Xcite Energy Limited Half Yearly Report (7295W)
24 August 2015 - 4:00PM
UK Regulatory
TIDMXEL
RNS Number : 7295W
Xcite Energy Limited
24 August 2015
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART
DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION WHERE TO
DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF SUCH JURISDICTION
TSX-V, LSE-AIM: XEL
24 August 2015
Xcite Energy Limited
("Xcite Energy" or the "Company")
Second Quarter Results for the 3 and 6 Month Periods Ended 30
June 2015
Xcite Energy announces its second quarter results for the 3 and
6 month periods ended 30 June 2015.
Highlights for the year to date
-- Increase in 1P, 2P and 3P heavy oil reserves for the Bentley
field to 234 MMstb, 265 MMstb and 296 MMstb, respectively,
effective 31 December 2014 and based on an expected initial 35 year
production period.
-- NPV10 (after tax) value of reserves for the Bentley field of
approximately US$1.9 billion, US$2.3 billion and US$2.6 billion on
a 1P, 2P and 3P basis, respectively, effective 31 December
2014.
-- Net loss in the second quarter of US$0.4 million.
-- Cash balance of US$34.4 million as at 30 June 2015.
-- Technical due diligence continuing with a number of potential field development partners.
Overview of Results
Management believes it is making progress despite the industry
environment remaining challenging with the oil price recently
falling below US$50 per barrel, development budgets remaining under
pressure, projects deferred and an increasing number of North Sea
assets being put up for sale as oil companies seek to realign their
portfolios. The Company's strategy remains flexible and innovative
as we pursue a range of potential funding solutions to secure the
development capital required for the Bentley first phase
development.
Technical due diligence continues with a number of potential
field development partners. Whilst management recognises that this
appears to be a slow process, as a key element of any such
diligence review, the Bentley reservoir requires extensive and
iterative subsurface modelling and detailed analysis in order to
fully understand the production mechanism and recovery from the
field. Xcite Energy's own experience and knowledge has been
developed through the course of its appraisal programme and an
extended well test, and it should be appreciated that a detailed
analysis by any third party is necessary, partly to compensate for
a lack of analogous oil fields and databases against which to
benchmark outcomes, and partly due to the unique characteristics of
the field which drive the application of innovative engineering
solutions incorporated into the development plan. Whilst this type
of analysis is a highly technical process, it is important to note
that the work completed by the Company, its reserves evaluator, AGR
TRACS, and recently Baker Hughes, has consistently shown the
potential recoverability from the field.
The Baker Hughes technical evaluation of the reservoir has
produced first phase development production profiles which closely
match the Company's base case modelling and those reported in the
Company's Reserves and Resources Assessment Report effective 31
December 2014 and dated 29 April 2015 (the "RAR"). Following on
from the RAR, the Company will continue to optimise the production
profile and will review potential uplifts from specific Baker
Hughes technology.
The Company is also continuing to work with a number of parties
in order to develop an asset funding package for the construction
and delivery of the mobile offshore production unit ("MOPU") and
the floating storage and offloading vessel ("FSO"). The current
industry environment has freed up capacity in shipyards and we are
actively pursuing and evaluating potential opportunities as a
result of increasing competitiveness for major projects in order to
deliver the best value and most secure project execution strategy.
Management believes this process is complementary with the
potential field development partner discussions and will create
greater clarity for the overall Bentley First Phase Development
funding requirements. Construction of the N Plus class drilling rig
continues to make good progress in Singapore.
The project execution strategy and the provision of yard quotes
and third party estimates incorporated into the RAR have been
supported by the assurance engineering and subsurface work
programmes completed to date, all of which underpin the current
full field development life-cycle cost estimate of US$35 per
barrel, representing a relatively low cost per barrel for a UK
North Sea development. The Company has worked closely with third
parties to validate the economic and commercial viability of the
Bentley project. The collaborative work with the development group
has also resulted in material operational efficiencies, such as the
utilisation of a bridge-linked FSO into the development plan, which
offers significant operational cost savings potential throughout
the life of the field. The Company believes this is a good example
of how contractor group collaboration can contribute towards
maximising economic recovery in the UK North Sea.
The Company has an active dialogue with the Oil and Gas
Authority ("OGA") and has recently begun detailed discussions to
review the technical approach to the Bentley field development in
order to ensure that it will be compliant with government policy.
Xcite Energy is fully committed to maximising economic recovery
from the Bentley field, maintaining a collaborative approach with
its development group and remaining consistent with the aims of the
OGA.
The Company will continue to update shareholders with material
news as required, in addition to its regular reporting
schedule.
The following tables summarise the financial performance of the
Company and its wholly owned subsidiary, Xcite Energy Resources
plc, in the 3 and 6 month periods ended 30 June 2015 and, following
a change in presentation currency from 1 January 2015, the restated
US Dollar comparatives for the 3 and 6 month periods ended 30 June
2014 and the restated Statement of Financial Position as at 31
December 2014.
6 months ended 3 months ended 6 months ended 3 months ended
30 June 30 June 30 June 30 June
------------------------------------- --------------- --------------- --------------- ---------------
Income Statement Information 2015 2015 2014 2014
------------------------------------- --------------- --------------- --------------- ---------------
US$m US$m US$m US$m
------------------------------------- --------------- --------------- --------------- ---------------
Net (loss)/profit (0.83) (0.38) 0.81 0.88
------------------------------------- --------------- --------------- --------------- ---------------
Basic earnings per share in cents (0.3) (0.1) 0.3 0.3
------------------------------------- --------------- --------------- --------------- ---------------
Diluted earnings per share in cents (0.3) (0.1) 0.2 0.3
------------------------------------- --------------- --------------- --------------- ---------------
6 months ended 3 months ended 6 months ended 3 months ended
30 June 30 June 30 June 30 June
----------------------------------------- --------------- --------------- --------------- ---------------
Cash Flow Information 2015 2015 2014 2014
----------------------------------------- --------------- --------------- --------------- ---------------
US$m US$m US$m US$m
----------------------------------------- --------------- --------------- --------------- ---------------
Net cash flow from operations 3.3 2.7 10.5 11.8
----------------------------------------- --------------- --------------- --------------- ---------------
Net cash flow from investing activities (19.4) (9.6) (34.4) (28.5)
----------------------------------------- --------------- --------------- --------------- ---------------
Net cash flow from financing activities - - 46.4 46.4
----------------------------------------- --------------- --------------- --------------- ---------------
As at As at As at
30 June 31 December 30 June
--------------------------------------------- --------- ------------- ---------
Statement of Financial Position Information 2015 2014 2014
--------------------------------------------- --------- ------------- ---------
US$m US$m US$m
--------------------------------------------- --------- ------------- ---------
Total assets 485.4 482.2 514.7
--------------------------------------------- --------- ------------- ---------
Cash and cash equivalents 34.4 50.4 70.8
--------------------------------------------- --------- ------------- ---------
Current liabilities 132.7 5.5 5.9
--------------------------------------------- --------- ------------- ---------
(MORE TO FOLLOW) Dow Jones Newswires
August 24, 2015 02:00 ET (06:00 GMT)
Xcite Energy (LSE:XEL)
Historical Stock Chart
From Apr 2024 to May 2024
Xcite Energy (LSE:XEL)
Historical Stock Chart
From May 2023 to May 2024