The UK North Sea gets another lift as Xcite Energy Ltd has informed that its Bentley field is rich in oil, according to the newest estimates. To top it all, the Bentley bed is estimated to be one of the largest heavy oil fields in the United Kingdom. The news awoke investors' hopes, while shares of the company climbed as much as 12 percent on the report.
New field rich in oil
According to the latest evaluation released by Xcite Energy Ltd, the company’s Bentley field has turned out to be rich in oil. The reports on the strategic assets have exceeded all expectations as they show that the Bentley field, which is located 100 miles east of the Shetland Islands, holds 250 million barrels of oil and gas, compared to the 2012's estimate of 116 million barrels, sic! To crown it all, that means that the Bentley field contains oil and gas estimated to be worth as much as staggering $14 billion, making it a tidbit.
Rupert Cole, chief executive officer at Xcite Energy Ltd, noted: "The reservoir delivered a lot more than we had been modelling in the well test, and that was the big upside in terms of longer-term productivity," concurrently underlining that the Bentley field turned out to be of the most strategic assets in the North Sea – the UK oil basin.
Interestingly, the bed was discovered back in the late 1970s, but because of the lack of proper technology, the asset was not exploited as it contains heavy crude. Oil companies have been recently more interested in extracting heavy crude as now they are in possession of improved extraction technology. Certainly, recently introduced tax breaks have also encouraged oil companies to consider exploiting heavy crude. Therefore the whole process of exploiting fields is more viable.
However, to exploit the Bentley field, Xcite Energy Ltd needs as much as $700 million, thereby it is seeking potential investors. Xcite Energy is strongly convinced that the fact that it has a 100 percent ownership of the oil-rich field will without a doubt strengthen its negotiating position. The company aims to start production in the second half of 2015, yet in fact a beginning of the process depends on its potential investors.
North Sea gets another boost
Undeniably, the latest reports on the Xcite Energy’s Bentley field will be another shot in the arm for the UK North Sea. The discovery will be simply an inducement to further exploration and production in the North Sea which is considered to be the UK oil basin. Therefore analysts believe that the rich-oil bed will reverse a long-lasting slump in the near future.
According to recent estimates, the United Kingdom is expected to see North Sea production dive approximately 6 percent in 2013. However, Oil & Gas UK believes that the latest wave of investments, including BP Plc’s project in the Clair field, will lead to a substantial increase in production to approximately 2 million barrels per day by 2017.
Without a doubt, the UK government counts on new investments in the North Sea and companies as a boost in production would have an immensely positive impact on the economy of the country.