-- STOIIP for the Most-Likely structure of 689 MMbbls, with a range of
521 to 886 MMbbls for Down-Side and Up-Side structures, respectively.
-- Most-Likely structure confirms potential recoverable resources, from a
single platform in the core area of the Field, of between 80 and 166
MMbbls, materially unchanged from the Contingent Resources range of 72 to
166 MMbbls reported in the CPR.
-- Addition of southern drill centre gives potential recoverable
resources range of 29 to 54 MMbbls, with 40 MMbbls Base Case.
-- Full Field evaluation gives potential recoverable resources range of
109 to 235 MMbbls, with 160 MMbbls Base Case.
Background to the 2009 Evaluation
The CPR focused on the resources accessed from a single drill centre in the
core area of the Field, based on a single depth structure and a range of
reservoir and fluid parameters representing Low, Base and High cases, which
are broadly equivalent to the P90, P50 and P10 from a probabilistic
analysis. These resources were assigned a reserves category of Contingent
Resources (Development Pending), with a range of 72 to 166 MMbbls and a
Base Case of 122 MMbbls.
The 2009 Evaluation also analysed resources accessible from a single drill
centre in the core area of the Field and computed a range materially
unchanged from the CPR (Table 1).
Table 1: Resources Comparison for Core Area of the Field - CPR vs 2009
Evaluation
Case Conventional Recovery
------------------------------
(MMbbls)
------------------------------
Low Case Base Case High Case
-------- --------- ---------
CPR
(Contingent
Resources -
Core Area Development
and Pending) 72 122 166
Most Likely -------- --------- ---------
Structure 2009 Evaluation
(Prospective
Resources) 80 120 166
-------- --------- ---------
Note: On the basis that the 2009 Evaluation has not been audited by an
independent third party, it is referenced herein as Prospective Resources.
However, Xcite Energy is confident that the comparison with the CPR in
Table 1 is valid and demonstrates that the 2009 Evaluation is supported by
the CPR for both resource category of Contingent Resources (Development
Pending) and range. Xcite Energy intends to update the CPR for the results
of the 2009 Evaluation as part of its future work programme on the Field.
Results of 2009 Evaluation
In addition to confirming the resources in the core area Most-Likely
structure as set out in the CPR, the 2009 Evaluation demonstrates that the
Field extends to the south and east beyond the area evaluated in the CPR.
This extension now encompasses Bentley East (originally considered a
separate prospect and referred to as "Prospect A" in the CPR) and permits a
southern drill centre to access resources from this area of the Field,
thereby enhancing the full Field economics.
The aggregation of the south and east extension together with the core
Field area provided the basis for the full Field evaluation. This
evaluation included a review of the Down-Side and Up-Side structures for a
range of Low, Base and High reservoir and fluid parameters, in addition to
the Most-Likely structure reported in Table 1. The results of this
evaluation are set out in Table 2 below.
Table 2: Bentley Full Field Potential Recoverable Resources
Structure Conventional Recovery
------------------------------
(MMbbls)
------------------------------
Low Case Base Case High Case
-------- --------- ---------
Down-Side Structure 73 123 168
-------- --------- ---------
Most-Likely Structure 109 160 220
-------- --------- ---------
Up-Side Structure 165 235 324
-------- --------- ---------
The above results represent nine deterministic cases. From these, Xcite
Energy considers the total potential recoverable resources from the Field,
on a (broadly equivalent) P90 to P10 basis from conventional cold-flow
recovery techniques, to be between 109 and 235 MMbbls, with 160 MMbbls as
the Base Case. The Down-Side and Up-Side extremes of 73 MMbbls and 324
MMbbls respectively are considered outside the normally quoted P90 and P10
cases.
Note: As noted above, the CPR confirms that, included in the Most-Likely
structure potential recoverable resources, a range of 72 to 166 MMbbls
(with 122 MMbbls Base Case) can be designated as Contingent Resources
(Development Pending).
The risks and uncertainties associated with recovery of the Contingent
Resources (Development Pending) which prevent them from being classified as
reserves have been set out in the CPR, with the probability of commercial
success for the Field being reported as 70%.
The principal risks and uncertainties associated with the recovery of the
Prospective Resources (over and above the CPR Contingent Resources) which
prevent them from being classified as Contingent Resources are that
appraisal wells have not yet confirmed their existence.
The principal issues remaining to be addressed following the drilling and
testing of the 9/3b-5 well, as reported in the CPR, include the requirement
to confirm commercial flow rates from the Field, which are currently
predicted from modelling supported by the well flow rates in the analogue
Bressay field, 6 km to the northwest and recently announced by StatoilHydro
as moving forward to development. The next reservoir intervention will be
designed to resolve these remaining issues and, if successful, will enable
the Field to be designated as 1P and 2P reserves (as defined under PRMS)
within its core area.
In addition, the next reservoir intervention is expected to be designed to
confirm the existence of the Up-Side structure in the core area and its
recoverable resources.
Richard Smith, Xcite Energy Chief Executive Officer, commented:
"We are very pleased with the outcome of this new 3D interpretation, which
confirms our belief in the potential of the Bentley field as a world class
asset and is expected to provide confidence to potential partners that
Bentley is indeed one of the largest undeveloped fields in the UK sector of
the North Sea, with substantial capacity to deliver value."
Neither 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.
While the above prospective resources estimates have been prepared in
accordance with the COGE Handbook by a qualified reserves evaluator with
the Company, they have not been verified by an independent third party.
Third party confirmation of these changes to potential recoverable
resources will be undertaken in due course as part of the work programme
for the pre-development well on Bentley.
The technical terms herein are used in accordance with the definitions and
guidelines set out in the 2007 SPE/WPC/AAPG/SPEE Petroleum Resource
Management System ("PRMS") as incorporated into the Canadian Oil and Gas
Evaluation Handbook ("COGEH") by the Society of Petroleum Evaluation
Engineers & Canadian Institute of Mining, Metallurgy & Petroleum.
Contingent Resources are those quantities of petroleum estimated, as of a
given date, to be potentially recoverable from known accumulations using
established technology or technology under development, but which are not
currently considered to be commercially recoverable due to one or more
contingencies. Contingencies may include factors such as economic, legal,
environmental, political, and regulatory matters, or a lack of markets.
There is no certainty that it will be commercially viable to produce any
portion of the Contingent Resources.
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. 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.
Stephen A. Kew has reviewed and approved the technical information
contained within this press release in his capacity as a competent person,
as required under the AIM rules. Stephen A. Kew is Head of Exploration and
Development at Xcite Energy and is an associate of the Institution of
Chemical Engineers and a member of the Society of Petroleum Engineers.
Glossary
"MMbbls" means millions of barrels
"P10" means a ten percent probability of the outcome being this or better
"P50" means a fifty percent probability of the outcome being this or better
"P90" means ninety percent probability of the outcome being this or better
"STOIIP" means stock tank oil initially in place
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 June 30, 2008 and in the annual
Management's Discussion and Analysis for Xcite Energy dated March 26, 2009
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.
Contact Information: ENQUIRIES: Xcite Energy Limited Richard Smith Chief Executive Officer Rupert Cole Chief Financial Officer +44 (0) 1330 826 740 Thomas Weisel Partners International Limited Paul Colucci Managing Director Jesse Meidl Vice President +44 (0) 20 7877 4300 Strand Partners Limited James Harris Director Rory Murphy Director +44 (0) 20 7409 3494 Pelham Public Relations Mark Antelme Director +44 (0) 20 7337 1500