ELIXIR ENERGY LIMITED — Capital/Financing Update 2012

Dec 9, 2012

ASX ANNOUNCEMENT

10 December 2012

Company Announcements Office ASX Limited Level 8, Exchange Plaza 2 The Esplanade PERTH WA 6000

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UK North Sea Farmout

Elixir Petroleum Limited (“Elixir” or the “Company”) (ASX:EXR) is pleased to announce the entry into a farmout agreement ( Farmout ) with UK based oil and gas exploration company, Adriatic Oil Plc ( Adriatic ) in relation to Elixir’s 100% owned and operated Seaward Production Licence P1921 ( Licence ).

Background

The Licence has been granted over Blocks 12/18 and 12/19c ( Blocks ) which are located in the Inner Moray Firth area of the UK North Sea ( see Figure 1 ). The Blocks are contiguous and are approximately 150km north east of Inverness, in a water depth of approximately 75m. The Licence was awarded to Elixir under the 26th UK Seaward Licensing Round in early 2012.

A single large stratigraphic oil prospect named ‘Sunset’ has been identified in the Middle Jurassic Beatrice Formation on the northern edge of the Smith Bank High. ‘Sunset’ is predicted to have Beatrice Formation reservoir sands, which have been identified as an acoustic impedance anomaly on several 2D seismic lines. No wells to date have targeted the Smith Bank High in the Blocks.

Farmout Terms

Under the terms of the Farmout, Adriatic will be assigned a 25% participating interest in the Licence in consideration for agreeing to fund the cost of interpreting newly purchased 3D seismic data over the Blocks up to an agreed maximum value, together with a cash contribution towards Elixir’s prior costs on the project. Elixir will remain operator of the Licence.

If following the interpretation of the 3D data it is determined that reprocessing is required, Adriatic will have an option to earn an additional 25% participating interest by carrying Elixir’s share of the costs of the reprocessing on a partially promoted basis. Alternatively, if it is determined the 3D data does not require reprocessing and a drill ready target exists, Adriatic will have an option to acquire an additional 25% participating interest by paying £100,000 and granting a 10% gross overriding royalty to Elixir.

The Farmout has been approved by the UK Department of Energy and Climate Change and the transaction completed on 7 December 2012.

Commenting on the announcement Elixir‘s Managing Director, Andrew Ross said:

“We are pleased to have been able to attract Adriatic as a partner in Blocks 12/18 and 19c to work with us in advancing the prospectivity identified in the Blocks.

“With Adriatic’s participation, we look forward to moving the ‘Sunset’ Prospect to drill ready status during 2013.”

Elixir Petroleum Limited

ASX CODE: EXR www.elixirpetroleum.com

ABN 51 108 230 995 Level 1, 89 St George’s Terrace PERTH WA 6000, AUSTRALIA T: +61 8 9226 2111 F: +61 8 9226 2099 E: info@elixirpetroleum.com

Yours sincerely, ELIXIR PETROLEUM LIMITED

Keith Bowker Company Secretary

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

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Figure 1 – Map of Licence and Sunset Prospect

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