Here's the YOUTUBE link to last week's presentation by Charles Lucas Clements (Dir. of Strategy and Business Development) at the Oilbarrel conference in London.
http://www.youtube.com/watch?v=L4mGoRte104
At the 9-10 minute mark, very interesting that he talks about the potential of the share price doubling or trebling is a "fairly safe bet". A bold statement from a Director of a company.
Showing posts with label oilbarrel. Show all posts
Showing posts with label oilbarrel. Show all posts
Thursday, January 20, 2011
Friday, January 14, 2011
Transcript of yesterday's Oilbarrel Xcite presentation
Thanks to Fowler the Prowler on iii.co.uk for transcribing the presentation.
(http://www.iii.co.uk/investment/detail/display=discussion&code=cotn:XEL.L&threshold=5&it=le&action=detail&id=7602365&prevpost=7602298&nextpost=7602377)
No apologies for going over old ground as I will just put words down as delivered and recorded to best of my typing abilities. I appreciate it is a little disjointed, but that is the nature of real time transcript recording from someone that kept falling behind! Comments in<> mine . The rest as near as possible to actual words spoken:
I am confident that Share price will double or treble in next 18 months, but can’t promise 700 and 800 percent rises last two years have seen respectively.
Extension of block that retain with more prospects in it . Oil in place billion barrel in place to be defined . More than know, but not sure how much, recoverable work in progress, some months because outside of range predicted.
Drill showed high porosity,high permeability and high productivity index. In a word exceeded all previous expectations.
Took 1200-2400 barrells expectations initially so maximum 2900 very pleasing. Shows mobility and reservoir qualities around or partially above our high end expectations.
500 metre well with no significant issues, stabilised flow rates which was one thing that people said could not be done, but did do, by paying attention to how facilites operated despite hose break and having to resort to 200 tote tanks one at a time over 2 day period .
Still a lot of work to be done to deliver new numbers of recoverable barrels not least because so much better than initially expected and more to map! Target date late feb early march, that’s when we expect to see more information coming . Not waiting though for this information though and priority to move to first stage production as soon as possible with fourth quarter still on target . Building same faciities does not change. Definitive number does not interfere with progress.
Process into bankable reserves gradual processs. When define and go forward reserves defined to that project then up to next level . 2 or 3 step process of building C1, C2 C3 into P1, P2 and P3 as add extra things extra reseource to end up with final reserves.
In other words the story will get stronger and stronger and the BOD will continue to add value bit by bit ,but ensuring they err on conservative scenario each time continuing to overdeliver.
Chance of Success now officially increased from 70 to over 90%. 90% barrier means happening and reserves will be proven. 750 million resource (not recoverable) expectation oil in place will be revised . Previous recoverable estimate of 120 million to low, 250 high for now, but expect 200 million barrels recoverable. Better recovery could increase this by 50 to 100 per cent .
Chairman has said all along that he expect half a billion barrels will be recovered when finished. Real confidence in this, but stage by stage process.
Valuation, encouraged by support with investors. 900 million dollars at the moment equivalent around $4.60 per barrel based on 200 million barrels.
Risks gone now, don’t sell up, potential to come up to range of $10 dollare or closer to $15 as C turns to P1,2 and 3.
Still comfortable scope to to double or treble as ‘safe bet’. Aim to give investors as much as that value as can achieved. Not instant, but not that long term in next 12-18 months as production kicks in and further fields are established.
Pilot well confirmed on eastern flank much higher than thought. Refractory in boulder challenging to determine. Gave us a path to follow to put horizontal well. 400-550 metres . Flowed 36 hours limited by equipment and time. The well flow behaved immaculately far better than they thought it would. Previous tests if not operate in right way can’t see wood from trees . 1,200 minimum then stepped right up when hit 2900 hit - limits that we can do . When achieved this view taken was let’s go home,well over highest expectations ...job done! . Using productivity index, half draw down easily 3,000-3,500 a day easily if use bigger facilities even at those rates acceptable draw done pressures.
