Tuesday 24 November 2020 | ShareProphets: The one stop source for breaking news, expert analysis, and podcasts on fast-moving AIM and LSE listed shares
This is getting to be the most used phrase on ShareProphets: you can’t say you were not warned…..And so today it is the turn of AIM-listed Xcite Energy (XEL) to get the told-you-so treatment, for this afternoon the shares were suspended and the company announced that its bondholders have walked on restructuring discussions with the company and are to instruct the bond trustee to petition for the appointment of a liquidator. In other words, short of a last-ditch effort to patch up a new deal it looks to be light out time. Shareholders are set to lose everything.
I have had rather a soft spot for the management of Xcite Energy (XEL) ever since it responded to a rise in its share price by effectively warning over exuberant retail punters that its shares were close to worthless.
Well you cannot say that you were not warned. Another day and another former darling of the Bulletin Boards goes up in smoke. XCite Energy (XEL) has given us details of its restructuring. Ouch.
We warned you often enough. When companies have no revenue, are burning cash, have no cash and are drowning in debt, things are not going to end well for shareholders. On the back of an RNS today, mug punters have taken such an almighty rogering that I hear that in Bulletin Board Moron land the shops have already run out of vaseline. So here is a ShareProphets translation service of that RNS (our words in bold).
When we talk to folk in the industry, about our plans to steam the Pilot, Elke & Narwhal fields in the middle of the Central North Sea, sometimes we get a pretty sceptical reaction, sometimes we don’t.
Or should I say, might eat their company. To say that the company has been eaten would involve making a prediction about the future and I steadfastly refuse to make predictions about what another company might do and what might happen to their share price. So this is all just analysis of what has already happened and what has already happened is that the debt monster has nearly eaten Xcite, or more precisely, Xcite's shareholders.
Xcite Energy (XEL) the drowning in debt North Sea wannabee has announced that bondholders are to meet on June 30th - the day the $139 million bonds were due to be repaid - to agree to a rollover. But there is an admission, and for shareholders it meets get out the vaseline...you are going to get shafted badly. Its now official.
The oil team at SP Angel is normally uber charitable to the array of dogs that litter the hydrocarbons segment of the AIM Casino. But one thinks of Geoffrey Howe, a mild mannered and retiring chap, as he savaged the blessed Maggie in his resignation speech as, this morning, analyst Zac Phillips has stuck it to XCite Energy (XEL) like a man possessed.
Xcite Energy (XEL) has today announced a new reserves and resources report for its Bentley field. In three months time the company must refinance $125 million of bonds and right now net cash is sub $10 million and falling fast and it has zero revenues. Discussing the economics of a field where Xcite has failed patently to get the farm in partner needed to take it to production is like Hitler worryig about the seating plans for dinner in 1945 as Russian tanks entered Berlin. The only issue now is the scale of the shareholder wipeout. Heck, even respectable and normally cautious brokers such as SP Angel are now openly saying what I have said for an awfully long time, the smell is of toast and it is everywhere.
If you want me to analyse a stock for you just drop me a line at firstname.lastname@example.org - Today I look at shares in Chaarat Gold (CGH), Iofina (IOF), Manx Financial (MFX) and Xcite Energy (XEL) setting share price targets for all four stocks.
If you want me to analyse a stock for you just drop me a line at email@example.com - Today I look at shares in Chaarat Gold (CGH), Orosur Mining (OMI) and Xcite Energy (XEL) setting share price targets for all three stocks.
Third quarter numbers from Xcite Energy (XEL) make for grim reading indeed. At 18.5p the company is valued at £57.4 million but it could well be toast within nine months.
Shares in Xcite Energy (XEL) are up 6.25% this morning on news of the company’s farm-in with Azinor Catalyst Limited. Under the terms of the deal, Azinor has the opportunity to earn into the UK Continental Shelf (UKCS) Licence P.1979, held by Xcite’s subsidiary Xcite Energy Resources. In return for completing a technical evaluation and then possibly an Induced Polarization survey of P.1979, Azinor could receive as much as 50% of the licence’s equity. On the face of it this looks like decent enough news for Xcite. The deal should enable progress at this non-core asset, allowing the company to focus on its flagship Bentley project. However, Xcite is giving up a significant proportion of P.1979 in return. The question now is, can this deal deliver value to shareholders?
