Mr. Rupert Cole reports

XCITE ENERGY LIMITED ANNOUNCES RESULTS FOR 3 AND 6 MONTH PERIODS ENDED 30 JUNE 2014

Xcite Energy Ltd. has released its results for the three- and six-month periods ended June 30, 2014.

Highlights for the year to date:

• Memorandum of understanding signed with Aibel AS, further enhancing the industry service provider partnership for the development of the Bentley field, which already includes AMEC Group Ltd., Ove Arup & Partners Ltd. and Teekay Shipping Norway AS;
• Collaboration agreement signed with Statoil (U.K.) Ltd. and Shell U.K. Ltd., for the sharing of technical and operational information to evaluate potential synergies and collaboration in the development of the Bentley and Bressay oil fields;
• $140-million (U.S.) raised through the issue of senior secured bonds and issue of new equity share capital, and repayment of the $80-million (U.S.) of unsecured loan notes;
• Upgrade in 1P, 2P and 3P oil reserves for the Bentley field to 203 million stock tank barrels, 257 million stock tank barrels and 317 million stock tank barrels, respectively, effective Dec. 31, 2013, and based on an initial 35-year production period;
• Material licence extension granted by the Department of Energy and Climate Change for the Bentley field until Dec. 31, 2016;
• Profit for the three-month period ended June 30, 2014, of 510,000 British pounds;
• Cash balance of 41.5 million British pounds as at June 30, 2014.

Rupert Cole, chief executive officer of Xcite Energy, commented: "We have continued to make good progress towards our near-term objective of the submission of the field development plan, with expansion of the development group, continuing engineering work and constructive contract discussions. With the industry beginning to recognize what can be achieved with an enhanced partnership model and the collaboration initiatives noted from the recently published Wood Review, I am very pleased that the efforts of the team are translating into commercial agreements to develop the Bentley field. With much to do in the coming months, we shall keep stakeholders updated at each step of the way."

Outlook for the balance of 2014

Pre-FEED/assurance engineering, project planning and contract negotiations with existing development partners are under way. The company continues its discussions with additional development partners to complement the Bentley development group, including drilling contractors and services companies as part of its rig tender process and overall well strategy. Xcite Energy will shortly be mobilizing a survey vessel to undertake the pre-FEED geotechnical site investigation for the Arup-designed ACE platform.

The benefits from working with its development partners are becoming evident, as the development group is able to identify and address the key design, engineering, execution and integration issues that will affect the core development assets and the overall development cost and schedule. In addition, there are potential opportunities to realize purchasing and logistical synergies for the benefit of the project as a whole.

The company continues to have discussions with other potential partners as part of its financing strategy, as set out in its full-year results published on March 27, 2014. The company's aim remains focused on reducing the front-end cash requirements of the project by exploring the potential use of asset financing for the ACE platform, leasing of certain key assets (such as the FSO and drilling rig) and some financial participation by its existing development partners. By reducing the initial financing requirement, the company intends to widen the scope of companies with which it can engage.

The recent bond financing and the repayment of the unsecured loan notes has provided a stable financial footing during a key period for the company as it continues to bring together a technically and financially compliant field development plan for the Bentley field with its development partners.

                                FINANCIAL RESULTS
           (in millions of British pounds, except per share amounts)

                                       Six months  Three months  Six months  Three months
                                            ended         ended       ended         ended
                                          June 30,      June 30,    June 30,      June 30, 
Income statement information                 2014          2014        2013          2013

Net profit                                   0.47          0.51         8.3          10.0
Basic earnings per share in British pence    0.16          0.17        2.85          3.43
Diluted earnings per share in British pence  0.14          0.15        2.56          3.07

We seek Safe Harbor.