ABERDEEN-BASED oil explorer Xcite Energy saw its shares rise almost 10% last night after announcing new cash funding.
Xcite, behind plans to develop the UK North Sea Bentley field, has increased a facility with US investment firm Yorkville Advisors by £50million to £150million to help it towards first oil. The Alternative Investment Market-listed firm also said it was engaged in discussions with potential lending banks to fund its first-stage development on the field, about 100 miles east of Shetland.
The announcement follows the arrival of the Rowan Norway jackup rig in Dundee for work before being moved out to the Bentley field to start drilling; previously predicted to start by the end of this year.
Xcite said last night it was making good operational progress and finalising details for infield storage, but did not give a date for when first oil might be expected.
It is awaiting the go-ahead for its field-development plan from the Department of Energy and Climate Change (DECC).
Chief executive Richard Smith said: “The company continues to make good progress with its funding initiatives and operations as we move toward first oil.
“Together with the recent rig arrival and our positive dialogue with DECC, these are important milestones on our way to delivering significant value for shareholders.”
Xcite has said previously its plans for first-stage production were to use a simultaneous drilling and prod-uction rig with an infield floating production vessel for offtake. The core Bentley area has been estimated to have 150million recoverable barrels of oil.
The increase in cash from Yorkville has been agreed through a so-called standby equity distribution agreement. This enables Xcite to raise cash by selling equity to Yorkville – as and when it wants to and up to a maximum share price.
Before agreeing the extra £50million, Xcite had £32.5million left to draw upon, having already spent £67.35million of the original amount raised with the US investment firm.