.

Looks like XEL going back to 60p.

200 mill market cap for a company sitting on 120 mill barrels...booked and that is just part of the field.....crackers

L2 shows little interest at all with very small order book, but even now offers outnumber bids 2:1

oooouuhhhh : it's in the biggest risers of the day list...just....

http://contrarianinvestoruk.squarespace.com/

Is Xcite Energy really only worth 1.12 a share?
Tuesday, June 28, 2011 at 12:48PM
Xcite Energy's share price has been in free fall for the last few days on funding concerns. Given all the pessimism I thought it was worth checking back at a few facts. At today's current share price of 111p, Xcite has a market cap of 181 million.

Financing

■As at March 31st 30.2 million in cash
■There is unused SEDA of 56 million
On the state of the finances (from the interim report for the period ending March 31st 2011 http://www.rns-pdf.londonstockexchange.com/rns/2106H_-2011-5-24.pdf

"The cash balance as at March 31, 2011 was 30.2 million (three months ended March 31, 2010: 24,243,904), compared with 36.0 million as at December 31, 2010. The decrease in cash balance during the three months ended March 31, 2011 has arisen due to the on-going working capital requirements, principally the settlement of outstanding 9/3b-6 and 9/3b-6Z well creditors from the year end, with a corresponding offset from raising funds of 15.0 million as a result of three SEDA draw-downs and the settlement of year end receivables. Following a further two draw-downs during February 2011 totalling 10.0 million, through the issuance of 2,921,676 new ordinary shares, the SEDA facility was increased on March 18, 2011 by an additional 40 million, bringing the total facility to 100 million. On March 28, 2011 a further draw-down of 5.0 million was made, through the issuance of 1,558,314 new ordinary shares. As at the date of this MD&A, there remains unused SEDA facility of 56.25 million.

Taking into account the unused SEDA facility and the Groups financial obligations, the Group has forecast that it has sufficient financial resources for working capital for the foreseeable future and to continue the planning of the initial expenditure associated with the First Stage Production (FSP) of the Bentley field. "

The big ticket items to come are the payment of the final installment for the Rowan Norway rig (figure to be confirmed) and the beginning of FSP development (estimated $100 million).

Tax Relief

Xcite's Bentley oil field is a heavy oil field which attracts 160 million a year of tax relief on profits for up to 5 years. So 800 million of tax relief is available to Xcite which means it will probably not pay corporation tax until 2017. (see First Energy report 11 February 2011: fmlinfo.co.uk/uploads/xel/pdf/Focus-C-XEL_LN-2011-02-15.pdf page 8 "The UK governments recent scal changes in favour of heavy oil assets will allow Xcite to claim up to 800 mm in tax credit spread out over ve years. We expect the Company will not pay any tax until 2017

DECC Approval

Upon DECC (Department of Energy and Climate Change) approval, which is expected by late August, booked reserves for the core area of the Bentley field will increase from 28 million barrels to 115 million barrels. At the current market cap of $290 million, Xcite's booked reserves (as announced by TRACS in the May Reserves Report) will be worth $2.5 a barrel against Brent Crude which is selling at $107 a barrel. North Sea takeovers historically have been over $10 a barrel of booked reserves. At $2.5 a barrel, Xcite seems cheap to me!

The Rowan Norway rig has been completed and will arrive in the North Sea in Q4. Drilling for oil will be underway in late Q1 or early Q2 2012.

Bentley Alliance

BP have already committed $20 million to Xcite for field development. Could this be squeezed higher?

Looking at the SEDA and funding (BP and cash at hand), Richard Smith and his merry crew surely can't be contemplating a discounted placing at this level? You would have thought that the big hitters at Rothschild, Morgan Stanley and Oriel Securities would able to solve this without resorting to a 1 a share or below give away. Hopefully we won't be waiting until August to find out the answer!

Will xel have to find a farm in partner. How are they going to raise cash, with the sp a little over 1. Is it not better to give away a percentage and not dilute the sp.

In auction +24.6%

very heavy volume, but whether or not that presages anything interesting or even good, remains to be seen

Looking good

Has the funding been sorted, for 20% rise today with no news yet.

certainly plenty of scrambling for stock at the moment, but of course that might be just forced bear closing

Someone knows something is going on behind closed doors.

Just hope there is no sell off tomorrow

that's just wishful thinking ..... there are numerous instances of stocks rocketing one day on very high volume and subsequently just falling away again ..... such moves in either direction tend to be self-fuelling

News could stop a sell off tomorrow

profit taking will drop it,

how much? ..... sufficient for you to take a short position? ..... or are you just mouth and trousers?

Place your bets, up 5% +. The rise will be sustained

yeeeeeeeeeeeeeeeeeeehaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa!!! lol

That was not a very large yeha