Successful Bentley Field Pre-Production Well Test

ABERDEENSHIRE, UNITED KINGDOM--(Marketwire - Sep 20, 2012) -

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                          LSE-AIM, TSX-V: XEL



20 September 2012


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

         Successful Bentley Field Pre-Production Well Test

Xcite Energy announces that it has successfully concluded the Bentley
Field pre-production well test in the Phase 1A work programme.


Highlights

- Pre-production well test results exceeded management
  expectations

- Successfully demonstrated full field development drilling,
  completion, production and export techniques

- Extensive data gathering for reservoir model calibration and
  production facilities design, enabling optimisation of field
  development

- Significantly improved understanding of oil, gas and water
  movement behaviour

- Water ingress to wellbore better than expected (i.e. less water
  produced)

- Produced approximately 147,000 barrels of Bentley crude

- Successful management of flow assurance issues, including
  pipeline transfer to a dynamically positioned shuttle tanker
  for in-field blending



Summary of results

Xcite Energy has concluded the Bentley pre-production well test in the
Phase 1A work programme ("Phase 1A"), meeting its principal objectives
to:

1. Demonstrate the mechanical and operational aspects of the
   drilling, completion and flowing of the proposed well design for
   application in Phase 1B; and

2. Collect additional reservoir and production data to improve the
   calibration of the reservoir engineering model and production
   facilities design, enabling field development optimisation.

The pre-production test comprised two horizontal wellbore sections (9/
3b-7 and 9/3b-7Z), totalling in excess of 4,200 feet of net reservoir.
The 9/3b-7 well was placed at a depth within the reservoir close enough
to the oil-water contact such that water would be produced during the
period of the flow test. The 9/3b-7Z well was successfully geo-steered
within five to ten feet of the attic of the reservoir. Downhole
control valves were successfully operated, delivering flow from each
wellbore individually and in combination.

Approximately 147,000 barrels of Bentley crude oil was safely produced
from the field during Phase 1A without any environmental
incidents. This crude, as previously announced, has been sold to a
major refiner in Europe.

The timing of first water ingress to the wellbore and the subsequent
rate of water build-up was better than expected (i.e. less water was
produced). As a result, the ratio of oil to water produced was also
better than expected, providing important information for modelling
long term future oil recovery from the field.

The flow test also confirmed the existence of a large, active aquifer,
which will provide vital long term pressure support during
life-of-field production.

During Phase 1A, the Company has collected extensive data relating to
the reservoir and fluid characteristics, and has significantly improved
its understanding of the oil, gas and water movement within the
reservoir. This confirms that the field is behaving within the range
of modelled outcomes and should enable optimisation of the field
development plan and facilities. The data also provides key
information to plan an enhanced oil recovery programme for the field.

The Company also conducted successful process facility trials during
the pre-production well test, including (i) design confirmation of
offshore separation, metering and export systems; (ii) the effect on
flow rates of demulsifier, defoamer and other speciality chemicals and
diluents; and (iii) verification of all principal process simulations,
including sub-surface diluent injection, downhole heating, pipeline
flow assurance and crude oil blending.

The substantial amount of data collected from the seabed and downhole
pressure gauges, the rig and from the extensive sampling programme,
will now be analysed and used to update the reservoir and economic
models. This analysis will form the basis for updating the Reserves
Assessment Report, the updated Field Development Plan for resubmission
to the Department of Energy and Climate Change and for the review
process of the Reserves Based Lending banks, which are expected to be
undertaken by early 2013.

The well will now be suspended, with both 9/3b-7 and 7Z wellbores being
kept available for future use in the next phase of the field
development.

The well test equipment on the Rowan Norway is currently being
decommissioned and dismantled in advance of being returned to
Aberdeen. The rig will be de-mobilised from the Bentley field as soon
as practicable, from where it will be towed to Dundee and released back
to Rowan.

The Scott Spirit tanker has left the field to discharge the collected
water and transfer the Bentley blended crude for onward shipment to the
refinery.

Commenting on today's announcement, Rupert Cole, Xcite Energy CEO,
said:"We are extremely pleased with the outcome of the Phase 1A work
programme, which has exceeded our expectations. We have gathered very
substantial quantities of high quality data, which has materially
de-risked the project. This will enable us to confirm the full field
development plan and advance our commercial strategy. As a result of
the expertise within the Xcite team, supported by our contractors and
service providers, we have safely delivered an outstanding
pre-production well test on Bentley, one of the largest remaining,
undeveloped North Sea oil fields."

Stephen Kew has reviewed and approved the technical information
contained within this press release in his capacity as a qualified
person, as required under the AIM Rules. Stephen Kew is Chief
Operating Officer at Xcite Energy and is an associate of the
Institution of Chemical Engineers and a member of the Society of
Petroleum Engineers.

ENQUIRIES:

Xcite Energy Limited                              +44 (0) 1483 549 063
Rupert Cole / Andrew Fairclough
Oriel Securities (Joint Broker and Nomad)        +44 (0) 207 710 7600
Emma Griffin / Michael Shaw / Ashton Clanfield

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 preliminary interpretation of data,
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, the
availability of equipment 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 25 July 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.


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