Energy Ventures invests in ArkeX, a company with a unique airborne exploration technology.

Energy Ventures has invested in ArkeX, a developer of revolutionary gravity gradiometry technology which allows energy companies to find valuable deposits more efficiently. Energy Ventures joined existing investors in a £5.5 million deal of second round funds, a deal which marks the largest venture capital fundraising for a UK oilfield technology company in 2005.

ArkeX, which has also clinched a strategically important deal with Chesapeake Energy, one of the largest independent gas producers in the United States, raised the new finance from a consortium led by Norwegian investors Energy Ventures and backed by existing investors, including Scottish Equity Partners.

The funding round, which also includes existing investors Dynamics and Eurovestech, follows the successful commercial launch of ARKeX's FTGeX gravity gradiometer. ARKeX, formed in Cambridge, England as a spinout from Oxford Instruments Superconductivity Ltd and ARK Geophysics Ltd, raised initial venture capital funding of £4 million in 2004.

ARKeX Managing Director Kitty Hall said the fresh funds will be used to accelerate the expansion of capacity to meet pent-up demand for the company's services and to accelerate international expansion with the opening of a new office in the United States.

"Since our first commercial survey in May of this year, we have had an overwhelmingly enthusiastic reception in the market to our technology. With the success we have had in such a short period, we expect to play an increasingly important role in the North American oil and gas exploration market," said Kitty Hall.

Leif André Skare, Investment Manager of Energy Ventures in Stavanger, Norway, commented: "ARKeX represents the combination of unique technology, competent managements and high growth potential Energy Ventures is looking for in its investments."

Chesapeake Energy will use ARKeX's pioneering full sensor gravity gradiometer, FTGeX, to identify promising geological deposits in the mid-continental US. Chesapeake, one of a growing number of major energy clients which have successfully trialled the FTGeX technology, has committed to a three-month program commencing in early 2006. Chesapeake chief geophysicist Larry Lunardi commented: "The gravity gradiometry data has significantly improved our geological understanding of the initial survey area and encouraged us to use it on a larger area in 2006."

ARKeX has a very strong order book already for the FTGeX with some 75 percent of 2006 capacity already sold. "We are confident that our proprietary EGG system will be recognized as an even more ground-breaking development when launched later next year," ARKeX's Hall added.

The funding consortium was advised by DLA Piper, Technical Investment Services Ltd. and by Deloitte Statsautoriserte Revisorer DA.

ARKeX, which as a world-class management team with vast experience in instrumentation, exploration geology and signal processing, is also making major strides in the development of its next generation proprietary technology, the EGG (Exploration Gravity Gradiometer), which will be the world's first commercial superconducting gravity gradiometer. The EGG is currently undergoing lab testing at ARKeX's headquarters and is expected to go into commercial service in late 2006.

About ARKeX technology:
Oil companies typically use seismic reflection surveys to determine subsurface structure and locate potential reservoirs o foil and gas, but with certain technical and practical limitations. In particular, there are limitations in geographic regions where terrain, safety, logistics or legislation puts either unacceptable cost of planning or execution on the surveyors. ARKeX is able to solve this by carrying out airborne surveys that can cover vast areas of land in a short period of time, thus pinpointing the areas worth further work (seismic or drilling) by the oil companies. The airborne surveys use gravity gradiometry in combination with magnetic and laser altimetry. The technology can be applied both onshore and offshore. The main marketing efforts are currently for the onshore domain, as this is where the advantages of airborne surveys are the greatest.

For further information: www.arkex.co.uk