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Message: Upgrade from Neutral to Strong Buy = Target 600 pence (~ $9.50 cad)

Dougie Youngson, oil and gas analyst at Arbuthnot Securities, gave the stock a resounding upgrade in the wake of the news. He upped his rating from ‘Neutral’ to ‘Strong Buy’, and increased his price target massively from 247 to 600 pence per share.

He added: “This is a transformational result for Xcite. The scale of the opportunity in terms of reserves and production will put it on a par with several main board listed companies.”

As well as the obvious boost that ‘commerciality’ brings, the findings of the flow test will also allow Xcite to update the Competent Person Report (CPR) for the Bentley field – which is likely to upgrade the existing oil resource.

“This process should see the contingent resources being converted into reserves,” Youngson said.

Furthermore the analyst also highlighted that the updated CPR will then provide the basis for Xcite’s partners - Amec (LON:AMEC) and others - to begin to scope the oil field development project.

Youngson noted three significant milestones that Xcite and its partners will need to achieve to bring this new North Sea oilfield into production.

According to Youngson, Xcite and Amec will first have to sign off the First Stage Production (FSP) development plan.

Then Xcite will need to raise around US$100 million - Youngson expects this to be a combination of debt and equity - to fund the FSP development.

Xcite must then secure the necessary approvals from the UK Department of Energy and Climate Change to allow the next phase of drilling and construction.

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