SOURCE: Xcite Energy Limited

June 12, 2012 02:00 ET

Marketing and Offtake Agreement with BP Oil

ABERDEENSHIRE, UNITED KINGDOM--(Marketwire - Jun 12, 2012) -


                     TSX-V, LSE-AIM: XEL

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

12 June 2012   Marketing and Offtake Agreement with
                    BP Oil International Limited

Xcite Energy announces that it has amended its agreement with BP Oil
International Limited ("BPOI"), a wholly owned subsidiary of BP plc
("BP"), as announced on 28 January 2010, under which BPOI will provide
the offtake services to market and sell the Bentley crude oil in return
for an incentive-based fee per barrel.

Under the amended agreement:

* The incentivised marketing and offtake fee to be paid to BPOI
continues to be directly related to the realised price achieved by BPOI
for the Bentley crude oil in relation to the prevailing Dated Brent
crude price.

* For the initial phase of up to three years under the amended
agreement BPOI will deliver diluent products in-field to Xcite Energy
for blending with the Bentley crude to maximise its value prior to
offtake by BPOI, subject to BP offshore operational standards being

* BPOI has undertaken that either BPOI or an associated BP company
will, subject to certain conditions, provide US$5 million of financing
for Phase 1B of the Bentley field development as part of the reserves
based lending facility being negotiated with a group of commercial

* BPOI has also undertaken to provide further support to Xcite
Energy during the initial phase of the amended agreement by reducing
Xcite Energy's working capital requirements for the diluent products to
be used in the blending-in-field operations. At current oil prices,
this working capital support is estimated to be in the range of US$20
million to US$40 million depending on Bentley crude oil production and
blending requirements, in respect of which Xcite Energy would pay BPOI
an appropriate commercial financing charge.

* The increased financial commitments referred to above replace the
previous commitment to procure US$20 million of financing from a
commercial bank with credit support from BP.

Rupert Cole, Chief Financial Officer, commented:"We are very pleased with
this further endorsement and increased
support from BP, with the amendment to the marketing and offtake
agreement providing significant additional financing for Phase 1B of
the Bentley field development programme, through a combination of
reserves based lending and flexible working capital support. This
amended agreement shows how Xcite Energy and BP have successfully
focused on operational detail to deliver an amended agreement that
assists Xcite Energy as it moves towards production of oil from the
Bentley field"


Xcite Energy Limited                            +44 (0) 1483 549 063
Richard Smith           Chief Executive Officer
Rupert Cole             Chief Financial Officer
Oriel Securities                                +44 (0) 207 710 7600
(Joint Broker and Nomad)
Emma Griffin            Partner
Michael Shaw            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           Account Director

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

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
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 26 October
2010 and in the interim Management's Discussion and Analysis for Xcite
Energy for the period ended 31 March 2012 filed with the Canadian
securities regulatory authorities and available at . 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.

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.

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


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