.

Agree.Need the funding news

I am copying this post from Luckyjonah on the Motley Fool Oil and Gas Board. Supports the title of this thread, strongly. He is commenting on the FT Alpha guys.

Not heard much from LuckyJ of late - care to comment?

Sorry, I've been tied up with other stuff of late... the price swings have been bordering on the ridiculous, but I'm maintaining my view that the ultimate way to profit from XEL is to hold through to production at least (unless you are a trading genius which you'd need to be with this volatility!)


NH the prospect might not be commercial... Doubts still remain about the commerciality of the field... a recent CPR estimated capex of almost $700m to develop the fields 28m barrels of 2P reserves.

As very clearly stated in the RAR:

"The capital expenditure and construction schedule of the FSP is assumed to be the same for the Proved (1P), Proved plus Probable (2P) and Proved plus Probable plus Possible (3P) outcomes. Hence the estimated future development costs are assumed to be the same for all three outcomes."

I presume their Blackberries couldn't fit all the text of the RAR into a single screen for them. As for "doubts over commerciality", more on that below:


The NPV10 of what will get booked when they get funding is twice the market cap
...
The claim of 200m bbls recoverable looks a bit far fetched here.

Current market cap is only around 35% of the NPV10, however this doesn't take account of anything other than the RAR cold flow figures - the RAR reserves + contingent + prospective = 150mmbo, but XEL have always stated that further field development plus EOR will cause the ultimate oil recovery to be "materially improved over time". I think "material" is going to be at least 30% (ie. 200 mmbo). As well as further drilling on Bentley to prove up further reserves there are other structures on 9/3b (Brunel, Bessamer, Bunsen, Boyle) not to mention their new block awards next door.


there are a lot of tax breaks for the first $800m of production.

The Field Allowance is 800m ( not $!) plus they already have $100m CT offset. More importantly FSP is expected to generate funds for SSP which converts to booked reserves as field development progresses (no technical barriers). Total capex is $676m as per RAR, however only $182m of this is in year 1. If FSP produces 15,000 bopd this will generate revenues of $547m in year 1 which is going to fund further drilling and expansion. Of that $182m a sizeable portion must be for the rig and the company already has a $160m SEDA with Yorkville of which they have drawn down $37m (I think, please correct if these figures are wrong!) - with $20m from BP I make them $2m short of that year 1 figure excluding any potential revenue from production. That's like 1 month's pay for the Directors ;-)


You may jest but a "fresh from the box" rig does give me a bit more cause for concern than one with a few wells under its belt.

The Rowan Norway has a sister rig the Rowan Viking, which is 5 months ahead of XEL's rig - it's already been kitted out in Dundee and is about to be used by Total. I am therefore pretty confident that any issues will be ironed out by Total on the Viking.

The point of the Norway rig is that it allows for simultaneous drilling and production - this offers flexibility in cost control and therefore significant control over finance and cashflow. Since 9/3b-6z was capped and can be re-entered for production, I would see this as a "low cost" entry for them to generate cash to fund drilling the second well, etc. I'm sure they are considering all options and will choose the optimal solution for shareholders (and themselves of course ;-)

Still happy to hold, although I'd prefer a move to the main market to try to quell the volatility.

Cheers


-luckyjonah.
--------------------------------------------------------------------------------

Britain has become a riskier place for oil and gas companies to invest than developing countries such as Egypt, according to a leading City banker.

Andrew Moorfield, global head of oil and gas at Lloyds Bank, says repeated government tampering with the UK tax system is severely restricting the amount of money that can be attracted from the energy sector.

"The (latest) unexpected increase in the tax rate for North Sea oil and gas production, and its impact on the measurement of UK tax stability, has enabled developing markets like Ghana and Egypt to compete more strongly for oil and gas investment", he added.

"When assessing credit risks, the industry considers both the political security of a country and the predictability of its tax regime. As a AAA rated country, the UK has traditionally scored well on both counts, but is now performing poorly on the second."

The comments from Lloyds, one of the biggest financiers of North Sea exploration and production comes just days after accountants Deloitte reported a 52% slump in drilling over the second quarter.

The comments by the bank still 41% owned by the government supports the concerns of the Oil and Gas UK lobby but undermines claims by ministers that all is well.

Last week a decision by BP to invest 3bn was used by Justine Greening, economic secretary to the Treasury as proof that "the North Sea basin remains an attractive area for significant levels of new investment."

