PROACTIVE NEWS SUMMARY: Xcite Energy, Jupiter Energy, Forbidden Technologies, Beacon Hill Resources, ReNeuronReported by Proactive Investors on Friday, 27 April 2012 (on April 27, 2012)
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Oil and gas groups, *Xcite Energy (LON:XEL)* and *Jupiter Energy (LON:JPRL)* were among today’s most followed companies. Xcite old investors that it will tap external sources of funding so that it can take the Bentley field through to the next stage of development, while Jupiter has secured a prepayment plan for crude sales with two oil traders.
Jupiter will receive US$400 per tonne of oil, or the equiValent of US$58 a barrel, and has sold initial production of 6,000 tonnes for US$2.4 million.
Half has already been received, and the remainder will be paid next week.
Chairman Geoff Gander said: “We are pleased that we have been able to reach terms for the presale of oil.
“It provides the oil traders with security of supply and Jupiter Energy with cash to assist in the continued development of Block 31.”
Earlier this week Jupiter announced that trial production had begun from its first wells in Kazakhstan.
Total daily output from wells J-50 and J-52 is expected to be around 600 barrels of oil a day, which will be transported by tanker to a nearby storage facility.
Licence applications for J-51 and J-53 are “progressing" and will be submitted to the Ministry of Oil & Gas for approval “soon”.
“The approval process is expected to be completed by the end of this year and the company expects to end 2012 with revenue from four wells on trial production,” Jupiter added.
All four wells are part of the Block 31 permit, located in the oil-rich Mangistau Basin, close to the port city of Aktau.
Trial production lasts for up to three years, during which time the oil can be sold into the local market at a discount to the prevailing price of crude.
Back to Xcite, the North Sea explorer still requires around US$310 million to cover its development costs for 2013, so that it can kick start production as part of the Phase 1B programme. After that it is expected that the Bentley field will be producing enough oil so that the remaining development will be self-sustaining.
This level of initial project financing is much less daunting for Xcite than the headline US$2.2 billion development bill would suggest.
Speaking with Proactive Investors, finance director Rupert Cole explains that the Bentley development has been structured in such a way that it is manageable for a company of Xcite’s size and financing capability.
“Obviously Phase 1B is the next significant hurdle but we’ve made it as flexible as possible and it gives us revenue as early as possible, so that we don’t suffer the usual mountain of capex,” he said.
A loan secured against in-the-ground reserves, otherwise known as reserve based lending (RBL), is likely to be the primary element of the funding package. A farm-out deal or another form of industry partnership could be a source of additional funds.
While the company is not yet in a position to rule out a share sale, this is understood to be a less favourable option.
“We are keen to point out that options are available to us. And the options are fairly straightforward,” Cole said.
Talks are currently underway with a group of lending banks to secure a RBL facility. And Cole says he expects to have secured the RBL in a relatively short period of time.
“RBL funding will be a very important milestone. It will prove that the Bentley development is ‘bankable’, and in the current market I think that is no mean feat.
“We are very encouraged by the conversations we are having [with the banks].”
Preparations are also underway to undertake industry discussions, with the appointment of City deal makers Rothschild and Jefferies.
It is however unlikely that any deal would be concluded until the Phase 1A test results are in, when the value of Bentley is likely to be maximised, Xcite said.
Another article by Proactive Investors was dedicated to *Forbidden Technologies (LON:FBT)*, which was among the top risers in London markets today.
Shares in the group were lifted by comments from the chairman that the board expects faster growth in the current year than in 2011.
By 1.05 pm, the stock was trading up 13.3 per cent at 25.50 pence.
The firm markets a Cloud video platform for the social media sphere.
In a statement prepared for today’s AGM, Vic Steel told investors: “We are confident that the company will grow faster this year than last year and that the building blocks are in place for further growth.”
