Exercise of Share Warrants

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

TSX-V, LSE-AIM: XEL

22 March 2011

Xcite Energy Limited

("Xcite Energy" or the "Company")

Exercise of Share Warrants

The Company announces that application has been made for the admission to AIM ("Admission") of 18,225 new ordinary shares without par value in the Company ("Ordinary Shares"), pursuant to the exercise of warrants. The new Ordinary Shares shall rank pari passu with the Company's existing issued Ordinary Shares and dealings are expected to commence on 25 March 2011.

Following Admission, the Company's enlarged issued share capital will comprise 161,643,899 Ordinary Shares with one voting right per share. There are no shares held in treasury. The total number of voting rights in the Company is therefore 161,643,899.

This figure of 161,643,899 Ordinary Shares may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FSA's Disclosure and Transparency Rules.

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.