Xcite Energy Cancels Rowan Rig

Xcite Energy reported Friday that it has cancelled its option for a jackup drilling unit from a subsidiary of Rowan Companies Incorporated.

The rig contract was originally agreed in February 2011 and amended a year later ahead of a pre-production extended well test on the Bentley field in the North Sea, which was completed in September 2012.

Xcite said that following the extended well test, which led to an increase in reserves and an updated field development plan, the company no longer believes the terms and structure of the rig option are appropriate for its commercial objectives. The firm added that it is in dialog with other drilling rig providers to develop alternative solutions.

Xcite CEO Rupert Cole commented in a company statement:

"We are grateful for the provision of the Rowan Norway and the associated drilling support during the successful extended well test last year. 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.

"We look forward to updating the market in due course on the outcome of this initiative, which could further enhance the economics of the Bentley field development."

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