LONDON (Alliance News) - Xcite Energy Ltd Tuesday reported a narrower first-quarter net loss, helped by foreign-exchange gains on the weakening of the US dollar.
In a statement, Xcite said it made a GBP41,164 net loss in the three months ended March 31, compared with a GBP1.7 million net loss for the corresponding period a year earlier. Net administrative expenses, including currency swings related to US cash balances, amounted to GBP525,385, compared with GBP737,977 in net gains.
Xcite said net administrative expenses increased to GBP358,875 from GBP307,488 for the comparable period in 2013 when removing the effect of foreign exchange and share-based payment charges. The increase reflects increased professional fees incurred.
Below the operating level, a total of GBP309,090 net forex gains were recognised in the quarter, compared with net forex losses of GBP1.4 million in the corresponding quarter a year earlier, mainly due to the movement of the dollar against sterling during the period, requiring the revaluation of Xcite's dollar borrowings to be revalued.
"Given a recent weakening of US dollar against the reporting currency of sterling, the group has reported a forex gain of GBP475,600 arising from the revaluation of the unsecured loan note liabilities as at March 31 2014. Similarly, a forex loss of GBP166,510 has been reported within administration expenses, reflecting the forex loss on the group?s US dollar cash balances held as at March 31 2014," Xcite said in a statement.
In the corresponding quarter of 2013, sterling had weakened against the US dollar, causing forex losses on Xcite?s US dollar liabilities, partially offset by forex gains on the group?s US dollar cash balances.
Xcite's strategy is to develop the heavy oil discoveries in the Bentley field in the UK northern North Sea and its adjacent blocks, explore and appraise the identified prospects in its other adjacent blocks, to pursue potential acquisitions, and to participate in future UK offshore licensing rounds to become a significant independent heavy oil producer in the North Sea.
Bentley oil field is located on the East Shetland Platform in the UK northern North Sea.
"We have worked very effectively this year to keep momentum in the development of Bentley, resulting in the signing of the memorandums of understanding with the first of our development partners and the successful extension of the Bentley licence until the end of 2016. We shall continue to apply this approach for the balance of the year to complete the engineering programmes, progress towards formal contracts with our development partners and be in a position to complete the Field Development Plan," Chief Executive Rupert Cole said in a statement.
"The recent collaboration with Statoil and Shell highlights how much the company can bring to an area development strategy and this is a good example of what the Wood Review is seeking to achieve," Cole said.
Earlier this month, Xcite Energy said it has started a collaboration agreement with Statoil Ltd and Shell UK Ltd, part of Royal Dutch Shell PLC, to share technical and operational information in order for potential joint operations at the Bentley and Bressay fields in UK North Sea.
Xcite shares were Tuesday quoted at 70.15 pence, down 1.2%.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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