Xcite Energy, the developer of heavy oil assets in the UK North Sea, is pleased to report:
2009 Budget – heavy oil Field Allowance - tax reduction of GBP 160 million
In connection with the 2009 HM Treasury Budget statement on April 22, Xcite Energy reports that the Bentley field in Block 9/3b in the UK North Sea falls within the scope of the new Field Allowance to support investment in heavy oil projects.
The Field Allowance, based on 100% ownership of the field, will reduce the corporation tax (supplementary) charge applicable to the Bentley field by GBP160 million, which would increase the net present value of the field as presented in the Base Case in the recent Competent Person’s Report by more than US $100 million.
Appointment of Divestment Advisor
Xcite Energy has appointed Stellar Energy Advisors (“Stellar”) to manage the partial divestment process to help fund the next intervention on the Bentley field, planned for 2010. Stellar is a leading independent portfolio management consultancy for the upstream international oil and gas community, with significant heavy oil experience.
Richard Smith, Xcite Energy Chief Executive Officer, commented, "We welcome the introduction of this Field Allowance for heavy oil fields and the positive effect that it will have on the already robust economics of the Bentley field. The GBP 160 million increase in retained value that will accrue to the field will provide added benefit toindustry and financial partners seeking significant value uplift and, in this context, the divestment of part of the Bentley field is well timed. We are very pleased to have the expertise and assistance of Stellar in this transaction and we look forward to a successful outcome."