Xcite Energy to Use New Funds as Future Working Capital

North Sea oil firm Xcite Energy has announced a further drawdown of its equity-line facility from Yorkville Advisors – this time for £3.20 million.

The company said it had issued 2,707.504 new shares to Yorkville’s YA Global Master Fund, priced at £1.18 per share – a six per cent discount to yesterday’s closing price of £1.255 pence per share.

The new funds will be used for future working capital as the company continues its work to bring the Bentley oilfield in the UK North Sea into production.

Earlier this month – on October 10 – the company told investors that the jack-up rig, which will be used to establish first production at the Bentley field, had in Dundee.

It added that long lead items had been ordered and delivery times are expected to coincide with the deployment of the rig.

Xcite is also finalising the selection of in-field storage facilities for the first stage production programme and it plans to contract this equipment ‘in line with the work programme to first oil’.

Importantly the group said that it continues to have positive dialogue with the UK Department of Energy and Climate Change (DECC) over the approval process for the field development plan, which was submitted in August.

In regards to the approval process Xcite said that progress was satisfactory and consistent with the rig deployment timing.

Xcite is still in talks with potential lending banks for the project financing to proceed with the first stage production programme, additionally it is also in talks over further borrowing facilities to supplement its existing financial resources.

In the meantime, Xcite extended its existing equity credit line facility – also referred to as a standby equity distribution agreement (SEDA) – with Yorkville Partners’ YA Global Master SPV Ltd by £50 million taking the total facility to £150 million.

[mappress]

Source: proactiveinvestors, October 25, 2011