Rising value of the dollar helps Xcite move back into the black

North Sea oil firm Xcite Energy moved into the black last year thanks to a rise in the value of the dollar against the pound.

The Aberdeenshire-based company, set up in 2003 to exploit the heavy oil deposits in the Bentley field, is not yet producing significant amounts of oil but is funding itself from money raised on the markets.

Xcite yesterday posted a profit of £100,000, compared to a loss of £2.4 million the year before.

It said: “Underlying operating costs of running the company have generally remained consistent, except for increased headcount and office space resulting in small increases to general overheads.”

The firm said fundraising activities during 2011 increased the company’s total assets as it enters into first phase development of the Bentley field.

In December Xcite announced a new fundraising of $40m (£25.8m), to be provided in two tranches of $20m each, and hired the Rowan Norway rig to carry out the next stage of drilling aimed a proving the accessibility of its reserves.

Xcite’s report came as Aberdeen-based Deo Petroleum became the latest oil firm to praise measures in this week’s Budget aimed at stimulating drilling activity in British waters.

Deo estimates that oil and gas at its Perth field will now qualify for the full tax allowance reducing the firm’s tax bill by about £25m over the life of the field.

Chief executive David Marshall said: “This is more encouraging news from the Treasury and is an encouraging demonstration of the UK government’s commitment to attracting investment in the North Sea.”