Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Xcite Energy - cut through the shit today the only question is the scale of shareholder wipeout

By Tom Winnifrith

21 March 2016 02:50

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Xcite Energy (XEL) has today announced a new reserves and resources report for its Bentley field. In three months time the company must refinance $125 million of bonds and right now net cash is sub $10 million and falling fast and it has zero revenues. Discussing the economics of a field where Xcite has failed patently to get the farm in partner needed to take it to production is like Hitler worryig about the seating plans for dinner in 1945 as Russian tanks entered Berlin. The only issue now is the scale of the shareholder wipeout. Heck, even respectable and normally cautious brokers such as SP Angel are now openly saying what I have said for an awfully long time, the smell is of toast and it is everywhere.

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Comments

Rhambo

21 March 2016, 05:52

Is there any preemptive action the bondholders can take before June? Is there normally a clause to allow recall of the debt if the bondholder has reasonable grounds to believe their interest is at risk of not being paid? XEL doesn’t have a lot of asset backing beyond a ludicrously high intangible value assigned to Bentley’s goodwill. If I were a bondholder I would want to take action sooner rather than later to recoup as much of the remaining cash as possible.