Heavy oil=? Money!
I have been watching Xcite for a few months now since they were 80p. Researching as much information as i can while trying to evaluate where this company are headed..
There seems to be some misapprehension re’ this stock. Currently trading at 111p. Xcite are about to spud their Bentley discovery in the North Sea. Investors seem to be under a delusion here { in my opinion} as to the value of this discovery and the technical difficulties in bringing heavy oil on stream.
There is an independent contingent resource of 122 million barrels of oil which could very well rise to over 200 million. Heavy oil sells at a discount to light sweet crude roughly between 6%/10%. The low broker sp targets here are fundamentally flawed, this is because heavy oil is thought to be difficult to bring on stream. There are currently drills going on all over China,Russia and South America which use proven technology for heavy oil drilling.
This stock is hugely under-valued. 200p minimum is where it should be.
And here are three very good reasons to back up this post
1/ Xcite own 100% of the Bentley discovery that’s 100% of 122 million barrels of heavy oil in place
2/ Xcite could own 100% of 200 million barrels of heavy oil “without having to employ enhanced recovery techniques”
And the third and most important pointer as to where this stock is headed is thus;
3/ Stat-oil have just paid 87 million pounds for a further 20% stake of the Mariner oil discovery which i might add is HEAVY OIL!
Now you may wonder why a Norwegian company are shelling out 87 million pounds in cash for a further 20% in a heavy oil discovery when some think that heavy oil is too difficult to drill?
Stat-oil would not pay such a sum unless they knew that they could bring heavy oil to the surface. The technology is already there as is the oil!
Xcite are on the cusp of a massive oil find that the market (just like Encore and Nautical were) have not priced in correctly!
300p/400p on a positive drill is possible here as the market monkies chase this sp up!
Please always research your investments before committing funds!
Daniel
Dan
well done
is the £3/ £4 target based on 122m
or the potential 200m ?????????????????????
Think small warrant shares issue on wed so presume post rush Thurs/Friday
Take the total share capital and current market valuation some 145 million pounds factor in the possible recovery rate of the oil in place(do this for both oil figures) then estimate the current crude price minus a 6% and a 10% discount for each oil play then work out the full value of the asset on both scenarios taking away the full cost of drill and recovery coupled with cash reserves and then project the net asset value. each one is in excess of 300p! Brokerages are down playing sp targets due to the nature of a heavy oil drill. There are more problems with this type of drill but nothing insurmountable. Houses always err on the side of caution especially given the current global difficulties. When the oil starts to flow this sp will dramatically increase.
Daniel
Thanks Dan
Rumour of the day so please no trading but my same source re Scotalass LSE bb says NO OWC regarding Cladan.
Time will tell if true but as i said before normally 100%
news soon…………… Tues/wed
Dan…..exactly what I have been harping on about to everyone that mails me for 3 mths, thks for putting in a clear concise manner…..
Q: now how the BH do I email you without posting a message on replies…..you need to know this info I have dude…..
Cheers
Hi Dan, thanks so much for the update on this 1, I have been reading lots and things were not adding up with the little knowledge I have about oilies and the bb’s bigging each other up was’nt helping me either, just left me bitting my nails and lost for a while. much appreciated best regards Lee
Dan, Took this from a BB talking about your blog on XCITE. Would be interested in your view?
“Not a fan myself either – he’s definitely lagging behind the investors on here. Also, he’s not comparing apples with apples when he talks about Bentley V’s Mariner. I don’t think he understands that although they’re both heavy oil, Bentley has a viscosity much higher than that of Mariner, which makes Mariners oil much easier to bring it to the surface.
Mariner’s viscosity was less than 20cp. Bentley’s is between 400 – 1100cp. Any oil company will tell you that viscosity is the key to production (not API).
If he wants to do comparisons then he should compare Bressay V’s Bentley – both are very similar.
Although I’m bullish on Xcite, £2 in the short term is just a pipe dream in my opinion. Upon results it will be a thing of the past though (assuming everything goes well). By MoneyInOil”
Well he clearly doesn’t know what he’s talking about. Below is a section from the 2008 drill stem test;
“The initial analysis of the crude oil sample obtained indicates, at reservoir conditions of 40 degress centigrade, a specific gravity of 0.976 which the company believes is within the acceptable range for commercial development and is consistent with the company’s expectation for the Bentley reservoir. The company is greatly encouraged by this outcome.”
And here is the Mariner viscosity taken from the DTI’s very own site! Which CLEARLY STATES the Mariner viscosity is up to 540cp!
“The new challenge is to develop a relative modest number of remaining discoveries where the viscosity is greater than 5 centipoise (corresponding to about 25°API). This has in fact begun with the development of Alba (7 cp), Captain (88 cp), Gannet E (20 cp), Gryphon (6 cp) and Harding (8 cp). Plans to develop Clair (up to 20 cp) and Mariner (up to 540 cp) are at an advanced stage. Bressay (up to 1000 cp) has been studied extensively but no development plan has been forthcoming. There are a variety of definitions of heavy oil and in a world context these viscosities are relatively modest. The maximum viscosity in the UK database is around 2000 cP.”
He’s talking poppycock below is a vicosity chart:
Approximate Viscosities of Common Materials
(At Room Temperature-70°F) *
Material
Viscosity in Centipoise
Water
1 cps
Milk
3 cps
SAE 10 Motor Oil
85-140 cps
SAE 20 Motor Oil
140-420 cps
SAE 30 Motor Oil
420-650 cps So as you can clearly see even between the range this joker is quoting
the viscosity is between sae20 motor oil and castrol oil! Hardly treacle!
SAE 40 Motor Oil
650-900 cps
Castrol Oil
1,000 cps
Karo Syrup
5,000 cps
Honey
10,000 cps
Chocolate
25,000 cps
Ketchup
50,000 cps
Mustard
70,000 cps
Sour Cream
100,000 cps
Peanut Butter
250,000 cps
Take no notice of these jokers listen to what the company are saying and news coming from proven reliable sources.
I suggest you get them all to read the 2008 epistle released on the 4th of Febuary which states quite clearly that the company have flow tested Bentley with no problems!
Daniel
Hi
Glad to see you mentioning XEL I’ve been invested for a while and could see the potential like yourself.
Good to see you on excellent form as always!
Cheers
Aj