Shares in heavy-oil explorer Xcite Energy spiked yesterday after it said its Bentley field could contain 116million barrels of proved and probable reserves.
The Aberdeen-based firm, which has been the subject of investor speculation, said the updated figures – covering Xcite’s planned first and second phases of development on Bentley – confirmed the field as “a major North Sea asset”.
The announcement came days after the firm said it would be looking to tow the Rowan Norway semisubmersible rig from Dundee to the field as soon as possible, depending on weather. It is due to carry out an extended well test – its phase 1A development on the field – expected to take about 90 days and aimed at helping Xcite to secure funding and understand more about the reservoir.
The term 1P means proved reserves, 2P proved plus probable and 3P proved plus probable and possible reserves.
Aim-listed Xcite’s chief executive, Richard Smith, said yesterday: “The upgrade to 116million barrels of 2P reserves for the core area on the Bentley field is independent confirmation that Bentley is a major North Sea asset.
“Furthermore, the Bentley field is expected to contain significant upside potential from future appraisal of the non-core area prospects, as well as the application of enhanced oil-recovery techniques.
“We now look forward to a successful delivery of Phase 1A on Bentley expected later this year.”
The firm’s previous 1P, 2P and 3P reserves estimate was limited to the first phase development, with the second phase only estimated as contingent resources. It is understood that categorising both areas – making up the core area – as 1P, 2P and 3P reserves will help the firm to get reserves-based lending because they are more respected by the banks.
Shares in the firm have risen from just under 91p on February 9, going through the £2 mark yesterday morning before dropping back to close at 154.25p last night.
According to figures released yesterday from the independent reserves and resources audit, as at December 31, the core area of the field had 116million stock tank barrels of proved plus probable reserves. The core area is to be developed in two phases and does not include three areas south and east of the field. 1P reserves were put at 96million barrels and 3P reserves were put at 140million barrels. At the 2P rate, the reserves were valued at £924million, according to a net-present-value estimate.
The update was commissioned following technical questions by the Department of Energy and Climate Change to Xcite after it submitted a field-development plan (FDP) last year, according to Xcite.
Since then it has made changes to the FDP and is now due to carry out an extended well test before resubmitting it later this year. Xcite owns 100% in the block containing Bentley and two adjacent blocks.