Mr. Rupert Cole reports

XCITE ENERGY LIMITED - MOU WITH TEEKAY SHIPPING

Xcite Energy Ltd.'s 100-per-cent subsidiary, Xcite Energy Resources Ltd., has entered into a memorandum of understanding with Teekay Shipping Norway AS that sets out the principles of co-operation for the supply of a bridge-linked Sevan floating storage and off-loading facility for the life of the Bentley field.

XER and Teekay intend to work together on an exclusive basis during the project, from front-end engineering through fabrication, hookup and onward into production operations and maintenance.

XER believes that the bridge-linked Sevan FSO offers a number of significant benefits to the overall Bentley field development concept, including available deck space to locate utilities on either the platform or FSO. In addition, XER believes that there would be reduced flow assurance risk, due to the removal of subsea pipelines and minimized motion characteristics to aid reservoir fluid dehydration.

Rupert Cole, chief executive officer of Xcite Energy, commented: "We are very pleased to be joined by Teekay as a partner in the development group, following on from their important role in the successful Bentley extended well test. Building on this relationship as we progress Bentley towards production, we believe will deliver the Sevan FSO as a vital component of the Bentley field development plan."

We seek Safe Harbor.