North Sea-focused oil explorer Xcite Energy announced Monday an upgrade to its oil reserves that Chief Executive Officer Richard Smith said confirmed the firm’s Bentley Field is "a major North Sea asset".
TRACS International Consultancy, an independent reserves auditor, estimated that oil reserves of the type 1P, 2P and 3P for the core area of Bentley of approximately 99 million, 116 million and 140 million barrels of oil respectively. The net present value of these reserves has been calculated at $1.1 billion, $1.5 billion and $1.9 billion respectively.
Morgan Stanley oil analysts, in a note to investors, said that the increase in recoverable reserves to 116 million barrels from 28 million previously "is in line with our expectations but is an important confirmation of the field's potential".
The Bentley Field is located on Block 9/3b in the UK zone of the North Sea. Xcite has a 100-percent working interest in the field as well as 100-percent interests in Blocks 9/3c and 9/3d (both adjacent to Bentley).
Xcite plans to begin developing the field this year. It said that it has completed "significant work" in the latter half of 2011 to prepare for the Bentley Phase 1A work programme in 2012.
The approval request for Phase 1A is now being undertaken through the convention Well Operations Notification Systems approval procedures. The principal objective of Phase 1A is to provide Xcite with additional reservoir and longer-term performance date to confirm and calibrate the existing reservoir model.
The field development plan for Bentley, comprising Phase 1B and Phase 2, was submitted for approval to the Department of Energy and Climate Change in the final quarter of 2011.
"The upgrade to 116 MMstb [million standard tank barrels] of 2P reserves for the core area on the Bentley Field is independent confirmation that Bentley is a major North Sea asset," said Smith. "Furthermore, the Bentley Field is expected to contain significant upside potential from future appraisal of the non-core area prospects, as well as the application of enhanced oil recovery techniques. We now look forward to a successful delivery of Phase 1A on Bentley expected later this year."
Xcite, whose shares are quoted on junior stock markets in London and Toronto, intends to become an independent heavy oil producer by 2014 via the pursuit of potential acquisitions and through the participation in future UK offshore licensing rounds.
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