve
£’000
Available for 
sale reserve
£’000
Retained 
earnings
 
£’000
Total Equity
£’000
At 1 January 2005    – – – – – –
Balance on incorporation – – – – – ‑ Issue of shares 199 1,857 – – – 2,056
Share based payments expense – – 33 – – 33
Share issue expenses – (101) – – – (101)
Loss for the period – – – – (170) (170)
At 31 December 2005 199 1,756 33 – (170) 1,818
Issue of shares 505 22,641 – – – 23,146
Share based payments expense – – 378 – – 378
Share issue expenses – (597) – – – (597)
Gain on revaluation of available for sale 
investments – – – 782 – 782
Deferred tax on revaluation of available  
for sale investments – – – (235) – (235)
Exchange differences on translation – – – – – –
Loss for the period – – – – (907) (907)
At 30 June 2007 704 23,800 411 547 (1,077) 24,385
available fOr sale reserve
The available for sale reserve is used to recognise fair value changes on available-for-sale investments
fOreigN CurreNCy traNslatiON reserve
The foreign currency translation reserve is used to record exchange differences arising from translation of the financial statements  
of foreign subsidiaries.
share based paymeNts reserve
The share based payments reserve is used to recognise the equity component of share base payments. Notes to the Consolidated Financial Statements
at 30 June 2007 continued
44 Xtract Energy   Annual Report 2007
21. acquisitiOn OF suBsidiaries 
xtraCt Oil limited
On 17 February 2006 the Company acquired 78.3% of the issued share capital of Xtract Oil Limited (“Xtract Oil”) increasing its holding 
to 100% for consideration of £4.9 million including expenses.  Xtract Oil has interests in oil shale mining tenements in Australia and is 
researching technologies to commercially extract oil from shale through a liquid solvent process.
The consideration and net assets acquired were as follows:
Book value
 £000
Fair value adjustments 
£000
Fair value
 £000
Net assets acquired:
Trade receivables 69 – 69
Bank and cash balances 65 – 65
Mining rights – 8,820 8,820
Deferred tax liability – (2,646) (2,646)
134 6,174 6,308
Less revaluation reserve 962 962
134 5,212 5,346
Satisfied by:
Cash 817
Directly attributable costs 99
916
Fair value of shares issued (refer to note 19) 4,023
Total consideration 4,939
Carrying value of associate brought forward 407
5,346
Net cash outflow arising on acquisition:
Cash and cash equivalents acquired 65
Cash paid for shares (817)
Directly attributable costs (99)
(851)
The fair value of mining rights held by Xtract Oil at the date of acquisition were determined based on the purchase consideration  
(£4.9  million) paid on 17 February 2006. The purchase consideration represents 78.3% of the fair value of the mining rights prior  
to deferred tax of 30%.
Xtract Oil contributed to the Group’s 12 month consolidated results, an operating loss of £0.4 million and a loss before tax of £0.3 million 
for the period between the date of acquisition and the balance sheet date.
If the acquisition of Xtract Oil had been completed on the first day of the financial period, Group revenues for the period would have been 
£0.2 million and Group profit attributable to equity holders of the parent would have been £7.2 million.
CambriaN Oil aNd gas plC
During the eighteen month period, the Company acquired 100% of the issued share capital of Cambrian Oil & Gas Plc (“COIL”) for total 
consideration of £13,641,000 including expenses. The acquisition occurred in two stages, being the purchase of a controlling interest of 
65.5% on 15 November 2006 and purchase of the remaining minority interest 23 April 2007.
The book values of other assets held by Xtract Oil at the date of acquisition are assumed to equate their fair value.
