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Xcite Energy www.xcite-energy.com/
Full Xcite Energy profile here

Xcite Energy Limited is a heavy oil appraisal and development company, with current interests in three licence blocks in the UK North Sea, all of which are held with 100% working interests through its wholly-owned UK subsidiary, Xcite Energy Resources Limited. Its primary focus is in bringing the Bentley oil field on Block 9/3b into production and in doing so becoming a significant independent oil producer in the North Sea by 2014. Watch Xcite Energy's May 2012 Corporate Video here.

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Xcite Energy says drilling is progressing satisfactorily - UPDATE

---Adds broker comment---

Xcite Energy (LON:XEL, CVE:XEL) this morning told investors that drilling operations are progressing satisfactorily.

It also announced that it has now contracted a shuttle tanker and a pipeline for the start of the Bentley field’s production phase.

Xcite said the Bentley 9/3b-7 well has so far been drilled to a depth of 6,684 feet. And drilling to the reservoir section will soon follow – after a liner has been set, cemented and pressure tested.

It has signed a time charter contract with Teekay Navion Offshore for the ‘Scott Spirit’ shuttle tanker, which will be used as the in-field storage and offtake facility during Phase 1A of the Bentley field development.

And Ocean Installer has been contracted to provide the 1.8 kilometre pipeline that will connect the Rowan Norway jack-up rig to the Scott Spirit vessel.

“This is an encouraging update from the company and it illustrates they are making positive steps in the long term development of the Bentley field,” Seymour Pierce analyst Sam Wahab said in a note to clients.

“Nevertheless, we believe their drilling results remain the key short term price driver.”

Seymour Pierce has a ‘buy’ recommendation on Xcite, targeting 242p a share.

Meanwhile fellow City broker Oriel Securities also rates the stock as a ‘buy’ and analyst Nick Copeman reckons the stock is worth 180p per share (risked NAV).

On AIM today Xcite shares edged up slightly to trade at 102.75p each.

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