Xcite Energy's subsidiary cancels Rowan rig option

AIM-listed heavy oil appraisal and development company Xcite Energy has reported that its subsidiaryXcite Energy Resources (XER) has cancelled its option for a jack-up drilling unit from British American Offshore, a subsidiary of Rowan Companies.

AIM-listed heavy oil appraisal and development company Xcite Energy has reported that its subsidiaryXcite Energy Resources (XER) has cancelled its option for a jack-up drilling unit from British American Offshore, a subsidiary of Rowan Companies.

The rig contract was initially entered into in February 2011 and amended in February 2012 ahead of the pre-production extended well test on the Bentley field, which was completed in September 2012.

Following the extended well test, which the group said had led to the significant increase in reserves and updated field development plan, the company said that it no longer believed the terms and structure of the rig option would be appropriate for its commercial objectives.

Xcite Energy Resources said that it had been in constructive dialogue with other drilling rig providers to develop alternative commercial solutions, which potentially would deliver better strategic alignment and fit for purpose structures to reflect the amended Bentley field development programme.

Consequently, it said that expressions of interest had been issued to a number of drilling rig providers to formally develop an optimised drilling solution for the Bentley field.

Rupert Cole, Chief Executive Officer of Xcite Energy, commented: "We are grateful for the provision of the Rowan Norway and the associated drilling support during the successful extended well test last year."

He added:"The amendments to the Bentley field development plan have given us the opportunity to construct a more commercially attractive and longer term approach to drilling up the field, and we are encouraged by the alternative structures that the industry has to offer."

Xcite Energy's share price was p 1.45% to 105p at 08:40 on Friday.

MF

Recommended

Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020
Why investors should be “cautiously bullish” for 2020
Stockmarkets

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020

Most Popular

The rising dollar is proving bad news for most other assets – will it last?
Investment strategy

The rising dollar is proving bad news for most other assets – will it last?

Precious metals, stocks and pretty much every other asset has taken a tumble as the US dollar strengthens. Dominic Frisby looks at how long this trend…
23 Sep 2020
The electric-car bubble could get an awful lot bigger from here
Renewables

The electric-car bubble could get an awful lot bigger from here

The switch to electric cars is driving a huge investment bubble. But that’s not necessarily a bad thing, says John Stepek. Fortunes will be made and l…
24 Sep 2020
Why you should stuff your end-of-pandemic portfolio with Chinese stocks
China stockmarkets

Why you should stuff your end-of-pandemic portfolio with Chinese stocks

For an end-of-pandemic portfolio, you need assets that can cope with today’s volatility. And that, says Merryn Somerset Webb, means Chinese stocks.
14 Sep 2020