ELIXIR ENERGY LIMITED — Capital/Financing Update 2008

Oct 14, 2008

ASX ANNOUNCEMENT

ABN 51 108 230 995

15 October 2008 Company Announcements Platform Australian Securities Exchange Level 4 20 Bridge Street SYDNEY NSW 2000 By E-Lodgement

POMPANO FIELD – OPERATIONS UPDATE

Elixir Petroleum Limited (“Elixir”), the international oil and gas exploration and production company (ASX:EXR, AIM:ELP), provides the following update on progress at the latest well to be drilled at the Pompano field and production from the existing wells.

Well SL 103320 #4 (“Well #3”)

Since our last announcement, the operator at the Pompano Project, AnaTexas Offshore Inc., has advised that the 7 5/8” casing was run to a depth of 7,974 feet and cemented in place. The 6 3/4” hole section was then drilled to a final depth of 8,314 feet.

The 6700 ft Sand encountered productive gas with a total net pay of 12 feet. Below the 6700 ft sand the pre-drill structural interpretation proved not to be accurate leading to the B, C and E Sand objectives being water wet.

The well will be temporarily suspended to allow the data gathered from drilling and logging to be fully evaluated and referenced back to the available 3D seismic. A decision will then be made if a completion of the 6700 ft Sand is warranted and/or whether a sidetrack of Well #3 should be drilled to access adjacent targets.

Well SL 103229 #1 (“Well #1”)

The above well was the first in the Pompano re-development program and has recently experienced declining production rates. The major cause of this decline has been assessed as a poor cement job between the B Sand (gas bearing and productive) and the deeper B-2 Sand (water bearing). This has allowed the water from the B-2 Sand to dominate flow.

Whilst this well was shut-in during Hurricane Ike, reservoir pressures were measured and are as expected and normal for the original reserve estimates in both the upper (6700 Sand) and lower (B Sand) completions. Over recent days, the B-2 water production has increased leading to the well being shut in.

To rectify this problem a workover is proposed to attempt to restore production from this well to predecline levels of approximately 5 – 7 million cubic feet per day. A work over rig is currently being sourced to commence this work as soon as possible.

ASX CODE: EXR www.elixirpetroleum.com

Elixir Petroleum Limited

Level 20, 77 St George’s Terrace PERTH WA 6000, AUSTRALIA T: +61 8 9440 2650 F: +61 8 9440 2699 E: info@elixirpetroleum.com

Well SL 103230 #1 (“Well #2”)

The production at this well is performing to expectation.

The Participants in Well #3 and their respective working interests are:

Elixir Petroleum Ltd Buccaneer Energy Ltd Baron Petroleum Inc. Streamline Exploration Inc.	25.0% 65.0% 7.5% 2.5%
	100%

• Interests held indirectly via their respective shareholdings in wholly-owned subsidiaries.

Yours faithfully,

Alex Neuling Company secretary Elixir Petroleum Ltd

For further information, please visit Elixir’s website at www.elixirpetroleum.com

Information contained in this report with respect to the Pompano Project, was compiled by Elixir, or from material provided by the project operator and reviewed by I L Lusted, BSc (Hons),SPE , who has had more than 15 years experience in the practice of petroleum engineering. Mr Lusted consents to the inclusion in this report of the information in the form and context in which it appears.

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