TIDMXEL
RNS Number : 7691L
Xcite Energy Limited
30 April 2015
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, TSX-V: XEL
30 April 2015
Xcite Energy Limited
("Xcite Energy" or the "Company")
Filing of Annual NI 51-101 Reserves Report and Summary of
Reserves Results
Xcite Energy announces that it has filed its annual Statement of
Reserves Data and other Oil and Gas Information (Form 51-101F1)
under National Instrument 51-101, as at 31 December 2014, as
evaluated by AGR TRACS International Limited ("TRACS"), an
independent, qualified reserves auditor and a wholly owned
subsidiary of AGR Group (Holdings) Limited, in their Reserves and
Resources Assessment Report ("RAR") dated 29 April 2015.
Summary of the NI 51-101
-- Mean PIIP for the Bentley field of 881 MMstb.
-- 1P, 2P and 3P heavy oil reserves for the Bentley field of 234
MMstb, 265 MMstb and 296 MMstb, respectively, based on an initial
35 year production period.
-- 1P, 2P and 3P natural gas reserves for the Bentley field of
23 bcf, 36 bcf and 49 bcf, respectively.(1)
-- NPV10 (after tax) value of reserves for the Bentley field of
approximately $1.9 billion, $2.3 billion and $2.6 billion on a 1P,
2P and 3P basis, respectively.
-- P50 Contingent Resources of 21 MMstb assigned to the Bentley
field for potentially recoverable volumes beyond the initial 35
years production period.
-- Aggregate, unrisked mean Prospective Resources assigned of
approximately 80 MMstb, relating to prospects in the Greater
Bentley area.
Notes:
(1) Natural gas reserves excludes natural gas liquids and
assumes that 90% of produced gas is used for process heat and power
within the Bentley facilities during ongoing operations.
For additional information regarding the independent reserves
evaluation that was conducted by TRACS, please see the Company's
Statement of Reserves Data and Other Oil and Gas Information (Form
51-101F1 dated 30 April 2015), which is available on the SEDAR
website at www.sedar.com.
Summary of RAR
Since the previous Reserves Assessment Report dated 25 February
2014, the Company has focused on creating an efficient,
cost-effective and deliverable development plan, supported by a
clearly defined execution strategy with an externally validated
cost base.
In carrying out this work, the Company has successfully
completed a significant number of technical, engineering,
optimisation and value assurance programmes in conjunction with the
Bentley development group that should deliver improved functional
and cost definition for the project. Subsurface definition has also
been improved, with additional detailed reservoir analysis and
modelling that should provide further technical assurance as part
of the overall development strategy.
The key features of this work programme, which have been
incorporated into the RAR, include:
-- A more detailed reservoir simulation and geological model,
which should enable further recovery optimisation.
-- An optimised development plan and execution strategy
utilising an Arup ACE Mobile Offshore Production Unit (MOPU) and a
bridge-linked cylindrical Floating Storage and Offloading unit
(FSO).
-- A revised drilling and completion strategy, including the
removal of all subsea wells, which balances technical risk and cost
during the different phases of the development with the overall
project objectives.
-- Incorporation of a Keppel FELS N Plus Class rig into the
development plan, which would allow additional wells to be drilled
from the planned facilities.
-- Increased fluid handling capacity in both the first and the
second phases of the development, which should increase front-end
production and overall economic recovery.
-- Reduced operating expenditure over the life of field from operational efficiencies.
These have resulted in revised production profiles and an
increase in 2P heavy oil reserves estimates from 257 MMstb to 265
MMstb, with some Contingent Resources being converted into reserves
as part of the ongoing optimisation process.
NPV10 (after tax) value of reserves for the Bentley field has
increased from approximately $2.1 billion to $2.3 billion.
Unescalated full field life cycle 2P costs remain at less than
$35 per barrel.
For additional information regarding the Reserves Assessment
Report dated April 29, 2015 that was conducted by TRACS, please see
the Company's website at http://www.xcite-energy.com/.
The Company's oil and gas reserves are held through its wholly
owned subsidiary, Xcite Energy Resources plc ("XER"), comprising
100% working interests in Blocks 9/3b, 9/4a, 9/8b and 9/9h, which
contain the Bentley field ("Bentley" or the "Field") and adjoining
assets (together the "Greater Bentley area").
In accordance with the AIM Rules, the information in this
release has been reviewed and signed off by Tom Gunningham (C.Eng.
MEI.), an associate at TRACS, who is a Chartered Petroleum
Engineer, member of the Energy Institute and an Independent
Qualified Reserves Auditor compliant with COGEH requirements.
Xcite Energy's hydrocarbon reserves were evaluated by TRACS, in
accordance with National Instrument 51-101 and the Canadian Oil and
Gas Evaluation Handbook.
The Form 51-101F1 is an annual statement required by Canadian
regulations to be filed by the Company, which sets out its
interests in oil and gas reserves, provides key data with respect
to those interests and identifies changes, if any, which have
occurred since the previous annual filing. The information
contained in the Form 51-101F1 is taken directly from the RAR.
ENQUIRIES: +44 (0) 1483
Xcite Energy Limited 549 063
Rupert Cole / Andrew Fairclough
Liberum (Joint Broker and Nominated +44 (0) 203
Adviser) 100 2222
Clayton Bush
Morgan Stanley (Joint +44 (0) 207
Broker) 425 8000
Andrew Foster
+44 (0) 203
Bell Pottinger 772 2500
Henry Lerwill
Cautionary Language
Liberum Capital Limited, which is authorised and regulated in
the United Kingdom by the Financial Services Authority, is acting
exclusively for Xcite Energy and for no one else in connection with
the subject matter of this announcement and will not be responsible
to anyone other than Xcite Energy for providing the protections
afforded to its clients or for providing advice in connection with
the subject matter of this announcement.
