ELIXIR ENERGY LIMITED — Capital/Financing Update 2008

Mar 24, 2008

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ASX RELEASE

25 March, 2008

POMPANO PROJECT – OPERATIONAL UPDATE

Elixir Petroleum Limited (“Elixir”) is pleased to provide an update on drilling operations on Well SL 103230 #1 (“Well #2”) at the Pompano Gas Field at Brazos Block 446-L SE/4.

Since our last announcement, the operator of the Pompano Project, AnaTexas Offshore Inc, has advised that the Well #2 has been drilled to 8,627ft Measured Depth (“MD”), which is approximately 200ft below the base of the ‘E’ sands. Due to difficult drilling conditions, the joint venture has elected to run the 5 ½” liner at this depth as a contingency before drilling on to the ‘F’ and ‘G’ sand targets. A logging run has been carried out on the ‘E’ sands and the 5 ½” liner was being run in the hole at 15:00hrs 24/03/08 (US/CST).

The final hole section will be drilled to a revised planned depth of 9,150ft MD and the ‘F’ and ‘G’ sands will then be logged and evaluated.

Thus far Well #2 has encountered hydrocarbon bearing sands in the 6700, B, C and E sands. Once the F and G sands have been evaluated, a completion program will be developed to optimise the production and recovery from these zones.

The Participants in Well #2 and their respective working interests are:

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

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

Elixir’s 25% working interest in Well #2 will be reduced by 5.5% pursuant to a ‘back-in’ arrangement with the Operator once Elixir has recouped 120% of its total investment in the well.

Yours sincerely,

Alex Neuling Company Secretary Elixir Petroleum Ltd

Golden Cross House 8 Duncannon Street London WC2N 4JF Tel: +44 207 484 5019 Fax: +44 207 484 4992 Website: www.elixirpetroleum.com

Level 20 77 St George’s Terrace Perth WA 6000 Western Australia +61 8 9440 2650 +61 8 9440 2699 ABN 51 108 230 995

Pompano Project – Background

The Pompano gas field lies offshore in the Gulf of Mexico, in Brazos Block 446-L SE/4, which is approximately 90 miles southwest of Houston Texas. The field is approximately 7 miles offshore in 55 feet of water.

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Schematic: Pompano Field Layout

The Pompano gas field was discovered in 1966 and produced over 120 billion cubic feet of gas prior to being shut-in in 2003. The Pompano Project is essentially a re-development of the Pompano gas field with new well locations based on modern 3D seismic data.

Well #1 was directionally drilled in January 2008 from the field’s existing “B” satellite platform to 7,825 feet measured depth. Well #1 intersected three gas bearing sands located between 6,700 feet and 7,426 feet measured depth which have been successfully flow tested. Production commenced from this well on Sunday 9[th] March 2008 from the B and 6700A sands.

Well #2 spudded in late February 2008 and is being directionally drilled from the field’s existing “A” Production Platform to 9,150 feet measured depth. Well #2 is targeting several sands which are anticipated to contain a combination of proved, probable and possible gas reserves.

The Pompano Project will use the field’s extensive existing production and pipeline facilities, which will achieve a significant capital cost saving and a reduction in time to production for the project.

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