Xcite Energy Limited (XEL) is a heavy oil appraisal and development company, with current interests in three licence blocks in the UK North Sea, all of which are held with 100% working interests through its wholly-owned UK subsidiary, Xcite Energy Resources Limited (XER).

Its primary focus is in bringing the Bentley oil field on Block 9/3b into production and in doing so becoming a significant independent oil producer in the North Sea by 2014.

Business Strategy

Bring the Bentley field into commercial production

Grow its reserves base from the existing 116 million barrels of oil equivalent
(“MMboe”) of 2P reserves through the conversion of its prospective resources base

Grow its resources base further through drilling activity on Blocks 9/3c and 9/3d

Employ enhanced oil recovery processes (“EOR”) to further increase its resource base

Increase its asset portfolio through license rounds and asset transactions whilst utilising its heavy-oil expertise to leverage opportunities


http://www.xcite-energy.com/

2012 in Review and the way ahead Robert Cole Video

From the above -

"Not surprisingly, we are greatly disappointed by the share price performance'' You can say that again.

From iii

One quick point from reading.......Farm out with RKH was 3 months.....they say early stages also Financing seems sorted........quicker than we think maybe...


The meeting took place in a relatively small but full room with some 40 or so investors present. Certain members of the BoD seem to have a good sense of humour. That's a good sign but some of the jokes would not be appropriate to convey on public website.
Here are some main points that were said or came out of questions asked. I would invite other shareholders to give their commentary and correct anything I may have got wrong.

- Rupert Cole went as far as he could to say there would be no further dilution. IMO to have ruled it out explicitly wouldn't have been responsible.

- Financing need likely to be split $400M (RBL) and the balance to come from expected farm out. The lending basis will be the 1P reserves allocated to first stage/phase (ie 100M barrels and not 198M). However it can't be 5 X $155m (100M is almost 5x 22M which is the previous 1P figure) as the banks would put other caps e.g. financial leverage

- Farm out process is at an early stage. It was confirmed that farm out the RBL are linked. Even though RBL would be a more straight forward deal, its final outcome would depend - at least to an extent - on the outcome of farm out. Not surprising at all IMO.

- Once the way is clear (RBL, farm out, FDP) then it would be approx 2 years to production. No major technical / engineering risks are expected in that phase.

- No need for FPSO means that a simple FSO would suffice, diff. in cap ex is $1m vs. $50-60k (think it was per day but in retrospect may be wrong as the $1m pd sounds excessive)
- Still on the technical front the oil is quite hydrophobic which is good news as it reduces penetration of water into oil and the steps required to extract it. So further savings on operational expenditure.

- The other fields eg Chadwick, Chartwright have less viscous oil. That means that oil from such fields could provide the perfect diluent for the core area. Does this mean that they should be developed at the same time? Forgot to ask that one!
- It was acknowledged that the farm out partner's role would have much broader scope than merely to co-finance the project.

- A question was asked about Socius ...and Rupert replying to the question whether he saw anything untoward in the structure or the nature of the investment he said no to as far as he knew.

- Throughout the presentation there was acknowledgment or implication as to how undervalued we are.

- Director share purchases were excluded for the time being as we're in a "closed period" until farm out is complete.

- Last not least and that may be a subjective comment but one of the key things I was looking for was to get reassured about the quality of management. As far as I could tell we are in good hands and in particular the reference is to the executives. The presentation was well balanced informative and BoD and especially Rupert Cole tried to answer questions as much as possible.

Off to enjoy more of Paris.

MHB

Xcite Energy announces its results for the 3 month period ended 31 March 2013.

Highlights
· Net loss in the current period of £1.7 million, arising primarily from unrealised foreign exchange losses on a strengthening US dollar over the 3 month period.

· Cash of £20.4 million as at 31 March 2013, of which £12.3 million was held in escrow relating to the Bentley Phase 1A work programme, with £11.6 million of the escrow amount having now been released.

· Effective 31 December 2012, upgrade in 1P, 2P and 3P oil reserves for the Bentley field to 198 MMstb, 250 MMstb and 312 MMstb, respectively, based on an initial 35 year production period, as announced on 8 April 2013.

· Success in the 27th UK Licensing Round provides new acreage to the Xcite Energy Resources Limited portfolio. Blocks 9/4a, 9/8b and 9/9h add four identified prospects to the future exploration and appraisal programmes in the wider Bentley area.

· A binding agreement has been entered into relating to the sale of certain technical well data for $15 million.

