SOURCE: Xcite Energy Limited

May 24, 2012 13:32 ET

Results of Annual and Special Meeting

ABERDEENSHIRE, UNITED KINGDOM--(Marketwire - May 24, 2012) -


                      TSX-V, LSE-AIM: XEL

24 May 2012

                     Xcite Energy Limited
               ("Xcite Energy" or the "Company")

             Results of Annual and Special Meeting

                 and Chairman's Opening Remarks

Xcite Energy is pleased to announce the results of its Annual and
Special Meeting held on 24 May 2012.

The holders of ordinary shares of the Company approved the following
matters at the Annual and Special Meeting:

       (1) the reappointment of the following nominated directors to the
           board of directors of the Company and for them to continue
           in office in accordance with the Company's Articles of

                   Stephen A. Kew
                   Roger S. Ramshaw
                   Scott R. Cochlan

           The term of office as director of Rupert E. Cole, Richard
           E. Smith, Gregory J. Moroney and Timothy S. Jones continues
           in accordance with the Company's Articles of Association.

       (2) the reappointment of BDO LLP as auditors for the ensuing
           year and the authorisation for the directors of the Company
           to fix their remuneration.

       (3) a resolution to ratify and confirm the Stock Option Plan of
           the Company dated 26 September 2007, as amended on 14 April

At the Company's Annual and Special Meeting today the Chairman of the Company, Roger Ramshaw, made the following opening remarks:"Since the beginning of 2011 the Company has made significant progress towards the development and commercialisation of the Bentley field. As announced in February 2012, we have confirmed 2P oil reserves for the core area of the Bentley field of approximately 116 million barrels with a net present value after tax (NPV10) of approximately $1.5bn."Starting with around GBP6 million spare cash after the successful 9/3b-6 well programme, we strengthened our balance sheet with new equity financing of nearly GBP105 million in 2011 and to date in 2012, with a further GBP31 million raised from the recent loan note issue, making a total of GBP142 million, or $227 million, with which to fund the Phase 1A work programme."Following the successful flow test of the 9/3b-6Z well in December 2010, which demonstrated the commercial viability of the Bentley field, we have begun work on a phased development of the field. Earlier this year we received Department of Energy and Climate Change approval to drill and produce the planned 9/3b-7 and 7Z wells and to conduct a pre-production well programme in Phase 1A. This programme is designed to collect additional reservoir and production data to improve the calibration of the reservoir model, and will also include data with respect to enhanced oil recovery techniques. It should allow us to substantially de-risk the field still further as well as confirming the Field Development Plan."We spudded the motherbore well of Phase 1A on 18 March 2012 and we are making good progress. Once we have analysed the results of this work programme, we shall be resubmitting the Field Development Plan to the Department of Energy and Climate Change. Approval will allow us to move to Phase 1B, the first full production phase."In preparation for Phase 1B we are currently working on a number of financing options, which we believe will deliver a good outcome for the Company. These options include, but are not limited to, a reserves based lending facility, a farm-out, other industry participation, mezzanine debt, convertible instruments and potentially equity financing. The Company has begun preparations for discussions with potential industry partners and has appointed Jefferies and Rothschild to act as advisers to the Company in this process. We shall keep the market updated on any progress."The Board of Directors is clearly aware of shareholder concerns around the market capitalisation of the Company. We appreciate that it is of no comfort that our share price performance has suffered with many other companies in the sector in the face of such volatile markets, and we wish to assure you that we are very focused on closing the gap to asset value. We believe the best way to do this is through a successful outcome of the Phase 1A pre-production work programme to, approval of the Field Development Plan by the Department of Energy and Climate Change and by negotiating a competitive funding programme for Phase 1B, which will have retention of shareholder value as its principal aim. These are our objectives for 2012 and the whole team is working hard to achieve them. I would like to thank the Board of Directors and all of Xcite's other employees for their hard work and dedication to date and their continued commitment at this important time."

For further details, please see the management proxy circular dated 19 April 2012 available on the Company's website and

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                                     +44 (0) 207 425
8000(Joint Broker)
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

Glossary"1P" means proved reserves."2P" means proved plus probable reserves."3P" means proved plus probable plus possible reserves. Possible reserves are those additional reserves that are less certain to be recovered than probable reserves and there is a 10% probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves."MMstb" means millions stock tank barrels."NPV10" means net present value in money of the day using a 10% forward discount rate, which values do not represent fair market value."$" means US dollars.

Oriel Securities, 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 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.

Cautionary Language

The independent reserves and resources audit of the Company Assets effective 31 December 2011, as audited by TRACS in compliance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities and in accordance with the Canadian Oil and Gas Evaluation Handbook, is based on forecast and prices effective as at 31 December 2011 from McDaniel & Associates' October 2011 Brent oil forecast, less a 12% discount for Bentley crude (

The calculation of the NPV10 (after tax) for the Core Area disclosed above takes into account the following: (a) UK Corporation Tax is charged at the rate of 30% on net taxable income; (b) UK Supplemental Corporation Tax ("SCT") is charged at the rate of 32% on net taxable income; and (c) heavy oil allowances of up to GBP800 million have been applied to offset the SCT to the extent possible.

Prospective resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery and a chance of development. Prospective resources are further subdivided in accordance with the level of certainty associated with recoverable estimates assuming their discovery and development and may be sub-classified based on project maturity. There is no certainty that any portion of the prospective resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the prospective resources. The principal risks and uncertainties associated with the recovery of the prospective resources which prevent them from being classified as contingent resources are that they have not yet been confirmed by appraisal drilling.

Statements relating to "reserves" or "resources" are deemed to be forward-looking statements or information, as they involve the implied assessment, based on certain estimates and assumptions, that the resources and reserves described can be profitable in the future. There are numerous uncertainties inherent in estimating quantities of proved reserves, including many factors beyond the control of the Company. The reserve data included herein represents estimates only. In general, estimates of economically recoverable oil reserves and the future net cash flows therefrom are based upon a number of variable factors and assumptions, such as historical production from the properties, the assumed effects of regulation by governmental agencies and future operating costs, all of which may vary considerably from actual results. All such estimates are to some degree speculative and classifications of reserves are only attempts to define the degree of speculation involved. For those reasons, estimates of the economically recoverable oil reserves attributable to any particular group of properties and classification of such reserves based on risk of recovery and estimates of future net revenues expected therefrom, prepared by different engineers or by the same engineers at different times, may vary substantially. The actual production, revenues, taxes and development and operating expenditures of the Company with respect to these reserves will vary from such estimates, and such variances could be material.

Consistent with the securities disclosure legislation and policies of Canada, the Company has used forecast prices and costs in calculating reserve quantities included herein. Actual future net cash flows also will be affected by other factors such as actual production levels, supply and demand for oil and natural gas, curtailments or increases in consumption by oil and natural gas purchasers, changes in governmental regulation or taxation and the impact of inflation on costs.

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


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