Xcite not fazed by North Sea oil tax change

25th Mar 2011 07:01

North Sea oilfields operator Xcite Energy said 2010 was a transformational year and the fourth quarter a pivotal period for the company, with the successful drilling of wells in its Bentley field.Loss before tax in 2010 widened to £2.45m from £0.78m in 2009 as the company invested heavily in its drilling programme.Post-tax loss in the fourth quarter widened to £1.72m from a loss of £0.21m in the preceding quarter and a loss of £0.36m in the final quarter of 2009.Cash spend during the fourth quarter was "exceptional but necessary" to deliver the successful outcome on the 9/3b-6z well test, the company said. "This success has provided the foundations for the anticipated commercial development of the Bentley field and its surrounding oilfield prospects," the company said, adding that there has been no shortage of "significant business entities who are keen to assist us during 2011 and beyond" now that the company has demonstrated the potential of its assets.The cash balance at the end of 2010 was £36m, up from £1.7m a year earlier, after two rounds of fund raising during the year and four standby equity distribution agreement draw-downs during the period October to December, which raised a further £22.5m net of costs.Recent Budget changes in North Sea tax will not affect the company's plans to move forward with its first stage development of its assets. According to the company's calculations, the increased benefit of the heavy oil tax allowances will have a material offsetting effect on the increased supplemental corporation tax charge.- - -jh