The successful drilling of the Bentley well has transformed Xcite Energy from an obscure North Sea minnow into one of the 10 largest oil and gas companies on the Alternative Investment Market (Aim). The well was drilled with a horizontal sidetrack, which was considered essential to increase flow rates from the heavy oil field that many previously thought couldn't produce at commercial rates. After weeks of anticipation and by employing the latest horizontal drilling technology, Xcite achieved a final stabilised flow rate of 2,900 barrels per day. This was at the upper end of management's expectations and even exceeded some analyst forecasts, and demonstrated Bentley's commerciality.
The company is now incorporating data from the well into its latest plans for development of the Bentley field, and aims to publish a revised reserves report by late March or early April. Management has secured the specialist deepwater drilling rig Rowan Norway, which is capable of drilling wells and producing oil at the same time. The rig is expected to be available to start drilling the first stage production wells late this year, and Xcite could see first oil from Bentley before the year-end.
There are no current forecasts for the company.
| XCITE ENERGY (XEL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 351p | MARKET VALUE: | £567m | |
| TOUCH: | 349-353p | 12-MONTH HIGH: | 425p | LOW: 44p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 50p* | NET CASH: | £36m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | nil | -0.63 | -0.02 | nil |
| 2008 | nil | -0.54 | -0.01 | nil |
| 2009 | nil | -0.78 | -1.40 | nil |
| 2010 | nil | -2.45 | -1.90 | nil |
| % change | - | - | - | - |
*Includes intangible assets of £65.3m, or 40p a share Aim: Oil & gas | ||||
