.

http://www.oilbarrel.com/nc/news/display_news/article/excitement-levels-build-as-xcite-energy-continues-with-critical-bentley-well/860.html

"......November 02, 2010
Excitement Levels Build As Xcite Energy Continues With Critical Bentley Well

Shares in Xcite Energy, the North Sea heavy oil specialist, have more than doubled over the past two months on the back of a key well on its Bentley field development. Monday morning saw the shares gain another ten pence to stand at 178.5 pence as chief executive Richard Smith used the release of the Q3 interims to say the results of the 9/3b-6 pilot well showed predictions for the Bentley field had been conservative
This is encouraging as the 9/3b-6 pre-development well has been designed to remove some of the uncertainties surrounding the commercial potential of this heavy oil deposit, which carries a contingent resource estimate of 160 million barrels of oil equivalent plus upside. Xcite management now believe the pilot well has confirmed the upside structure in the eastern half of the reservoir, significantly increasing the volume of oil in place.

The pilot section of the well confirmed a 113 ft oil column, some 40ft thicker than the 73 ft prognosis, in a good quality Dornoch oil reservoir, and confirmed the oil water contact at 3,729 ft total vertical depth (on prognosis). The oil column has 100 per cent net to gross, compared to previous average of 88 per cent. The pilot section also encountered 15 ft of Jurassic reservoir with oil shows. A horizontal side-track is now underway to flow test the Dornoch oil column, with completion and testing expected by the end of November. We look forward to the next few weeks with high expectations," said Smith.

Analysts at Edison Investment Research say the US$35-US$40 million well is critical and must achieve stable and explainable flow rates to give confidence for first stage production to proceed. The test equipment has been limited to 2,800 to 3,000 barrels per day to ensure low-end to mid-range performance: this is not about maximum flow rates but sustainable, stable production. The well should also help to move an initial volume of resources to 1P and 2P reserves, which would pave the way for a field development plan and possible first oil as early as next year.

First stage production would be around 15,000 bpd and the aim would be to iron out any longer term production issues associated with heavy oil developments, specifically water issues. This would not only de-risk the project before committing to full field development but would also generate revenues and book reserves, which if confirmed at 160 million boe or more would transform the 248 million market cap company, making it one of the more substantial independent players.

Bentley lies 160 km east of the Shetlands in a known heavy oil area, with Nautical Petroleums Kraken field and Statoils Bressay field as neighbours. The field was discovered by Amoco in 1977, before transferring to Conoco, which drilled three wells in the 1980s (one poorly tested, one untested and one was dry). Xcite acquired the asset in 2003 and drilled the 9/3b-5 vertical well in December 2007, which flowed 100-250 bpd despite formation damage. A CPR reckons a flow rate of 3,700 bpd could be achieved using a horizontal well. The crude is 10-12 degrees API with low sulphur and no wax and Xcite already has an offtake agreement in place with BP.

Indeed, Xcites management team have worked diligently to put together an alliance of technical and commercial partners, including AMEC and BP. This unique alliance financing structure incentivizes the partners for the work they do on a risk/reward basis yet sees the AIM company retain 100 per cent of the equity in the project......."

the dreaded oilbarrel self-promoting platform ..... i gave up reading stuff there a year or more ago, for exactly the aforementioned reason ..... shame there is not proper critical analysis there or it would have some credibility

On a charge for 200p, will we get to the 240p pre flow test results target price soon ?

and i thought i was brave (stupid and greedy!) topping up a few days ago at 179!

And you called me stupid for buying this at 20p as it was an "MM stock only".

LOL :)


Still is an MM only stock, but glad I was in at 20p.

you're stupid because, inter alia, you never bank profits .... for myself, buying at 47/67/81/179 has done me very well

Morning Balerboy,

bit happier this morning as starting to see a bit more of a gain, lets hope we see the 240p before the end of the week. GKP still looking promising as well.

Nice little post on TMF.

http://boards.fool.co.uk/xciting-options-12084293.aspx

.

Another 7 million in the bank and given them warrants to buy at over 3.60 a share.

That might be cheap in a few weeks time.

Anyway, looks like its full steam ahead and as the RNS says "without delay".

this has certainly been a real crackerjack in the last 6 months, outstripped only (for me) by the performance (and banked profit!) of RKH .... i just wish it was not just an MM stock as it makes trading somewhat opaque .... i wonder what triggers a stock to become SETS

anyone know when flow test is due out?

Think this is the right info: towards end of Nov I think.


Current well: 9/3b-6 well designed to remove uncertainties
Because of these uncertainties, Xcite spudded the 9/3b-6 well on 29 September 2010, and this will
be tested with the principal objective of proving flow rates and confirming fluid properties. Drilling
and testing is expected to take around 60 days at a cost of $35m to $40m. The well will be drilled
with a slanted pilot section through the reservoir in order to correctly pinpoint the formation depths.
A horizontal well will then be drilled high up in the attic of the reservoir, as it is planned to use
horizontal wells in the development of the field, and it will be suspended on completion of testing as
a future producer to be re-entered as part of the FSP programme. The test will focus on achieving
a stable flow rate from the well rather than a maximum rate and, as such, the capacity of the test
equipment is limited to 2,800-3,000bopd to ensure low-end and mid-range performance.

Good flow test and it can still triple from here (when you account for the upside in terms of thicker pay, 100% gross to net etc...).

400p to 600p range, imo, on good flow test and upgrades and positive comments will push it more to the 600p end of the range.


Cynic, flow test could be next week IMO, and results out not long after.

2nd tanker deployed apparently !!

2 Tankers - well they must be confident of getting near to the top of the restricted 3000 bopd maximum flow rate then.

(3000 bopd is the maximum of the equipment that will be used for the flow testing and 1200 bopd is the level at which things are very rosy and successful).

i can't find the recent analyst reports .... it's not that they are especially well-informed or clever, but it would be good to see what sp targets they perceive

Nice here innit.

There are two notes below. Look at their estimates for success and upside, cause that is where we might be soon, there will be no 50% risk discount soon, we hope, and oil is now nearing 88 US$ a barrel and we know the gross to net pay is 100% (estimates below use a lower figure) and the pay is thicker than the estimates below..... :)

Lots of upside.....


Canadian Dollars figures

http://www.xcite-energy.com/docs/XEL_10262010%20Wellington%20West.pdf

++++++++++++

Sterling Pounds figures

http://fmlinfo.co.uk/uploads/xel/xcite211010outlook.pdf

.

thanks Pros .... it was the Edison one i particularly wanted to read

I'm getting worried because....I have a big position here...and it's going like a train....