If you want me to analyse a stock for you just drop me a line at firstname.lastname@example.org - Today I look at shares of First Quantum (FQM), Kromek (KNK), Xcite Energy (XEL) and offer some share price targets.
If you want me to analyse a stock for you just drop me a line at email@example.com - Today I look at shares of Aminex (AEX), Ithaca Energy (IAE), Xcite Energy (XEL) and offer some share price targets.
If you want me to analyse a stock for you just drop me a line at firstname.lastname@example.org - Today I look at the shares of Amara Mining (AMA), Hurricane Energy (HUR), Xcite Energy (XEL) and offer some share price targets.
I gave a presentation at a conference in Aberdeen last week on how steaming could boost returns offshore UK. One of the companies where this clearly applies is Xcite Energy (XEL) with its Bentley Field.
Given the solid looking recovery on the daily chart for shares of Xcite Energy towards the end of April in the wake of the break above the 50 day moving average then towards 30p, it can be said that disappointment is in the air as far as those who were looking for a lasting recovery here.
It was very disappointing to read about Xcite Energy’s (XEL) options award this morning. In total the company has awarded 6.7million options, with an exercise price of £0.64 (yesterday’s close), to various members of staff and the board. The bulk of these options go to employees and there shouldn’t be many concerns about this. I appreciate the need to keep the troops happy and to retain key players. Giving employees a sense of ownership in the business has to be positive. However, the 2.65million options the directors have awarded themselves are in extremely poor taste. Broadly speaking, I’ve become a fan of Xcite’s over the last four or five months, but I’m under no illusions that recent performance can yet be judged a success. The new strategy is risky and so far, judging by the share price, the market is not convinced. Xcite’s board is in serious need of a credibility overhaul. Today, it has, rather unfortunately, thrown away an excellent opportunity to demonstrate its contrition for not securing a farm-out and genuine commitment to building future shareholder value.
The time to buy AIM oil shares is when nothing seems to be happening, especially if you’re taking a longer term view and not just looking for a quick buck. Xcite Energy (XEL) is certainly a company that applies to and you could be forgiven for thinking that it is trying to bore its investors into submission, given the rate of progress being made.
Commissioned researcher Edison has published a new report in the wake of the $140 million funding package secured by Xcite Energy (XEL). It reckons that the shares, now 63p, are worth 146p.
It is very difficult to put much of a positive spin on today’s bond issue and placement by Xcite Energy (XEL). The funding is extremely expensive, the terms Xcite has entered into are worse than those it previously had and it looks like at least one of the company’s major funders has decided not to continue backing it. This is all bad news for Xcite’s new strategy to commercialise its North Sea Bentley oil field, as the market appears to have priced this project for likely failure. There are a couple of faint glimpses of hope, but I now have to revisit my call to buy this stock, from just over a fortnight ago.
The more I’ve looked at Xcite Energy (XEL) recently the more I’ve liked this stock. Last week, I wrote an initial positive response to the company’s AGM presentation. Since then, I’ve watched the share price bump along around the 70p mark. Ideally I am hoping for a sub-65p entry level, but I might be pushing my luck with this. Notwithstanding a market wide retreat, it looks like a base is forming, as investors digest details of the company’s new strategy to commercialise Bentley.
My recent commentary on Xcite Energy (XEL) has put me at odds with some of my colleagues here at ShareProphets. Despite what many of our faceless critics have to say, one thing I love about working with this company is that we support genuine debate. We don’t impose myopic, rigid editorial positions and we recognise it takes opposing views to make a market. Above all, we encourage our contributors to write what they genuinely believe. In the case of Xcite, the more I read about and research the path this company is now on, the more bullish I feel about its future.
The rapture that has greeted Xcite Energy’s (XEL) announcement this morning is not too surprising. Release an RNS mentioning Shell and Statoil in the headline and this is bound to get a lot of people salivating at the prospect of that long waited for, yet ever illusive, takeover/farm in. The 20% jump in Xcite’s share price, in the first hour or so of trading, confirms the appetite that still remains for this recently beleaguered stock. But is this enthusiasm misplaced?
