This is an update of last week's story on Xcite Energy.
Xcite Energy and Gulf Keystone were among the most bought shares again this week in Hot Stocks.
Interest in Xcite Energy (XELL.L) among private investors on the Selftrade platform showed no sign of cooling following the quadrupling of its proven plus probable reserves at its 100% owned Bentley field in the North Sea.
Following the increase in reserves from 28 million to 116 million barrels, analysts at Morgan Stanley held their rating of the stock at ‘overweight’ with a target price of 270p. The shares were trading at 138p on Thursday lunchtime after spiking at 154p on 20th February.
Jamie Maddock, analyst at Morgan Stanley, said at the time that the rise in proven plus probable reserves was an important confirmation of the Bentley field’s potential and tests are underway to prove its commercial viability.
Maddock added: ‘Current estimates of the recoverable reserves of the field’s core area are based upon a 24% recovery factor of the oil in place, which we believe could prove overly conservative, providing additional potential upside.
‘Whilst a technical test, its success will provide lending banks with the necessary comfort to allow Xcite to raise the financing required to proceed to full commercial development.’
In an update to the stock market on Thursday, Xcite said its Rowan Norway drilling rig left Dundee to start its exploration of the field.
Richard Smith, chief executive of Xcite, revealed in an interview with Reuters in February that the company had been approached by potential partners to discuss the possibility of joint development to reduce overall costs if the site proves viable.
The company confirmed its intention to gain a premium listing on the London Stock Exchange this year, moving up and out of the alternative investment market.