Xcite Energy Limited (XEL) is a heavy oil appraisal and development company, with current interests in three licence blocks in the UK North Sea, all of which are held with 100% working interests through its wholly-owned UK subsidiary, Xcite Energy Resources Limited (XER).

Its primary focus is in bringing the Bentley oil field on Block 9/3b into production and in doing so becoming a significant independent oil producer in the North Sea by 2014.

Business Strategy

Bring the Bentley field into commercial production

Grow its reserves base from the existing 116 million barrels of oil equivalent
(“MMboe”) of 2P reserves through the conversion of its prospective resources base

Grow its resources base further through drilling activity on Blocks 9/3c and 9/3d

Employ enhanced oil recovery processes (“EOR”) to further increase its resource base

Increase its asset portfolio through license rounds and asset transactions whilst utilising its heavy-oil expertise to leverage opportunities


http://www.xcite-energy.com/

2012 in Review and the way ahead Robert Cole Video

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Sorry, but as that post is soon to be deleted, I absolutely must preserve it for posterity! The head trauma explains everything!!! ;o)
mnamreh - 10 Jan 2013 10:46 - 57 of 57
Caustic wit eh?

That's (a) big lye!

Old age, past head trauma and poor attitude to humankind all catching up with me now.

It will soon be TANKER's turn (if it hasn't already happened).

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Sorry but what's the point in engaging with some idiot who deletes their every post?
Attention seeking and succeeding.

Lighten up H, where's your sense of humour old chap, we could all be dead tomorrow:O)

Hence the ;o) in my post!......................................and don't call me old! :o)

big lye (sic)???
must be making a large batch of soap - or perhaps crack!

LOL! your so funny. Wanker.

your = you're

hi chuckles .... don't waste your time on it ..... it thinks it's frightfully clever and droll posting abuse, whereas it is water off a duck's back to me

Xcite Energy: Merchant Securities initiates with a target price of 167.8p and a buy recommendation.

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Wish something would boost it mnamreh

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mnamreh totally agree with you

http://tradingresearchpoint.co.uk/2013/01/21/buy-xcite-energy-at-102p-target-181p/

Buy Xcite Energy at 102p – Target 181p

AIM oil explorer Xcite Energy (XEL) is a darling of the Bulletin Boards which is normally a good reason not to buy the shares. Indeed the shares have fallen from 395p in January 2011 to 103.25p today (they were 67.5p five months ago) and whilst this is not for the feint hearted, there is a string fundamental case for this £299 million capitalised company. I believe that the shares are worth 181p and are a buy.

The company’s sole asset is the Bentley field in the UK Northern North Sea. The shares hit the all time higher as Xcite reported on a successful “transformational well” drilling result. With hindsight investors got ahead of themselves. A reserves report in May of that year dampened some of the ardour but none the less Bentley is a real asset. The 100% owned field is located in Block 9/3b (Licence P1078), one of the largest undeveloped fields in the North Sea and contains around 550 MMstb in-place of 10°-12° API heavy oil.

The company is already producing some oil from Bentley from a pre-production test well. In the three months to 30th September it produced approximately 149,000 barrels of Bentley crude, which was combined with approximately 58,000 barrels of diluent. This generated £13.3 million of revenue. But it is small beer. The company need to develop the full field and this will be expensive. But I expect that we will get news on how this progresses shortly and that will begin with a new reserve update within weeks.

That should provide the platform for securing the funding to bring Bentley into full production. A farm in deal is possible or it may be possible to secure debt finance but do not rule out the possibility of an equity issue too. As things stand, at 30th September, Xcite had cash of £54.6 million but also £53.7 million of current liabilities. It has invested more than £100 million in Bentley and although it has a $155 million loan facility to drawn down on to bring Bentley onstream it will need more. It has admitted as such. My money is on the field being funded with debt but with Xcite also issuing new equity.

So what is the field worth? The last competent persons report indicated that it offered a post-tax Net Present Value (at a 10% discount rate) for the 2P (‘Proven’ + ‘Probable’) Reserves in the core area of approximately $1.5 billion (£935 million). However there is upside on this model from the application of enhanced oil recovery techniques. Xcite has also picked up a few surrounding licenses and in theory these could add to the reserves. One would hope that the imminent new reserve report would also push the number up.

The risks here are operational (Bentley is heavy oil and in frontier territory) and also financial: how will the funding be secured? I would therefore risk weight the current estimate of NPV by and additional 30% and would also assume that there is an additional 20% dilution for the issue of new equity. That leaves me with an aggressively risk weighted target price of 181p. At 103.25p the shares are a buy.

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http://www.spreadbetmagazine.com/blog/



Some interesting new commentary from the latest fact sheet from broker Fox-Davies on Xcite Energy. It looks like they now have a signficantly more optimistic stance than some of their previous coverage. In October they raised fears that the Bentley North Sea field may be non-commerical due to operational costs, now they say that “Based on peer group comparisons, we believe that 251p a share is a better reflection of Bentley’s value.” “Post a Company update (16th of Jan), our initial fears over the commerciality of the Bentley field have been partially offset by the disclosure of an active aquifer as drive mechanism”, following the succesful completion of the extended well test in late 2012.

The shares are holding steady today at 103p, with investors waiting with eager anticipation for the new Bentley field reserves report, and with it the potential for a good upgrade (all being well!!) from the current 116 million barrels 2P (proven and probable) reserves and which should be due any time soon from auditors TRACS. This morning, it was announced that 931,000 share options were being exercised…someone seems confident of a near term rise.

Fox-Davies http://www.fox-davies.com/media/52501/xcite_energy_factsheet__jan_2013_.pdf

“XEL’s market value is being hampered by the fact that investors are aware that funding will be required for it to meet the equity portion of its development costs, providing that it does not farm-out the asset or sell the Company first. Even allowing for the funding expectation, the discount to current valuation is excessive, unless you also start to adjust for development risks. Based on peer group comparisons, we believe that 251p a share is a better reflection of Bentley’s value. ”
In October 2012, Fox-Davies wrote, “Bentley Phase 1A successful, But Questions Remain - Successful completion of Bentley field pre-production well test programme materially de-risks the Bentley development project. Pre-production wells successfully tested full field development drilling, completion, production and export techniques. The 9/3b-7 and 7Z wells have been suspended for future use as producer wells during Phase 1B. Betley’s 2P reserves are estimated at 116mm bbl. Phase 1B development expected to commence in 2013. While news that any North Sea operation has been completed successfully and safely is good news, in the longer-term it still leaves the question of operating costs unanswered. We have always maintained that this field will produce commercially in the first phase, we remain concerned the opex costs, both in absolute terms as a well as measured on a per barrel of oil produced basis, will rise to levels that make the operations non-commercial.”

Contrarian Investor UK

Xcite Energy – XEL – Constructive Technicals
28th Feb
- See more at: http://www.directorstalk.com/#sthash.Bm2xzujP.dpuf