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http://www.proactiveinvestors.co.uk/companies/news/9364/xcite-engages-furgo-well-services-to-drill-and-test-production-well-at-bentley-9364.html

Thursday, October 22, 2009

Xcite engages Furgo Well Services to drill and test production well at Bentley

North Sea explorers Xcite Energy (AIM: XEL) has advanced its Bentley field closer to production today, engaging oil & gas services provider Fugro Well Services to drill and test a horizontal production well on the field, intended to be the start of an early production system to deliver first oil on the field.

Furgo has joined the Bentley Alliance, a management and operational structure created by Xcite to direct the Bentley field into full field development. The company is entering the operation on a risked basis and will shoulder percentage of the cost of the well in return for a commitment to be engaged to carry out future work if the well is successful.

“I am very pleased with the outcome of our farm-in process, which has resulted in the formation of the Bentley Alliance and we welcome Fugro as the first alliance partner to assist in the drilling and testing of the first production well on Bentley. This represents a major step forward for Xcite and creates great momentum as we move towards oil production from Bentley,” said Chief Executive of Xcite Richard Smith.

The Bentley field is among the largest undeveloped heavy oil prospects in the North Sea. Its resource estimate was recently upped to 690 million barrels of oil (mbo) with the upside at nearly 890 mbo following a 3D seismic survey.

The most likely aggregate contingent and prospective resources now stood at 160 million barrels, valued at US$1 billion at a flat price of oil of US$80/barrel, while the upside estimate puts its overall value at US$2 billion.

Fugro has participated in the pre-development work at the Bentley field, entering an agreement for the drilling of a geotechnical test well and a MoU (memorandum of Understanding) to drill and test the 9/3b-R pre-development well on the field.

The well is currently set to be spudded in the first quarter of 2010, pending on regulatory approval, availability of funding and the finalisation of contract terms with Fugro.

Xcite recently raised 2.1 million through a placing earlier this month to fund the development of the Bentley field and said discussions with potential industry partners were ongoing, reaffirming its intention to bring more parties to the Bentley Alliance.

Proselenes : you are on to something here, the market cap is tiny : 20 million by my reckoning and there is a 3d seismic on this....minimum 160 million barrels of heavy crude in our waters...more than 2.1 million pounds in the bank, drilling early next year...and the target is 100% owned by the company !.

It could be a real massive multi bagger, the question is over the dilution needed to get there. If the EPS works well (Early Production System) then dilution will be much smaller.

The question really is if the field is good, will the dilution even matter as its still going to multi bag from here, just a case then of how many bags.

High risk, you will need patience, its illiquid, but it might Xcite lots of people later.

We must not forget that heavy crude is cheaper than light, which is much more expensive...

Yes, but also Gordon Brown has also announced lots of incentives for companies dealing in North Sea Heavy Oil.........and rumour is that Darling is going to announce even more soon.

This makes the chances of the project going ahead full steam and getting less dilutive funding much much better.

The oil in the Bentley field has lots of positives, worth reading up on the information so far.

I can't believe the market cap is so low....on MoneyAm it is at only 16 million...with today's increase I work it out at (please correct me if I'm wrong) : 20 million or so with about 3 million in cash......this is chicken feed compared to the size of the discovery and it is a discovery...

very intresting worth a punt ,will be following this share now hope to pick a small amt tomoorow .
exploration director and another dir bought small amount of shares in may 2009 @32p .
small volumes ,should be volatile in price on big volume trades .

cannot get quote or buy through hsbc

The sp is up this morning...check out "the possiblity of Bentley containing as much as 800 million barrels of heavy crude"....with the market cap as it is the upside could be into a pound before drilling gets underway.

already a 10 bagger this year!

You bought in at 5p marni...? or you mean the stock has increased in value by that much ?......I think we are going to see 80 to 100p before drilling.

in @39,small amount

This could turn into a favourite blog here...now where's Cynic ?....

up in harrogate for number one son's wedding ...... what a lovely place and the shops leave even bath for dead ..... anyway .....

you know i'm not going to get excited (sorry about that!) about this stock on several grounds

a) spread shows as 3p at 37/40, which if the norm for this stock, shows its illiquidity

b) the above looks to be further supported by the fact that sp moved 3p - merely the width of the spread of course - on only 58,000 shares

c) the field they want to develop is apparently heavy oil which trades at a significant(?) discount to light crude and is, i think, a lot harder to extract efficiently anyway


clearly if you want a change from backing horses or the roulette wheel, then i guess you may want a flutter here ..... if you get it right, then you may make a few shillings, for i bet you can't trade many, but remember to bank a realistic profit instead of shooting for the jackpot .... do the latter, and you will more than likely blow the lot

have checked L2 ....
MM stock only
4 MMs, which is the good news
the bad news is that EMS is only 5,000 shares and individually, the MMs each show a 5p spread

Thanks for the info, hope the wedding goes fine....my purchases yesterday were not shown...and I bought quite a few, even though the spread is wide I managed at the start to get just within 1p of the sp, the thing with this is that it is already a discovery and in the North Sea, close to home and the market cap is ridiculous and a placing has already been done and dusted...the next corporate activity could be to bring in a big player (partner)....to me : it looks good at the moment, if it climbs to 60p or more quickly I'll have another detailed look at it.

Further to my previous post : they tested in the discovery well 150 barrels per day (heavy oil)...but Schlumberger reckon that on production it will flow 4000 barrels per day and a 70% chance of commercial success which to me is high....minimum 160 million barrels of heavy oil.....

far be it from me to tell you where or where not to put your money .... just not for me; have learnt the hard way to keep minnow stocks to a tight minimum in my portfolio and for no great logical reason, prefer to hold VIY, CRA and VOG (rather by default) and a few PXS