Morgan Stanley, which is authorised and regulated in the United
Kingdom by the Financial Services Authority, is acting exclusively
for Xcite Energy and for no one else in connection with the subject
matter of this announcement and will not be responsible to anyone
other than Xcite Energy for providing the protections afforded to
its clients or for providing advice in connection with the subject
matter of this announcement.
The calculation of the NPV10 (after tax) for the Field disclosed
above takes into account the following: (a) UK Ring-Fence
Corporation Tax is charged at the rate of 30% on net taxable
income; (b) UK Supplementary Charge ("SC") is charged at the rate
of 20% on net taxable income with no deduction for finance charges
and interest; and (c) investment allowances have been applied to
offset the SC to the extent possible.
Glossary
"1P" means proved reserves, which are those quantities that are
estimated with a high degree of certainty to be recoverable. It is
likely that the actual remaining quantities recovered will exceed
the estimated proved reserves.
"2P" means proved plus probable reserves. Probable reserves are
those quantities of additional reserves that are less certain to be
recovered than proved reserves. It is equally likely that the
actual remaining quantities recovered will be greater or less than
the sum of the estimated proved plus probable reserves.
"3P" means proved plus probable plus possible reserves. Possible
reserves are those additional reserves that are less certain to be
recovered than probable reserves. It is unlikely that the actual
remaining quantities recovered will exceed the sum of the estimated
proved plus probable plus possible reserves.
"bcf" means billion cubic feet of gas.
"Contingent Resources" means those quantities of petroleum
estimated, as of a given date, to be potentially recoverable from
known accumulations using established technology or technology
under development, but which are not currently considered to be
commercially recoverable due to one or more contingencies.
Contingencies may include factors such as economic, legal,
environmental, political, and regulatory matters, or a lack of
markets. There is no certainty that it will be commercially viable
to produce any portion of the Contingent Resources.
"FPD" means First Phase Development of the Field.
"MMstb" means millions stock tank barrels.
"NPV10" means net present value in money of the day using a 10%
forward discount rate, which values do not represent fair market
value.
"PIIP" means petroleum initially in place.
"Prospective Resources" means those quantities of petroleum
estimated, as of a given date, to be potentially recoverable from
undiscovered accumulations by application of future projects. There
is no certainty that any portion of the prospective resources will
be discovered. If discovered, there is no certainty that it will be
commercially viable to produce any portion of the prospective
resources.
"SPD" means Second Phase Development of the Field, or Phase
2.
"stb/d" means stock tank barrels per day.
"$" means United States dollars.
Forward-Looking Statements
Certain statements contained in this announcement constitute
forward-looking information within the meaning of securities laws.
Forward-looking information may relate to the Company's future
outlook and anticipated events or results and, in some cases, can
be identified by terminology such as "may", "will", "should",
"expect", "plan", "anticipate", "believe", "intend", "estimate",
"predict", "target", "potential", "continue" or other similar
expressions concerning matters that are not historical facts. These
statements are based on certain factors and assumptions including
expected growth, results of operations, performance and business
prospects and opportunities. While the Company considers these
assumptions to be reasonable based on information currently
available to us, they may prove to be incorrect. Forward-looking
information is also subject to certain factors, including risks and
uncertainties that could cause actual results to differ materially
from what is currently expected. These factors include risks
associated with the oil and gas industry (including operational
risks in exploration and development and uncertainties of estimates
in oil and gas potential properties), the risk of commodity price
and foreign exchange rate fluctuations and the ability of Xcite
Energy to secure financing. Additional information identifying
risks and uncertainties are contained in the annual Management's
Discussion and Analysis for Xcite Energy dated 25 March 2015 filed
with the Canadian securities regulatory authorities and available
at www.sedar.com. The Company disclaims any intention or obligation
to update or revise any forward-looking statements whether as a
result of new information, future events or otherwise, except as
required under applicable securities regulations.
Statements relating to "resources" and "reserves" are deemed to
be forward-looking statements or information, as they involve the
implied assessment, based on certain estimates and assumptions,
that the resources and reserves described can be profitable in the
future. There are numerous uncertainties inherent in estimating
quantities of proved reserves, including many factors beyond the
control of the Company. The reserve data included herein represents
estimates only. In general, estimates of economically recoverable
oil reserves and the future net cash flows therefrom are based upon
a number of variable factors and assumptions, such as historical
production from the properties, the assumed effects of regulation
by governmental agencies and future operating costs, all of which
may vary considerably from actual results. All such estimates are
to some degree speculative and classifications of reserves are only
attempts to define the degree of speculation involved. For those
reasons, estimates of the economically recoverable oil reserves
attributable to any particular group of properties and
classification of such reserves based on risk of recovery and
estimates of future net revenues expected therefrom, prepared by
different engineers or by the same engineers at different times,
may vary substantially. The actual production, revenues, taxes and
development and operating expenditures of the Company with respect
to these reserves will vary from such estimates, and such variances
could be material.
Consistent with the securities disclosure legislation and
policies of Canada, the Company has used forecast prices and costs
in calculating reserve quantities included herein. Actual future
net cash flows also will be affected by other factors such as
actual production levels, supply and demand for oil and natural
gas, curtailments or increases in consumption by oil and natural
gas purchasers, changes in governmental regulation or taxation and
the impact of inflation on costs. The estimated future net revenue
set out herein does not necessarily represent the fair market value
of the Company's reserves.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) acceptsresponsibility for the adequacy or
accuracy of this release.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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