LONDON (Alliance News) - Xcite Energy Ltd Thursday said it swung to a profit in 2013, stemmed its cash outflows, and will select its preferred partners for its undeveloped oil field in the North Sea this year.
The company reported a net profit of GBP6.6 million for 2013, compared with a GBP1.7 million loss in 2012. Its cash outflow from operations was GBP0.6 million compared with the outflow of GBP9.5 million in 2012. It also strengthened its balance sheet after securing new debt financing, ending 2013 with a cash balance of GBP21.9 million.
In a statement, it said it will select its key preferred development partners for the Bentley field, and start engineering programmes to more accurately define a development concept with a view to signing binding contracts with them for the project execution phase following approval of the field development plan.
"In addition, we shall continue to work to clarify the funding requirement for the Bentley development, taking into account the relevant contributions from each partner in the development group, and evaluate the available financing options to take advantage of the cash flows generated during the first phase development, with the emphasis on debt finance," it said.
The shares were down 11.8% at 73.45 pence Thursday morning, one of the biggest declines on AIM. The stock has been in a downtrend since last September.
"At each step in the appraisal of Bentley since 2007, we have faced market disruption and economic challenges. In spite of this, we have delivered Bentley as a strategic, de-risked, development-ready North Sea asset with 257 million stock tank barrels of 2P reserves. It is clear to us that innovation has always been core to our business, our team and our success, and we intend to continue this approach with a view to securing a funded development plan for Bentley," the company added.
"Xcite has decided to develop commercial principles with oil service providers to share the financing, risk and reward of the Bentley field development while continuing to discuss a conventional farmout. In the current environment, this novel approach should continue to progress the key project towards monetisation," Liberum analyst Andrew Whittock said in a note to clients.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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