Total belief that can move contignency resources will translate into reserves . Moving on with contractors and vendors make sure achieve before end of year. Rig in final stage of negotiating rates ...will be with us October.
Preliminary review of structure . Extra reserves have not discovered everything yet, much more there. Hugh improvement, helped us get high quality log a lot of confidence going forward . Sceptics say it can’t be that good, but difficult to show that it is not! High quality logs, ideal high porosity for putting horizontal well in. Lower down porosity lower. This is actually a good thing as they want low porosity layers to slow water down, because this will give higher recoverability.
Spreads right across reservoir. 73 feet of pay ended up being 113 feet nearly 50 per cent extra . Flat or domed not sure.... everything higher than original interpretations . Tracked rservoir down whole length of well . Very positive . No sign of roof coming down .
Beautiful sands if it was light oil, it would be called a bonanza. Now outside of original envelope. More work to convert into confident numbers. Need to produce a new in place number, full scale structure model. Interim reserves, multi stage process . Info in to get first level of reserves . Conservative initially definitely not less than that will fit with first stage prodcution. Very close to finishing negotating with rig. 15th not hard and fastg date . Will finish when finished wait and see .
First oil October/ November . Medium term whole process resources into reserves but have to remodel whole reservoir in parallel with everything else.
Field plant plan to government with full life cycle plans Will go in second quarter ready effectively for approval start of production last quarter . Will continue to add value. Delivering first oil first target just before Christmas will be determined on scale of things. Before end of year.
This opportunity is not finished, more to come now derisked for full value that we know we have. Successful flow tests gives no risk 200 million. Proved commerciality without doubt, proving reserves. Aim will be realised as number 2 independent in North Sea, still doubling or tripling sp just in this field alone and we’ll not going to stop here. We’ll leverage knowledge of using other opps to bear further fruits .
Question How does Bently alliance work?
Alliance is a framework upon which contractors can apply their net experience, degree of risks they feel they can take and as we ascertain next stage they will elect what stage of risk to next stage .
Encouraged by contractor community want to take some risk on this project . In reality risk normal, just that Xcite is a new kid on the block. Alliance partners are not equity partners. They are within costing regions increasing their ability to get more margin as project develops. Very controlled process. Opt in process.
What about the South east Jurassic?
South east Jurassic – 15 feet of something oil shows there, evaluating currently not enough to commit well to that area . Working example, currently have zero value on then and will until prove them, when wells down will continue. 2 wells in new blocks. Not flowable yet. Were not expecting it to.
Why did directors sell so many shares that will be worth 2 to 3 times?
Charles handed over to Rupert Cole on this. He explained that after 7 hard years sacrifice with loans, mortgages, pressures on family on line they felt entitled to take some out .
Will CPR increase data on east?
New blocks work first? High probability some, Jurassic higher risk. Live system know they are there. Main effort main field into production. During implenmentation stage of using FSP will be dipping into 12-24 month period.
Private questions asked after event by another investor.....Will there be a big placement/ dilution shortly?
£30 million shortfall after drawdown for rig contract etc, but may finance this through debt or if they raise the money by a small placement of no more than 5-7 per cent < this is fantastic news and makes sense>
(http://www.iii.co.uk/investment/detail/display=discussion&code=cotn:XEL.L&threshold=5&it=le&action=detail&id=7602365&prevpost=7602298&nextpost=7602377)
No apologies for going over old ground as I will just put words down as delivered and recorded to best of my typing abilities. I appreciate it is a little disjointed, but that is the nature of real time transcript recording from someone that kept falling behind! Comments in<> mine . The rest as near as possible to actual words spoken:
I am confident that Share price will double or treble in next 18 months, but can’t promise 700 and 800 percent rises last two years have seen respectively.
Extension of block that retain with more prospects in it . Oil in place billion barrel in place to be defined . More than know, but not sure how much, recoverable work in progress, some months because outside of range predicted.
Drill showed high porosity,high permeability and high productivity index. In a word exceeded all previous expectations.
