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Investors excited by rig launch By Peter Ranscombe
Published on Sunday 19 February 2012 00:00


WEATHER permitting, Xcite Energy’s Rowan Norway rig will be towed out of Dundee tomorrow, taking with it the hopes of its army of small investors.


Aberdeenshire-based Xcite’s shares have been one of the most hotly traded stocks over the past year, and are particularly popular with private shareholders.

The company’s value has almost doubled as attention focused on the potential size of its reserves in the North Sea’s Bentley field. But the company is taking a more cautious approach to its prospects.

The management team that set up Xcite in 2003 with the idea of exploiting the field has never been in any doubt that large amounts of recoverable oil exist in the area.

Two major oil companies failed to make anything of the asset and returned the licence to the UK government, but Xcite’s team was convinced that increased knowledge and technology could develop the prospect’s notoriously heavy oil, and their last test well proved that.

Chief executive Richard Smith says the company is not aiming to maximise the flow from the wells it plans to drill this year. Instead, it will be focused on resolving technical issues about how the water table under the oil behaves, which is key to extracting as much of the reserves as possible in the long term.

That knowledge will allow the company to book proven reserves for the core area of the field, which it hopes will be at least 115 million barrels. It will also help it finalise a field development plan that is eagerly awaited by investors.

Questioned by analysts, Smith said: “It’s important that the market understands that what we are seeking to get out of this well is not necessarily what they are hoping to get out of it.”

this morning's rns upgrading reserves is somewhat at variance with the above

I would like to think that this rns is good news and send the stock much higher !...

good reaction in the market, but bid/offer balanced so have sold (again) at 175.5 to profit (again) from the lump i bought back on friday - nice start to the week!

and sold another slice at 169.75 to bring me back to slightly u'weight at today's sp .... it is very noticeable that the offer book is now quite heavily in the ascendancy with the implication of "too far, too fast" and that the news will struggle to support these upper levels

Not certain...this is volatile and drilling will start again with production in mind....hefty reserves out there (for the north sea).....set to climb further....?....and oil is rising as we speak..a steady climb to 200p should be on the cards now in my view....

the market is almost never wrong ..... WHEN production and all the periphery surrounding that is truly set to go, THEN a further and sustainable rise may be warranted ..... meanwhile, i shall hold the relatively small number that i do and rub my hands gleefully at the excellent profits i have banked

you would be well advised to read and take good note of the company's more cautious statement issued over w/e

This company has always issued cautious statements....looking good...

quite so, and that is a saving grace .... nevertheless, caution and prudence should be the bywords

Prudence was gordon brown's favourite!

seems a good move cynic, also sold a batch at 172p.,.

quite so, and am happy to hold balance at least for now

limit order in for 140p got to go earn a penny this pm.,.

Boy !...is this volatile or what....more octane than a night out on baked beans !....(I do know how to treat a woman).....

You still in and out RF....LOL

On the spreads.....stayed put on the shares....job to do all these things together .....

Didn't quite get there, another day tomorrow.,.

Xcite Energy (LON:XEL) jumped to a high of 205p during early trading, after the company said that the results of the independent reserves and resources audit of the Company Assets, effective 31 December 2011, as audited by TRACS International Consultancy Ltd showed Oil reserves of the type 1P, 2P and 3P for the Core Area of approximately 96 MMstb, 116 MMstb and 140 MMstb, respectively, NPV10 (after tax) for the Core Area of $1.076 billion, $1.464 billion and $1.921 billion on a 1P, 2P and 3P basis, respectively (see "Cautionary Language" below for a general explanation of the method and assumptions used in these calculations), Prospective resources for seven (7) prospects on the Company Assets remain unchanged and those assigned were, in the aggregate, approximately 18 MMboe on a risked "best estimate" basis. The market is now waiting on an update regarding the rig, that could be a catalyst to see a retest of the stubborn 200p resistance level once again.

Read more: http://www.oilvoice.com/n/FoxDavies_views_from_the_trading_floor_Bowleven_Ascent_Resources_and_Gulf_Keystone/efffe426396f.aspx#ixzz1mwKwcXVH

Rowan Norway must be still in Dundee as tugs have not left yet follow on
http://www.marinetraffic.com/
Tugs are AHT Pegasus and BBworker.,.

Courtisy of Contrarian:

After a very strong opening on the reserves upgrade news from 28 to 116 mm barrels by TRACS (180-200p), profit taking has kicked in. After banking a few on the spike, I'm buying back 155-165p.

Why?

1.Core area has a value of around £1 billion, three times market cap, this is without enhanced oil recovery techniques
2. Additional reserves likely to booked outside core area
3. Lots of newsflow to come e.g. WONS well approval, departure of Rowan Norway, well test etc.

Use the dip to your advantage! Ultimately there will be a transfer of wealth from impatient private investors moving money to other hot AIM stocks to institututional investors. At the current market cap of £350 million or so, each of the barrels is valued at £3 ($4.7) compared with Brent Crude at $121. So even with field development and funding risks, Xcite is not overvalued with 116 million in proven audited reserves

Update on Monday, February 20, 2012 at 12:10PM by Contrarian Investor UK
Price fallen to 158p on profit taking and Numis note, reduce from hold, target price 135p (would be interested to read the note given its so out of kilter with the other Brokers)

Update on Monday, February 20, 2012 at 1:30PM by Contrarian Investor UK
Numis note assumed 116 mm barrels would come after extended well test. Also with no 116 mm barrels, funding would be a problem. Richard Smith has strongly implied in the press last week that debt funding was not far away for phase 1b.

Not little sell off just like Friday lunctime to 145p to catch the stop losses and panic small investors. Don't let the institutions take these off you too cheaply!