COIL is a PLC that with its subsidiary and associate undertakings (“COIL group”) is involved in investment in and financing of oil and gas 
exploration and development assets. COIL group includes a subsidiary with interests in Kyrgyzstan and two associates: 24% in MEO 
Australia Ltd (“MEO”), listed on the Australian Stock Exchange, and 32% of Elko Energy Inc, based in Canada. Notes to the Consolidated Financial Statements
at 30 June 2007 continued
45 Xtract Energy   Annual Report 2007
21. acquisitiOn OF suBsidiaries (cOntinued)
purchase of controlling interest (65.5% of issued share capital)
As at 15 November 2006, Xtract acquired a controlling interest of 65.5% in COIL are as follows:
Effective date
Number of shares Percent acquired Consideration
£’000
15 November 2006 202,964,102 65.5% 6,544
Expenses 35
Total Investment 6,579
The net assets of the COIL Group acquired in the first step of the acquisition are as follows:
Book value
£’000
Fair value adjustments
£’000
Fair value
£’000
Mining rights and exploration costs 2,098 – 2,098
Investment in associates 6,100 3,993 10,093
Property, plant and equipment 178 – 178
Deferred tax asset – 268 268
Investments – held for trading 3,639 – 3,639
Inventories 14 – 14
Trade and other receivables 385 – 385
Cash and cash equivalents 2,716 – 2,716
Trade and other payables (2,169) – (2,169)
Deferred tax liability (1,092) (1,467) (2,559)
11,869 2,794 14,663
Excess of acquirer’s interest in net assets of acquiree over cost (3,077)
Minority interest (5,093)
Minority interest in subsidiary acquired 86
6,579
Satisfied by:
Cash 1,850
Directly attributable costs 35
Convertible loan 889
Short–term loan 1,950
Fair value of shares issued 1,855
Total consideration 6,579
Net cash outflow arising on acquisition
Cash paid (1,885)
Cash and cash equivalents acquired 2,716
831
The fair value of COIL’s associate investment in MEO has been based on the market value of MEO shares (ASX:MEO) at the date  
of acquisition. The fair value of COIL’s other assets and liabilities is assumed to approximate their carrying values at the date of acquisition.
As the fair value of the Company’s share in net assets at the date of acquisition exceeds the total consideration paid for the 65.5% interest 
acquired, negative goodwill of £3.1 million arises on acquisition.
The COIL Group contributed to the Group’s results for the period an operating profit of £1.2 million and a profit before tax of £0.9 million for 
the period between the date of acquisition and the balance sheet date.
If the acquisition of COIL had been completed on the first day of the financial period, Group revenues (excluding other gains and losses)  
for the period would have been £0.2 million and Group profit attributable to equity holders of the parent would have been £9.8 million. Notes to the Consolidated Financial Statements
at 30 June 2007 continued
46 Xtract Energy   Annual Report 2007
21. acquisitiOn OF suBsidiaries (cOntinued)
dilution of interest in COil between 15 November 2006 and 23 april 2007
During the period between 15 November 2006 and 23 April 2007, 16,499,993 warrants and 4,266,670 options in COIL were exercised  
by parties other than Xtract, resulting in a dilution of Xtract’s interest in COIL from 65.5% to 61.4%.  Proceeds to COIL from the exercise  
of warrants and options totalled £0.6 million and a loss on dilution of £0.4 million has been recognised in the income statement for the period.
purchase of minority interest (38.6% of issued share capital)
On 23 April 2007 the company acquired the remaining 38.6% minority interest of COIL by way of a scheme of arrangement through the 
issue of shares to the value of £6.5 million – see note 19(e). The total cost of acquisition including the value of COIL share warrants held  
by Xtract that were cancelled as part of the transaction was as follows:
Effective date
Number of shares Percent acquired Consideration
£’000
April 2007 127,796,382 38.6% 6,527
COIL share warrants held by Xtract cancelled 406
Expenses 129
Total investment 7,062
Acquiring shares in a controlled entity does not meet the definition of a business combination and therefore does not fall within the scope 
of IFRS 3 Business Combinations. Accordingly a policy has been developed in accordance with IAS 8 Accounting Policies Changes in 
Accounting Estimates and Errors, which is also consistent with generally accepted accounting practice. This policy recognises an increase 
in the fair value of the entity to the extent of the further ownership interest acquired.  As a result, shares in the associate MEO have been 
further revalued upwards by £3.5 million and deferred tax liabilities increased by £1.0 million a net revaluation of £2.5 million.
The negative goodwill arising on the purchase of the revalued minority interests is £2.6 million and the transaction gave rise to cash outflow 
of £129,000.
