ELIXIR ENERGY LIMITED — Capital/Financing Update 2008

Jan 29, 2008

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ASX RELEASE

30 January, 2008

POMPANO PROJECT UPDATE – WELL#1 TO BE COMPLETED FOR PRODUCTION

Elixir Petroleum Limited (“Elixir” or “the Company”) is pleased to provide an update on drilling activities at the Pompano Project.

Well No. SL 103229 (“Well #1”) reached total depth on Saturday 26 January 2008 at 7,821 feet Measured Depth. Gas returns in the mud were encountered whilst drilling the primary targets. Several zones were logged while drilling and were found to be gas bearing in the 6,700 sands, the A sands and the B sands.

Following measurement of formation pressures the logged pay encountered is considered commercial and the joint venture has elected to complete Well #1 as a producer. Completion activities will commence immediately together with platform and flow line refurbishment. It is expected that the completion of Well #1 will take 15 days.

Elixir’s Managing Director, Andrew Ross, said:

“We are very pleased with drilling results from our first well at the Pompano Project and are looking forward to starting completion activities.”

The Participants in Well #1 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.

Elixir’s 25% working interest in Well #1 will be reduced by 5.0% pursuant to a ‘back-in’ arrangement with the operator once Elixir has recouped its total investment in the well, plus 20%.

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.

The Pompano gas field was discovered in 1966 and has 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 has been directionally drilled from the field’s existing “B” satellite platform to 7,821 feet measured depth. Well #1 was designed to test several potentially gas bearing sands located between 3,800 feet and 7,900 feet measured depth. Several of these sands have been productive down dip of the Well #1 location, or nearby within the Pompano field.

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

Information contained in this report with respect to the Pompano Project, was compiled from material provided by the project operators and reviewed by P D Allchurch, BSc, FAIMM, MPESA, who has had 40 years experience in the practice of geology including more than 5 years experience in petroleum geology. Mr Allchurch consents to the inclusion in this report of the information in the form and context in which it appears.

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