The company is experiencing strong continuing growth in broadcast Post Production. Over the past twelve months Forbidden has added a further sixteen post houses and production companies and is benefiting from regular repeat business as more and more companies are choosing FORscene as their preferred, advanced cloud-based video platform.
After good growth in 2011, invoiced broadcast sales in the first quarter of 2012 are showing a further 60 per cent increase over the corresponding period in 2011.
In the Professional web video segment, its US partner BIM has agreements to add further TV stations to its user base over the coming months.
“We anticipate that this, together with our higher quality web offering, will result in further growth in this area in the current financial year,” Steel said.
*Beacon Hill Resources (LON:BHR)* also did well today, seeing its shares surge 6.5 percent to 8.5 pence by 11:30 am after releasing a quarterly update, which drew positive comments from brokers.
The firm is making good progress in its bid to ramp up production from its Minas Moatize coal mine in the Tete region to 4 million tonnes per year.
It also revealed that production of first coking coal had begun in the three months to March 31.
Investors also liked the news and as at 11.30am, the shares were up 6.45 per cent, trading at 8.50 pence.
Beacon said it was track to produce and export 100,000 tonnes of coking coal in 2012 as planned, despite issues over weather and power with the first shipment expected in the middle of this year.
Chairman Justin Lewis highlighted that, as well as now producing coal, the firm had struck a highly valuable marketing agreement with Vitol Group - the world's largest private energy trading company, which will see it act as agent to market export coal produced at the mine.
The period also saw the publication of a definitive feasibility study (DFS), which showed compelling economics for Minas Moatize, underpinning the firm's valuation.
"Importantly, we remain well funded with access to a $20 million debt facility from Vitol Group, and revenues from the sale of both coking and thermal coal are anticipated to increase as we ramp up production to 4Mtpa ROM (run-of- mine) coal," Lewis said.
Minas Moatize, which has a JORC reserve of 42.7 mln tonnes, is surrounded by a number of significant mine development projects such as Vale’s Moatize mine and the projects Rio Tinto acquired from Riversdale last year.
Chairman Lewis said Beacon Hill had an active period ahead, which would see the maiden export of high margin coking coal as well as continued negotiations to secure an allocation on the Sena rail line in advance of the expansion of the mine later this year.
House broker Cannacord Genuity, which repeated its 'buy' rating and 38 pence-a- share target for the stock, highlighted that this access to the Sena railway was key, and when achieved, should bring a re-rating to the shares.
"Access will underpin future transport cost reductions and allow for the ramp up in production to 4Mtpa ROM," said analyst Tim Dudley.
"Until then, trucking of coking coal to the Beira port is expected to provide a sufficient margin and meets the group's planned output over the next 18 months.
"Importantly, we don't expect Beacon Hill to expand the plant and operations above the current 0.5mtpa planned capacity until rail allocation is secured, which should bring with it a major re-rating in Beacon Hill's share price.
Mining analyst John Meyer, at City firm Fairfax, also honed in on the firm's share price, which he said had come back in line with the rest of the junior mining space.
Proactive also covered today’s news from* ReNeuron (LON:RENE)*, which has successfully raised over £6 million to fund its ongoing research and development programme.
Shares were placed with new investors at 4 pence each (last night’s close was 3.99 pence), raising £5.4 million, while existing shareholders were able to participate in the open offer portion of the cash call, adding a further £700,000.
Chief executive Michael Hunt said: “We have raised sufficient overall net proceeds to enable us to progress the company's development strategy to key pre-clinical, regulatory and clinical milestones over the coming year across our core therapeutic programmes."
ReNeuron's ReN001 therapy is currently being used to treat disabled stroke patients as part of the ground-breaking PISCES Study being carried out in Scotland.
In all, 12 stroke sufferers will be given varying doses ReN001 as part of this early-stage trial.
ReNeuron said earlier this month that five patients had been treated in the PISCES stroke study - all three in the first dose cohort and two in the second dose cohort.
Links:  Full news story
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