22. nOtes tO the cash FlOw stateMent Group Company
Period ended  
30 June 2007 
£’000
Year  ended  
31 December 2005 
£’000
Period ended 
 30 June 2007 
£’000
Year  ended 
 31 December 2005 
£’000
Profit/(loss) for the period/year 7,472 (220) (907) (170)
Adjustments for:
Share of results of associates 362 24 – –
Investment revenue (99) (25) (77) (25)
Other gains and losses (5,968) – (9) –
Income tax expense 1,787 – – –
Government grants (66)
Depreciation of property, plant and equipment 11 – – –
Amortisation of intangible assets – 21 – 4
Negative goodwill released to income (5,730) – – –
Share–based payments expense 152 79 152 79
Gain on disposal of property, plant and 
equipment (10) – – –
Operating cash flows before movements  
in working capital (2,089) (121) (841) (112)
Increase in inventories (2) – – –
Increase in receivables 175 (12) (62) (21)
Increase in payables 172 59 15 59
Cash used in operations (1,744) (74) (888) (74)
Income taxes paid – – – –
Interest paid 128 – 119 –
Foreign exchange differences (18) – – –
Net cash used in operating activities (1,634) (74) (769) (74) Notes to the Consolidated Financial Statements
at 30 June 2007 continued
47 Xtract Energy   Annual Report 2007
23. Financial instruMents The following table sets out the carrying amount, by maturity, of the Group’s financial instruments that are exposed to interest rate risk:
As at 30 June 2007
Less than one year
£’000
Total
£’000
floating rate
Cash and cash equivalents 1,582 1,582
1,582 1,582
As at 31 December 2005
Less than one year
£’000
Total
£’000
floating rate
Cash and cash equivalents 1,321 1,321
1,321 1,321
The Group calculates the fair value of assets and liabilities by reference to amounts considered to be receivable or payable on the Balance 
sheet date. The Group’s financial assets and liabilities, together with their fair values are as follows:
Book value Fair value
2007
£’000
2005
£’000
2007
£’000
2005
£’000
Financial assets
Cash and cash equivalents 1,582 1,321 1,582 1,321
Available for sale assets 3,206 – 3,206 –
Trading investments 9 – 9 –
4,797 1,321 4,797 1,321
Financial liabilities
Amounts due to related parties 50 – 50 –
50 – 50 –
Market values have been used to determine the fair value of available for sale assets. The fair value of held for trading assets has been 
calculated using the Black-Scholes model. The fair value of borrowings has been calculated by discounting the expected future cash flows 
at prevailing interest rates. The fair value of other financial assets has been calculated using market interest rates.
The following table sets out the carrying amount, by maturity, of the Company’s financial instruments that are exposed to interest rate risk:
As at 30 June 2007 Less than one year
£’000
Total
£’000
floating rate
Cash and cash equivalents 952 952
952 952
As at 31 December 2005 Less than one year
£’000
Total
£’000
floating rate
Cash and cash equivalents 1,318 1,318
1,318 1,318
The company’s financial assets and liabilities, other than trade receivables and payables, together with their fair values are as follows:
Book value Fair value
2007
£’000
2005
£’000
2007
£’000
2005
£’000
Financial assets
Cash and cash equivalents 952 1,318 952 1,318
952 1,318 952 1,318
Financial liabilities – – – – Notes to the Consolidated Financial Statements
at 30 June 2007 continued
48 Xtract Energy   Annual Report 2007
23. Financial instruMents (cOntinued)
Credit risk
The Group’s principal financial assets are bank balances and cash, trade and other receivables and investments. An allowance for 
impairment is made where there is an identified loss event which, is evidence of a reduction in the recoverable cash flows.
The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-
rating agencies.
