ABERDEENSHIRE--(Marketwire - Jun 22, 2012) -
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TSX-V, LSE-AIM: XEL
22 June 2012
Xcite Energy Limited
("Xcite Energy" or the "Company")
Signing of US$155 million reserves based loan facility
Xcite Energy is pleased to announce that it has signed a US$155 million
secured reserves based loan facility agreement (the "Facility") for the
Bentley field with a leading group of lending institutions. The
Facility, with a term of five years, will be used to provide a
substantial part of the funding required for the Phase 1B development
of the Bentley heavy oil field in the UK North Sea.
The Facility has been arranged with Royal Bank of Scotland plc, Societe
Generale Corporate & Investment Bank, GE unit GE Energy Financial
Services, Nedbank Limited and Britannic Strategies Limited (a
subsidiary of BP plc). Royal Bank of Scotland is acting as the Facility
agent and security trustee, with Societe Generale acting as technical
and modelling bank.
The draw down under the Facility is subject to conditions precedent,
including the achievement of certain principal objectives in the
Bentley Phase 1A work programme announced on 19 April 2012 as set out
below, together with their current status:
- Drilling of a horizontal motherbore well in the geological formation
immediately overlying the reservoir.
Current status: the drilling of this motherbore in excess of 1300ft has
now been successfully completed.
- Drilling of the toe extension well (9/03b-7 well), a horizontal
wellbore from the toe of the motherbore, with a reservoir section of up
to 2,400ft in length. This well is 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.
Current status: as announced on 29 May 2012, the drilling of this toe
extension well has now been successfully completed, with a reservoir
section in excess of 2,200ft having been penetrated with 100% net pay.
Sand control screens have been successfully installed.
- 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, to
achieve sufficient water cut to enable satisfactory calibration of the
reservoir model and a revised, independent reserves assessment report.
Current status: this flow test is expected to commence in the coming
weeks.
- Drilling of a lateral well (9/03b-7z well) from the side of the
motherbore, a horizontal wellbore with a reservoir section of
approximately 2,450ft in length. This well is positioned as high in the
reservoir as possible, being similar in design and completion to the
successful 9/03b-6z well. This wellbore was drilled after the toe
extension well, but will not be 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.
Current status: as announced on 13 June 2012, the drilling of this
lateral well has now been successfully completed in the roof of the
reservoir, a section in excess of 2,000ft has been penetrated, 100% net
pay was encountered and the oil column was found to be thicker than
expected. Sand control screens have been successfully installed. The
flow test on this well is expected to be completed in the fourth
quarter of 2012.
With the Facility now signed, the Company will continue its
preparations for the development of the Bentley field in Phase 1B,
including the inter-dependent completion of the funding programme and
the DECC approval for the field development plan.
In line with the previously outlined funding strategy and with the
Facility now signed, the Company intends to pursue its other options to
provide the balance of the funding required to commence the Phase 1B
development. Such funding could be provided by the potential farm-out
of an appropriate interest in the Bentley field following the outcome
of Phase 1A programme in the fourth quarter of 2012, other industry
participation, convertible debt instruments, mezzanine debt and
potentially equity financing.
Commenting on today's announcement Rupert Cole, Chief Financial
Officer, said:"We are very pleased to have secured the Facility from such a
high
quality banking consortium with considerable experience in reserves
based lending. The process to secure the Facility has involved a
further rigorous, independent technical assessment of the Bentley
field, the Company's field development plan for the Bentley field and
the route to market for the Bentley crude.
Having secured the Facility in the current, difficult banking and
financial market conditions, the Company has demonstrated a further
substantial de-risking of the Bentley field and its proposed
development plan."
Rothschild acted as independent financial adviser, and Pinsent Masons
LLP as legal adviser, to Xcite Energy in relation to the Facility.
Herbert Smith LLP acted as legal adviser to the lending group.
ENQUIRIES:
Xcite Energy Limited +44 (0) 1483 549 063
Richard Smith (CEO) / Rupert Cole (CFO)
Rothschild (Financial Adviser) +44 (0) 207 280 5000
Neeve Billis / Stewart MacDonald
Oriel Securities (Joint Broker and Nomad) +44 (0) 207 710 7600
Emma Griffin / Michael Shaw
Morgan Stanley (Joint Broker) +44 (0) 207 425 8000
Andrew Foster
Pelham Bell Pottinger +44 (0) 207 861 3232
Mark Antelme / Henry Lerwill
Paradox Public Relations +1 514 341 0408
Jean-Francois Meilleur
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
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