Xcite Energy Signs Supply, Offtake Agreement with BP Oil
January 28 2010 - 3:15AM
Dow Jones News
Xcite Energy Ltd. (XEL.LN), a developer of heavy oil assets in
the U.K. North Sea, said Thursday Xcite Energy Resources Ltd., its
100% subsidiary and the owner of the Bentley field, has concluded
an agreement with BP Oil International Ltd., or BPOI, a wholly
owned subsidiary of BP PLC (BP), where BPOI will provide the
offtake services to market and sell the Bentley crude oil in return
for an incentive-based fee per barrel.
MAIN FACTS:
-The offtake fee is directly related to the realized price
achieved by BPOI for the Bentley crude oil in relation to the
prevailing Brent crude price, incentivising BPOI to maximise the
price per barrel achieved for XER by minimizing the discount to
Brent crude.
-In addition, BPOI have undertaken that, subject to certain
conditions, when Xcite Energy move to full field development, an
associated BP company will procure $20 million of financing from a
commercial bank for Xcite Energy with credit support from BP.
-BP's financing is for the purpose of assisting with the full
field development of the Bentley field, the terms of which will be
negotiated in due course.
-By London Bureau, Dow Jones Newswires; Contact Ian Walker; +44 (0)20 7842 9296; ian.walker@dowjones.com
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