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You're exhausting the JVM. Well, you're not, we are. The current method we use to create XLS files isn't optimal and we're looking to address it in a future release.
In the meantime, you have two options:
Use CSV instead of XLS - fast
Increase the JVM so we can use more memory - works but takes more memory
For the 2nd option find this line in your sqldeveloper.conf file in the sql developer bin directory
Change the 256M to something larger. The amount required will largely depend on the amount of data you're writing to XLS.
Tried updating the memory, but didn't make any difference, in fact kept going up and when got to 1024 SQL Dev wouldn't even start.
I did get the extract i mentioned to extract using export to CSV so thanks for that, however then the next extract which was 300K rows same no of colums then caused the same issue even using export -> csv.
So used the /*csv*/ hint with a spool and that seems to work for now.