Trapoil Enters Farm-In Agreement with Extract Energy (UK)

Trapoil, the independent oil and gas exploration, appraisal and production company focused on the UK Continental Shelf (“UKCS”) region of the North Sea, announces that on 18 January 2013 it completed a farm-in agreement with Extract Petroleum Limited (“Extract”) with respect to the acreage awarded to it in the recent 27th Seaward Licensing Round, the results of which were announced by the Department of Energy and Climate Change (“DECC”) on 25 October 2012.

The acreage concerned comprises one Promote Licence (P.1938) covering thirteen blocks or part blocks totaling 1,026Km2. Subject to DECC’s approval, Trapoil will become operator of the acreage and farm-in for a 100 per cent working interest while Extract will retain a 1 per cent royalty interest over any future production from the acreage.

Trapoil’s farm-in obligations are to fund and undertake a preliminary evaluation of the potential for production from tight reservoirs on the acreage comprising Promote Licence (P.1938), based on the acquisition of appropriate 2D and 3D seismic data. If the preliminary results are encouraging, Trapoil subsequently intends to secure partners to further develop the concept with the ultimate objective of drilling one or more proof of concept wells. Trapoil would seek to achieve a carried interest in the initial drilling effort in return for its upfront work in developing the prospects to a drill ready stage.

Mark Groves Gidney, Chief Executive Officer of Trapoil, commented:

“This farm-in agreement with Extract plays to our strengths as a technically led company pursuing innovative initiatives relating to the exploration and extraction of oil from potentially high impact prospects in the UK North Sea.”

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Press Release, January 22, 2013