ABERDEENSHIRE--(Marketwire - Apr 19, 2012) -
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART
DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO
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SUCH JURISDICTION
TSX-V, LSE-AIM: XEL
19 April 2012
Xcite Energy Limited
("Xcite Energy" or the "Company")
Operations Update and Bentley Phase 1A Work Programme
The Company is pleased to provide an update to the market in respect of
the current drilling operations and the Bentley Phase 1A work
programme.
Current Operations Update
As previously announced, the well was spudded on 18 March 2012, with 20
inch casing now having been set down to approximately 2000ft below the
rotary table. Preparations are being made to set the blow out preventer
and to continue the drilling of the 17.5 inch hole.
Summary of Bentley Phase 1A Work Programme
Following the successful completion of the 9/03b-6 and 6Z wells (as
announced in December 2010), the Company has invested significant
resources designing and engineering the next phases in the development
of the Bentley field, the Phase 1A and Phase 1B work programmes.
The Bentley Phase 1A Work Programme has two principal objectives:
1. The 9/03b-7 and 7Z wells are planned to demonstrate the mechanical
and operational aspects of the drilling, completion and flowing of the
proposed well design for Phase 1B. The 9/03b-7Z well is planned to be
used in Phase 1B as the first full production wellbore.
2. To collect additional reservoir and production data to improve the
calibration of the reservoir model, including data with respect to
enhanced oil recovery techniques. This data with be used to further
increase the certainty with respect to the longer term oil, gas and
water production profiles and recoverable reserves from the Bentley
field.
The Phase 1A work programme on the Bentley field has been planned to
achieve the two principal objectives set out above and comprises the
following key operations:
* Drilling of a horizontal motherbore well in the geological formation
immediately overlying the reservoir. This motherbore is planned to be
approximately 2,000ft in length.
* Drilling of the toe extension well (9/03b-7 well), being a horizontal
wellbore from the toe of the motherbore, with a reservoir section of up
to 2,400ft in length. This well is planned to be positioned
approximately at mid-height in the reservoir at an elevation above the
oil-water contact such that, when produced at an oil rate of at least
1,500 barrels of oil per day ("bopd"), it should initiate water
breakthrough at the well and subsequently develop sufficient water cut
(to approximately 50%) within the flow test period. This well will be
plugged and abandoned at the end of the production test.
* The 9/03b-7 wellbore is planned to recover a minimum cumulative
volume of 45,000 barrels of oil during the flow test period to help
ensure that the data gathering will be as effective as possible. This
flow test is planned to be up to 90 days in length and to be conducted
at a range of different flow rates (specifically not 500 barrels per
day for 90 days), again to assist in the data gathering programme. This
flow test is expected to commence in the second quarter of 2012 and,
for the sake of clarity, it is not a headline flow rate test, it is a
data gathering exercise.
* Drilling of a lateral well (9/03b-7Z well) from the side of the
motherbore, being a horizontal wellbore with a reservoir section of
approximately 2,450ft in length. This well is planned to be positioned
as high in the reservoir as possible, being similar in design and
completion to the successful 9/03b-6Z well. This wellbore will be
drilled after the toe extension well, but not flowed until after the
toe extension well has been flowed to achieve sufficient water cut.
This lateral wellbore will be cleaned up and then flowed at a rate of
at least 1,500 bopd for a minimum period of one day, prior to being
suspended as the first full production well on the field in Phase 1B.
This flow test is expected to be completed in the fourth quarter of
2012.
* Crude oil produced from the 9/03b-7 and 7Z wells will be marketed by
BP Oil International Limited, the Company's marketing and offtake
partner.
* The results and data gathered from the 9/03b-7 well will be used to
calibrate the existing reservoir model and update the Reserves
Assessment Report. This update is likely to take a number of weeks to
finalise after the Phase 1A work programme has been completed.
* In parallel to the update of the Reserves Assessment Report, the
Field Development Plan for the Bentley field is expected to be updated
for re-submission to the Department of Energy & Climate Change as soon
as practicable.
The Company will continue to keep shareholders fully informed during
the coming months, which will include the filing of its NI51-
101"Statement of Reserves Data and other Oil and Gas Information" as
required in Canada by the end of April 2012.
ENQUIRIES:
Xcite Energy Limited +44 (0) 1483 549 063
Richard Smith Chief Executive Officer
Rupert Cole Chief Financial Officer
Oriel Securities +44 (0) 207 710 7600
(Joint Broker and Nomad)
Emma Griffin Partner
Michael Shaw Partner
Morgan Stanley (Joint Broker) +44 (0) 207 425 8000
Andrew Foster Managing Director
Pelham Bell Pottinger +44 (0) 207 861 3232
Mark Antelme Director
Henry Lerwill Account Director
Paradox Public Relations +1 514 341 0408
Jean-Francois Meilleur Consultant
Oriel Securities Limited, which is authorised and regulated in the
United Kingdom by the Financial Services Authority, is acting
exclusively for Xcite Energy and for no one else in connection with the
subject matter of this announcement and will not be responsible to
anyone other than Xcite Energy for providing the protections afforded
to its clients or for providing advice in connection with the subject
matter of this announcement.
Morgan Stanley, which is authorised and regulated in the United Kingdom
by the Financial Services Authority, is acting exclusively for Xcite
Energy and for no one else in connection with the subject matter of
this announcement and will not be responsible to anyone other than
Xcite Energy for providing the protections afforded to its clients or
for providing advice in connection with the subject matter of this
announcement.
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 26 October
2010 and in the annual Management's Discussion and Analysis for Xcite
Energy dated 22 March 2012 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 whether as a result of new information,
future events or otherwise, except as required under applicable
securities regulations.
Neither the 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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