ABERDEENSHIRE, UK--(Marketwire - August 24, 2010) -  This Announcement is Not for Release, Publication or Distribution in or Into the United States.

Further to its press release of August 19, 2010 announcing a proposed fundraising, Xcite Energy Limited ("Xcite" or the "Company") (TSX-V: XEL) (LSE: XEL) (AIM: XEL) is pleased to announce that it has conditionally placed 9,727,756 ordinary shares of no par value (the "Placing Shares") at a price of 60 pence (C$0.96) per share to raise approximately £5.8 million (gross) (C$9.3 million) from investors in the UK (the "Placing").

As stated previously, the net proceeds to the Company will be used on an enhanced 9/3b-R well work programme, which Xcite believes will provide greater certainty of outcome from the planned horizontal flow test, significant additional data and an acceleration of the planned first stage production ("FSP") programme. Greater detail on the scope of the enhanced 9/3b-R well work programme can be found in the Company's press release dated August 19, 2010.

The Placing Shares have been conditionally placed by Arbuthnot Securities Limited and FirstEnergy Capital LLP subject, inter alia, to admission of the Placing Shares to trading on AIM ("Admission"). The Placing Shares will represent 6.7 per cent of the Company's enlarged share capital.

The TSX Venture Exchange has conditionally approved the Placing, subject only to usual conditions. Application for Admission has been made to London Stock Exchange plc. Closing is expected to occur on August 26, 2010 and Admission is expected at 14:30 (London time) on August 26, 2010.

Following Closing and Admission, the Company expects to have 144,268,276 ordinary shares in issue with voting rights. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or change to their interest in, the Company under the FSA's Disclosure and Transparency Rules.

The Placing Shares have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "Securities Act"), and, may not be offered, sold or delivered, directly or indirectly, in the United States or to or for the account or benefit of any U.S. person unless the securities are registered under the Securities Act or an exemption from the registration requirements of the Securities Act is available. This press release does not constitute an offer to sell or solicitation of an offer to buy any securities, nor shall there by any sale of securities in any state in the United States in which such offer, solicitation or sale would be unlawful.

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 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 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:

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) 207 012 2000
Antonio Bossi
Nick Tulloch
Ben Wells
Associate Director

First Energy Capital LLP
+44 (0) 207 448 0200
Hugh Sanderson
Managing Director
Derek Smith

Pelham Bell Pottinger
+44 (0) 207 861 3232
Mark Antelme

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