Xcite Energy plummets on concerns over capital

1st Dec 2011 11:32

Xcite Energy, the North Sea focused oil company, has fallen dramatically this morning following an announcement that it has "re-configured its approach" to development of the Bentley field.The re-configuration (essentially a rescheduling of drilling operations) follows feedback from the Department for Energy and Climate Change on the financial viability of the project.According to Sharecast sources, DECC is thought to be concerned over Xcite's access to capital. For understandable reasons, the UK Government is not keen on having half-completed oil wells in the North Sea.Xcite maintains "first oil" is still expected in 2012 but there are also murmurs among analysts that this is an ambitious, and possibly unrealistic, timetable.In a separate announcement Xcite said it had made use of a £2m equity line from the alternative investment manager Yorkville Advisors. The move will see 1,814,059 new shares issued, bringing the total to 190,810,070. This equates to a share dilution of just under 1%.At 13:39am Xcite shares were down 16% at 94p. In the year to date the firm's share price has plunged 75%. BS