Xcite Energy Regulatory News (XEL)

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TSX-V, LSE-AIM: XEL

29 July 2011

Xcite Energy Limited

("Xcite Energy" or the "Company")

Results for the 3 Month Period Ended 30 June 2011

Xcite Energy is pleased to announce its results for the 3 months ended 30 June 2011.

The second quarter of 2011 has seen important progress in the Company's plans for the First Stage Production ("FSP") programme on the Bentley field, with the Rowan Norway harsh environment, deep water jack-up rig being delivered on time to Rowan in Singapore from the Keppel FELS construction yard. The rig will now be transported to Dundee using the OHT Hawk heavy lift vessel, where it will undergo final testing and will be crewed and equipped for its deployment onto the Bentley field.

Preparations for the final submission to the Department of Energy and Climate Change ("DECC") of a Field Development Plan for the Bentley field remain on track and are consistent with the rig deployment timing.

Financing discussions are progressing satisfactorily, with a number of different options being assessed in parallel with the submission of the Field Development Plan to DECC.

On 26 July 2011 the Company announced that a submission had been made to DECC of the Environmental Statement for the planned First Stage Production on the Bentley field. This is a standard DECC requirement in connection with, but not simultaneous with the submission of a field development plan.

The completion of the Reserves Assessment Report ("RAR") on the Bentley field and the announcement of its principal findings as published by the Company on 10 May 2011 and followed by the announcement of the filing of the Material Change Report on 17 May 2011 has, in management's opinion, de-risked the field significantly and greatly enhanced its value by upgrading it to reserves status.

The RAR focused on the reserves accessed from a single drill centre in the northern area of the field relating to the FSP, together with the Second Stage Production ("SSP") from the same drill centre. Together the FSP and the SSP comprise the core area of the reservoir.

The RAR assigned a NPV10 (after tax) value per barrel as approximately $14.20 for the 28 million barrels 2P reserves in the FSP, or in aggregate $396 million. The RAR assigned a NPV10 (after tax) value per barrel as approximately $11.00 for the 87 million barrels of "best" estimate contingent resources in the SSP, or in aggregate $961 million.

As no technical contingencies remain with respect to the contingent resources in the SSP, the RAR confirms that these would be converted to an equivalent volume of reserves following the Company's decision to pursue the development of the SSP and the approval by DECC of its development plan for this purpose. On this basis, the Company intends to seek approval from DECC for the FSP and SSP which, if obtained together with appropriate funding, would enable it to (i) move forward with the FSP; (ii) move forward with the SSP at an appropriate time that suits its business objectives; and (iii) upgrade the SSP contingent resources to reserves status.

Richard Smith, Xcite Energy Chief Executive Officer, commented:

"We are pleased that the Reserves Assessment Report has provided independent third party validation of the value and commerciality of the Bentley field, following the excellent outcome from the successful 9/3b-6 and 6Z wells. This re-confirmed management's belief in the commercial value of Bentley and its potential as one of the largest undeveloped fields in the UK sector of the North Sea. We are making significant progress towards the First Stage Production which, if successful, will be a key milestone in our objective to determine full field reserves in due course and deliver significant value for shareholders."

The Company's unaudited Financial Results for the 3 Months Ended 30 June 2011 can be found at the following link:

http://www.rns-pdf.londonstockexchange.com/rns/2600L_-2011-7-28.pdf 

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.

Morgan Stanley which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Xcite Energy and for no one else in connection with the subject matter of this announcement and will not be responsible to anyone other than Xcite Energy for providing the protections afforded to its clients or for providing advice in connection with the subject matter of this announcement.

Oriel Securities which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Xcite Energy and for no one else in connection with the subject matter of this announcement and will not be responsible to anyone other than Xcite Energy for providing the protections afforded to its clients or for providing advice in connection with the subject matter of this announcement.

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 October 26, 2010 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.