Took 1200-2400 barrells expectations initially so maximum 2900 very pleasing. Shows mobility and reservoir qualities around or partially above our high end expectations.
500 metre well with no significant issues, stabilised flow rates which was one thing that people said could not be done, but did do, by paying attention to how facilites operated despite hose break and having to resort to 200 tote tanks one at a time over 2 day period .
Still a lot of work to be done to deliver new numbers of recoverable barrels not least because so much better than initially expected and more to map! Target date late feb early march, that’s when we expect to see more information coming . Not waiting though for this information though and priority to move to first stage production as soon as possible with fourth quarter still on target . Building same faciities does not change. Definitive number does not interfere with progress.
Process into bankable reserves gradual processs. When define and go forward reserves defined to that project then up to next level . 2 or 3 step process of building C1, C2 C3 into P1, P2 and P3 as add extra things extra reseource to end up with final reserves.
In other words the story will get stronger and stronger and the BOD will continue to add value bit by bit ,but ensuring they err on conservative scenario each time continuing to overdeliver.
Chance of Success now officially increased from 70 to over 90%. 90% barrier means happening and reserves will be proven. 750 million resource (not recoverable) expectation oil in place will be revised . Previous recoverable estimate of 120 million to low, 250 high for now, but expect 200 million barrels recoverable. Better recovery could increase this by 50 to 100 per cent .
Chairman has said all along that he expect half a billion barrels will be recovered when finished. Real confidence in this, but stage by stage process.
Valuation, encouraged by support with investors. 900 million dollars at the moment equivalent around $4.60 per barrel based on 200 million barrels.
Risks gone now, don’t sell up, potential to come up to range of $10 dollare or closer to $15 as C turns to P1,2 and 3.
Still comfortable scope to to double or treble as ‘safe bet’. Aim to give investors as much as that value as can achieved. Not instant, but not that long term in next 12-18 months as production kicks in and further fields are established.
Pilot well confirmed on eastern flank much higher than thought. Refractory in boulder challenging to determine. Gave us a path to follow to put horizontal well. 400-550 metres . Flowed 36 hours limited by equipment and time. The well flow behaved immaculately far better than they thought it would. Previous tests if not operate in right way can’t see wood from trees . 1,200 minimum then stepped right up when hit 2900 hit - limits that we can do . When achieved this view taken was let’s go home,well over highest expectations ...job done! . Using productivity index, half draw down easily 3,000-3,500 a day easily if use bigger facilities even at those rates acceptable draw done pressures.
Total belief
Preliminary review of structure . Extra reserves have not discovered everything yet, much more there. Hugh improvement, helped us get high quality log a lot of confidence going forward . Sceptics say it can’t be that good, but difficult to show that it is not! High quality logs, ideal high porosity for putting horizontal well in. Lower down porosity lower. This is actually a good thing as they want low porosity layers to slow water down, because this will give higher recoverability.
Spreads right across reservoir. 73 feet of pay ended up being 113 feet nearly 50 per cent extra . Flat or domed not sure.... everything higher than original interpretations . Tracked rservoir down whole length of well . Very positive . No sign of roof coming down .
Beautiful sands if it was light oil, it would be called a bonanza.
First oil October/ November . Medium term whole process resources into reserves but have to remodel whole reservoir in parallel with everything else.
Field plant plan to government with full life cycle plans Will go in second quarter ready effectively for approval start of production last quarter . Will continue to add value. Delivering first oil first target just before Christmas will be determined on scale of things. Before end of year.
This opportunity is not finished, more to come now derisked for full value that we know we have. Successful flow tests gives no risk 200 million. Proved commerciality without doubt, proving reserves. Aim will be realised as number 2 independent in North Sea, still doubling or tripling sp just in this field alone and we’ll not going to stop here.
Question How does Bently alliance work?
Alliance is a framework upon which contractors can apply their net experience, degree of risks they feel they can take and as we ascertain next stage they will elect what stage of risk to next stage .
Encouraged by contractor community want to take some risk on this project . In reality risk normal, just that Xcite is a new kid on the block. Alliance partners are not equity partners. They are within costing regions increasing their ability to get more margin as project develops. Very controlled process. Opt in process.
