Xcite Energy Limited ("Xcite Energy" or the "Company"): Placing to Raise Approximately GBP2.1 Million (CAN$3.8 Million)

LONDON--(Marketwire - October 2, 2009) - Xcite Energy (TSX-V: XEL) (LSE: XEL) (AIM: XEL), a developer of heavy oil assets in the UK North Sea, announces that it has conditionally placed 10,141,998 new ordinary shares of no par value (the 'Placing Shares') at a price of 21 pence (CAN$0.37) per share to raise approximately GBP2.1 million (gross) (CAN$3.8 million) from investors in the UK and Canada (the 'Placing').

The net proceeds will be used to assist the Company in securing the necessary industry partners, and to further the commercial arrangements, that are expected to enable the Company to move forward to the next phase of its development of the Bentley field, and for general working capital purposes.

Placing Shares have been conditionally placed in the UK by Arbuthnot Securities Limited with institutional and other investors and in Canada by Octagon Capital Corporation and by the Company. Application will be made to London Stock Exchange plc, and has been made to the TSX Venture Exchange for the Placing Shares to be admitted to trading on AIM and to listing on the TSX Venture Exchange.

Subject, inter alia, to admission of the Placing Shares to AIM and the listing on the TSX-V becoming effective, closing and admission are expected to occur on 7 October 2009. The Placing Shares will represent 14.2 per cent. of the Company's enlarged share capital. Following Admission, the Company expects to have 71,555,798 Ordinary Shares in issue.

Richard Smith, Xcite Energy Chief Executive Officer, commented:

"We are delighted with the support of existing and new investors in this fundraising, who have understood the value creation opportunity that currently exists in Xcite Energy, through its Bentley field. The Company continues to make progress in planning the next phase of the Bentley field development, with the securing of industry partners being the priority."

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