Xcite Closes Placing

ABERDEENSHIRE, UK--(Marketwire - October 7, 2009) - XCITE Energy Limited ("Xcite" or the "Company") (TSX-V: XEL) (AIM: XEL), a developer of heavy oil assets in the UK North Sea, announces that it has completed its previously announced placing of 10,141,998 new ordinary shares (the "Placing Shares") at a price of 21 pence (CAN$0.37) per share to raise gross proceeds of approximately £2.1 million (CAN$3.8 million) from investors in the UK and Canada. Completion of the placing is subject to admission to trading on AIM of the Placing Shares which is expected to occur at 2:30 pm (London time) today.

Placing Shares were placed in the UK by Arbuthnot Securities Limited with institutional and other investors and in Canada by Octagon Capital Corporation and by the Company. In connection with the financing, the Company has agreed to pay an aggregate cash commission of CDN$183,125 to Arbuthnot Securities Limited (UK) and Octagon Capital Corporation (Canada).

The Placing Shares represent 14.2 per cent. of the Company's enlarged share capital. Except in accordance with Canadian securities laws, the Placing Shares may not be sold or otherwise traded on or through the facilities of the TSX Venture Exchange or otherwise in Canada or to or for the benefit of a Canadian resident until February 8, 2010. The closing of the private placement remains subject to final acceptance of the TSX Venture Exchange.

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 826 740 Richard Smith Chief Executive Officer Rupert Cole Chief Financial Officer Arbuthnot Securities Limited Lead Broker to the Placing +44 (0)20 7012 2000 Andrew Fairclough Director Ed Burbidge Strand Partners Limited (NOMAD) +44 (0) 20 7409 3494 James Harris Director Rory Murphy Director Pelham Public Relations +44 (0) 20 7337 1500 Mark Antelme Director