Xcite Energy Limited ("Xcite Energy" Or The "Company") - Issue Of US$50 Million Of Unsecured 14% Loan Notes

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TSX-V, LSE-AIM: XEL

TORONTO, April 5, 2012 /PRNewswire/ - 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.

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