Shareholder Update

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

LSE-AIM: XEL

17 June 2016

Xcite Energy Limited

("Xcite Energy" or the "Company")

Shareholder Update

The Board of Directors notes the fall in the Company's share price this morning and wishes to confirm that, in parallel with the discussions with its principal Bondholders with respect to a potential restructuring of the Bonds, the Company continues with the development funding proposals as stated in the RNS dated 24 May 2016, announcing its first quarter results for the 3 month period ended 31 March 2016.

Forward-Looking Statements

This announcement contains certain forward-looking statements that are subject to the usual risk factors and uncertainties associated with the oil and gas exploration and production business. Whilst the Company believes the expectations reflected herein to be reasonable in light of the information available to it at this time, the actual outcome may be materially different owing to factors beyond the Company's control, or otherwise within the Company's control, for example, if the Company decides on a change of plan or strategy. Accordingly, no reliance may be placed on the figures contained in such forward-looking statements.