.

Well spudded...sp drops....time and time again, this happens.....

aaparent fall highlights the prob with stocks that are MM only .... when they don't want to deal, they just widen the spread - it's 5p today, though by picking and choosing, it can brought down to 3p

It is isable....fingers crossed for a good result....the good thing is that this is not an exploration well.....they know the oil is there...

Rock on.,.

Broker update :

Thursday 30 September

Xcite Energy* Strong Buy (from No Rec)

XEL.L / 109.5p / 158.8m / TP: 247p

Xcite has spudded its well on the Bentley field we therefore have taken the opportunity to re-visit our valuation. In addition new shares have been added to the register following the recent exercise of warrants. Our valuation matrix
is now as follows.

Table 1: Valuation matrix
Low Base High
NPV/share (p) - Unrisked 113 353 656
NPV/share (p) - Risked 79 247 459
Source: Company data, Arbuthnot estimates

The unrisked valuations reflect the slight dilution due to the recent conversion of 250,000 warrants. The risked valuations reflect the 70% chance of success which RPS Energy has determined for the well.

Now that the well has spudded we feel that it provides an ideal opportunity to upgrade our valuation to the base case (i.e. 122mmbbl of resource) scenario.

Table 2: CPR assumptions and outputs
Input assumption Low Base High
Capex (m) $1,881 $2,573 $2,661
Opex (m) $1,394 $2,135 $2,229
Oil price $80 Brent (flat real) $80 Brent (flat real) $80 Brent (flat real)
less 15% discount less 15% discount less 15% discount
Recoverable resource (mmbbl) 72.0 122.5 166.0
Field life (years) 13 15 15
Success case NPV10 (m) - New
terms* $282 $881 $1,635
Success case NPV10 (m) - Old
terms $181 $781 $1,535
Source: RPS Energy estimates, *includes new heavy oil incentives

The CPR does not include the additional 3D seismic data which was evaluated in 2009. The company now estimates that the field could contain in excess of 200mmbbl of recoverable oil, well in excess of the high scenario.

The company has also indicated that by employing enhanced oil recovery techniques the recovery factor could be increased substantially.

The well is due to drill for a maximum of 60 days which will be followed by a 5 day flow test. Post drilling the data gathered from the vertical and horizontal wells will be used to update the CPR. At this stage we should start to see some of the contingent resource base being converted into reserves.

We continue coverage with a Strong Buy recommendation and increase our target price to 247p (114p previously)."

Like the story so had a nibble earlier today for the SIPP.

Strong again of late. The drillbit is turning..........

Looking strong today, L2 is 3 v 1 @ 116/118 with just ARBT offering at 118p.

BUT be careful as all controlled by MMs all of whom only offer (are obliged?) to deal in max lumps of 5k

is that to sell as well as buy cynic??

yes .... further, each MM's spread is 5p and nearly always is and volumes are also low (only 267k this morning)

A lot less risky then DES...this one because this is an appraisal-production well, not an exploration one.......

that's why i hold both (and EO.) but considerably less in DES

Fingers crossed, and in a few weeks time the sp could be 50% more....

In around 7 weeks from now the SP could be 60% down or 300% up.

Enjoy it as best you can.

Canada closed for trading yesterday (Thanksgiving Day Holiday), in case anyone is wondering why the Canada chart has not changed.

Very nice intraday reversal.

Been looking at Encore.

EO. have 15% of Catcher and 16.6% of Cladhan.

Looking at what other companies are willing to say it appears you could, if you so wished allocate at the moment perhaps 20m recoverable barrels to EO. for their share for Catcher/Cladhan.

With a 350m market cap and only presently, at most, you could say 20m barrels recoverable for their share, is it not rather toppy ?

Yes appraisals might push that recoverable figure up (and yes they have other things but so does everyone else), but for now 350m market cap for 20 million barrels as it stands now, that looks incredibly high.

If the Xcite Energy (XEL) well comes off and they end up with 100 million recoverable barrels from Bentley (let alone if that become 200m), if you use the Encore metric (350/20) and discount by 50% it would still put XEL at 875m market cap (today its 163m).

Either EO. is grossly overvalued or XEL and many others will be zooming away if they have a bit of luck.

Pros - you can't extrapolate (this week's new word for Emu!) like that ...... north sea with infrastructure and south atlantic with none bear no meaningful comparison

XEL is north sea !!!!!!!