24. exPenditure cOMMitMents At the balance sheet date the Group and Company have outstanding commitments under non-cancellable operating lease, which fall due 
as follows:
Group Company
As at
30 June 2007 
£’000
As at 
31 December 2005 
£’000
As at
30 June 2007
£’000
As at 
31 December 2005
£’000
Operating lease rentals 
Within one year 41 41 41 41
Within the second to fifth years inclusive 82 166 82 166
123 207 123 207
Capital expenditures
Within one year 454 182 181 182
Within the second to fifth years inclusive 419 727 362 727
873 909 543 909
The expenditure commitments relate to various annual mining lease rental and work programme capital expenditures. The capital 
expenditure commitments are subject to variation on application to the relevant governmental authority.
25. share Based P ayMents equity-settled direCtOrs’ aNd emplOyee share warraNts
The Company has issued share warrants to certain employees and officers of the Group.  All warrants vest immediately. If the warrants 
remain unexercised after a period of three years from the date of grant the warrants expire. Details of the share warrants outstanding 
during the period are as follows.
Period ended 30 June 2007 Year ended 31 December 2005
Number of share 
warrants
Weighted average 
exercise price 
 £
Number of share 
warrants
Weighted average 
exercise price 
£
Outstanding at beginning of period 3,000,000 0.015 – –
Granted during the period 5,000,000 0.055 3,000,000 0.015
Forfeited during the period – –
Exercised during the period – –
Expired during the period – –
Outstanding at the end of the period 8,000,000 0.040 3,000,000 0.015
Exercisable at the end of the period 8,000,000 3,000,000 Notes to the Consolidated Financial Statements
at 30 June 2007 continued
49 Xtract Energy   Annual Report 2007
25. share Based P ayMents (cOntinued)
No share warrants were exercised during the period. The warrants outstanding at 30 June 2007 had a weighted average exercise 
price of £0.040, and a weighted average remaining contractual life of 1.42 years. For the period to June 30 2007, 5,000,000 warrants 
were granted on 24 April 2006. The aggregate of the estimated fair values of the options granted on those dates is £141,654. In 2005, 
3,000,000 options were granted on 29 March 2005. The aggregate of the estimated fair values of the options granted on those dates is 
£11,766. All share-based payments to Directors and employees are recognised as an expense in the income statement. 
w arrants granted 29 march 2005
The inputs into the Black-Scholes model are as follows:
Number of warrants granted 3,000,000
Weighted average share price GBP 1.5p
Weighted average exercise price GBP 1.5p
Expected volatility 30%
Expected life in years 3 years
Risk‑free rate 4.5%
Expected dividend yields 0%
These inputs resulted in a Market Option Value of £0.0039 per share. 
w arrants granted 24 april 2006
The inputs into the Black-Scholes model are as follows:
Number of warrants granted 5,000,000
Weighted average share price GBP 6.0p
Weighted average exercise price GBP 5.5p
Expected volatility 70%
Expected life in years 3 years
Risk‑free rate 4.5%
Expected dividend yields 0%
These inputs resulted in a Market Option Value of £0.0283 per share.
Expected volatility of warrants granted was determined by calculating the historical volatility of the share price of comparable companies 
(including Xtract’s ultimate parent entity) over the previous 3 years as the Group itself had no trading history at that time.  The expected life 
used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions, 
and behavioural considerations.
equity-settled paymeNts tO smith aNd williamsON
The company granted 3,088,550 share warrants to Smith and Williamson on 29 March 2005.
The inputs into the Black-Scholes model are as follows:
Weighted average share price GBP 1.5p
Weighted average exercise price GBP 1.0p
Expected volatility 30%
Expected life in years 3 years
Risk‑free rate 4.5%
Expected dividend yields 0%
These inputs resulted in a Market Option Value of £0.0067p per share. Total fair value of £20,730 is recognised in equity.
On 24 March 2005 3,088,550 ordinary shares were issued to Smith and Williamson relating to their corporate finance fee for provision of 
advisory services in connection with the Company’s listing on AIM. No consideration was payable with respect to these shares which had 
a fair value of £0.015p per share on the date of listing. Though these shares were issued in exchange for goods and services, the fair value 
of the goods and services is determined by the fair value of the shares rather than the fair value of the share-based payment transaction 
being measured with reference to the fair value of those services as no fixed value of the services provided was stipulated in negotiating 
the issue of the options. This resulted in the recognition of £46,328 in equity. Notes to the Consolidated Financial Statements
at 30 June 2007 continued
50 Xtract Energy   Annual Report 2007
25. share Based P ayMents (cOntinued)
equity-settled paymeNts tO brOkers
The company granted 7,213,475 share warrants to WH Ireland Group PLC on 22 November 2006.
