SOURCE: Xcite Energy Limited

May 25, 2012 09:15 ET

Results for the 3 Month Period Ended 31 March 2012

ABERDEENSHIRE, UNITED KINGDOM--(Marketwire - May 25, 2012) -


NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION

TSX-V, LSE-AIM: XEL

25 May 2012

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

Results for the 3 Month Period Ended 31 March 2012


Xcite Energy is pleased to announce its results for the 3 months ended 31 March 2012.

Highlights

    - Upgrade in oil reserves of the type 1P, 2P and 3P for the core
      area of the Bentley field to approximately 96 MMstb, 116 MMstb
      and 140 MMstb, respectively, with NPV10 (after tax) for the core
      area of $1.076 billion, $1.464 billion and $1.921 billion on a
      1P, 2P and 3P basis, respectively (see "Cautionary Language"
      below for a general explanation of the method and assumptions
      used in these calculations).

    - Strengthened balance sheet with cash of GBP78.9 million as at 31
      March 2012, following net new equity capital financing of GBP36.4
      million in the period.Included in cash balances are amounts held
      in escrow of GBP73.9 million relating to the Bentley Phase 1A
      work programme.

    - The Rowan Norway jack-up rig commenced the Phase 1A work programme
      on the Bentley field; the 9/3b-7 well was spudded on 18 March
      2012, with good progress being made on the Phase 1A work
      programme to date.

    - Since the period end, $50 million additional funding has been
      raised in respect of unsecured loan notes issued, as announced on
      5 April 2012.

    - Since the period end, contracts have been awarded for the Scott
      Spirit tanker planned to be used as the in-field storage and
      offtake facility for Bentley crude oil during the Phase 1A, and
      for the installation of the oil export pipeline of approximately
      1.8 km between the Rowan Norway jack-up rig and the Scott Spirit.

The following tables summarise the Group's performance in the three months ended 31 March 2012 and the comparatives for the 3 months ended 31 March 2011. The Group had no trading revenue in any of these periods.

                                           3 months      3 months
                                              ended         ended
                                           31 March      31 March
Income Statement Information                   2012          2011
                                               GBPm          GBPm

Net profit/(loss)                             (0.05)        (0.01)
Earnings/(loss) per share (basic) in pence    (0.0p)        (0.0p)
Earnings/(loss) per share (diluted) in        (0.0p)        (0.0p)
pence


                                        3 months ended   3 months ended
                                              31 March         31 March
Cash Flow Information                             2012             2011
                                                  GBPm             GBPm

Net cash flow from operations                      3.5            (17.9)
Net cash flow from investing activities          (25.1)            (2.7)
Net cash flow from financing activities           36.4             14.9


                                        As at         As at       As at
                                     31 March   31 December    31 March
Balance Sheet Information                2012          2011        2011
                                         GBPm          GBPm        GBPm

Total assets                            192.6         152.8        99.2
Cash and cash equivalents                78.9          64.1        30.2
Current liabilities                      13.0           9.5         5.0
Long term liabilities (deferred tax)      0.5           0.5         0.5
Total net assets                        179.2         142.7        93.7

The Company's unaudited Financial Results for the 3 Months Ended 31 March 2012 can be found at the following link:

http://www.rns-pdf.londonstockexchange.com/rns/1348E_1-2012-5-25.pdf

ENQUIRIES:

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 andNomad)
Emma Griffin                Partner
Michael Shaw                Partner
Morgan Stanley                                      +44 (0) 207 425 8000
(Joint Broker)
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

Glossary"1P" means proved reserves."2P" means proved plus probable reserves."3P" means proved plus probable plus possible reserves. Possible reserves are those additional reserves that are less certain to be recovered than probable reserves and there is a 10% probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves."MMstb" means millions stock tank barrels."NPV10" means net present value in money of the day using a 10% forward discount rate, which values do not represent fair market value."$" means US dollars.

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.

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.

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 26 October 2010 and in the annual Management's Discussion and Analysis for Xcite Energy dated 22 March 2012 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.

Cautionary Language

The independent reserves and resources audit of the Company Assets effective 31 December 2011, as audited by TRACS in compliance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities and in accordance with the Canadian Oil and Gas Evaluation Handbook, is based on forecast and prices effective as at 31 December 2011 from McDaniel & Associates' October 2011 Brent oil forecast, less a 12% discount for Bentley crude ( www.mcdan.com).

The calculation of the NPV10 (after tax) for the Core Area disclosed above takes into account the following: (a) UK Corporation Tax is charged at the rate of 30% on net taxable income; (b) UK Supplemental Corporation Tax ("SCT") is charged at the rate of 32% on net taxable income; and (c) heavy oil allowances of up to GBP800 million have been applied to offset the SCT to the extent possible.

Prospective resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery and a chance of development. Prospective resources are further subdivided in accordance with the level of certainty associated with recoverable estimates assuming their discovery and development and may be sub-classified based on project maturity. There is no certainty that any portion of the prospective resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the prospective resources. The principal risks and uncertainties associated with the recovery of the prospective resources which prevent them from being classified as contingent resources are that they have not yet been confirmed by appraisal drilling.

Statements relating to "reserves" or "resources" are deemed to be forward-looking statements or information, as they involve the implied assessment, based on certain estimates and assumptions, that the resources and reserves described can be profitable in the future. There are numerous uncertainties inherent in estimating quantities of proved reserves, including many factors beyond the control of the Company. The reserve data included herein represents estimates only. In general, estimates of economically recoverable oil reserves and the future net cash flows therefrom are based upon a number of variable factors and assumptions, such as historical production from the properties, the assumed effects of regulation by governmental agencies and future operating costs, all of which may vary considerably from actual results. All such estimates are to some degree speculative and classifications of reserves are only attempts to define the degree of speculation involved. For those reasons, estimates of the economically recoverable oil reserves attributable to any particular group of properties and classification of such reserves based on risk of recovery and estimates of future net revenues expected therefrom, prepared by different engineers or by the same engineers at different times, may vary substantially. The actual production, revenues, taxes and development and operating expenditures of the Company with respect to these reserves will vary from such estimates, and such variances could be material.

Consistent with the securities disclosure legislation and policies of Canada, the Company has used forecast prices and costs in calculating reserve quantities included herein. Actual future net cash flows also will be affected by other factors such as actual production levels, supply and demand for oil and natural gas, curtailments or increases in consumption by oil and natural gas purchasers, changes in governmental regulation or taxation and the impact of inflation on costs.

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

END

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