Award of Options to Directors and Management Team

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

TSX-V, LSE-AIM: XEL

March 29, 2010

Xcite Energy Limited

("Xcite Energy" or the "Company")

Award of Options to Directors and Management Team

Xcite Energy Limited, a developer of heavy oil assets in the UK North Sea, today announces the award of (in aggregate) 4,093,000 options to purchase ordinary shares of the Company to the following Directors and members of the Xcite Energy Resources Limited (the Company's wholly owned subsidiary) management team:

Roger Ramshaw (100,000), Gregory Moroney (100,000), Timothy Jones (100,000), Scott Cochlan (100,000), Richard Smith (831,000), Stephen Kew (831,000), Rupert Cole (831,000), Jonathan Dale (150,000), Barnaby Brennan (300,000), Richard West (450,000) and Charles Lucas-Clements (300,000).

The options were granted under the terms of the Company's share option scheme by reference to the closing price of the Company's ordinary shares on March 26, 2010, to vest in three equal tranches with one third vesting immediately, one third on the first anniversary of grant and one third on the second anniversary of grant. All options have an exercise price of £0.44 (CAN$0.68) per ordinary share and are exercisable for a period of five years. This award recognises the significant progress that has been made with respect to the Bentley field during 2009 and early 2010.

Following these option awards, the Directors of the Company have the following aggregate number of ordinary shares under option:

ENQUIRIES:

Neither 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.