Xcite Energy Regulatory News (XEL)

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LSE-AIM: XEL

27 September 2016

Xcite Energy Limited

("Xcite Energy" or the "Company")

Shareholder Update

Xcite Energy provides an update on the restructuring of its senior secured bonds (the "Bonds") issued by Xcite Energy Resources plc.

As initially announced by the Company on 21 March 2016 in its full year results for the year ended 31 December 2015, the Company has been in discussions with its principal Bondholders with respect to a potential restructuring of the Bonds. On 16 June 2016, the Company announced an extension of the maturity of the Bonds until 30 September 2016 in order to continue those discussions. On 12 September 2016, the Company subsequently announced that in light of its discussions with Bondholders, it believed that there would be a minimal residual equity stake attributed to the Company's existing shareholders following the restructuring.

Negotiations are being concluded between the principal Bondholders and the Company to finalise the details of the restructuring, but the Company expects that, subject to shareholder approval, the restructuring will comprise 100% of the value of the outstanding Bonds (approximately US$149 million) being exchanged for 98.5% of the enlarged issued share capital of the Company, through the issue of additional shares in the Company ("Proposed Restructuring"). The Company is also in discussions with principal Bondholders in relation to the provision of a working capital facility of up to US$10 million, which remains subject to finalisation of terms and documentation. The Proposed Restructuring will provide the Company with a significantly stronger balance sheet and the working capital to continue to pursue the development of the Bentley field in order to deliver value for all stakeholders in the future.

The directors of the Company recognise that the Proposed Restructuring represents a very significant dilution to existing shareholders, however they believe that it is in the best interests of the Company and, as a result, intend to call an extraordinary general meeting of shareholders (the "Shareholder EGM") to consider and vote upon the Proposed Restructuring. A circular to shareholders will be issued as soon as practicable, containing an explanation of, and rationale for, the Proposed Restructuring, including the likely consequences for shareholders and the Company should the Proposed Restructuring not be supported at the Shareholder EGM.

The directors understand that should shareholders not support the Proposed Restructuring at the Shareholder EGM, the Bondholders intend to pursue enforcement action against the Company. On the basis of advice received by the Company and the directors, the directors believe that such enforcement action is unlikely to result in the return of any value to the Company's existing shareholders.

In order to conclude discussions with Bondholders and to hold the Shareholder EGM, the Company has requested a further short-term extension to the maturity date of the Bonds to the earlier of (i) 31 October 2016; or (ii) immediate demand by the bond trustee (acting on the instructions of Bondholders). The summons to Bondholders in relation to the further extension of the Bonds' maturity date can be found on the Xcite Energy Resources plc section of the Company's website www.xcite-energy.com.

This announcement contains inside information as defined in Article 7 of the Market Abuse Regulation No. 596/2014 and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations.

Forward-Looking Statements

This announcement contains certain forward-looking statements that are subject to the usual risk factors and uncertainties associated with the oil and gas exploration and production business. Whilst the Company believes the expectations reflected herein to be reasonable in light of the information available to it at this time, the actual outcome may be materially different owing to factors beyond the Company's control, or otherwise within the Company's control, for example, if the Company decides on a change of plan or strategy. Accordingly, no reliance may be placed on the figures contained in such forward-looking statements.

Notes to Editors

Xcite Energy (LSE-AIM: XEL) is an oil appraisal and development company with a portfolio of heavy oilfield assets in the Northern North Sea in the UK. Xcite Energy holds a 100% working interest in the Bentley field; a heavy oil field with 2P recoverable reserves of 267 MMstb, making Bentley one of the largest undeveloped oilfields in the UK Continental Shelf.