North Sea explorer Xcite Energy (LON:XEL) has reported a successful test at its Bentley field, but its share price has failed to surge.
In a statement, the firm announced that it had extracted approximately 147,000 barrels of crude oil from the well without any environmental incidents.
Rupert Cole, Xcite’s chief executive, said he was ‘extremely pleased with the outcome’ and claimed it had ‘exceeded our expectations’. He described Bentley as ‘one of the largest remaining, undeveloped North Sea oil fields’.
However, the group’s share price slumped 10 per cent on the news to 117.25p. The stock had risen 13 per cent to 133p earlier in September, after Xcite confirmed a deal to sell the prospective Bentley oil.
On 7 September, the company declared an agreement with BP for the purchase of more than 135,000 barrels of crude. Xcite claimed that the sale price had been ‘better than the company’s assumption’ of a 12 per cent discount to standard Brent oil price.
Angelos Damaskos, chief executive of oil specialist Sector Investment Managers, has tipped Xcite for a strong fourth quarter on the back of rising oil prices and tax incentives for North Sea operators.
Xcite presently has a flaring price-to-earnings (P/E) ratio of 1305, with a market capitalisation of £344 million and a profit of just £130,000 for the most recent full year.
But researcher Digital Look forecasts its P/E ratio falling to 42.7 now that it has struck oil, as it should deliver a profit above £10 million for the year ending 31 December 2012.