Increase in Equity Line and Operations Update

ABERDEENSHIRE--(Marketwire - Oct 10, 2011) -

THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR
                       INTO THE UNITED STATES



                        TSX-V, LSE-AIM: XEL



11 October 2011



                         Xcite Energy Limited

                ("Xcite Energy" or the "Company")



    GBP50 million Increase in Equity Line and Operations Update



Funding



Xcite Energy announces that it has increased its Standby Equity
Distribution Agreement ("SEDA") with YA Global Master SPV Ltd
("Yorkville") by GBP50 million to GBP150 million. This is subject to TSX
Venture Exchange approval.



Funding under the SEDA will be used as future working capital for the
Company and to fund the work required to achieve first oil from the
Bentley field.



Prior to this SEDA increase, GBP32.65 millionwas available for draw
down, such that a total of GBP82.65 million is now available. Under the
terms of the SEDA increase, the Company will pay Yorkville a fee of
GBP250,000, of which GBP125,000 will be payable when the increased
facility is accessed by the Company and GBP125,000 will be paid 
on 01 October 2012.



The Company is engaged in discussions with potential lending banks in
connection with the first stage production programme on the Bentley
field. In addition, the Company is in discussions for the provision of
additional borrowing facilities to supplement its existing financial
resources.



Operations



The Company continues to make good operational progress as it moves
towards first oil from the Bentley field.



The Rowan Norway jack-up rig has arrived in Dundee and is currently
being prepared and certified for operations, including crew training
and equipment testing. Following this programme, the rig will be made
available to the Company for its own preparatory work prior to being
moved to the Bentley field. The required long lead items have been
ordered and delivery times are expected to coincide with the deployment
of the rig.



The Company is finalising the selection of the necessary in-field
storage facility for the first stage production programme, which is
intended to be contracted in line with the work programme to first oil.



Consistent with the rig deployment timing, progress toward receiving
approval of the Field Development Programme for the Bentley field is
satisfactory as the Company continues its positive dialogue with the
Department of Energy and Climate Change. 



Richard Smith, Xcite Energy Chief Executive Officer, commented:"The Company continues to make good progress with its funding
initiatives and operations as we move toward first oil. Together with
the recent rig arrival and our positive dialogue with DECC, these are
important milestones on our way to delivering significant value for
shareholders."











ENQUIRIES:                                            

Xcite Energy Limited                             +44 (0) 1483 549 063

Richard Smith                      Chief Executive     
                                   Officer

Rupert Cole                        Chief Financial     
                                   Officer

Rothschild (Financial Advisor)                   +44 (0) 207 280 5000

Neeve Billis                       Managing Director

Stewart MacDonald                  Director

Oriel Securities (Joint Broker and               +44 (0) 207 710 7600
Nomad)                                                 

Emma Griffin                       Partner             

Simon Edwards                      Partner             

Morgan Stanley (Joint Broker)                   +44 (0) 207 425 8000

Andrew Foster                      Managing Director   

Pelham Bell Pottinger                           +44 (0) 207 861 3232

Mark Antelme                       Director            

Henry Lerwill                                          



Paradox Public Relations                        +1 514 341 0408

Jean-Francois Meilleur             Consultant          


Neither the 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.



Rothschild, which is authorised and regulated in the United Kingdom by
the Financial Services Authority, is acting exclusively for Xcite
Energy and for no one else in connection with the subject matter of
this announcement and will not be responsible to anyone other than
Xcite Energy for providing the protections afforded to its clients or
for providing advice in connection with the subject matter of this
announcement.



Oriel Securities, which is authorised and regulated in the United
Kingdom by the Financial Services Authority, is acting exclusively for
Xcite Energy and for no one else in connection with the subject matter
of this announcement and will not be responsible to anyone other than
Xcite Energy for providing the protections afforded to its clients or
for providing advice in connection with the subject matter of this
announcement.



Morgan Stanley, which is authorised and regulated in the United Kingdom
by the Financial Services Authority, is acting exclusively for Xcite
Energy and for no one else in connection with the subject matter of
this announcement and will not be responsible to anyone other than
Xcite Energy for providing the protections afforded to its clients or
for providing advice in connection with the subject matter of this
announcement.



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 October
26, 2010 and in the annual Management's Discussion and Analysis for
Xcite Energy dated March 24, 2011 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.





                    This information is provided by RNS
          The company news service from the London Stock Exchange

END