www.xcite-energy.com
Xcite Energy Limited 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.
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.
Watch Xcite Energy's May 2012 Corporate Video here.
Xcite Energy announces changes to rig contract for Bentley development
Xcite Energy (LON:XEL, CVE:XEL) announced changes today to its rig contract for Phase 1B of the Bentley oil development programme, which will better suit the work planned.
Chief executive Richard Smith described the amendment as "a very good outcome" for the company.
The contract for the jack-up rig is with Rowan Companies and the changes give Xcite greater flexibility, it said.
The original contract was for a fixed 240 day initial period for the Phase 1A work programme, starting from the rig arriving at Bentley in the North Sea, followed by six consecutive one year extension options.
The amendment to the contract includes the ability to shorten the 240 day initial period for Phase 1A, thereby reducing its financial commitment if completion of the work programme is ahead of schedule.
It also provides that Xcite can at any time up to 240 days after the end of Phase 1A re-call an appropriate rig from the Rowan fleet for Phase 1B of the Bentley field development.
In a statement, Smith said: "This is a very good outcome for the company allowing us to maintain our principal objective of using a suitable jack-up unit for the first phase of the Bentley development.
"This amendment provides greater flexibility to manage the timing and costs of our revised work programme for Phase 1B."
On Wednesday this week, the firm said The UK Department of Energy and Climate Change (DECC) had confirmed its support for the firm's Bentley oilfield plan.
Xcite expects the DECC to approve phase 1 of the development in the near future. The company will then be able to start work in sufficient time to achieve first oil in the first half of this year, it explained.
In a note yesterday, research firm Edison said the "last two months have seen Xcite carve out a route to first oil from Bentley in 2012 that can be fully equity funded and without need for FDP (first phase development) approval".
"With shares trading under £1, the stock still offers significant upside although catalysts remain the same with funding and subsequent formal FDP approval the hurdles to commercialisation," said analyst Ian McLelland.
Edison said the proposed development now involved the following phases - an early-stage pre-production facility which will target first oil in 2012, followed in 2013 by a more substantial FPD Phase 1B to extract the current approximate 28 million barrels of oil equivalent of reserves in the field.
