3rd Dec 2008 14:04
THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES
TSX-V, LSE-AIM: XEL
December 3, 2008
Xcite Energy Limited
("Xcite Energy" or the "Company")
Results for the 3 Month Period Ended September 30, 2008 and
Outlook for 2009
Xcite Energy is a heavy oil company focused on the development of discovered resources in the United Kingdom North Sea. The Company holds a 100% working interest in Block 9/3b, the Bentley field, one of the largest undeveloped heavy oil fields in the United Kingdom North Sea.
The Company is listed on the AIM Market of the London Stock Exchange (AIM) and the TSX Venture Exchange (TSX-V).
The Company today announces its financial and operational results for the 3 month period ended September 30, 2008 and its outlook for 2009.
KEY HIGHLIGHTS
Operational
Realisation of the commercial potential of the Bentley field continues to be progressed through essential study work and commercial discussions.
Important new understanding of the Bentley crude's in-situ cold flow behaviour has been achieved through the correlation of the successful drill stem test on well 9/3b-5 with historic data.
Improved understanding of applicable well and process technologies resulting from the successful 9/3b-5 drill stem test underpins management confidence in economic productivity and recoverability, even at low oil prices.
Re-processing of the 3D seismic data confirms that Bentley is a major North Sea asset. Interpretation of this dataset is underway, with initial findings supporting a material increase in oil in place, leading to improved commercial productivity characteristics compared to the initial 3D interpretation and the original 2D seismic data.
The neighbouring Bressay Field (6km) has been shown to be a close reservoir analogue field for Bentley, with similar crude oil and geological properties. StatoilHydro, as Operator of Bressay, has recently completed a well and already shared its initial thinking for the development of the field with a target first oil date in 2014.
Financial
Cash balance as at September 30, 2008 was £2.7 million in line with budget.
Challenging market conditions are likely to impact on the Bentley work programme timetable.
2009 OUTLOOK
The improving commercial potential of the Bentley field has required additional study work prior to RPS Energy, independent reserves engineer, completing a new Competent Person's Report ("CPR"), which is now expected by the end of Q1 2009.
Further reinterpretation of the 3D seismic data will be undertaken to define better the upside potential of the oil in place and the improved commercial productivity characteristics. This is expected to be completed by the end of Q1 2009.
Preparation for an Early Production System on Bentley will continue in conjunction with the new CPR and, together with the application to the Department for Business, Enterprise and Regulatory Reform by Xcite Energy Resources Limited, the Company's subsidiary, to become a North Sea Production Operator, significant progress is expected during the first half of 2009.
Commercial options for undertaking the Early Production System are being discussed and appraised with a number of potential business partners. The Company anticipates being able to conclude such discussions during 2009.
Richard Smith, Xcite Chief Executive Officer commented:
"Additional analysis of the successful appraisal well results on the Bentley field has enabled our technical team to make significant advances in the understanding of the in-situ behaviour of North Sea heavy oil reservoirs. This understanding has been seminal to the significant progress that we have made in the programme to commercialise Bentley during 2008, commencing with the successful 9/3b-5 drill stem test in February and marking a milestone for this field 30 years after its discovery. We now look forward to an equally productive 2009 in spite of difficult market conditions."
The Company has also announced and filed its Management Discussion and Analysis and Interim Unaudited Financial Statements. These documents can be found for viewing by electronic means on the System for Electronic Document and Analysis Retrieval at www.sedar.com.
Below is a link to Management's Discussion and Analysis and Interim Consolidated Financial Statements:
http://www.rns-pdf.londonstockexchange.com/rns/4794J_-2008-12-3.pdf
ENQUIRIES:
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Xcite Energy |
+44 (0) 1330 826 740 |
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Richard Smith |
Chief Executive Officer |
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Rupert Cole |
Chief Financial Officer |
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Thomas Weisel Partners (UK) Limited |
+44 (0) 20 7877 4300 |
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Paul Colucci |
Managing Director |
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Paul Newman |
Managing Director |
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Strand Partners Ltd. |
+44 (0) 20 7409 3494 |
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James Harris |
Director |
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Rory Murphy |
Director |
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Pelham Public Relations |
+44 (0) 20 7743 6676 |
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Alisdair Haythornthwaite |
Director |
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Katherine Stewart |
Account Manager |
The TSX-V has not reviewed and does not accept 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 changes in market and competition, governmental or regulatory developments and general economic conditions. Additional information identifying risks and uncertainties are contained in the Company' prospectus filed with the Canadian securities regulatory authorities, 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.
Related Shares:
Xcite Energy