ELIXIR ENERGY LIMITED — Capital/Financing Update 2011

Dec 22, 2011

ASX ANNOUNCEMENT

23 December 2011

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

Update on Tiger Farmout

Elixir Petroleum Limited (ASX:EXR) ( Elixir ) provides an update in relation to the farmout of Block 211/12b located in the UK North Sea ( Tiger Prospect ).

As previously announced, at the conclusion of the extended exclusivity period in mid-October the proposed farminee had not been able to satisfy the condition precedents to completion under the Farmout Agreement ( FOA ). Elixir has today advised the proposed farminee that it has terminated the FOA.

Although the proposed farminee was able to ultimately achieve the consent of the UK regulator to the farmin and the assignment of operatorship of the Tiger Prospect following the completion of the extended Exclusivity Period, we are advised that the farminee’s source of funding has failed to perform its obligations under its contracted funding arrangements.

We have been further advised that the proposed farminee has commenced legal proceedings to compel the funding source to meet its obligations, and is in discussions with alternative funding partners. If any of these discussions are successful in securing funds, Elixir will consider reengaging with the farminee on the Tiger Prospect.

In the meantime, Elixir has recommenced efforts to secure an alternative farminee to the licence.

Yours sincerely, ELIXIR PETROLEUM LIMITED

Julie Foster Company Secretary

For further information on Elixir Petroleum please visit the Company's website at www.elixirpetroleum.com

Elixir Petroleum Limited

ASX CODE: EXR www.elixirpetroleum.com

ABN 51 108 230 995 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