LONDON (Alliance News) - Xcite Energy Ltd Monday said it is still attempting to improve the company's financial flexibility by holding talks with its bondholders and by adjusting the potential capital cost for its flagship project as the company reported a narrower loss in 2015.
The heavy oil appraisal and development company focused on the UK North Sea said its pretax loss in 2015 amounted to USD1.7 million, narrower than the USD8.0 million loss booked in 2014 after a large foreign exchange loss of USD10.7 million that was charged in 2014 didn't recur.
The company, which does not currently generate any revenue, managed to report a USD812,000 profit after tax thanks to a USD2.5 million tax credit, swinging from a USD5.1 million loss in 2014.
Cash at the end of the year stood at USD20.8 million, of which USD8.3 million has been ring-fenced for interest due under the company's senior secured bonds.
"Given that the bonds are due on 30 June 2016, we have engaged with our bondholders to develop financial flexibility for the group, while we continue to progress with the indicative funding proposals we have received," said the company.
The Bentley field offshore the UK remains the company's priority, specifically securing the necessary finance to develop the project. Xcite said it is considering leasing the mobile offshore production unit and the floating storage offtake unit for the project in order to bring down capital costs for Bentley as part of an "asset light" approach, but said this is not final.
"We believe that this 'asset light' approach to developing projects is a good way to manage capital, particularly in the current market conditions. In conjunction with developing these funding proposals, we have invited a number of shipyards into a tender process in order to align yard selection with the funding strategy," said Xcite.
Xcite shares were down 7.1% to 6.15 pence per share on Monday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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