ELIXIR ENERGY LIMITED — Capital/Financing Update 2008

Sep 30, 2008

ASX ANNOUNCEMENT

ABN 51 108 230 995

1 October 2008

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

POMPANO – DRILLING 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 Well SL10320 #4 (“Well #3”), the latest development well to be drilled at the Pompano field.

Since our last announcement, the operator at the Pompano Project, Anatexas Offshore Inc., has advised that Well #3 spudded at 07:30hrs on 22 September 2008 (US/CST). The Operator has also confirmed that the 36” caisson has been successfully driven to depth and that the 20” and 13 ½” hole sections have been drilled to planned depth, cased and cemented to surface.

At the time of the Operator’s report at 06:00hrs on 30 September 2008 (US/CST), the rig was making preparations to commence drilling the 9 7/8” hole section from a depth of 3,005 ft. The 9 7/8” hole section will be directionally drilled to an approximate depth of 8,000 ft and is designed to penetrate a number of the target horizons for this well.

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

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

Background to Pompano Project – Well #3

Well #3 is being drilled through a new caisson positioned adjacent to the existing #5 Caisson. The #5 Caisson forms part of the existing field infrastructure and is located approximately 900m to the southwest of the ‘A’ Production Platform to which it is already connected via subsea flowlines (see schematic below).

Well #3 is targeting undrilled and updip fault block compartments immediately adjacent to the recently successful Well #2. The well will be directionally drilled into a total of four primary and two secondary target sands. It is expected that the primary sands will contain proven undeveloped reserves in the horizons encountered by Well #2.

==> picture [473 x 308] intentionally omitted <==

Schematic: Layout of the Pompano Project

It is estimated that Well #3 will take approximately 25 days to drill and evaluate. If a decision is made to complete the well, then these operations are expected to take a further 22 days.

Subject to integrity testing, the existing flowline infrastructure from the Well #3 location to the ‘A’ Production Platform should facilitate a short time frame to production from the well. The addition of a third production stream to the existing two producing wells will require some upgrade activity on the ‘A’ Production Platform which may temporarily interrupt production from the field for short periods.

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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