Xcite Energy Limited ("Xcite Energy" or the "Company") Drawdown on Equity Line

ABERDEENSHIRE, UK--(Marketwire - December 10, 2010) - This Announcement Is Not for Release, Publication or Distribution in or Into the United States.

Xcite Energy (TSX-V: XEL) (LSE: XEL) (AIM: XEL) announces that it has drawn down on its Standby Equity Distribution Agreement ("SEDA") with YA Global Master SPV Ltd ("Yorkville") in the amount of £6.75 million (CAD$10.80 million). This draw down has been undertaken at a price of £2.87 (CAD$4.59) per share and will result in the issue of 2,351,916 ordinary shares of no par value in the capital of the Company (the "New Ordinary Shares") to Yorkville. In connection with this SEDA drawdown, the Company will pay Yorkville a fee of £100,000.

As stated in its press release of September 28, 2010, funding under the SEDA will be used as future working capital for the Company and to progress towards the first stage production of the Bentley field without delay.

Subject to the terms of the SEDA and except in accordance with Canadian securities laws and with prior written approval of the TSX Venture Exchange, the shares issued to Yorkville under this draw down 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 the date that is four months and one day from the date of issue.

Application will be made for the admission to AIM ("Admission") of the New Ordinary Shares upon approval of the share issue by the TSX Venture Exchange. The New Ordinary Shares will rank pari passu with the Company's existing issued Ordinary Shares.

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. 

Contact Information:

ENQUIRIES:

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

Arbuthnot Securities Limited
(Nomad and Broker)
Antonio Bossi
Director
+44 (0)20 7012 2000

Pelham Bell Pottinger
Mark Antelme
Director
Henry Lerwill
+44 (0) 20 7861 3232

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