Two weeks ago, my colleague Red Evans wrote this speculative piece wondering whether or not Xcite Energy (XEL) stood to lose everything as a result of the Wood Review into North Sea Oil. At the time, I thought Red’s conclusion missed the point of Xcite’s recent shift in strategy. The company clearly laid out a new plan for developing Bentley and the signs in April suggest it means to carry this out. And quickly.
Recently we have seen the value of Xcite Energy (XEL) plummet by 30% with the release of its annual report, a document which clearly flies in the face of what was set out in the UK government’s recent Wood Review.
The last time Xcite Energy (XEL) shares were at 66p was in July 2012. Then, there were 278million shares in issue, today there are 290million. At 74p, roughly £30million has been added to Xcite’s market cap, but the question now is does this represent the true value of progress this company has made in the last two years?
Fiddly, is probably the best description of the price action at Xcite Energy (XEL) in the recent past, with little in the near-term for most traders to go on apart from a likely Bull flag at and just below the 100p level.
Gambling on wildcat drills in far-flung and politically unstable parts of the world has led to many forgetting what we have on our own doorstep. The North Sea has been producing significant amounts of oil for decades now and will continue to do so, and the largest new field in recent years is 100 per cent owned by a small AIM company called Xcite Energy (XEL).
Given the somewhat mischievous nature of the Closet Chartist, it is actually quite tempting to suggest that the much loved, much followed and almost entirely long interest from retail investors should guarantee the bear argument is backed at Xcite Energy (XEL) even if there is a modicum of doubt as far as the charting position for the North Sea focused explorer goes.
Commissioned researcher Edison admits that Xcite Energy (XEL) is taking longer than expected to farm out its Bentley prospect but it claims that the value in the stock – now languishing at 98p - is unchanged by the delay. Really?
As the case of life in general, when something in the financial markets takes too long to happen it is normally a bad sign and a reason to be concerned. This is certainly the case as far as the recent charting set up at Xcite Energy (XEL).
As you will have noticed this month’s Stock-Ping is early! This is due to events concerning oil companies: Norwegian owned Statoil (Oslo Børs: STL) and London listed AIM share Xcite Energy (XEL). XEL has been an infrequent pinger and popped up on the Radar only twice in March 2013 at 115.5pps and 121pps.
Frustration is the main emotion that shareholders of Xcite Energy (XEL) have suffered in the recent past. The reason: a, seeimgly, interminable consolidation by the shares in the 110p – 120p zone since late summer. That may change.
On a fundamental basis Xcite (XEL) strikes me as a binary bet. Either its vast (but deep water) oil is worth a fortune and the shares are worth a multiple of today’s price or there is some issue we do not understand and the shares are worth buttons. There is no middle ground. The charts, however, give a steer for the short term at least.
I have to admit that I am not a great reader of the financial press, but now and again something catches my eye. Today it was Tempus in The Times which was focusing on Xcite Energy and how it requires $700 million before the Bentley project turns cash positive in 2015. Clearly, if I had the cash I would be writing a cheque for those good people at Xcite immediately.
The start of May delivered a very threatening appearance to the chart of Xxcite Energy, the stock which ironically is one of my favourite oil plays.
There are currently two technical issues and one fundamental issue of note regarding North Sea focused Oil & Gas group Xcite Energy (XEL). The technicals in terms of the charting picture remain flattered as they have been for the past 6 weeks by the way that new support for the stock has started to come in at and above the former January 110p intraday peak.
Shares in AIM and Canada-listed Xcite Energy (XEL) hit 395p in January 2011 as it reported on a successful “transformational well” drill on its flagship Bentley oil field in the UK Northern North Sea, 160 kilometres east of the Shetland Isles. However, market disappointment at a 10th May 2011 reserves report on Bentley saw the shares fall from 316.5p to close at 110p just seven weeks later. They hit a low of 67.5p in July 2012 and currently trade at 92.75p – capitalising the company at approaching £270 million. The stock is a darling of the Bulletin Boards. But is it good value?