SOURCE: Xcite Energy Ltd

October 22, 2009 02:11 ET

Xcite Energy Limited ("Xcite Energy" or the "Company"): Fugro Well Participation

This Announcement Is Not for Release, Publication or Distribution in or Into the United States

LONDON--(Marketwire - October 22, 2009) - Xcite Energy Limited (TSX-V: XEL) (LSE: XEL) (AIM: XEL) ("Xcite" or the "Company") is pleased to announce that its 100% subsidiary, Xcite Energy Resources Limited ("XER"), has entered into Heads of Agreement with Fugro Well Services Limited ("Fugro") for the provision of a turn-key tested well as the next stage in the development of the Bentley field.

Fugro has undertaken to drill and test a horizontal production well, which is intended to be the start of an early production system to deliver first oil on the field. Fugro will undertake this well on a risked basis, such that it will bear a material percentage of the cost of the well in return for a commitment to be engaged to carry out future work on behalf of XER if the well is successful. It is intended to spud this well at the end of Q1 2010, subject to regulatory approval, the availability of funding and finalisation of contract terms with Fugro.

Fugro is one of the world's leading service providers in the search for natural resources. Fugro also provides its clients with technical data and information in order to design, construct and maintain installations, structures and infrastructure in a safe and efficient manner.

In signing this agreement, Fugro has joined the Bentley Alliance, the management and operational structure created by XER as the vehicle to direct the Bentley field to full field development. The harnessing of the technical expertise, project management skills and financial strength of major contractors and other industry partners will greatly assist XER in taking the Bentley field into production. XER intends to widen the Bentley Alliance to other industry partners in due course as the field is moved towards development.

Richard Smith, Chief Executive of Xcite, commented:

"I am very pleased with the outcome of our farm-in process, which has resulted in the formation of the Bentley Alliance and we welcome Fugro as the first alliance partner to assist in the drilling and testing of the first production well on Bentley. This represents a major step forward for Xcite and creates great momentum as we move towards oil production from Bentley."

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Statements

Certain statements contained in this announcement constitute forward-looking information within the meaning of securities laws. Forward-looking information may relate to the Company's future outlook and anticipated events or results and, in some cases, can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "target", "potential", "continue" or other similar expressions concerning matters that are not historical facts. These statements are based on certain factors and assumptions including expected growth, results of operations, performance and business prospects and opportunities. While the Company considers these assumptions to be reasonable based on information currently available to us, they may prove to be incorrect. Forward-looking information is also subject to certain factors, including risks and uncertainties that could cause actual results to differ materially from what we currently expect. These factors include risks associated with the oil and gas industry (including operational risks in exploration and development and uncertainties of estimates oil and gas potential properties), the risk of commodity price and foreign exchange rate fluctuations and the ability of Xcite Energy to secure financing. Additional information identifying risks and uncertainties are contained in the Company's annual information form dated June 30, 2008 and in the annual Management's Discussion and Analysis for Xcite Energy dated March 26, 2009 filed with the Canadian securities regulatory authorities and available at www.sedar.com. The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required under applicable securities regulations.

Contact Information

  • ENQUIRIES:

    Xcite Energy Limited
    +44 (0) 1330 826740
    Richard Smith, Chief Executive Officer
    Rupert Cole, Chief Financial Officer

    Strand Partners Limited
    +44 (0) 20 7409 3494
    James Harris, Director
    Rory Murphy, Director

    Arbuthnot Securities Limited
    +44 (0)20 7012 2000
    Andrew Fairclough, Director
    Ed Burbidge

    Pelham Public Relations
    +44 (0) 20 7337 1500
    Mark Antelme, Director

    Paradox Public Relations
    +1 514 341 0408
    Jean-Francois Meilleur, Consultant
    Karl Mansour, Consultant