Drawdown on Equity Line

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

TSX-V, LSE-AIM: XEL

November 4, 2010

Xcite Energy Limited

("Xcite Energy" or the "Company")

Drawdown on Equity Line

Xcite Energy announces that it has drawn down on its Standby Equity Distribution Agreement ("SEDA") with YA Global Master SPV Ltd ("Yorkville") in the amount of £7 million. This draw down under the SEDA has been undertaken at a price of £1.5385 (CAD$2.50) per share and will result in the issue of 4,549,886 million ordinary shares of no par value in the capital of the Company (the "New Ordinary Shares") to Yorkville.

As stated in its press release of September 28, 2010, funding under the SEDA will be used as future working capital for the Company and to progress towards the first stage production of the Bentley field without delay.

In connection with this draw down, the Company will pay to Yorkville a fee of £75,000 and will issue to Yorkville 150,000 share purchase warrants. Each share purchase warrant entitles Yorkville to subscribe for an additional share in the capital of the Company at a price of £3.62 (CAD$5.90) for a period of 24 months from the date of issue.

Subject to the terms of the SEDA and except in accordance with Canadian securities laws and with prior written approval of the TSX Venture Exchange, the shares issued to Yorkville under this draw down may not be sold or otherwise traded on or through the facilities of the TSX Venture Exchange or otherwise in Canada or to or for the benefit of a Canadian resident until the date that is four months and one day from the date of issue.

Application will be made for the admission to AIM ("Admission") of the New Ordinary Shares upon approval of the share issue by the TSX Venture Exchange. The New Ordinary Shares will rank pari passu with the Company's existing issued Ordinary Shares.

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.