Xcite wins fresh £10.9m funding for Bentley field

By Peter Ranscombe
Published on 03/03/2012 00:00

OIL explorer Xcite Energy is preparing to ramp up the development of its Bentley field in the North Sea after yesterday drawing down a further £10.9 million in funding from a key investor.

Florida-based venture capital firm Esousa Holdings will receive just under eight million shares in the Aberdeen-based company, valued at 138p each.

The deal pushed up the stock, which closed 3.75p or 2.8 per cent higher at 137.25p.

Xcite said: “This funding will be used as future working capital for the company and to progress towards first oil from the Bentley field.”

The company’s shares have fallen from a high of 368p in April to just 79p in December but have since rallied after an independent audit of the oil reserves thought to be present in the Bentley field.

Xcite has been a stock-market darling in recent years and regularly features among the list of most-traded shares compiled by Selftrade and TD Direct Investing due to its popularity among private investors.

The company signed a £60m funding agreement with Esousa Holdings in December, replacing a previous facility with Yorkville Advisors. At the time, a further £25.8m was raised through a private share placing.

News of the equity funding came a day after Xcite revealed that the Rowan Norway oil rig – which it will use to carry out tests on the Bentley field, off the east coast of Shetland – has now set sail from Dundee. The company also signed a deal in December for a storage tanker to support tests in the field.

Morgan Stanley analyst Jamie Maddock noted that the tests would be “crucial” when it comes to raising enough cash to develop the field.

Last month Xcite said it had been approached by a number of potential partners that could help extract oil from the field if the tests are successful.