The North Sea focused oil company, has fallen dramatically over the last few months so just what’s going on following the announcement that it has “re-configured its approach” to development of the Bentley field?
The re-configuration (essentially a rescheduling of drilling operations) follows feedback from the Department for Energy and Climate Change on the financial viability of the project. According to City sources, DECC has raised concerns over Xcite’s access to capital. Xcite maintains “first oil” is still expected in 2012 but there are also murmurs among analysts that this is an ambitious, and possibly unrealistic, timetable.
In a separate announcement today Xcite released a shareholder update, widely believed to be an attempt to calm shareholders down (Judging by the amount of criticism the company are receiving online it may prove to be a shot in the dark) and steady the Xcitable share-holders (Pun intended). At 13:30am Xcite shares were down 1.49% at 82.75p. In the year to date the firm’s share price has plunged approx’ 80%. So what’s gone wrong with the company? It’s a funding issue pure and simple.
Costs have out-paced the business model. Delays cost money. There’s no doubting the Xcite Board’s intention to progress the Bentley field for first production in 2012 but the fact remains that the market doesn’t think it’s possible.
The field is commercial, BP’s involvement should put paid to the nonsense being perpetuated online. A global multi-national doesn’t just “jump in” blindly. BP will have run tests/analysis on the field before they signed on. The recriminations online are laughable the wild crazy eyed day-traders have been caught with their pants down. Of course we here moved on away from Xcite quite some time ago Banking massive profits. We do have some residual stock which we’ll hold until production thus taking more profit. Proof positive that when you are showing a 200%, 300%, 400% profit that one should derisk immediately! Investors invest. Day-traders trade. The difference between them is thus; Investors invest in company potential,assets,fundamentals,management experience and research. Day-traders are canon-fodder they cut corners responding instantly to intra-day movements/news and can be sold a “dummy spike” by the Market Makers. When their trades go wrong they vent their spleen by accusing all & sundry. This is exactly what’s happening online now. Basically Xcite are a decent investment even with the delays and extra funding. Investors know this. Traders don’t!