Xcite Energy’s new Rupert Cole video fails to boost short term sentiment

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A rather underwhelming response to the video released on Friday afternoon by Xcite Energy featuring Chief Executive, Rupert Cole, with the shares dropping 3% on Friday and close to 2% today to less than 90p.

Like his predecessor, Richard Smith, who had several videos produced with Proactive Investors, Cole appears to have not produced the investor reaction he was hoping for.

Short term traders have taken the opportunity to sell as the video reiterated that the major news events like the reserves upgrade wouldn’t be available in days, rather in the first few months of 2013. This was flagged some time ago, though some investors still seemed to believe that a pre-Christmas RNS with major news was somehow imminent.

Cole does point out that the recently completed extended well test on the Bentley field exceeded expectations and all is in place for a series of steps including completion of a new reserves report (with the possibility that 2P reserves will be increased from 116 mm barrels), new CPR (competent persons report), submission of a newly revised field development plan to DECC for Bentley, completion of the reserves based lending deal on DECC approval and farm out in 2013.

The crucial farm out will take place after the new reserves report is complete to maximise the value to Xcite shareholders. The reserves report will as well as modelling the core and extended area of the Bentley field using the new reservoir data will potentially include the impact of new EOR (enhanced oil recovery) techniques that may boost the field productivity and recoverability increasing the company’s reserves further.

Plenty to look forward to in the first half of 2013 for those with a little patience. Let’s hope Cole and his team deliver on their promises!

Contrarian investor UK

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