Xcite Energy Limited 3rd Quarter Results (5057G)

TIDMXEL

RNS Number : 5057G

Xcite Energy Limited

23 November 2015

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

LSE-AIM: XEL

23 November 2015

Xcite Energy Limited

("Xcite Energy" or the "Company")

Third Quarter Results for the 3 and 9 Month Periods Ended 30 September 2015

Xcite Energy announces its third quarter results for the 3 and 9 month periods ended 30 September 2015.

Highlights for the year to date

   --    Continuing diligence and discussions with potential field partners and funders. 

-- Continue with a technical assessment of the Bentley development concept with the Oil & Gas Authority.

   --    Agreement to farm-out an interest in the P.1979 Licence to Azinor Catalyst. 

-- Increase in 1P, 2P and 3P heavy oil reserves for the Bentley field to 234 MMstb, 265 MMstb and 296 MMstb, respectively, effective 31 December 2014 and based on an expected initial 35 year production period.

-- NPV10 (after tax) value of reserves for the Bentley field of approximately US$1.9 billion, US$2.3 billion and US$2.6 billion on a 1P, 2P and 3P basis, respectively, effective 31 December 2014.

   --    Net loss in the third quarter of US$0.3 million. 
   --    Cash balance of US$27.9 million as at 30 September 2015. 

Overview of Results

In its second quarter results, the Company provided some background to the current industry environment and explained some of the challenges it faced in securing development partners and the financing required to develop the Bentley oil field. As would be expected, with the oil price remaining at low levels, this backdrop remains materially the same. However, there is continuing evidence that costs across the industry are falling and are adjusting to the low oil price environment, and we are working to update and incorporate revised estimates into our development cost base.

The Company and the Oil and Gas Authority ("OGA") have committed a significant amount of time over the past few months to a technical review of the Bentley field development concept. Earlier in the year, the OGA identified the Bentley field development as one of its top commercial priorities, following which Xcite Energy and the OGA have undertaken a detailed assessment of the key technical aspects of the proposed development, including reservoir management, drilling and well engineering, asset management and operatorship, and a Stakeholder review by the key regulators.

Concurrent with this activity, the Company continues to engage with potential development partners and other potential sources of funding that are required to develop the Bentley oil field, including the asset financing for the principal assets, the MOPU and the FSO, and to repay the June 2016 Bonds in accordance with their terms. Technical and economic due diligence has been completed by a potential partner, which has enabled progression to commercial discussions. However, the Company believes it is prudent to keep all options open and therefore remains very actively engaged with a wide range of parties in order to maximise the opportunity to secure the required funding. Construction of the N Plus class drilling rig continues to make good progress in Singapore.

Separately, the Company recently announced a farm-in agreement with Azinor Catalyst Limited ("Azinor") to undertake a technical assessment on Licence P.1979, at its own cost, which covers Blocks 9/4a, 9/8b, and 9/9h containing the Clement, Chadwick, Cartwright and Camm prospects, in return for the right to 40% equity in the Licence. This could be increased by a further 10% equity in the Licence if both parties see additional value in undertaking an Induced Polarization survey (as a potential hydrocarbon indicator), with Azinor being responsible for all costs of the survey, if conducted. This agreement enables Xcite Energy to continue to focus on Bentley, whilst benefitting from the technical and quantitative interpretation techniques and integrated subsurface modelling provided by Azinor, to further delineate and de-risk the prospects identified by Xcite Energy, so that it can meet its obligations under the Licence.

As part of its regular economic review cycle, the Company's voluntary de-listing from the TSX-V was completed at the close of trading on 30 September 2015, which it believed to be necessary, as trading had declined on the Canadian market to negligible levels and the associated legal, compliance and administrative costs significantly outweighed the benefits of the dual listing. The Company's continuing listing on the AIM market provides sufficient liquidity and simplified administration going forward.

The following tables summarise the financial performance of the Company and its wholly owned subsidiary, Xcite Energy Resources plc, in the 3 and 9 month periods ended 30 September 2015 and, following a change in presentation currency from 1 January 2015, the restated US Dollar comparatives for the 3 and 9 month periods ended 30 September 2014 and the restated Statement of Financial Position as at 31 December 2014.

 
                                                  9 months ended   3 months ended   9 months ended   3 months ended 
                                                         30 Sept          30 Sept          30 Sept          30 Sept 
-----------------------------------------------  ---------------  ---------------  ---------------  --------------- 
 Income Statement Information                               2015             2015             2014             2014 
-----------------------------------------------  ---------------  ---------------  ---------------  --------------- 
                                                            US$m             US$m             US$m             US$m 
-----------------------------------------------  ---------------  ---------------  ---------------  --------------- 
 Net loss                                                  (1.1)            (0.3)            (3.5)            (4.3) 
-----------------------------------------------  ---------------  ---------------  ---------------  --------------- 
 Basic and diluted earnings per share in cents             (0.4)            (0.1)            (1.2)            (1.5) 
-----------------------------------------------  ---------------  ---------------  ---------------  --------------- 
 
 
                                            9 months ended   3 months ended   9 months ended   3 months ended 
                                                   30 Sept          30 Sept          30 Sept          30 Sept 
-----------------------------------------  ---------------  ---------------  ---------------  --------------- 
 Cash Flow Information                                2015             2015             2014             2014 
-----------------------------------------  ---------------  ---------------  ---------------  --------------- 
                                                      US$m             US$m             US$m             US$m 
-----------------------------------------  ---------------  ---------------  ---------------  --------------- 
 Net cash flow from operations                         6.6              3.3             12.1              1.7 
-----------------------------------------  ---------------  ---------------  ---------------  --------------- 
 Net cash flow from investing activities            (29.1)            (9.7)           (26.1)            (4.9) 
-----------------------------------------  ---------------  ---------------  ---------------  --------------- 
 Net cash flow from financing activities                 -                -             46.7              0.3 
-----------------------------------------  ---------------  ---------------  ---------------  --------------- 
 
 
                                                   As at          As at      As at 
                                                 30 Sept    31 December    30 Sept 
---------------------------------------------  ---------  -------------  --------- 
 Statement of Financial Position Information        2015           2014       2014 
---------------------------------------------  ---------  -------------  --------- 
                                                    US$m           US$m       US$m 
---------------------------------------------  ---------  -------------  --------- 
 Total assets                                      488.6          482.2      498.8 
---------------------------------------------  ---------  -------------  --------- 
 Cash and cash equivalents                          27.9           50.4       62.8 
---------------------------------------------  ---------  -------------  --------- 
 Current liabilities                               136.3            5.5      126.3 
---------------------------------------------  ---------  -------------  --------- 
 Long term liabilities                               2.4          125.8        4.0 
---------------------------------------------  ---------  -------------  --------- 
 Total net assets                                  349.8          350.9      368.5 
---------------------------------------------  ---------  -------------  --------- 
 

The Company's unaudited Consolidated Financial Results for the 3 and 9 month periods ended 30 September 2015 can be found at the following link:

http://www.rns-pdf.londonstockexchange.com/rns/5057G_-2015-11-20.pdf

Forward-Looking Statements

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November 23, 2015 02:00 ET (07:00 GMT)