Exercise of Warrants

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION

TSX-V, LSE-AIM: XEL

29 May 2012

Xcite Energy Limited

("Xcite Energy" or the "Company")

Exercise of Warrants

Xcite Energy announces that Socius CG II, Ltd ("Socius") has exercised on a cashless basis the warrants issued in connection with the second stage of the private placement announced on 10 February 2012. As a result, the Company will issue 6,449,599 ordinary shares of no par value in the Company ("the New Ordinary Shares") to Socius on or around 1 June 2012.

Application has been made for the admission to AIM of the New Ordinary Shares. The New Ordinary Shares will rank pari passu with the Company's existing issued ordinary shares.

Following the issue of the 6,449,599 New Ordinary Shares, the issued share capital of the Company will comprise 247,693,630 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.