Contact Information: ENQUIRIES: Xcite Energy Limited Richard Smith Chief Executive Officer Rupert Cole Chief Financial Officer +44 (0) 1330 826740 Strand Hanson Limited (Nomad) James Harris Director Rory Murphy Director +44 (0) 20 7409 3494 Arbuthnot Securities Limited (Broker) Andrew Fairclough Director Ed Burbidge +44 (0)20 7012 2000 Pelham Public Relations Mark Antelme Director +44 (0) 20 7337 1500 Paradox Public Relations Jean-Francois Meilleur Consultant Karl Mansour Consultant +1 514 341 0408
Xcite Energy Limited ("Xcite Energy" or the "Company") Supply and Offtake Agreement With BP Oil International Limited
| Source: Xcite Energy Ltd
LONDON--(Marketwire - January 28, 2010) - Xcite Energy Limited ("Xcite Energy" or the
"Company") (TSX-V : XEL ) (LSE : XE )
THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR
DISTRIBUTION IN OR INTO THE UNITED STATES
Xcite Energy, a developer of heavy oil assets in the UK North Sea, today
announces that Xcite Energy Resources Limited ("XER"), the 100% subsidiary
of the Company and the 100% owner of the Bentley field, has concluded an
agreement with BP Oil International Limited ("BPOI"), a wholly owned
subsidiary of BP plc ("BP"), whereby BPOI will
provide the offtake services to market and sell the Bentley crude oil in
return for an incentive-based fee per barrel.
The offtake fee is directly related to the realised price achieved by
BPOI for the Bentley crude oil in relation to the prevailing
Brent crude price, incentivising BPOI to maximise the price per
barrel achieved for XER by minimising the discount to Brent crude.
In addition, BPOI have undertaken that, subject to certain
conditions, when Xcite Energy move to full field development, an associated
BP company will procure $20m of financing from a commercial bank for
Xcite Energy with credit support from BP, for the purpose of assisting
with the full field development of the Bentley field, the terms of which
will be negotiated in due course.
Richard Smith, Xcite Energy Chief Executive Officer commented:
"We are delighted to welcome BP Oil International as our offtake partner
in the Bentley field. This is a relationship that brings
the global resources and expertise of the BP oil trading organisation
to manage the marketing and selling of the Bentley crude, together with
assistance in financing the work programme as we move towards first oil on
the field. This is another watershed for the Company, which underpins the
value of Bentley crude through field life and significantly progresses the
plan for development."
Neither TSX Venture Exchange nor its Regulation Services Provider (as that
term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
Forward Looking Statements
Certain statements contained in this announcement constitute
forward-looking information within the meaning of securities laws.
Forward-looking information may relate to the Company's future outlook and
anticipated events or results and, in some cases, can be identified by
terminology such as "may", "will", "should", "expect", "plan",
"anticipate", "believe", "intend", "estimate", "predict", "target",
"potential", "continue" or other similar expressions concerning matters
that are not historical facts. These statements are based on certain
factors and assumptions including expected growth, results of operations,
performance and business prospects and opportunities. While the Company
considers these assumptions to be reasonable based on information currently
available to us, they may prove to be incorrect. Forward-looking
information is also subject to certain factors, including risks and
uncertainties that could cause actual results to differ materially from
what we currently expect. These factors include risks associated with the
oil and gas industry (including operational risks in exploration and
development and uncertainties of estimates oil and gas potential
properties), the risk of commodity price and foreign exchange rate
fluctuations and the ability of Xcite Energy to secure financing.
Additional information identifying risks and uncertainties are contained in
the Company's annual information form dated December 8, 2009 and in the
annual Management's Discussion and Analysis for Xcite Energy dated March
26, 2009 filed with the Canadian securities regulatory authorities and
available at www.sedar.com. The Company disclaims any intention or
obligation to update or revise any forward-looking statements