Investment summary

Having recently upgraded resources to reserves at Bentley, Xcite's current activities are focused on a Phase 1A work programme that includes a 90 day well test designed to calibrate the company's reservoir model and to drill what will be the first production well in Phase 1B. With a 100% interest in Bentley the need for further funding has weighed heavily on the share price. Encouragingly, the company issued $50m of unsecured loan notes in early April at an effective interest rate of 16%, the first debt raised to develop the Bentley field. However, we estimate Xcite still requires a further c £120m of initial funding and based on 50/50 debt equity we carry a core NAV of 216p, increasing to 236p with nearby prospective resources.

Last updated on 23/04/2012

Industry outlook

Xcite continues to retain a 100% interest in Bentley, although equity funding so far has incurred significant shareholder dilution. Despite this, success with Bentley could still make Xcite one of the North Sea’s largest independents by reserves in production.

Last updated on 23/04/2012