Oil field developer xcite in £10m deal for Shetland wells data

Meat firm Cranswick delivers healthy set of results

XCITE Energy is raising up to £10.5 million by selling information about two wells drilled east of Shetland in a deal that appears to reflect strong industry interest in heavy oil fields.

The Aberdeen-based company said it has agreed to sell technical data in respect of two recent wells on the undeveloped Bentley heavy oil field for £9.8m with a further £656,000 payable if certain regulatory milestones are achieved by the purchaser.

xCite declined to provide further details including the identity of the purchaser.

Chief executive Rupert Cole said: “We are very pleased to have completed this agreement, which is complementary to t he recently commenced farmout process, and further validates the quality of the information collected from our two well programmes. This has been done without compromising the company’s intellectual property and is a good commercial outcome that provides additional working capital.”

Advances in exploration and production and refining techniques combined with high oil prices have galvanised interest in some heavy oil fields that used to be considered uneconomic. Cairn Energy and partners expect to submit a field development plan for the Kraken heavy oil field east of Shetland this year.

Edinburgh-based Cairn bought into the field through the £414m acquisition of Nautical Petroleum last year.

xCite announced the well data deal four weeks after it said it was seeking farm-out partners to help develop Bentley, which it describes as one of the major strategic assets in the North Sea.

Last mont h , xCite increased estimates of the size of the field to 250 million barrels oil on a proved and probable basis, from 116 million barrels previously.

The company calculated the reserves were worth $2.2bn after tax on a net present value basis. It expects to submit an updated field development plan for Bentley in coming months.

Shares in xCite Energy closed up 11%, 10p, at 102.5p. PORK-producer Cranswick said it was well placed to benefit from the increased popularity of British-sourced food as it unveiled a healthy set of full-year results.

The Hull-based group, a major supplier of sausages and bacon to supermarkets including Sainsbury’s and Tesco, expects to prosper in the wake of the horsemeat scandal, which raised questions about the provenance of meat products.

Sales increased after it won business from Asda and Marks & Spencer earlier this year, while the company said it managed to absorb the rising cost of pigs driven by high grain prices.

Amid squeezed household finances, Cranswick said pork remained a good value meat, compared to beef or lamb. Pig meat consumption continued to grow, it said, compared with a fractional increase in poultry and reductions in beef/veal and lamb/mutton volumes.

The company reported adjusted full-year pre-tax profits to March 31 up 8% to £49.3 million with revenues up 7% from £821m to £875m.

Cranswick was formed by farmers in the 1970s to produce pig feed, but the 1980s saw a significan expansion. Last month it bought Norfolk-based pig breeder East Anglian Pigs.

It said the move showed its “commitment to, and greater control over, a robust and integrated supply chain with a clear focus on premium British ingredients”.

Announcing the results, Cranswick chairman Martin Davey said: “Recent issues in the integrity of the supply chain for meat products and the introduction in 2013 of higher welfare standards for pig production in the EU enhance the competitive position of UK-based pork processors,” he said.

Cranswick has approval to export to markets in Australia and the US, and also plans to expand into China.