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Commencement of Pre-Production Flow Test


July 9, 2012 - Aberdeenshire, United Kingdom



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TSX-V, LSE-AIM: XEL

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



9 July 2012



Commencement of Pre-Production Flow Test

The Company announces that it has now successfully completed the final
part of the 9/03b-7 & 7z well lateral well construction work programme,
including installation of the smart completions equipment (enabling
individual laterals to be flowed, co-mingled or shut-in), the
installation of twin electrical submersible pumps (giving full
redundancy) and a down hole safety valve.

The on-rig process and control packages have been fully commissioned
and linked to the pipeline and in-field dynamically-positioned shuttle
tanker, Scott Spirit.

The pre-production flow test operations on the 9/03b-7 (B6) lateral
well were successfully commenced this morning and the well is currently
being cleaned up. This flow test is not a headline flow rate test; it
is a data gathering exercise.

The 9/03b-7 lateral well is planned to recover a minimum cumulative
volume of 45,000 barrels of oil during the flow test period, to help
ensure that the data gathering will be as effective as possible and
will be used to calibrate the existing reservoir model and update the
Reserves Assessment Report.

This flow test is planned to be up to 90 days in length and to be
conducted at a range of different flow rates (specifically not 500
barrels per day for 90 days), to collect additional reservoir and
production data, including data with respect to enhanced oil
recovery.This data will be used to further increase the certainty with
respect to the longer term oil, gas and water production profiles and
recoverable reserves from the Bentley field.




Commenting on today's announcement Steve Kew, Exploration and
Development Director, said:"We are very pleased with the production test
work programme to date,
with all major elements having been completed safely and competently.
This is a significant step forward for the Company in proving its
technical capabilities in the drilling of these wells with the
multi-lateral smart completions that have been installed. The start-up
of the production test has gone well and we shall continue to provide
operational updates in due course."

ENQUIRIES:

+44 (0) 1483 549 063
Xcite Energy Limited
Richard Smith / Rupert Cole
Rothschild (Financial Adviser) +44 (0) 207 280 5000
Neeve Billis / 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
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)
acceptsresponsibility for the adequacy or accuracy of this release.







This information is provided by RNS
The company news service from the London Stock Exchange

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