UPDATE 1-Xtract Energy to buy out Elko for 9.4 mln stg

Tue Jun 21, 2011 9:15am BST

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* To acquire remaining 51 pct stake in Elko Energy

* Xtract shares to be suspended during course of transaction

* Says to reapply for AIM listing on completion of transaction

June 21 (Reuters) - Xtract Energy , which invests in oil and gas firms, said on Tuesday it would acquire the 51 percent stake it does not already own in Canada's Elko Energy in a stock deal.

Xtract, which has invested in early stage oil and gas assets like Extrem Energy AS and Zhibek Resources Ltd, said it would issue seven shares for every Elko share, valuing the transaction at 9.4 million pounds ($15.2 million).

"We have focused our time on rebalancing the asset portfolio of the company and the acquisition of Elko is the logical next step in this process," the company said in a statement.

According to AIM rules, the transaction is modeled as a reverse takeover and Xtract's shares have been suspended from trading for the course of the transaction.

Xtract will no longer be considered as an investing company and will reapply for listing on the AIM.

Its shares closed at 2.675 pence on Monday on the London Stock Exchange. ($1 = 0.618 British Pounds) (Reporting by Juhi Arora in Bangalore; Editing by Roshni Menon)

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