28th Jan 2010 07:00
THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES
TSX-V, LSE-AIM: XEL
Xcite Energy Limited
("Xcite Energy" or the "Company")
January 28, 2010
Supply and Offtake Agreement with
BP Oil International Limited
Xcite Energy, a developer of heavy oil assets in the UK North Sea, today announces that Xcite Energy Resources Limited ("XER"), the 100% subsidiary of the Company and the 100% owner of the Bentley field, has concluded an agreement with BP Oil International Limited ("BPOI"), a wholly owned subsidiary of BP plc ("BP"), whereby BPOI will provide the offtake services to market and sell the Bentley crude oil in return for an incentive-based fee per barrel.
The offtake fee is directly related to the realised price achieved by BPOI for the Bentley crude oil in relation to the prevailing Brent crude price, incentivising BPOI to maximise the price per barrel achieved for XER by minimising the discount to Brent crude.
In addition, BPOI have undertaken that, subject to certain conditions, when Xcite Energy move to full field development, an associated BP company will procure $20m of financing from a commercial bank for Xcite Energy with credit support from BP, for the purpose of assisting with the full field development of the Bentley field, the terms of which will be negotiated in due course.
Richard Smith, Xcite Energy Chief Executive Officer commented:
"We are delighted to welcome BP Oil International as our offtake partner in the Bentley field. This is a relationship that brings the global resources and expertise of the BP oil trading organisation to manage the marketing and selling of the Bentley crude, together with assistance in financing the work programme as we move towards first oil on the field. This is another watershed for the Company, which underpins the value of Bentley crude through field life and significantly progresses the plan for development."
ENQUIRIES:
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Xcite Energy Limited |
+44 (0) 1330 826740 |
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Richard Smith |
Chief Executive Officer |
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Rupert Cole |
Chief Financial Officer |
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Strand Hanson Limited (Nomad) |
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+44 (0) 20 7409 3494 |
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James Harris |
Director |
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Rory Murphy |
Director |
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Arbuthnot Securities Limited (Broker) Andrew Fairclough Ed Burbidge |
Director |
+44 (0)20 7012 2000 |
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Pelham Public Relations |
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+44 (0) 20 7337 1500 |
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Mark Antelme
Paradox Public Relations |
Director |
+1 514 341 0408 |
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Jean-Francois Meilleur Karl Mansour |
Consultant Consultant |
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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 26, 2009 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
Related Shares:
Xcite Energy