TIDMXEL
RNS Number : 0548G
Xcite Energy Limited
03 August 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
3 August 2016
Xcite Energy Limited
("Xcite Energy" or the "Company")
Second Quarter Results for the 3 and 6 Month Periods Ended 30
June 2016
Xcite Energy announces its second quarter results for the 3 and
6 month periods ended 30 June 2016.
Material information for the year to date
-- Extension to the maturity of the senior secured Bonds granted
until 30 September 2016, to continue negotiations with respect to a
potential restructuring of the Bonds.
-- 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 to
either guarantee the full funding package, or to provide any
balance of funding required.
-- 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.
-- Received extension of Bentley licence until 30 June 2017.
-- 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 for the six months ended 30 June 2016 of $0.9 million.
-- Cash balance of US$7.4 million as at 30 June 2016.
Overview of Results
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 the Company is 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, the
Company believes 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 30 June 2016, Bondholders agreed to a short-term
extension to the maturity date of the Bonds until 30 September
2016, in order to continue negotiations to resolve terms for
restructuring the Bonds.
The Company recently announced that it had agreed principal
commercial terms for development funding proposals for the first
phase of the Bentley project. Whilst the Company is not able to
expand on the details of this proposal until it is secured, the
structure does require a partner to join Xcite Energy in the
development, to either guarantee the full funding package or to
provide any balance of funding required. This support from
providers of development capital is important in attracting a
guarantor partner, but this will still be challenging in the
current environment.
Whilst developing these funding options, the focus has remained
on optimising the Bentley project execution strategy. As announced
in our 2015 full year results, a tender process has been run 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 the Company to utilise
preliminary quotes in the March 2016 RAR, which as reported above
has again confirmed the robust economics of the Bentley field.
Costs have been removed from the business in the last 12 months
as we have limited the project scope to critical activities,
lowered personnel costs, released contractors and reduced general
operating overheads in response to the current circumstances.
The following tables summarise the unaudited, consolidated
financial performance of the Company and its wholly owned
subsidiary, Xcite Energy Resources plc, in the 3 and 6 month
periods ended 30 June 2016 and comparatives for the 3 and 6 month
periods ended 30 June 2015, and the Statement of Financial Position
as at 30 June 2016, 31 December 2015 and 30 June 2015.
6 months ended 3 months ended 6 months ended 3 months ended
30 June 30 June 30 June 30 June
----------------------------------------------- --------------- --------------- --------------- ---------------
Income Statement Information 2016 2016 2015 2015
----------------------------------------------- --------------- --------------- --------------- ---------------
US$m US$m US$m US$m
----------------------------------------------- --------------- --------------- --------------- ---------------
Net (loss)/profit (0.9) (0.6) (0.8) (0.4)
----------------------------------------------- --------------- --------------- --------------- ---------------
Basic and diluted earnings per share in cents (0.3) (0.2) (0.3) (0.1)
----------------------------------------------- --------------- --------------- --------------- ---------------
6 months ended 3 months ended 6 months ended 3 months ended
30 June 30 June 30 June 30 June
(restated) (restated)
----------------------------------------- --------------- --------------- --------------- ---------------
Cash Flow Information 2016 2016 2015 2015
----------------------------------------- --------------- --------------- --------------- ---------------
US$m US$m US$m US$m
----------------------------------------- --------------- --------------- --------------- ---------------
Net cash flow from operations (0.8) (0.2) (3.2) (0.8)
----------------------------------------- --------------- --------------- --------------- ---------------
Net cash flow from investing activities (4.3) (2.3) (4.8) (1.9)
----------------------------------------- --------------- --------------- --------------- ---------------
Net cash flow from financing activities - - (8.1) (4.1)
----------------------------------------- --------------- --------------- --------------- ---------------
As at As at As at
30 June 31 December 30 June
--------------------------------------------- --------- ------------- ---------
Statement of Financial Position Information 2016 2015 2015
--------------------------------------------- --------- ------------- ---------
US$m US$m US$m
--------------------------------------------- --------- ------------- ---------
Total assets 495.1 489.8 485.4
--------------------------------------------- --------- ------------- ---------
Cash and cash equivalents 7.4 20.8 34.4
--------------------------------------------- --------- ------------- ---------
Current liabilities 144.3 138.1 132.7
--------------------------------------------- --------- ------------- ---------
Long term liabilities - - 2.5
--------------------------------------------- --------- ------------- ---------
Total net assets 350.8 351.7 350.2
--------------------------------------------- --------- ------------- ---------
The Company's unaudited Consolidated Financial Results for the 3
and 6 month periods ended 30 June 2016 can be found at the
following link:
http://www.rns-pdf.londonstockexchange.com/rns/0548G_-2016-8-2.pdf
Going Concern and Basis of Preparation of Financial
Statements
The Bonds were issued by the Company's 100% subsidiary, Xcite
Energy Resources plc ("XER") in June 2014 and fell due for
repayment on 30 June 2016. The Company and XER (together the
"Group") met all of their covenants and paid in full all interest
falling due under the Bonds to the original maturity date. On 30
June 2016 the Group's Bondholders agreed to an extension to the
maturity of the Bonds to 30 September 2016.
The Group's current and forecast cash position is insufficient
to repay the Bond capital in full by the extended maturity date of
30 September 2016 and, accordingly, it continues its discussions
with Bondholders with respect to a potential restructuring of the
Bonds.
Whilst the Bondholders agreed to a short-term extension to the
maturity 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 continue to 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
renegotiate the key terms of the Group's Bonds which now fall due
for settlement on 30 September 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 the 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.
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
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
This information is provided by RNS
The company news service from the London Stock Exchange
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