Xcite Energy Limited Closes C$38.4 million (GBP 24.9 million) Placing

This Announcement Is Not for Release, Publication or Distribution in or Into the United States.

Xcite Energy (TSX-V: XEL) (LSE: XEL) (AIM: XEL), a developer of heavy oil assets in the UK North Sea, is pleased to announce that it has successfully raised gross proceeds of C$38.4 million (approximately GBP 24.9 million) through its previously reported placing of new ordinary shares, principally to institutional investors.

As a result of the placing 61,972,394 new Ordinary Shares have been issued at a price of C$0.62 (GBP 0.40) per Ordinary Share.

The net proceeds of the offering, together with US$4 million in funds committed to the Company by Challenger Minerals (North Sea) Limited, are anticipated to be used primarily to fund the drilling and flow testing of the 9/3b-R pre-development well on the Company's Bentley oil field. The balance of the net proceeds of the offering will be used for general working capital purposes.

Richard Smith, Chief Executive of Xcite Energy, commented:

"This fund raising represents a significant step forward for the Company in the overall achievement of the development plan for the Bentley field. We have successfully obtained commitment from our Bentley partners, BP, Transocean/ADTI/ChallengerMinerals, AMEC and Fugro in the last few months and, now that we have the finance in place, we have the resources to drill the 9/3b-R well expected to commence during the summer of 2010."

The offering was completed by Octagon Capital Corporation and CIBC World Markets Inc. as agents in Canada, and Arbuthnot Securities Limited as special selling agent in the United Kingdom. The TSX Venture Exchange has conditionally approved the listing of the new Ordinary Shares, and the Company has applied to London Stock Exchange Plc for admission of such Ordinary Shares to trading on AIM, which is expected to occur at 14:30 (UK time) on 18 March 2010. Following Admission, the Company expects to have 133,528,192 Ordinary Shares in issue.

The Ordinary Shares have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "Securities Act"), and, may not be offered, sold or delivered, directly or indirectly, in the United States or to or for the account or benefit of any U.S. person unless the securities are registered under the Securities Act or an exemption from the registration requirements of the Securities Act is available. This press release does not constitute an offer to sell or solicitation of an offer to buy any securities, nor shall there by any sale of securities in any state in the United States in which such offer, solicitation or sale would be unlawful.

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.

Forward-Looking Statements

Certain statements contained in this announcement constitute forward-looking information within the meaning of securities laws. Forward- looking information may relate to the Company's future outlook and anticipated events or results and, in some cases, can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "target", "potential", "continue" or other similar expressions concerning matters that are not historical facts. These statements are based on certain factors and assumptions including expected growth, results of operations, performance and business prospects and opportunities. While the Company considers these assumptions to be reasonable based on information currently available to us, they may prove to be incorrect. Forward-looking information is also subject to certain factors, including risks and uncertainties that could cause actual results to differ materially from what we currently expect. These factors include risks associated with the oil and gas industry (including operational risks in exploration and development and uncertainties of estimates oil and gas potential properties), the risk of commodity price and foreign exchange rate fluctuations and the ability of Xcite Energy to secure financing. Additional information identifying risks and uncertainties are contained in the Company's annual information form dated December 8, 2009 and in the annual Management's Discussion and Analysis for Xcite Energy dated March 26, 2009 filed with the Canadian securities regulatory authorities and available at www.sedar.com. The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required under applicable securities regulations.

ENQUIRIES:

Xcite Energy Limited
Richard Smith
Chief Executive Officer
Rupert Cole
Chief Financial Officer
+44 (0) 1330 826 740

Arbuthnot Securities Limited (Broker)
Andrew Fairclough
Ed Burbidge
+44 (0)20 7012 2000

Strand Hanson Limited (Nomad)
James Harris
Rory Murphy
+44 (0) 20 7409 3494

Pelham Bell Pottinger Public Relations
Mark Antelme
Henry Lerwill
+44 (0) 20 7337 1500

Octagon Capital Corporation
H. Richard Smith
Sylvia Lai
+1 416 368 3322

Paradox Public Relations
Jean-Francois Meilleur
Karl Mansour
+1 514 341 0408