Executive Summary
Xcite Energy Limited (LON:XEL) is an oil exploration and production business which is focused on heavy oil reserve development in the North Sea. Established in 2003, XEL's only asset is its 100% interest in the Bentley viscous oil field (Block 9/3b) which it was awarded in 2003 in the 21st UK Licence Round. This is situated 160 km east of the Shetland Isles in 113 m of water. XEL is the operator and a total of five wells have been drilled in the Block so it is now considered a development project rather than an exploration play. Xcite Energy is listed on AIM and the TSX-V (CVE:XEL).
Assets
At present XEL's only asset is its 100% interest in the Bentley viscous oil field in the UK North SeaBentley was discovered in 1977 and is is one of the largest undeveloped oil discoveries in the region.
Despite being discovered in 1977 (by Amoco, operatorship then moved to Conoco in the 1980s), the field has remained undeveloped due to the viscous nature of the oil. Several members of the XEL management team were Conoco employees at the time of the field’s discovery and some were actually involved in the initial appraisal activity. A combination of low oil prices, volatile fiscal terms and a poor perception of viscous oil, led to the field being abandoned. XEL was formed in 2002 specifically to develop the field and the company was awarded 100% interest in block 9/3b (located 160km east of the Shetland Islands) during the 21st UK offshore licensing round in 2003
source: Arbuthnot [1]
Fiscal terms for the development of such projects were improved significantly by the UK Govt in August 2009, adding more than $100 million to the NPV of the Bentley project overnight see RNS [2]
A presentation was given at an OilBarrel conference in March 2010
- see presentation [3]
sources of data
company web-site [4]
original IPO prospectus [5]
analyst report by Arbuthnot [1]
oil barrel presentation [ref] www.oilbarrel.com/fileadmin/content/pdfs/oilbarrel/presentations/Xcite%20E.pdf [/ref]
rns re change in fiscal treatment of heavy oil [7]
