Xcite Energy Limited ("Xcite Energy" or the "Company") Option Award to Directors and Management Team

Xcite Energy Limited

 (TSX-V: XEL) (LSE: XEL) (AIM: XEL)

This announcement is not for release, publication or distribution in or into the United States.

Xcite Energy announces the award of in aggregate 1,630,000 options to purchase ordinary shares of the Company to each of the following Directors and members of the Xcite Energy Resources Limited (the Company's wholly owned subsidiary) management team:

Roger Ramshaw, Gregory Moroney, Timothy Jones, Scott Cochlan, Richard Smith, Stephen Kew, Rupert Cole, Jonathan Dale, Barnaby Brennan, Richard West, Charles Lucas-Clements and Thomas Blystad.

The options, which vest immediately, were granted under the terms of the Company's share option scheme by reference to the closing price of the Company's ordinary shares on 31 December 2010. All options have an exercise price of CAN$5.95 per ordinary share and are exercisable for a period of five years. This award recognises the outstanding outcome to the 9/3b-6 well on the Bentley field.

Following these option awards, the Directors of the Company have the following aggregate number of ordinary shares under option:

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                           Option award now being  Aggregate ordinary shares
                                    made                  under option
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Roger Ramshaw                      90,000                   590,000
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Gregory Moroney                    90,000                   390,000
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Timothy Jones                      90,000                   490,000
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Scott Cochlan                      90,000                   490,000
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Richard Smith                      90,000                  2,421,000
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Stephen Kew                        90,000                  2,421,000
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Rupert Cole                        90,000                  2,421,000
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Neither 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.

ENQUIRIES: Xcite Energy Limited [phone] Richard Smith Chief Executive Officer Rupert Cole Chief Financial Officer Arbuthnot Securities Limited (Nomad and Broker) [phone] Antonio Bossi Director Pelham Bell Pottinger [phone] Mark Antelme Director Henry Lerwill Paradox Public Relations [phone] Jean-Francois Meilleur Consultant