Xcite Energy Shareholder Update

Xcite Energye remain highly committed to the successful commercial development of the Bentley field, one of the largest undeveloped oil fields in the UK North Sea. They shall continue to provide timely news updates based on the regulatory environment that governs their public listing status.

They recognise that the announcement of 1 December 2011 comprised an evolution of field development plans from those set out earlier in the year. They believe these changes provide the Company with a viable and more financially efficient solution to achieve their shared objective of commercialising the Bentley field.

The update to the market of these plans was not previously announced as it has not yet received a response from DECC. The company had hoped, and remain optimistic, that this response will be received shortly and that the field development update could have been made in conjunction with the announcement of a number of other important events for the Company in the coming weeks.

They are currently waiting for the DECC response with respect to the Field Development Plan (“FDP”). They are unable to provide definitive guidance on when this will be received, but based upon their positive, on-going dialogue with DECC, the Company is expecting to receive the necessary response shortly. This will allow them to move forward with the reconfigured development plan and to deliver Phase 1A on Bentley, which includes an expected First Oil date in the first half of 2012.

Following the response from DECC regarding the FDP, the Company is also optimistic that it will be able to convert the 87 MMbbls of Contingent resources to 2P Reserves in due course. This would assign to the Company approximately 115MMbbls of 2P Reserves, which they believe would be an important milestone in demonstrating the value of the Bentley field.

Work has started on the enhanced oil recovery programme, where they are identifying the technologies and business methods that can deliver significant additional barrels from Bentley through tertiary production techniques. Company’s early work is encouraging.

They have a highly valuable asset being managed by an experienced and knowledgeable team, supported by excellent technical and financial advisers. Bentley remains a complex project, which they are striving to bring to fruition as efficiently as possible in challenging economic circumstances. They have confidence in the outcome and ask for the patience and support of shareholders while they progress the various initiatives.

They reiterate the commitment of the Board of Directors and management team to its shareholders. For over eight years, the Xcite Energy team has been and continues to work hard on the Bentley project and they are now at a decisive stage for the Company, with drilling planning for Phase 1A proceeding on schedule.

[mappress]

Offshore Nieuws Staff , December 13, 2011; Image: mpckr