Private Placement & Equity Credit Facility

TSX-V, LSE-AIM: XEL

Xcite Energy Limited ("Xcite Energy" or the "Company")

GBP25.8 million Private Placement and GBP60 million Equity Credit Facility Agreement

Xcite Energy is pleased to announce that it has agreed a GBP25.8 million private placement (the "Placing") with Socius CG II, Ltd. ("Socius"), a subsidiary of Socius Capital Group, LLC. Based in Bermuda, Socius invests in emerging growth companies in the United States, Canada, Europe and Australia.

The Company also announces that it has entered into a GBP60 million Equity Credit Facility with Esousa Holdings, LLC ("Esousa"), with whom Socius has been a co-investor in previous transactions. The Company has terminated its standby equity agreement with YA Global Master SPV Ltd. dated September 27, 2010.

The combination of financing made available from the Placing and the Equity Credit Facility will further strengthen the Company's balance sheet to allow it to progress Phase 1A of the development of the Bentley field.

Commenting on today's announcement Richard Smith, CEO, said:"Against a challenging economic backdrop, we are very pleased to have further strengthened our balance sheet as we move forward with the field development plan towards first oil."

The Placing

The Placing will occur in two stages. The first stage, which closed today, provides the Company with gross proceeds of GBP12.9 million (C$20.7 million) through the issuance of 15,195,294 units (each, a"Unit") at a price of GBP0.85 per Unit. The Company and Socius have agreed to complete the second stage of the Placing, which will provide the Company with gross proceeds of approximately GBP12.9 million, at any time between eight to twelve weeks from today, at a price per Unit equal to the 20 day volume weighted average price of the Shares on AIM (the "20 Day VWAP") calculated two trading days prior to the closing of the second stage, subject to the private placement pricing parameters of the TSX Venture Exchange (the "TSX-V").

Each Unit comprises one ordinary share in the capital of the Company (a"Share") and one-half of one ordinary share purchase warrant (a"Warrant"). Each whole Warrant issued pursuant to the Placing is exercisable for one additional Share at 120% of the Unit price per share for three years from the date of issue. The exercise price of the Warrants issued in the first stage of the Placing is GBP1.02.

The Warrants are subject to a forced exercise provision, at the Company's discretion, provided that the 20 Day VWAP exceeds a 20% premium to the Warrant exercise price and the average trading volume of the Shares during such period exceeds one million shares. The Warrants are subject to a cashless exchange right, exercisable at the discretion of the holder, in the event that the 20 Day VWAP is less than the exercise price of the Warrants.