ELIXIR ENERGY LIMITED — Capital/Financing Update 2008

Jan 24, 2008

==> picture [125 x 101] intentionally omitted <==

ASX RELEASE

25 January, 2008

CONVERTIBLE NOTE ISSUE

Elixir Petroleum Limited (ASX: EXR, AIM: ELP) (“Elixir”) is pleased to announce the proposed issue of 8,571,429 convertible notes at a subscription price of $0.35 (“Notes”) raising a total of $3.0 million before expenses.

Funds raised are expected to be applied primarily towards drilling and development activities at Elixir’s Pompano gas project and for general working capital purposes.

The Notes will be issued to Macquarie Bank Limited without disclosure under section 708 of the Australians Corporations Act. Shareholder approval is not required for the issue, which is within the 15% limit available to the Company under ASX Listing Rule 7.1. The Notes will not be quoted on the ASX or AIM.

The Notes are convertible, at the election of the Noteholder, at a price of $0.35 per share at any time up until 31 December 2008 or are redeemable at face value plus interest on 31 January 2009. The Notes are unsecured and accrue interest at 10% per annum on face value.

The Chairman of Elixir Jon Stewart commented that “Elixir is very pleased to expand its business arrangements with Macquarie Bank Limited who are already a valued shareholder of the Company. Our cashflow comfortably services these Notes with more than US$800,000 of proceeds from October production at High Island received during January and receipts for November production being imminent. At a time when our existing cash balances are being put towards our current drilling activities, this new funding gives us additional working capital to put towards further drilling and development activities that would follow a successful initial well at Pompano”.

Alex Neuling Company Secretary Elixir Petroleum Limited

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