Exercise of Share Warrants

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

TSX-V, LSE-AIM: XEL

7 October 2010

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 212,800 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 8 October 2010.

Following Admission, the Company's enlarged issued share capital will comprise 145,231,076 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 145,231,076.

This figure of 145,231,076 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.