OilVoice - Xcite Energy Closes C$38.4 million (£24.9 million) Placing

Xcite Energy Closes C$38.4 million (£24.9 million) Placing

Thursday, March 18, 2010

Xcite Energy, a developer of heavy oil assets in the UK North Sea, announces that it has successfully raised gross proceeds of C$38.4 million (approximately £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 (£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.

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