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
END
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