What about the South east Jurassic?
South east Jurassic – 15 feet of something oil shows there, evaluating currently not enough to commit well to that area . Working example, currently have zero value on then and will until prove them, when wells down will continue. 2 wells in new blocks. Not flowable yet. Were not expecting it to.
Why did directors sell so many shares that will be worth 2 to 3 times?
Charles handed over to Rupert Cole on this. He explained that after 7 hard years sacrifice with loans, mortgages, pressures on family on line they felt entitled to take some out .
Will CPR increase data on east?
New blocks work first? High probability some, Jurassic higher risk. Live system know they are there. Main effort main field into production. During implenmentation stage of using FSP will be dipping into 12-24 month period.
Private questions asked after event by another investor.....Will there be a big placement/ dilution shortly?
£30 million shortfall after drawdown for rig contract etc, but may finance this through debt or if they raise the money by a small placement of no more than 5-7 per cent < this is fantastic news and makes sense>
Thursday, January 13, 2011
Xcite has a mini flash crash as CPR announcement moved back
Wow what a day for Xcite Energy!! All seemed to be stable this morning with the share price barely budging at around 392p to buy. Then the company presentation started at the Oilbarrel forum at 12.30pm and things starting moving down. First a few pence and then before I knew it I was choking on my sandwich as the share price briefly hit 350p, down 40p or so at just after 1pm. Suddenly
the margin on my spread bet account was looking rather perilous with an email from IGindex arriving in my inbox before long asking for a deposit (note to myself to review my emergency deposit requirements).
Xcite had in effect suffered its own “flash crash”, similar in nature, but not as severe as the Rockhopper (RKH) one back in June 2nd 2010. The price quickly bounced back as I desperately tried to buy more shares below 355p to no avail and actually went back into the mid 380p range around 1.30pm before settling at its current 376p, down 4.4% on the day.
What was the reason for the precipitous fall? Well the severe drop seemed to coincide with news being received from the oilbarrel conference that the CPR (Competent Persons Report) would be available in February or even March rather than the January timescale originally anticipated (thanks to Hedge Fox on iii.co.uk for his live posts from the conference).
Initial sales byprivate investors on this news seems to have led to a massive loss of
liquidity (as it did with Rockhopper’s “flash crash”) probably due to a sudden but severe lack of
buyers and overwhelming sells, large numbers of stop losses being triggered and a likely degree of Market Maker manipulation who swung the price down heavily to mop up sales. Like the Rockhopper situation, I am sure many holders were left out of pocket as the price bounced back.
Do not use stop losses on AIM stocks this is the golden rule in Contrarian Investors’s humble
opinion, the extreme volatility on some of these stocks can be very expensive if they are used. Fine on FTSE stocks, but on stocks controlled by Market Makers investors need to be disciplined and watchful and avoid them.
Looking at the presentation from the oilbarrel conference (http://www.xcite energy.com/docs/XEL%20General%20Jan11%20Oilbarrel%20v3%20FINAL.pdf
) the only disappointment is the delay in the CPR release, otherwise things
look increasingly positive with probability of success now 90%+ (I think this is on the low side given the strong flow test results)
Key points from the presentation include:
9/3b-6, 6z appraisal well:
- Potential resource of 950 million barrels (at least 750 million barrels)
- 120-250 million barrels of recoverable oil (an increase from 160mm barrels)
- Successful commercial flow test in Dec 2010
- Shows mobility and reservoir properties are at or above the high end of expectation for this part of the reservoir
- The techniques to drill 500m+ horizontal well and achieve stabilised flow rates worked according to plan
- Pilot well confirmed upside reservoir on Eastern flank
- Horizontal well of over 500m; flowed for over 36 hours; stabilised at multiple flow rates
- Multi-staged flow test reached 2900 bopd (pre-well max expectation of 2800bopd); test was surface equipment limited
- 6z well had a flow capability of 3000 to 3500+ bopd with a reasonable and sustainable drawdown
- Test results should enable the movement of ‘Contingent Resources’ to ‘Reserves’ for First Stage Production plan.
