Xcite Energy Limited ("Xcite Energy" or the "Company") - Issue of US$50 million of Unsecured 14% Loan Notes

    




  

 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART  DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO  WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF  SUCH JURISDICTION 

 TSX-V, LSE-AIM: XEL 

 TORONTO, April 5, 2012 /CNW/ - Xcite Energy announces that it has today  issued US$50 million of unsecured Loan Notes to a fund managed by West  Face Capital Inc. ("West Face"), a Canada-based investment management  firm. 

 The Loan Notes have an initial term of 360 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$1 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 raised by the issue of these Loan Notes strengthen the  Company's balance sheet and provide additional contingency funding  during the important Phase 1A work programme on the Bentley field. The  funds will be used for the Company's working capital requirements and  general corporate purposes. 

 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 annual Management's Discussion and Analysis for Xcite  Energy dated 22 March 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. 

Xcite Energy Limited


CONTACT:  ENQUIRIES: Xcite Energy Limited [phone]Richard SmithChief Executive OfficerRupert ColeChief Financial OfficerOriel Securities (Joint Broker and Nomad)[phone]Emma GriffinPartnerMichael ShawPartnerMorgan Stanley (Joint Broker)[phone]Andrew FosterManaging DirectorPelham Bell Pottinger+44 (0) 207 861 3232Mark AntelmeDirectorHenry LerwillAccount DirectorParadox Public Relations+1 514 341 0408Jean-Francois MeilleurConsultant 


    

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