ELIXIR ENERGY LIMITED — Capital/Financing Update 2008

Sep 30, 2008

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ASX RELEASE – 1 OCTOBER 2008

DRILLING UPDATE ‐ POMPANO PROJECT

Buccaneer Energy Limited (“Buccaneer” or “the Company”) is pleased to announce Hercules Rig 152 spud the third well in the Pompano field redevelopment program SL 103230 # 4 at 07.30am (USC) on 22 September 2008.

All reported depths are below the Rotary Table Kelly Bushing on the rig floor in Measured Depth (“MD”) and/or True Vertical Depth (“TVD”) since the well is being directionally drilled to a bottom location approximately 1,700 feet to the southeast of the surface location:

Current Depth:

3,005 feet MD

Progress:

The Operator has 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.

The rig is preparing to drill out the 10 3/4” casing and drill ahead in the 9 7/8” hole section.

Hydrocarbon Indications:

Hydrocarbon shows will only be reported after logging and evaluation of the well after reaching the Total Depth. The well will take approximately 4 weeks to drill to the programmed Total Depth of 8,380 feet MD, or 8,000 feet TVD.

Targets:

This well is targeting undrilled and up‐dip fault block compartments immediately adjacent to the recently drilled SL 103230 # 1 well (# 2 well).

The well is designed to test 4 primary and 2 secondary target sands. It is expected the primary sands will contain proven undeveloped reserves in the horizons encountered in the previous well SL 103230 # 1 (# 2 Well).

The well 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 ~900 metres SE of the A Production platform to which t is already connected via sub‐sea flow lines.

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The Participants in this well are as follows:

Participant	Working Interest
Buccaneer Resources*	65.0%
Elixir Petroleum	25.0%
Baron Petroleum+	7.5%
Streamline Exploration+	2.5%

• A wholly owned subsidiary of Buccaneer Energy Limited

• Affiliated with AnaTexas Offshore, Inc. Baron Petroleum and Streamline Exploration are members of Millennium Explorer, LLC., the generator of the Pompano project.

While operations are underway, the Company will issue routine drilling releases every Wednesday or at any such time that material matters require an earlier release.

For further information please contact Dean Gallegos on 0416 220 007 or 02 9233 2520, alternatively visit the Company’s website at www.buccenergy.com.

Yours faithfully

BUCCANEER ENERGY LIMITED

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Mr Dean Gallegos Director

About Buccaneer:

Buccaneer Energy’s wholly owned subsidiary Buccaneer Resources is based in Houston, Texas and is an upstream oil and gas company. It specialises in the development and expansion of behind‐pipe proved and probable reserves and low‐risk exploration plays with growth potential.

Buccaneer’s growth strategy is focused on the progressive expansion of oil and gas production and reserves by acquiring significant working interests in low‐cost, low‐risk development properties that possess significant undeveloped upside.