Xcite Energy Limited 1st Quarter Results (0628Z)
24 Mai 2016 - 8:00AM
UK Regulatory
TIDMXEL
RNS Number : 0628Z
Xcite Energy Limited
24 May 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
24 May 2016
Xcite Energy Limited
("Xcite Energy" or the "Company")
First Quarter Results for the 3 Month Period Ended 31 March
2016
Xcite Energy announces its first quarter results for the 3 month
period ended 31 March 2016.
Highlights for the year to date
-- Continuing discussions with bondholders ahead of debt
maturity on 30 June 2016.
-- Principal commercial terms agreed for development
funding proposals for the first phase development
of the Bentley field. Proposals will require a partner
to join the development group.
-- Increase in 1P, 2P and 3P heavy oil reserves for the
Bentley field to 236 MMstb, 267 MMstb and 298 MMstb,
respectively, effective 31 December 2015 and based
on an expected initial 35 year production period.
-- Confirmed NPV10 (after tax) value of reserves for
the Bentley field to be approximately US$2.3 billion,
US$2.5 billion and US$2.9 billion on a 1P, 2P and
3P basis, respectively, effective 31 December 2015.
-- Net loss in the current period of US$0.9 million.
-- Cash balance of US$14.13 million as at 31 March 2016.
Overview of Results
Xcite Energy remains engaged in discussions with its bondholders
ahead of the bond maturity on 30 June 2016, in order to
re-negotiate the terms of its bond and, assuming it is able to
agree such terms, provide financial flexibility to continue to
pursue its development funding initiatives. The Company will update
the market on the outcome of discussions with bondholders when it
is in a position to do so.
The Company has now reached agreement on the principal
commercial terms for the development funding proposals for the
first phase of the Bentley project. These proposals will require a
partner to join the development group and the Company believes its
ability to offer a funding package to potential partners is an
innovative structure which potentially mitigates the capital
constrained environment in which the oil and gas industry is
currently operating.
Concurrently the Company has also continued to progress the
tender process to select an EPCIC contractor for the MOPU and FSO,
and to finalise a drilling rig contract. The eventual outcome of
the funding proposals and the Company's continuing review of market
opportunities to reduce costs, may influence the future structure
of the current contractor group as it continues to pursue the
principles of its collaborative model which the Company believes
creates value for all stakeholders.
On 21 March 2016, the Company announced the results of an
updated Reserves and Resources Assessment Report ("RAR"), prepared
by AGR TRACS International Limited. This RAR, with an effective
date of 31 December 2015, confirmed 2P Reserves for the Bentley
field of 267 million stock tank barrels ("MMstb"), an increase of 2
MMstb since the previous RAR dated 29 April 2015. Additionally, the
after-tax net present value of the Bentley field cash flows
(discounted at 10%) was confirmed to be approximately US$2.5
billion. A further 9 MMstb of P50 Contingent Resources were
assigned to the Bentley field, representing the additional economic
production that could be achieved after an expected initial 35 year
facilities life cut-off had been applied to the development
plan.
Going Concern and Basis of Preparation
The Bonds were issued by XER in June 2014 and fall due for
repayment on 30 June 2016. The Group has met all of its covenants
and has paid in full all interest falling due under the Bonds to
date. The remaining coupon interest due under the Bonds to maturity
is included in restricted cash in an escrow account for the benefit
of the Bondholders. However, the Group's current and forecast cash
position is insufficient to repay the Bond capital in full by 30
June 2016 and, accordingly, it continues its discussions with the
principal bondholders in order to develop financial flexibility for
the Group as it continues its efforts to secure a development
financing package that meets its long-term field development
funding requirements, in addition to the funds required for the
settlement in full of the Bonds.
It should be noted that there is no certainty that these efforts
will result in funding being secured by the Group or, if funding is
secured, the terms or timing of such funding and, therefore, the
Group may be unable to realise its assets and discharge its
liabilities in the normal course of business.
These circumstances indicate the existence of material
uncertainty in relation to the Group's ability to continue as a
going concern. This is dependent on the Group's ability to repay or
renegotiate the key terms of the Group's Bonds which fall due for
settlement on 30 June 2016. However, having regard to the legal and
financial advice received by the Board of Directors and having
carefully considered the current liquidity position of the Group
and the financing initiatives being pursued, the Board of Directors
have a reasonable expectation that the Group will have adequate
resources to continue in operational existence for the foreseeable
future. On this basis, the Group continues to adopt the going
concern basis of accounting in preparing these interim unaudited
consolidated financial statements and they do not include the
adjustments that would result if the Group was unable to secure its
long-term funding and to continue as a going concern.
The following tables summarise the Group's financial performance
in the 3 months ended 31 March 2016 and the restated US Dollar
comparatives for the 3 months ended 31 March 2015.
3 months ended 3 months ended
31 March 31 March
--------------------------------------------- --------------- ---------------
Income Statement Information 2016 2015
--------------------------------------------- --------------- ---------------
US$m US$m
--------------------------------------------- --------------- ---------------
Net loss (0.9) (0.5)
--------------------------------------------- --------------- ---------------
Loss per share (basic and diluted) in cents (0.29) cents (0.15) cents
--------------------------------------------- --------------- ---------------
3 months ended 3 months ended
31 March 31 March
----------------------------------------- --------------- ---------------
Cash Flow Information 2016 2015
----------------------------------------- --------------- ---------------
US$m US$m
----------------------------------------- --------------- ---------------
Net cash flow from operations (1.1) (2.3)
----------------------------------------- --------------- ---------------
Net cash flow from investing activities (1.4) (2.9)
----------------------------------------- --------------- ---------------
Net cash flow from financing activities - 1.6
----------------------------------------- --------------- ---------------
As at As at As at
31 March 31 December 31 March
--------------------------------- ---------- ------------- ----------
Balance Sheet Information 2016 2015 2015
--------------------------------- ---------- ------------- ----------
US$m US$m US$m
--------------------------------- ---------- ------------- ----------
Total assets 491.64 489.84 482.6
--------------------------------- ---------- ------------- ----------
Total cash and cash equivalents 14.13 20.78 24.4
--------------------------------- ---------- ------------- ----------
Current liabilities 140.80 138.11 4.5
--------------------------------- ---------- ------------- ----------
Non-current liabilities - - 127.6
--------------------------------- ---------- ------------- ----------
Total net assets 350.83 351.73 350.5
--------------------------------- ---------- ------------- ----------
The Company's unaudited Financial Results for the 3 Month Period
Ended 31 March 2016 can be found at the following link:
http://www.rns-pdf.londonstockexchange.com/rns/0628Z_-2016-5-23.pdf
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.
Notes to Editors
Xcite Energy (LSE-AIM: XEL) is an oil appraisal and development
company with a portfolio of heavy oilfield assets in the Northern
North Sea in the UK. Xcite Energy holds a 100% working interest in
the Bentley field; a heavy oil field with 2P recoverable reserves
of 267 MMstb, making Bentley one of the largest undeveloped
oilfields in the UK Continental Shelf.
ENQUIRIES: +44 (0) 1483 549
Xcite Energy Limited 063
Rupert Cole / Andrew Fairclough
+44 (0) 203 100
Liberum (Joint Broker and Nomad) 2222
Clayton Bush /Jamie Richards
+44 (0) 207 425
Morgan Stanley (Joint Broker) 8000
Andrew Foster
+44 (0) 203 772
Bell Pottinger 2500
Henry Lerwill
This information is provided by RNS
The company news service from the London Stock Exchange
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