Xcite Energy Ltd -Cancellation of Rowan Rig Option

ABERDEENSHIRE, UNITED KINGDOM--(Marketwired - May 31, 2013) - Xcite Energy Ltd (TSX VENTURE: XEL) (LSE: XEL) (AIM: XEL)

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                           TSX-V, LSE-AIM: XEL


31 May 2013

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

                   Cancellation of Rowan Rig Option

Xcite Energy announces that its 100% subsidiary, Xcite Energy Resources
Limited ("XER"), has cancelled its option for a jack-up drilling unit
from British American Offshore Limited, a subsidiary of Rowan
Companies, Inc. The rig contract was initially entered into in February
2011 and subsequently amended in February 2012 ahead of the
pre-production extended well test on the Bentley field, which was
completed in September 2012.

Following the extended well test, which has led to the significant
increase in reserves and updated field development plan, the Company no
longer believes the terms and structure of the rig option to be
appropriate for its commercial objectives.

XER has been in constructive dialogue with other drilling rig providers
to develop alternative commercial solutions, which potentially would
deliver better strategic alignment and fit for purpose structures to
reflect the amended Bentley field development programme. Consequently,
Expressions of Interest have now been issued to a number of drilling
rig providers to formally develop an optimised drilling solution for
the Bentley field.

Rupert Cole, CEO of Xcite Energy, commented:"We are grateful for the
provision of the Rowan Norway and the
associated drilling support during the successful extended well test
last year. The amendments to the Bentley field development plan have
given us the opportunity to construct a more commercially attractive
and longer term approach to drilling up the field, and we are
encouraged by the alternative structures that the industry has to
offer. We look forward to updating the market in due course on the
outcome of this initiative, which could further enhance the economics
of the Bentley field development."



ENQUIRIES:
Xcite Energy Limited                           +44 (0) 1483 549 063
Rupert Cole / Andrew Fairclough
Liberum Capital Limited                        +44 (0) 203 100 2000
(Joint Broker and Nomad)
Clayton Bush / Tim Graham
Morgan Stanley (Joint Broker)                  +44 (0) 207 425 8000
Andrew Foster
Pelham Bell Pottinger                          +44 (0) 207 861 3232
Mark Antelme / Henry Lerwill
Paradox Public Relations                       +1 514 341 0408
Jean-Francois Meilleur


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 Management's Discussion and Analysis for Xcite Energy
dated 17 May 2013 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.

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