Xcite Announces Fundraising for Enhanced Bentley Work Programme
August 19 2010 - 2:42PM
Marketwired
THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION
IN OR INTO THE UNITED STATES
Xcite Energy Limited ("Xcite" or the "Company") (TSX-V: XEL)
(LSE: XEL) (AIM: XEL) notes the recent press comments in relation
to a potential placing of shares in the Company. Xcite, a developer
of heavy oil assets in the UK North Sea, is pleased to announce an
enhanced 9/3b-R well work programme which it believes will provide
greater certainty of outcome from the planned horizontal flow test,
significant additional data and an acceleration of the planned
first stage production ("FSP") programme. To fund the increase in
cost for the enhanced programme, the Company has engaged Arbuthnot
Securities Limited and FirstEnergy Capital LLP who have received
indicative commitments in excess of C$8.5 million (the
"Placing").
The Placing is subject to completion of normal final
documentation.
The enhanced scope of work on the previously announced 9/3b-R
well is now intended to include a slant pilot well section, which
will enable Xcite to collect additional data to expand its
understanding of the field and, in particular, the upside reservoir
parameters. The Company intends to suspend the well as a future
production well.
Many of the programme changes are possible because of the
Company's decision to drill the well using the Ocean Nomad, a
semi-submersible drilling rig contracted from Diamond Offshore
Drilling (UK) Limited ("Diamond"), which has significant operating
advantages over the originally planned jack-up rig.
The Company intends to include the following key elements in the
enhanced work programme:
- Drilling a slant pilot well through the reservoir to optimise
the placement of the horizontal well section and to enable the
collection of a range of data to assist with the planning of the
FSP programme. The pilot well will be logged and a core sample
collected to allow enhanced analysis of reservoir permeability and
fluid flow characteristics. The core will also help to identify the
existence of a tar mat at the base of the reservoir.
- Suspending the 9/3b-R well for re-use at a later date within
the FSP programme expected to commence in 2011. This would
potentially enable the Company to re-enter the well at the start of
the FSP programme, providing for early oil revenues and reducing
the funding required for the FSP programme.
- Given the environmental sensitivities surrounding flaring of
crude oil produced offshore and the risk of consequential
operational shutdown, the crude offtake from the planned well test
will be transferred to a vessel moored in the field and shipped to
shore. The crude oil collected will be sold by the Company,
recouping a portion of the additional cost and, more importantly,
will enable BP, the Company's offtake partner, to conduct blending
and refinery tests.
- The partial 'turnkey' programme for the low risk drilling
portion of the 9/3b-R well will be moved to a day rate basis, with
a material consequent cost saving.
The Company expects to be ready to commence drilling the well in
September, 2010 and anticipates being in receipt of any
outstanding, ordinary course regulatory consents at that time.
Application will be made to London Stock Exchange plc, and has
been made to the TSX Venture Exchange for shares issued under the
Placing to be admitted to trading on AIM and for conditional
approval of the Placing by the TSX Venture Exchange.
Richard Smith, Xcite Energy Chief Executive Officer,
commented:
"We are very pleased with the support of existing and new
investors for our enhanced drilling programme for 9/3b-R well. With
drilling planned to commence next month, we look forward to moving
ahead rapidly with the next steps to bring the Bentley Field into
production and maximise its commercial value."
Stephen Kew has reviewed and approved the technical information
contained within this press release in his capacity as a competent
person, as required under the AIM Rules. Stephen Kew is Head of
Exploration and Development at Xcite Energy and is an associate of
the Institution of Chemical Engineers and a member of the Society
of Petroleum Engineers.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Forward-Looking Statements
Certain statements contained in this announcement constitute
forward-looking information within the meaning of securities laws.
Forward-looking information may relate to the Company's future
outlook and anticipated events or results and, in some cases, can
be identified by terminology such as "may", "will", "should",
"expect", "plan", "anticipate", "believe", "intend", "estimate",
"predict", "target", "potential", "continue" or other similar
expressions concerning matters that are not historical facts. These
statements are based on certain factors and assumptions including
expected growth, results of operations, performance and business
prospects and opportunities. While the Company considers these
assumptions to be reasonable based on information currently
available to us, they may prove to be incorrect. Forward-looking
information is also subject to certain factors, including risks and
uncertainties that could cause actual results to differ materially
from what we currently expect. These factors include risks
associated with the oil and gas industry (including operational
risks in exploration and development and uncertainties of estimates
oil and gas potential properties), the risk of commodity price and
foreign exchange rate fluctuations and the ability of Xcite Energy
to secure financing. Additional information identifying risks and
uncertainties are contained in the Company's annual information
form dated December 8, 2009 and in the annual Management's
Discussion and Analysis for Xcite Energy dated March 24, 2010 filed
with the Canadian securities regulatory authorities and available
at www.sedar.com. The Company disclaims any intention or obligation
to update or revise any forward-looking statements whether as a
result of new information, future events or otherwise, except as
required under applicable securities regulations.
This information is provided by RNS The company news service
from the London Stock Exchange
ENQUIRIES: Xcite Energy Limited +44 (0) 1330
826740 Richard Smith Chief Executive Officer Rupert Cole Chief
Financial Officer Arbuthnot Securities Limited (Nomad and
Broker) +44 (0) 207 012 2000 Antonio Bossi Director Nick Tulloch
Director Ben Wells Associate Director First Energy Capital
LLP +44 (0) 207 448 0200 Hugh Sanderson Managing Director Derek
Smith Associate Pelham Bell Pottinger +44 (0) 207 861 3232
Mark Antelme Director Paradox Public Relations +1 514 341
0408 Jean-Francois Meilleur Consultant
Xcite Energy Limited (TSXV:XEL)
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