Xcite Energy Limited: Statement of Reserves Data and Other Oil and
Gas Information (Form 51-101F1)
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
ABERDEENSHIRE, UNITED KINGDOM--(Marketwired - Feb 26, 2014) -
Xcite Energy Limited ("Xcite Energy" or the "Company")
(TSX-VENTURE: XEL) (LSE: XEL) (AIM: XEL)
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 -- Standards of Disclosure for
Oil and Gas Activities -- and in accordance with the Canadian
Oil and Gas Evaluation Handbook, with an effective date as at 31
December 2013.
AGR TRACS International Limited ("TRACS"), an independent,
qualified reserves auditor and a wholly owned subsidiary of AGR
Group (Holdings) Limited, has prepared a Reserves Assessment Report
("RAR") dated 25 February 2014, in which it has evaluated all of
the Company's oil and natural gas reserves in its UKCS North Sea
blocks.
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.
Summary of the NI 51-101
- Mean PIIP for the Bentley field of 909 MMstb.
- 1P, 2P and 3P oil reserves for the Bentley field of 203 MMstb,
257 MMstb and 317 MMstb, respectively, based on an initial 35 year
production period.
- 1P, 2P and 3P natural gas reserves for the Bentley field of 26
bcf, 32 bcf and 41 bcf, respectively.
- NPV10 (after tax) value of oil reserves for the Bentley field
of approximately $1.5 billion, $2.1 billion and $2.7 billion on a
1P, 2P and 3P basis, respectively.
- 48 MMstb of P50 Contingent Resources assigned to the Bentley
field for recoverable volumes beyond the initial 35 years
production period.
- Aggregate, unrisked mean Prospective Resources assigned of
approximately 96 MMstb, relating to prospects in the Greater
Bentley area.
See "Cautionary Language" below for a general explanation of the
method and assumptions used in the above calculations.
Key updated assumptions
- Approximate 2.5% increase in the number of recoverable barrels
of crude oil, taking account of a reduction in production
facilities constraints.
- Approximate 2% reduction in the forward looking initial Brent
oil price from approximately $94 equivalent per barrel to
approximately $92 equivalent per barrel, to reflect the latest
available McDaniel forecast with effect from October 1, 2013 as
published at www.mcdan.com.
- Approximate 3.5% increase in the underlying cost assumptions
used in the economic forecasts to reflect the current industry and
market conditions.
The Company continues to work on improvements to the development
plan, and is conducting work on reservoir modelling and reservoir
drainage mechanisms to facilitate optimisation and enhanced oil
recovery modelling. This work has not yet been factored into the
reserves assessment.
The Form 51-101F1 will be available on SEDAR at
www.sedar.com
The Company's oil and gas reserves are held through its wholly
owned subsidiary, Xcite Energy Resources Limited ("XER"),
comprising 100% working interests in Blocks 9/3b, 9/3c, 9/3d, 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.
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 Corporation Tax is
charged at the rate of 30% on net taxable income; (b) UK
Supplementary Charge ("SC") is charged at the rate of 32% on net
taxable income; and (c) heavy oil allowances of up to £800 million
have been applied to offset the SC to the extent possible.
Glossary
"1P" means proved reserves.
"2P" means 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 and there
is a 10% probability that the quantities actually recovered will
equal or exceed the sum of 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 which are estimated, as of a given date, to be
potentially recoverable from undiscovered accumulations by
application of future development 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.
"$MM" means millions of 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 2013 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 "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) accepts responsibility for the adequacy
or accuracy of this release.
ENQUIRIES: Xcite Energy Limited Rupert Cole / Andrew Fairclough
+44 (0) 1483 549 063 Liberum (Joint Broker and Nominated Adviser)
Clayton Bush / Tim Graham +44 (0) 203 100 2222 Morgan Stanley
(Joint Broker) Andrew Foster +44 (0) 207 425 8000 Bell Pottinger
Mark Antelme / Henry Lerwill +44 (0) 207 861 3232
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