Xcite Energy opts for semi-submersible rig to drill 9/3b-R well on the Bentley field

Xcite Energy (LON:XEL, TSX:XEL) has selected the Ocean Nomad semi-submersible rig, to drill 9/3b-R well on the Bentley field in the North Sea. The company said it expects to conclude the final rig contracts shortly, and the drilling will get underway with an anticipated spud date at the end of August.

“This rig provides significant metocean operating advantages over a jack-up unit for the 9/3b-R well programme, which continues to be managed by Applied Drilling Technology International,” Xcite stated.

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 (LSE: 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.