SOURCE: Xcite Energy Ltd

September 28, 2010 02:00 ET

Xcite Energy Limited ("Xcite Energy" or the "Company") Secures GBP 20 Million Equity Line

ABERDEENSHIRE, UNITED KINGDOM--(Marketwire - September 28, 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 entered into a Standby Equity Distribution Agreement ("SEDA") with YA Global Master SPV Ltd ("Yorkville"), an investment fund managed by Yorkville Advisors LLC, for a £20 million equity line of credit. The Company intends to use funding from the SEDA judiciously and prudently to assist in its future working capital requirements and to progress towards the first stage production of the Bentley field without delay.

Under the terms of the SEDA, Xcite may draw down funds from time to time, at its sole discretion, over a period of up to three years in exchange for the issue of new shares in the capital of the Company. All shares issued by Xcite will be at a price based on existing market conditions at the time of each drawdown within the private placement pricing parameters of the TSX Venture Exchange.

Yorkville will receive an aggregate fee of £400,000 for the provision of this SEDA facility, of which £200,000 is payable within the first 6 months of the facility term and in tranches as the facility is available and used (or 6 months from the execution of the SEDA); a further £200,000 will be payable on the first anniversary of the execution of the SEDA. In addition, Yorkville will be granted 300,000 share purchase warrants in tranches relating to the initial drawdowns under the SEDA. Each warrant will be exercisable to acquire one share in the capital of the Company for a period of 24 months from the date of grant at a price equal to 200% of the closing price of the shares on the TSX Venture Exchange on the day prior to the date of the grant.

Richard Smith, Xcite Energy Chief Executive Officer commented:

"This SEDA facility is a very useful part of our funding options and we are very pleased to have the independent financial capacity that Yorkville can provide at this vital time in our corporate development."

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.

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 December 8, 2009 and in the annual Management's Discussion and Analysis for Xcite Energy dated March 24, 2010 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.

Contact Information

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

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

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

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