THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN ORINTO THE UNITED STATES

Xcite Energy (TSX-V: XEL) (LSE: XEL) (AIM: XEL) is a heavy oil companyfocused on the development of discovered resources in the United KingdomNorth Sea. The Company holds a 100% working interest in Block 9/3b, theBentley field, one of the largest undeveloped heavy oil fields in theUnited Kingdom North Sea.

The Company is listed on the AIM Market of the London Stock Exchange (AIM)and the TSX Venture Exchange (TSX-V).

The Company today announces that, in recognition of their contribution tothe progress made during 2008 with respect to the Bentley field, thefollowing options to purchase ordinary shares of the Company at an exerciseprice of CAN$0.07 per ordinary share have been awarded to the followingindividuals in the Xcite Energy Resources Limited (the Company's whollyowned subsidiary) Management Team:

-- Mr Richard West, options to purchase 200,000 ordinary shares of theCompany.

-- Mr Barnaby Brennan, options to purchase 200,000 ordinary shares of theCompany.

-- Mr Charles Lucas-Clements, options to purchase 200,000 ordinary sharesof the Company.

-- Mr Philip Gardner, options to purchase 200,000 ordinary shares of theCompany.

-- Mr Jon Dale, options to purchase 50,000 ordinary shares of the Company.

All of these options are being granted under the terms of the Company'sshare option scheme and are exercisable for a period of five years from thedate hereof.

Richard Smith, Chief Executive of Xcite Energy, commented:

"We are pleased to be able to award additional share options to the keymembers of the Xcite Energy Resources Management Team, all of whom havemade a major contribution to the significant progress that has been madeduring 2008 with respect to the Bentley field."

The TSX-V has not reviewed and does not accept responsibility for theadequacy or accuracy of this release.

Forward-Looking Statements

Certain statements contained in this announcement constituteforward-looking information within the meaning of securities laws.Forward-looking information may relate to the Company's future outlook andanticipated events or results and, in some cases, can be identified byterminology such as "may", "will", "should", "expect", "plan","anticipate", "believe", "intend", "estimate", "predict", "target","potential", "continue" or other similar expressions concerning mattersthat are not historical facts. These statements are based on certainfactors and assumptions including expected growth, results of operations,performance and business prospects and opportunities. While the Companyconsiders these assumptions to be reasonable based on information currentlyavailable to us, they may prove to be incorrect. Forward-lookinginformation is also subject to certain factors, including risks anduncertainties that could cause actual results to differ materially fromwhat we currently expect. These factors include changes in market andcompetition, governmental or regulatory developments and general economicconditions. Additional information identifying risks and uncertainties arecontained in the Company' prospectus filed with the Canadian securitiesregulatory authorities, available at www.sedar.com. The Company disclaimsany intention or obligation to update or revise any forward-lookingstatements whether as a result of new information, future events orotherwise, except as required under applicable securities regulations.

ENQUIRIES:Xcite Energy+44 (0) 1330 826 740Richard SmithChief Executive OfficerRupert ColeChief Financial OfficerThomas Weisel Partners (UK) Limited+44 (0) 20 7877 4300Paul ColucciManaging DirectorPaul NewmanManaging DirectorStrand Partners Limited+44 (0) 20 7409 3494James HarrisDirectorRory MurphyDirectorPelham Public Relations+44 (0) 20 7743 6676Alisdair HaythornthwaiteDirectorMark AntelmeDirector