Oil explorer Xcite Energy said yesterday it planned to start production at the Bentley field in the North Sea within five months.
The Aberdeen firm said it expected the Department of Energy and Climate Change (DECC) to approve its proposals for the first phase of extraction in the near future, which would allow it to begin this year’s drilling programme at the development.
Xcite also said it believed it had addressed all of DECC’s questions over its field-development plan (FDP) for Bentley.
The explorer said in December it was changing its FDP following feedback from DECC, but said yesterday it had received a letter from the department which said it was “broadly satisfied” with Xcite’s approach.
The company said formal approval of the FDP was subject to funding and any amendments it made after receiving results from the first stage of production: phase 1A. In December, Xcite announced a £25.8million placing and £60million equity-credit agreement to strengthen its balance sheet and progress phase 1A.
The private placement was with Socius CG II, a subsidiary of Socius Capital Group in Bermuda, while the equity-credit deal was with Esousa Holdings, with which Socius has been a co-investor in previous transactions.
The Rowan Norway jack-up rig is to be used on Bentley. Xcite has also lined up a shuttle tanker from Teekay Shipping Norway to develop the first phase of the heavy-oil field, one of the largest undeveloped finds in UK waters.
The core Bentley area is thought to have 150million recoverable barrels of oil. The total development cost for the field, 100 miles east of Shetland, has been estimated to be more than £1billion.
Xcite’s shares dipped 0.5p lower at 94.5p yesterday.