The inputs into the Black-Scholes model are as follows:
Weighted average share price GBP 6.0p
Weighted average exercise price GBP 5.5p
Expected volatility 70%
Expected life in years 3 years
Risk‑free rate 5.25%
Expected dividend yields 0%
These inputs resulted in a Market Option Value of £0.0313 per share. Total fair value of £225,882 is recognised in share premium.
There was no impact on the income statement as the cost of the options has been taken to share premium account as a cost of share 
issuance. Though these options were issued in exchange for goods and services, the fair value of the goods and services is determined 
by the fair value of the option rather than the fair value of the option being measured with reference to the fair value of those services as no 
fixed value of the services provided was stipulated in negotiating the issue of the options.
equity-settled paymeNts tO ram p artNers sa
The company granted share warrants to RAM Partners SA (“RAM”) on the basis of 100,000 share options per month for the period 
January 2007 to June 2007.
The inputs into the Black-Scholes model are as follows:
Weighted average share price GBP 5.5p
Weighted average exercise price GBP 6.0p
Expected volatility 70%
Expected life in years 3 years
Risk‑free rate 5.25%
Expected dividend yields 0%
These inputs resulted in a Market Option Value of £0.0211 per share. Total fair value of £10,587 is recognised in income statement.
The warrants were issued to RAM in relation to investor and public relations services provided. Though these warrants were issued in 
exchange for goods and services, the fair value of the goods and services is determined by the fair value of the option rather than the 
fair value of the option being measured with reference to the fair value of those services as no fixed value of the services provided was 
stipulated in negotiating the issue of the options.
CambriaN Oil & gas plC (“COil”) warraNts aNd OptiONs
In April 2007 Xtract issued shares in exchange for all minority owned shares in Cambrian Oil & Gas Plc (“COIL”). As part of this transaction 
231,150 COIL options exercisable at 5p, 6,150,000 COIL options exercisable at 7p and 1,500,000 COIL warrants exercisable at 3p 
continue in accordance with their terms.  COIL option and warrant holders are entitled to receive Xtract shares upon exercise of such 
options and warrants on the basis of 9 new Xtract ordinary shares for every 10 COIL shares which the option or warrant holder is entitled 
to under the terms of the option or warrant.  All options and warrants were granted and vested prior to the acquisition of COIL by Xtract.
The effective number and exercise price of Xtract shares subject to the existing COIL share options and warrants on the basis of 9 new 
Xtract ordinary shares for every 10 COIL shares is as follows:
Expiry date Effective number of 
Xtract shares
Effective exercise 
price for Xtract shares
231,150 COIL options exercisable at 5p (a) 15 July 2007 208,035 5.56p
6,150,000 COIL options exercisable at 7p (b) 1 March 2008 5,535,000 7.78p
1,500,000 COIL warrants exercisable at 3p (a) 23 October 2007 1,350,000 3.33p
Issued to external 3rd parties.
Issued to Directors and employees of COIL.
The Group recognised total expenses of £152,241 and £78,825 related to equity-settled share-based payment transactions in 
2007 and 2005 respectively.
The amount recognised in equity relating to share-based payments at the balance sheet date was £410,660 (2005:£78,825).
a)
b) Notes to the Consolidated Financial Statements
at 30 June 2007 continued
51 Xtract Energy   Annual Report 2007
26. related P arty transactiOns 
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not 
disclosed in this note.  Transactions between the Group and its associates are disclosed below.  
remuNeratiON Of key maNagemeNt persONNel
The remuneration of the directors, who are the key management personnel of the Group, is set out below in aggregate for each of the 
categories specified in IAS 24 Related Party Disclosures.  
