Xcite Energy Regulatory News (XEL)

THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES

TSX-V, LSE-AIM: XEL

25 October 2010

Xcite Energy Limited

("Xcite Energy" or the "Company")

9/3b-6 Well Update

The Company is pleased to announce that the 9/3b-6 well on the Bentley field is progressing on plan, on schedule and has reached target depth for the first part of the planned work programme, the pilot section of the well.

The pilot section confirmed 113ft oil column, some 40ft thicker than the 73ft prognosis, in a high quality Dornoch reservoir and confirmed the oil water contact at 3729ft total vertical depth (on prognosis). The oil column has 100% net to gross (compared to previous average of 88%). Management believes that this height of oil column confirms that an upside structure is present in the eastern half of the reservoir, significantly increasing the volume of oil in place.

The pilot section has provided valuable reservoir information for use in optimising the placing of the horizontal wellbore and for planning the first stage development.

The pilot section was extended to test the Jurassic play concept approximately 800ft deeper than the Bentley field Dornoch accumulation and encountered 15ft of Jurassic reservoir with oil shows.

The pilot section has now been cemented and abandoned, and work has commenced on the horizontal side track which is planned to flow test the Dornoch oil column. The completion and testing of the horizontal section is expected by the end of November.

The Bentley oil field is located on Block 9/3b (Licence 1078), approximately 160km east of the Shetland Isles, in which Xcite Energy holds 100% working interest.

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 Head of Exploration and Development at Xcite Energy and is an associate of the Institution of Chemical Engineers and a member of the Society of Petroleum Engineers.

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.

ADVISORY REGARDING FORWARD LOOKING STATEMENTS

Information in this news release that is not current or historical factual information may constitute forward-looking information within the meaning of securities laws. Such information is often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "schedule", "continue", "estimate", "expect", "may", "will", "project", "predict", "upside", "potential", "targeting", "intend", "could", "might", "should", "believe", "if successful" and similar expressions.

Implicit in this information are assumptions regarding measurements from instrumentation, which are subject to the inherent minor inaccuracies of offshore oilfield measurement processes. These assumptions, although considered reasonable by the Company at the time of preparation of this press release, may prove to be incorrect. Readers are cautioned that actual future operating results and economic performance of the Company are subject to a number of risks and uncertainties, including general economic, market and business conditions and could differ materially from what is currently expected. Although this press release discloses information regarding the oil columns, oil shows and reservoirs encountered in the pilot section of the Company's 9/3b-6 well, readers are cautioned that reserves have not been attributed to, and there is no certainty that it will be commercially or technically viable to produce hydrocarbons from, such well. In addition, readers should note that references to "oil in place" in this press release do not represent references to recoverable volumes of oil.

For more exhaustive information on these risks and uncertainties you should refer to the Company's most recently filed annual information form which is available at www.sedar.com. You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While the Company may elect to, it is under no obligation and does not undertake to update this information at any particular time except as may be required by applicable securities laws.