Short-term:
- Assimilate and update current reservoir model with new well information to:
- Produce an interim PIIP update (pre full-scale structural model)
- Produce an interim Reserves assessment to progress the FSP plan
- Complete jack up rig contract for the Rowan Norway unit (drilling & production)
- Complete design and order process equipment for FSP (full scale production)
- Upgrade full reservoir model with new well information to:
- Produce a new PIIP using the new structural model
- Produce an updated recoverable Reserves assessment based upon new full scale model
- Submit Field Development Plan to the Government for approval for FSP and beyond
- Identify projects to expand Block Reserves, eg EOR (full field and new satellites)
- Deliver ‘first oil’ from FSP
What a day for Xcite Energy! I was in need of a bit of portfolio stimulation this morning after the
lack of share price movement, but this was a little too much. It didn’t help that there was a cock up in the RNS being released this morning about the presentation being available on the Xcite web site and it was nowhere to be seen for at least an hour. The directors have been great at managing news flow so far, but I ask them to take note today since I think a great many investors lost money
unnecessarily. It also shows how illiquid Xcite energy is and how much volatility there is due to its large private investor base which means huge swings in the share price can occur on news of any sort. The sooner we get off AIM and onto the main FTSE market the better with some more institutions on board to give greater stability to the share price action (BOD, if there's any possibility at all you're reading this blog perhaps you can make an announcement about intention to leave AIM soon??)
I love the excitement of AIM shares, but on days like this it can be a little too Xciting!! So we await the rig announcement (due any day), CPR with potentially significant resource upgrade in February (or March worst case), plus announcements relating to preparation for start of production by end of year (rig should arrive in October). Sounds good to me and glad I managed to pick up a few extra at 370p by selling some Angel Mining.
lack of share price movement, but this was a little too much. It didn’t help that there was a cock up in the RNS being released this morning about the presentation being available on the Xcite web site and it was nowhere to be seen for at least an hour. The directors have been great at managing news flow so far, but I ask them to take note today since I think a great many investors lost money
unnecessarily. It also shows how illiquid Xcite energy is and how much volatility there is due to its large private investor base which means huge swings in the share price can occur on news of any sort. The sooner we get off AIM and onto the main FTSE market the better with some more institutions on board to give greater stability to the share price action (BOD, if there's any possibility at all you're reading this blog perhaps you can make an announcement about intention to leave AIM soon??)
I love the excitement of AIM shares, but on days like this it can be a little too Xciting!! So we await the rig announcement (due any day), CPR with potentially significant resource upgrade in February (or March worst case), plus announcements relating to preparation for start of production by end of year (rig should arrive in October). Sounds good to me and glad I managed to pick up a few extra at 370p by selling some Angel Mining.
Wednesday, January 12, 2011
Xcite confirmed at Oilbarrel forum tomorrow
40th Oilbarrel Forum Thursday 13th January 2011
2:16 PM (28 minutes ago)
Good Afternoon,
40th Oilbarrel Forum 13th January 2011 – tomorrow from 9am at our NEW VENUE
As you’ve registered to attend tomorrow’s Oilbarrel Forum, here is a quick e-mail to confirm your booking and remind you that the first event of 2011 will take place at our new venue, for which the address is:
Merchant Taylors' Hall
30 Threadneedle Street
London
30 Threadneedle Street
London
EC2R 8JB
The nearest tube station is Bank. For a map, please click here.
As usual, registration is at 9am with the first presentation starting at 9.30am, and the event will be followed by a complimentary buffet lunch – a great chance to chat to the speakers as well as other investors and industry professionals attending the show.
The presenting companies at tomorrow’s event include (in presenting order):
If you have any queries you can reach me on 020 7562 3398.
Kind regards,
Amy
Amy Clayton
Website & Communicationsend_of_the_
Minesite.com
Oilbarrel.com
Level 3, 3 London Wall Buildings, London Wall, London, EC2M 5SY
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