Xcite Energy Limited 3rd Quarter Results (6069X)

TIDMXEL

RNS Number : 6069X

Xcite Energy Limited

21 November 2014

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

21 November 2014

Xcite Energy Limited

("Xcite Energy" or the "Company")

Results for the 3 and 9 Month Periods Ended 30 September 2014

Xcite Energy announces its results for the 3 and 9 month periods ended 30 September 2014.

Highlights for the year to date

-- Memorandum of Understanding signed with China Oilfield Services Limited, setting out the principles for the provision and operation of a new-build, harsh environment, jack-up drilling rig, completing the final role in the Bentley development group, which now consists of AMEC, Aibel, Arup, Baker Hughes, COSL and Teekay.

-- Collaboration Agreements signed with Statoil and EnQuest to share information to evaluate the potential benefits of a future shared gas import pipeline.

-- Collaboration Agreement signed with Statoil and Shell, for the sharing of information to evaluate potential synergies and collaboration between the Bentley and Bressay fields.

-- US$140 million raised through the issue of senior secured bonds and issue of new equity share capital, and repayment of the US$80 million of unsecured loan notes.

-- Upgrade in 1P, 2P and 3P oil reserves for the Bentley field to 203 MMstb, 257 MMstb and 317 MMstb, respectively, effective 31 December 2013 and based on an initial 35 year production period.

-- Material Licence extension granted by the Department of Energy and Climate Change for the Bentley field until 31 December 2016.

-- Loss for the 3 month period ended 30 September 2014 of GBP2.7 million, arising from unrealised foreign exchange losses from a strengthening US dollar.

   --     Cash balance of GBP38.7 million as at 30 September 2014. 

Rupert Cole, Chief Executive Officer of Xcite Energy, commented:

"The Bentley development group continues to mature, with pre-FEED/assurance engineering progressing well, contract negotiations with development partners continuing constructively and the important signing of another key MOU with China Oilfield Services Limited for the provision of a jack-up drilling rig. This means we now have AMEC, Aibel and Arup engaged to manage and construct the ACE platform, Baker Hughes to provide drilling services, Teekay to supply a Sevan FSO unit and now COSL providing the rig; this completes the key development partner line up and will help us create further certainty over the project schedule.

We successfully conducted an offshore geotechnical survey in September 2014 and are waiting for the final results from the sample analysis, which we expect to confirm the suitability of the platform location for the First Phase Development. We will be submitting a revised Environmental Statement to reflect the updated technical blueprint of the field development plan, in particular the utilisation of the ACE platform and the Sevan FSO.

We have consistently stated that the technical and commercial workstreams would be our focus for 2014 and that we will only submit a formal field development plan when we are able to demonstrate both the technical and financial capability required by DECC. I believe the progression of our MOUs to firm contracts will be an important step towards demonstrating the technical expertise surrounding the Bentley development to allow us to construct the required financial capability. We continue to progress available financing options, and discussions with potential co-venturers are ongoing.

Offshore oil and gas developments are major and complex engineering projects, which require detailed planning and execution for successful delivery. We believe that our strategy to work with our selected development partners early in the project life, in a collaborative partnership model, with aligned incentives to deliver the project safely, on-time and on-budget, is an innovative and appropriate strategy for addressing the key challenges currently facing our industry.

As we look forward to formalising the relationship with our partners over the coming months, we remain committed to delivering value for all stakeholders and firmly believe that this collaborative strategy is the right approach in the current market environment."

The following tables summarise the Group's financial performance in the 3 and 9 months ended 30 September 2014 and the comparatives for the 3 and 9 months ended 30 September 2013.

 
                             9 months ended 30       3 months ended 30       9 months ended 30       3 months ended 30 
                                     September               September               September               September 
----------------------  ----------------------  ----------------------  ----------------------  ---------------------- 
 Income Statement                         2014                    2014                    2013                    2013 
 Information 
----------------------  ----------------------  ----------------------  ----------------------  ---------------------- 
                                          GBPm                    GBPm                    GBPm                    GBPm 
----------------------  ----------------------  ----------------------  ----------------------  ---------------------- 
 Net (loss)/profit                       (2.2)                   (2.7)                     9.2                     0.9 
----------------------  ----------------------  ----------------------  ----------------------  ---------------------- 
 Basic earnings per 
  share in pence                        (0.7p)                  (0.9p)                    3.2p                    0.3p 
----------------------  ----------------------  ----------------------  ----------------------  ---------------------- 
 Diluted earnings per 
  share in pence                        (0.7p)                  (0.9p)                    2.8p                    0.3p 
----------------------  ----------------------  ----------------------  ----------------------  ---------------------- 
 
 
                             9 months ended 30       3 months ended 30       9 months ended 30       3 months ended 30 
                                     September               September               September               September 
----------------------  ----------------------  ----------------------  ----------------------  ---------------------- 
 Cash Flow Information                    2014                    2014                    2013                    2013 
----------------------  ----------------------  ----------------------  ----------------------  ---------------------- 
                                          GBPm                    GBPm                    GBPm                    GBPm 
----------------------  ----------------------  ----------------------  ----------------------  ---------------------- 
 Net cash flow from 
  operations                               9.6                     5.1                    14.0                     0.5 
----------------------  ----------------------  ----------------------  ----------------------  ---------------------- 
 Net cash flow from 
  investing activities                  (20.6)                   (8.2)                  (18.0)                   (3.4) 
----------------------  ----------------------  ----------------------  ----------------------  ---------------------- 
 Net cash flow from 
  financing activities                    27.7                     0.2                     0.4                       - 
----------------------  ----------------------  ----------------------  ----------------------  ---------------------- 
 
 
                                      As at          As at           As at 
                               30 September    31 December    30 September 
---------------------------  --------------  -------------  -------------- 
 Balance Sheet Information             2014           2013            2013 
---------------------------  --------------  -------------  -------------- 
                                       GBPm           GBPm            GBPm 
---------------------------  --------------  -------------  -------------- 
 Total assets                         307.1          269.5           263.9 
---------------------------  --------------  -------------  -------------- 
 Cash and cash equivalents             38.7           21.9            22.0 
---------------------------  --------------  -------------  -------------- 
 Current liabilities                    2.5           49.0            44.4 
---------------------------  --------------  -------------  -------------- 
 Long term liabilities                 77.8            3.5             0.9 
---------------------------  --------------  -------------  -------------- 
 Total net assets                     226.9          217.0           218.7 
---------------------------  --------------  -------------  -------------- 
 

The Company's unaudited Financial Results for the 3 and 9 Month Periods Ended 30 September 2014 can be found at the following link:

http://www.rns-pdf.londonstockexchange.com/rns/6069X_-2014-11-20.pdf

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 annual Management's Discussion and Analysis for Xcite Energy dated 26 March 2014 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.

 
 ENQUIRIES:                                        [phone] 
  Xcite Energy Limited                              063 
 Rupert Cole / Andrew Fairclough 
 
                                                  [phone] 
 Liberum (Joint Broker and Nominated Adviser)      2222 
 Clayton Bush 
 
                                                  [phone] 
 Morgan Stanley (Joint Broker)                     8000 
 Andrew Foster 
 
                                                  [phone] 
 Bell Pottinger                                    2500 
 Henry Lerwill 
 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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