Xcite Energy contracts rig for Bentley Field’s 9/3b-R well

Xcite Energy (LON:XEL, TSX-V:XEL) has contracted the Ocean Nomad semi-submersible rig, to drill the 9/3b-R well on the Bentley field in the North Sea. The well is expected to spud in the middle of September, subject to the current rig programme, which will enable the company to complete the intended 9/3b-R well programme in 2010, as planned.

In its Q1 statement in May, Xcite offered a positive outlook for the rest of 2010, highlighting the establishment of the Bentley Alliance during 2009 to take the field into development. This alliance includes Transocean Drilling’s well management arm Applied Drilling Technologies Intl and oil and gas engineering firm and FTSE 100 constituent Amec (LON:AMEC), which has signed an agreement to provide technical expertise, engineering and project management services to help demonstrate the reserves potential at Bentley.

“With a seminal first quarter of the year, we have created the opportunity to demonstrate the commercial value of the Bentley field through the drilling of the 9/3b-R well later this year. The continuing dedication and hard work of the Xcite team, together with the belief and support of our advisors, is proving to be a powerful combination as a semblance of stability returns to our business environment,” CEO Richard Smith said in May.

Other developments that bode well for the future of the project included a supply and offtake agreement signed with BP’s (LSE: BP) subsidiary BP Oil International Limited (BPOI), which will procure US$20 million of financial for the project, and a farm-in deal with Challenger Minerals to provide US$4 million towards the cost of the 9/3b-R well in exchange for 4% of the Bentley field.

The farm-in deal along with an equity issue to raise £24.7 million gross and £23.1 million provides the necessary funds for the well and working capital “for the foreseeable future.” Cash reserves increase from £1.7 million at 31 December 2009 to the current £24.24 million. “Based on this, the company now intends to demonstrate the potential of the Bentley field and confirm its value as a significant North Sea oil field,” Xcite had said in the statement.

http://www.proactiveinvestors.co.uk/companies/news/19016/xcite-energy-contracts-rig-for-bentley-fields-93b-r-well-19016.html