· Commencement of the Bentley field farm-out process with industry participants.

http://www.moneyam.com/action/news/showArticle?id=4597796

"Under the terms of the Agreement, XER will receive $15 million in respect of the well data and associated interpretation work. An additional payment of $1 million will be made to XER following certain regulatory milestones being achieved by the purchaser"

Well If it’s a card game someone has shown their hand and very interested in been a partner……….should open the door to a few more players with a bit of luck.

Again I think things are at a more advanced stage than they are letting on………the SP will determine this.

Another good blue day

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How can you follow this thread ? cannot see the point of leaving dots. Getting very frustrating!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Its a dot dot Dash...........it means some thing is brewing with XEL

More a dot marky . :-)) Perhaps that's the only key that works on his computer.


24 out of 24 of m's posts are a (. ) , not really worth the posting ? MVO

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Thanks for that mnamreh. :-))

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thank u for pointing that out

Is there not at least a gap between Bressay and Bentley field of about 18 months between them been developed ? ..,

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Would be nice to see what you have typed as been away all weekend and just logged on.

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http://oilbarrel.com/news/xcite-energy-tantalises-shareholders-as-it-sells-bentley-well-data-for-us-15-million

May 28, 2013

Xcite Energy Tantalises Shareholders As It Sells Bentley Well Data For US$15 Million



Xcite Energy surprised – in a good way – its followers last week when the AIM-quoted company announced the sale of a package of technical well data for US$15 million. This is an unusual move but then £300 million market cap Xcite has prided itself on thinking outside the box when it comes to its 100 per cent owned Bentley heavy oilfield in the North Sea.


The confidential deal covers technical data for the Bentley 9/03b-6, 6Z well and the 9/03b-7 and 7Z extended pre-production well test plus associated interpretation work. Xcite will receive an additional payment of US$1 million when the buyer passes certain regulatory milestones.

This is good news for Xcite, adding up to US$16 million to the coffers. The company ended Q1 with cash of £20.4 million, of which £12.3 million was held in escrow for the Bentley Phase 1A work programme; £11.6 million of this has now been released.

The data sale also underscores the technical credibility of Xcite's work on the Bentley field, signalling that the work has value to other operators. And while there is no information as to the identity of the mystery buyer, investors are obviously speculating that the deal signals some very real interest in the project or possibly the company itself.Xcite CEO Rupert Cole said the deal was “complementary” to the farm-out process that recently got underway, a statement that had industry watchers scratching their heads as companies engaged in the farm-out would surely have had access to this data in the data room as part of the due diligence.

“This has been done without compromising the company's intellectual property and is a good commercial outcome that provides additional working capital," said Cole.

Bentley is a major asset. It was discovered in 1977 by Amoco and is one of the largest undeveloped oilfields in the North Sea. The Bentley field may be heavy oil – between 10 and 12 degree API – but it's a quality reservoir, with oil saturations of more than 90 per cent and high porosity and permeability. Xcite has now drilled three wells into the field – that makes seven altogether when adding in wells already sunk by former operators Amoco and Conoco – and its work has successfully derisked this heavy oilfield, demonstrating it is capable of flowing at commercial rates and firming up 1P reserves of 198 million barrels, 2P reserves of 250 million barrels and 3P reserves of 312 million barrels.

It hasn't all been good news, however. The stock was the darling of the small cap markets, surging more than 700 per cent in 2010, but was dented following a conservative reserves report of 2011 and an FDP knock back by DECC. To restore confidence – and secure a US$155 million reserves-based lending facility - Xcite ran a pre-production test, known was known as Phase 1A, with the well exceeding management expectations. Water breakthrough was better than expected – a key indicator in heavy oil economics – and around 149,000 barrels of oil plus diluent were successfully sold to BP, raising £13.3 million. Importantly, the company now has a better understanding of how oil, gas and water move through the reservoir to help optimise the field development plan.

This, however, is still a long way short of being what most investors consider a developed oilfield. Phase 1B, involving a 15-well template, is the next key milestone and a farm-down is necessary to shoulder the development costs. This will be a key benchmark of how the industry values this project. Bulletin boards are alive with chatter, however, that the company will be acquired before then, with Norwegian oil giant Statoil tipped as the most likely candidate given that it is already signed up for the US$7 billion development of the 250 million barrel Mariner heavy oilfield.

Indeed, industry watchers suspect Statoil could be the mystery buyer of the Bentley well data – after all, £15 million is relatively small change to the Norwegian giant – signalling its potential interest either in a farm-in or corporate transaction. For its part, Xcite is playing its cards close to its chest but once again the AIM company has won plaudits for extracting cash from industry before a deal has even been inked.

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