2007 
£’000
2005 
£’000
Short-term employee benefits (a) 150 36
Share‑based payment 142 –
292 36
Payments to Qualrex Pty Limited of £41,252 during the year relate to consultancy services provided by Mr Carl Layden, a director of 
the Company. Payments to Abacus London Limited of £8,300 during the year relate to consultancy services provided by Ms Susan 
Wickerson, a director of the Company. 
The remuneration of directors and key executives is determined by the remuneration committee having regard to the performance of 
individuals and market trends.
t ransactions with drawone pty ltd
Drawone Pty Ltd (“Drawone”) was granted a royalty from the Company on 2 November 2005. The royalty agreement entitles Drawone to 1% 
of the sales revenue of the Company generated by sale of oil, gas and any related petroleum product from the following tenements located 
in Queensland, Australia ; EPM 14798 to 14806, 14957 and 15066. John Newton, a director of the Company is also a director and joint 
shareholder in Drawone. No sales revenue has been generated to date by the Company for the purposes of the royalty agreement. 
Other related party traNsaCtiONs 
During the year the Group entered into transactions with other related parties. Transactions entered into and balances outstanding at  
30 June 2007 are discussed below.
t ransactions with ultimate parent entity Cambrian mining plc and subsidiaries (“Cambrian”) 
Amounts owed to Cambrian Mining plc, Xtract’s ultimate parent entity, as at 30 June 2007 totaled £49,786. 
During the period Xtract was charged for management services by Cambrian Mining plc totaling £48,000.
In September 2006 Xtract acquired 44,630,669 ordinary shares in Cambrian Oil & Gas Plc (“COIL”) and warrants over an additional 
22,844,994 ordinary shares for a total consideration £888,923 in Loan Notes and £450,000 in cash. These loan notes were converted by 
Cambrian into 16,638,927 shares on 17 November 2006.
In September 2006 Xtract acquired 81,511,422 ordinary shares in Wasabi Energy Limited (representing 19.5% of Wasabi’s issued ordinary 
share capital) from Cambrian for a total consideration of £818,388 in Loan Notes. These loan notes were converted by Cambrian into 
15,318,647 shares on 17 November 2006.
In September 2006 Xtract acquired 61,500,000 ordinary shares in Aviva Corporation (representing 18.6% of Aviva’s issued ordinary share 
capital) and options over 10,000,000 Aviva shares exercisable at a price of A$0.10 per share from Cambrian for a total consideration of 
£1,605,422 in Loan Notes. These loan notes were converted by Cambrian into 30,050,408 shares on 17 November 2006.
The Company entered into a loan facility with Cambrian under the terms of which Cambrian provided a loan facility to Xtract for an amount 
of £2,000,000. The Loan was at an interest rate of LIBOR plus 2%. The loan was repaid during the period.
a) Notes to the Consolidated Financial Statements
at 30 June 2007 continued
52 Xtract Energy   Annual Report 2007
26. related P arty transactiOns (cOntinued)
In November 2006 Xtract acquired from Cambrian 53,333,333 ordinary shares (together with the same number of warrants exercisable at 
a price of 3p per share) in COIL, the consideration for which was the issue to Cambrian of 29,090,909 new Xtract ordinary shares.
During the period Xtract’s subsidiary COIL purchased 15,000,000 special warrants of Elko Energy Inc (“Elko”) from Cambrian. COIL 
previously owned 2,500,000 special warrants of Elko and the enlarged holding represents 29% (fully diluted) of the issued capital of Elko. 
During the period each special warrant converted into 1 common share in the capital of Elko for no further consideration. COIL purchased 
the special warrants for a total cash consideration of £1,544,993. 
On 16 November 2006 Xtract placed 109,795,800 million new ordinary shares of 0.1 pence each at 5.5 pence per ordinary share. As part 
of the Placing, Cambrian subscribed for 9,795,800 new ordinary shares. In addition, Cambrian Investment Holdings Limited converted its 
loan notes of £3,361,231 (including interest) into ordinary shares of Xtract at the Placing price.
t ransactions with associate entity meO australia limited (“meO”)
On 4 May 2007 Xtract, via its wholly owned subsidiary COIL increased its investment in MEO Australia Limited through the exercise of 
28,598,157 A$0.25 options. Following this transaction COIL held 77,116,814 shares in MEO representing 24% of the issued capital in 
MEO as at balance date.
t ransactions with investee company w asabi energy limited.