Lloyds Bank, which is a key lender to oil and renewable energy companies, said an increasing amount of business was leaking from the UK to the Norwegian sector of the North Sea, despite the latter often being portrayed as a high-cost location.

Ow,being hit hard.

Looks like another steep fall starting again.

Who cares short term. Long term 5 - 7 +

or even 50-70p!

cynic, Long term 50p - 70p HA HA HAaaaaaaaaaaaaaaaaaaaa
Have you wine withdrawl, or sun stroke.

neither .... i always drink decent wine at home or on hol :-)

Everyone is invested for a long term return of 70p max, Ok

EK's position on XEL:
"I do not wish to be thought to boast that my livelihood is solely down to trading Xcite Energy (XEL) on the short tack. But I closed my latest short at 161p on Friday. And that is that I will otherwise get addicted to the proposition that I have been indulging in my birthright and that I therefore no longer need to think. That noted, Xcite Energy remains a high risk investment."

What will happen on the announcement of funding with the sp?

7 to 9 Months time this will be sitting 5+ when they start to extract the oil out of the ground hence the money i have in ISAs is dead money but i can wait.

Time will tell.

DJ Xcite Energy Limited Drawdown on Equity Line

TIDMXEL

RNS Number : 6146K

Xcite Energy Limited

19 July 2011

THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES

TSX-V, LSE-AIM: XEL

19 July 2011

Xcite Energy Limited

("Xcite Energy" or the "Company")

Drawdown on Equity Line

Xcite Energy announces that it has drawn down on its Standby Equity Distribution Agreement ("SEDA") with YA Global Master SPV Ltd ("Yorkville") in the amount of GBP4.2 million (CAD$6.46 million). This draw down has been undertaken at a price of GBP1.567 (CAD$2.41) per share and will result in the issue of 2,680,451 ordinary shares of no par value in the capital of the Company (the "New Ordinary Shares") to Yorkville. This funding will be used as future working capital for the Company and to progress towards the first stage production of the Bentley field.

Subject to the terms of the SEDA and except in accordance with Canadian securities laws and with prior written approval of the TSX Venture Exchange, the shares issued to Yorkville under this draw down may not be sold or otherwise traded on or through the facilities of the TSX Venture Exchange or otherwise in Canada or to or for the benefit of a Canadian resident until the date that is four months and one day from the date of issue.

Application will be made for the admission to AIM ("Admission") of the New Ordinary Shares upon approval of the share issue by the TSX Venture Exchange. The New Ordinary Shares will rank pari passu with the Company's existing issued Ordinary Shares.

ENQUIRIES: +44 (0) 1483 549
Xcite Energy Limited 063
Chief Executive
Richard Smith Officer
Chief Financial
Rupert Cole Officer

Oriel Securities (Joint Broker +44 (0) 207 710
and Nomad) 7600
Emma Griffin Partner
Simon Edwards Partner

+44 (0)207 425
Morgan Stanley (Joint Broker) 8000
Andrew Foster Managing Director

+44 (0) 207 861
Pelham Bell Pottinger 3232
Mark Antelme
Henry Lerwill Director
Paradox Public Relations +1 514 341 0408
Jean-Francois Meilleur Consultant

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Morgan Stanley which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Xcite Energy and for no one else in connection with the subject matter of this announcement and will not be responsible to anyone other than Xcite Energy for providing the protections afforded to its clients or for providing advice in connection with the subject matter of this announcement.

Oriel Securities which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Xcite Energy and for no one else in connection with the subject matter of this announcement and will not be responsible to anyone other than Xcite Energy for providing the protections afforded to its clients or for providing advice in connection with the subject matter of this announcement.

This information is provided by RNS

The company news service from the London Stock Exchange

END
MSCSFEEEAFFSESW

(END) Dow Jones Newswires

19-07-11 0600GMT

--------------------------------------------------------------------------------

May be a rise today?

one swallow does not a summer make, but it's a relief to see some blue for a change

Not only XEL +12p is moving higher, RKH is on the UP aswell +10p but on the steady side not like XEL with spikes up and down

    

a simpleton's chart below shows sp just challenging the 50 dma from below - red = 25 dma and black 200 ..... imo, the 50 dma needs to be pierced with impetus, and then with some luck, sp may surge to somewhere useful

Moving up, book looks strong.