Xcite Energy Limited Notice of AGM (0657D)

TIDMXEL

RNS Number : 0657D

Xcite Energy Limited

04 July 2016

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

4 July 2016

Xcite Energy Limited

("Xcite Energy" or the "Company")

Advance Notice of the Annual General Meeting ("AGM")

Xcite Energy confirms that the AGM of the Company will take place in Calais, France, on Wednesday, 27 July 2016 at the Holiday Inn Coquelles Hotel, Avenue Charles de Gaulle, 62231 Calais, France from 13:00 local time (UTC+1).

The formal notice in respect of the AGM, together with the 2015 Annual Report & Accounts, will be posted to shareholders who have elected to receive them from today and details are also included on the Company's website at www.xcite-energy.com.

The Notice of AGM contains the following statement from the Chairman:

"The past year has been extremely challenging across the oil and gas industry as I highlighted in our full year results, but we have continued to focus on our efforts to develop the funding required to take the Bentley field into development. Not only have we continued to engage with potential partners, but we have also worked hard to try to ensure that the Bentley development remains positioned as an attractive project in a highly capital constrained environment.

The Reserves Assessment Report for the year ended 31 December 2015 (the "RAR"), which was released on 17 March 2016, set out the benefits of intensive interaction with suppliers and shipyards to deliver valid quotes and cost estimates which further drove down the full field lifecycle cost per barrel for the Bentley field to a highly competitive $30 per barrel.

We have also found the Oil and Gas Authority ("OGA") to be supportive, having identified Quad 9, including the Bentley field, as a strategic priority, and during 2015 we successfully completed a detailed technical review with the OGA of the first phase of the Bentley development. This was an extensive process, which took several months to complete and was an important achievement for the Company, as we believe it further reduced the risk and uncertainty of the first phase development concept for us and for any potential development and funding partners. In February 2016, we received an extension to the Bentley licence until 30 June 2017.

Despite the continuing low oil price environment, we have continued to engage with potential partners and have undertaken several due diligence processes during the past year. Whilst 'traditional' sources of funding for major offshore projects are continuing to stay away from the UK North Sea, we have spent a significant amount of time looking for alternative and innovative funding sources. We recently announced that we had agreed principal commercial terms for development funding proposals for the first phase of the Bentley project. Whilst we are not able to expand on the details of this proposal until it is secured, the structure does require a partner to join Xcite in the development, to either guarantee the full funding package or to provide any balance of funding required.

In working with supportive providers of capital, who see the opportunity to fund the Bentley project at a time when development capital is in short supply, we believe that our ability to attract a guarantor partner will be improved by such a proposal, although it will still be challenging in the short term, in the current environment. We are fully committed to this process and concluding funding on this scale would be a major achievement in the UK North Sea.

While we have been developing these funding options, we have also remained focused over the last year on optimising our project execution strategy. We have been running a tender process, as highlighted in our full year results, with shipyards for the Engineering, Procurement, Construction, Installation and Commissioning contract for the mobile offshore production unit and floating storage and offtake facility. This has attracted significant interest, enabling us to utilise preliminary quotes in this year's RAR, and we are now evaluating a short-list of yards.

The construction of the jack up drilling rig continues in Singapore. However as with all our potential contracts, we monitor the market and engage with suppliers where opportunities arise to further reduce costs or improve terms, and we shall continue to do so while the current market environment offers such opportunities.

Costs have been removed from the business throughout the year as we have limited the project scope to critical activities, lowered personnel costs, released contractors and reduced general operating overheads as part of the restructuring process.

The Company has been in discussions with its principal Bondholders with respect to a potential restructuring of the Bonds, ahead of their maturity on 30 June 2016, and while those negotiations have been constructive, no terms have yet been agreed. Whilst we are not able to make any further comment on the potential outcome of these negotiations until they are concluded, should agreement on the terms of a restructuring be reached, we believe it is likely that these will involve a reduction to the balance of the Bonds in return for an equity stake in the Company. On 16 June 2016, we requested a short-term extension to the maturity date of the Bonds until 30 September 2016, in order to continue negotiations with Bondholders and allow us to resolve terms for restructuring the Bonds. The Bondholders granted the extension to the maturity date at a Bondholders' Meeting on 30 June 2016.

The Summons to the aforementioned Bondholders' Meeting can be found on the Xcite Energy Resources plc section of the Company's website at www.xcite-energy.com.

The recent EU referendum result in the UK has clearly given rise to volatility in the markets, but it is premature to assess the potential impact on the Company or the dollar-denominated economics of the Bentley field."

 
 ENQUIRIES: 
                                        +44 (0) 1483 
  Xcite Energy Limited                       549 063 
 Rupert Cole / Andrew 
  Fairclough 
 
                                         +44 (0) 203 
 Liberum (Joint Broker and Nomad)           100 2222 
 Clayton Bush / Jamie 
  Richards 
 
 Morgan Stanley (Joint                   +44 (0) 207 
  Broker)                                   425 8000 
 Andrew Foster 
 
                                         +44 (0) 203 
 Bell Pottinger                             772 2500 
 Henry Lerwill 
 

Forward-Looking Statements

This announcement contains certain forward-looking statements that are subject to the usual risk factors and uncertainties associated with the oil and gas exploration and production business. Whilst the Company believes the expectations reflected herein to be reasonable in light of the information available to it at this time, the actual outcome may be materially different owing to factors beyond the Company's control, or otherwise within the Company's control, for example, if the Company decides on a change of plan or strategy. Accordingly, no reliance may be placed on the figures contained in such forward-looking statements.

This information is provided by RNS

The company news service from the London Stock Exchange

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July 04, 2016 02:00 ET (06:00 GMT)