During the period Xtract agreed to sell its holding of 61.5 million ordinary shares in Aviva, together with an interest in a steel-making 
technology, to Wasabi in exchange for the issue of 175 million new Wasabi ordinary shares together with 25 million warrants exercisable at 
a price of A$0.03 per Wasabi share. The transaction was subject to approval of Wasabi shareholders that was granted subsequent to the 
period end.
27. events aFter the Balance sheet date authorised share capital of the Company
On 31 July 2007, shareholder approval was obtained for the authorised share capital of the Company to be increased from £1,000,000 
divided into1,000,000,000 ordinary shares of 0.1p each to £2,000,000 divided into 2,000,000,000 ordinary shares of 0.1p each by the 
creation of 1,000,000,000 new ordinary shares of 0.1p each such shares to rank pari passu in all respects with the existing ordinary 0.1p 
shares in the capital of the Company
issue of share options
On 9 July 2007 5,500,000 options were granted to directors. 3,500,000 options have an exercise price of £0.08 per share and are 
exercisable for a three year term and expire on 8 July 2010.  1,000,000 options have an exercise price of £0.10 per share and are 
exercisable for a three year term from 9 July 2008 and expire on 8 July 2011. 1,000,000 options have an exercise price of £0.12 per share 
and are exercisable for a three year term from 9 July 2009 and expire on 8 July 2012.
investment activity
On 2 August 2007, the Company was issued with 175 million new ordinary shares in Wasabi Energy Ltd (“Wasabi”) together with 
25 million options exercisable on or before 30 June 2008 at a price of A$0.03 per Wasabi share (ASX:WAS) in exchange for 12.3 million 
ordinary shares in Aviva Corporation, together with an interest in a steel making technology. Following this transaction the Company holds 
256,511,422 Wasabi ordinary shares (representing approximately 34.5% of Wasabi’s issued share capital). As a result, Wasabi will become 
an associate of the Group, previously recorded as an available for sale investment. 
On 24 September, the Company announced a further investment of US$2.0 million in Elko Energy Inc (“Elko”) through a private placement. 
Pursuant to the private placement, the Company’s wholly owned subsidiary Cambrian Oil and Gas Plc (COIL) received 4 million new 
common shares in Elko at a cost of US$0.50 each in cash. Following the placement and the issue of an additional 300,000 common 
shares to COIL in consideration for a due diligence fee payable by Elko to COIL, COIL’s total holding represents approximately 36.5% of 
the issued capital of Elko, previously 32%.
On 28 September 2007, the Company announced that it reduced its interest in MEO Australia Ltd (“MEO”). COIL sold 5 million shares 
in MEO at A$1.10 per share for cash. Following this disposal COIL retains 71,366,814 shares in MEO representing 21.3% of the issued 
capital of MEO.
52 Xtract Energy   Annual Report 2007 cOMP any nuMBer 5267047
directOrs Robert J. Annells 
John Conlon
Andy Morrison
John Newton
Susan Wickerson 
secretary Talya Barry
reGistered OFFice 27 Albemarle Street
London W1S 4DW
nOMinated adviser Smith & Williamson Corporate Finance Limited
25 Moorgate
London EC2R 6AY
auditOrs Deloitte & Touche LLP
Hill House
1 Little New Street
London EC4A 3TR
sOlicitOrs Trowers & Hamlins
Sceptre Court
40 Tower Hill
London EC3N 4DX
reGistrars 
Share Registrars Limited 
Craven House 
West Street
Farnham Surrey GU9 7EN
53 Xtract Energy   Annual Report 2007 Xtract Energy   Annual Report 2007
Directors and Advisors Annual Report & Accounts 2007
Unlocking Energy Potential
Level 2
27 Albemarle St
London, W1S 4DW
Tel: +44 (0) 20 7079 1798 
Fax: +44 (0) 20 7491 2758
www.xtractenergy.co.uk
Unlocking Energy Potential         Annual Report & Accounts 2007