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Faroe Petroleum....but not in the north sea....

1 minute chart with volume for XEL in Canada.




1 C$ = 61.5257 pence

So 2C$ = 123p


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Worth going over the latest broker note for newbies.

Strong Buy with Target Price of 247p


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)."

A broker getting something right , there's a novelty !

Sod the brokers ... chart looks pretty.

Finished up 21% in Canada.

People hopefully will realise we are at an interim stage now, and if 1st phase is good it derisks everything coming on phase 2.

A good phase 1 vertical also potentially adds to the upside if the net pay is thicker than was thought.

Its worth of a big rise on a complete phase 1, but the really big rise comes in November when the horizontal flow test is done, if that is good and deemed commercial then 400p+ is where XEL should be IMO.

Plenty of profit taken after a good rise
but then it goes higher yet again,
so continuing witht the lovely UPTREND

i am quite surprised there is no news of any kind - and not about sp rise, which is academic

Bentley could be turning into a rolls royce....

136p with no rns....with one and good news....just an update...add another 25p....

CHARTS -                            5 DAYS                                                                       3 MONTH

They were/are doing coring after the vertical was complete, so perhaps no news until those cores are tested and analysed.

The horizontal should be starting anytime soon, and the DST stuff is due on site around the 31st Oct, which means they should plan to have the HZ completed around that time and so, the flow test should be early Nov.

Exciting times for Xcite :) !!

Building some good momentum here. Lots of people top slicing and selling but someone is hoovering up the slack.

Will make for a solid re-rating with less resistance IF/WHEN the good news comes flowing (along with horizontal flowing early mid/Nov).

On Line Limits are :

MAX BUY = 7.5K @ 139p

MAX SELL = 70K @ 137.37p



So it suggests there are buy orders to fill and they want stock, which ties in the price movements and the shaking out of weak holders with a gradual rise.

Edison note out today.

You can view here : http://fmlinfo.co.uk/uploads/xel/xcite211010outlook.pdf


Or download from the Edison site :

http://www.edisoninvestmentresearch.co.uk/research/index.php

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Perky again today. I hope we get an interim update next week on progress/details of the vertical.

Would be good to know all is well and also what they have found so far.

it would be very jolly if both XEL and EO could move in tandem!
when one roars ahead, the other seems to stumble

But EO. is way over-valued. Its been pumped up far too high. It has a measly few million barrels of oil in 2C category and yet has a 360m market cap.

XEL on the other hand could have in 2C category about 6 times the amount of oil as EO. and yet its a fraction of the market cap of EO.

Hence, while EO. has a lot of work to do in order to find more oil to try to catch up with the market cap, XEL on success would re-rate very fast to a much higher market cap.

say what you will, but both the above are currently showing me very serious (paper!) profits!

friend hali has always voiced similar doubts about TLW (and me re ASC) but market defies him (and me!)

EO., if they suffer any problems given so much "future success" is already in the price could suffer a major collapse at any bad news.

Surprised you have not reduced risk and taken those profits and put them in bank cynic.