Xcite Energy Limited: Issue of US$10 million of Unsecured 14% Loan Notes

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ABERDEENSHIRE, UNITED KINGDOM--(Marketwire -08/08/12)-

 
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TSX-V, LSE-AIM: XEL

8 August 2012


Xcite Energy Limited
("Xcite Energy" or the "Company")

Issue of US$10 million of Unsecured 14% Loan Notes

Xcite Energy announces that it closed yesterday on the issue of US$10
million of unsecured Loan Notes to a fund managed by West Face Capital
Inc. ("West Face").

The Loan Notes have been issued on the same principal terms as the
US$50 million of unsecured Loan Notes previously issued to West Face as
announced on 10 April 2012.

The Loan Notes have an initial term of 236 days and, subject to West
Face approval, may be extended by XEL for a further 360 days. The Loan
Notes bear interest at 14% per annum payable in arrears on 31 March, 30
June, 30 September and 31 December in each relevant year and at
maturity. Interest can be paid or rolled up into the principal amount
of the Loan Notes at the Company's discretion.

West Face is entitled to receive a maintenance fee equal to 1% of the
outstanding principal amount of the Loan Notes 180 days from issue date
and at maturity. The Company has paid a fee of US$0.2 million to a
third party in connection with the initiation of this transaction.

The Company may prepay the Loan Notes at any time after 14 August 2012,
either in full or in part in an amount equal to at least 10% of the
principal amount outstanding, provided that it also pays on the amount
prepaid accrued interest up to the date of prepayment and an amount
equal to the interest that would have been paid on the amount prepaid
up to maturity.

In certain circumstances (including any person(s) acquiring a 35% or
greater holding in XEL's shares, the current directors of XEL ceasing
to constitute the majority of its board, the amalgamation or merger of
XEL into another company or the liquidation of XEL), holders of Loan
Notes may elect to have all or part of the principal amount of their
Loan Notes prepaid together with accrued interest and an amount equal
to the interest up to maturity that would have been paid, on the amount
prepaid.

Prepayment of the Loan Notes, together with accrued interest and an
amount equal to the interest that would have been paid up to maturity,
on the amount prepaid, may also be required from the proceeds of any
non-ordinary course disposal of assets by XEL or its subsidiary, Xcite
Energy Resources Limited.

West Face is also entitled to be paid in the event of any prepayment on
the Loan Notes an amount equal to the maintenance fee that it would
have been otherwise paid on the amount of Loan Notes prepaid.

The funds will be used to provide contingency funding during the
important Phase 1A work programme on the Bentley field.


ENQUIRIES:

Xcite Energy Limited +44 (0) 1483 549 063
Rupert Cole / Steve Kew

Rothschild (Financial Adviser) +44 (0) 207 280 5000
Stewart MacDonald

Oriel Securities (Joint Broker and Nomad) +44 (0) 207 710 7600
Emma Griffin / Michael Shaw

Morgan Stanley (Joint Broker) +44 (0) 207 425 8000
Andrew Foster

Pelham Bell Pottinger +44 (0) 207 861 3232
Mark Antelme / Henry Lerwill

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

Oriel Securities Limited, which is authorised and regulated in the
United Kingdom by the Financial Services Authority, is acting
exclusively for Xcite Energy and for no one else in connection with the
subject matter of this announcement and will not be responsible to
anyone other than Xcite Energy for providing the protections afforded
to its clients or for providing advice in connection with the subject
matter of this announcement.

Morgan Stanley, which is authorised and regulated in the United Kingdom
by the Financial Services Authority, is acting exclusively for Xcite
Energy and for no one else in connection with the subject matter of
this announcement and will not be responsible to anyone other than
Xcite Energy for providing the protections afforded to its clients or
for providing advice in connection with the subject matter of this
announcement.

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 26 October
2010 and in the Management's Discussion and Analysis for Xcite Energy
dated 25 July 2012 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.

Neither the 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.



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