Option Award to Management and Project Team

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

26 June 2012

Xcite Energy Limited

("Xcite Energy" or the "Company")

Option Award to Management and Project Team

Xcite Energy announces the award of an aggregate of 4,700,000 options to purchase ordinary shares of the Company to members of the Company's senior (non-board) management team and to certain members of the Bentley field project team.

The options, which vest immediately, 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 25 June 2012. All options have an exercise price of CAN$1.19 (£0.74) per ordinary share and are exercisable for a period of five years. This award is made in recognition of the significant progress made in the Phase 1A and Phase 1B work programmes during 2012.

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.