ELIXIR ENERGY LIMITED — Interim / Quarterly Report 2010

Jul 29, 2010

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

ASX RELEASE

30 July 2010

QUARTERLY ACTIVITIES REPORT FOR THE PERIOD ENDED 30 JUNE 2010

HIGHLIGHTS

• Completion of the acquisition of a 100% interest in the 1.3 million acre Moselle Permit in the East Paris Basin, France

• Commencement of core and cuttings sampling, seismic reprocessing and interpretation and geochemical and petrophysical studies at Moselle

• Workover of the High Island wells delayed due to lack of availability of support vessels following the blowout of the BP operated Macondo well

• Marketing activities for farmout commenced on Block 211/12b (Tiger Prospect), UK North Sea

• Several additional new opportunities currently under consideration

• Cash on hand at the end of the period of $5.1 million

Elixir is an internationally focused upstream oil and gas company with a diversified portfolio of petroleum interests across the exploration, appraisal, development and production lifecycle. Elixir holds interests in licences located in the Gulf of Mexico, the UK North Sea and onshore in France.

A summary of the Group’s activities for the June 2010 quarter is set out below.

DEVELOPMENT AND PRODUCTION

Gulf of Mexico

Project Name: High Island Project (Block 268-A) Location: High Island Area, Offshore Texas, USA Ownership: 30% Working Interest (22.5% Net Revenue Interest) Operator: Peregrine Oil and Gas, LP

The High Island field is located approximately 60 kilometres offshore the Texas coast in the Gulf of Mexico. The field has been in production since September 2007 from two wells and has produced to date in excess of 3.94 billion cubic feet (“Bcf”) of gas and over 147,000 barrels (“Bbls”) of condensate (100% project).

Production uptime for the High Island 268 platform has continued to be curtailed due to gas handling constraints at the nearby High Island 442 processing facility. Both High Island wells have a second shallower zone with gas reserves at original reservoir pressures. Producing from these shallower zones would negate the requirement to utilise the limited compressor capacity on the HI-442 platform, as the wells would have sufficient pressure to flow straight to export.

The US Minerals and Management Service (“MMS”) requires that a prescribed minimum flow rate be reached before a producing horizon can be temporarily or permanently abandoned. During the reporting quarter, Well A1 was producing at rates slightly above the prescribed MMS rate, and therefore further depletion of the current horizon by way of production was needed before the zone could be shut-in ahead of producing from the shallower reservoir in that well.

8 The Courtyard Level 20 Eastern Road 77 St George’s Terrace Bracknell Perth WA 6000 Berkshire RG12 2XB Western Australia Tel: +44 1344 423 170 +61 8 9440 2650 Fax: +44 1344 360 268 +61 8 9440 2699 Website: www.elixirpetroleum.com ABN 51 108 230 995

With a drilling rig locally available, the operator received approval from the High Island joint venture participants in late March 2010 to recomplete Well A1 over the shallower horizon. The intention was that following the recompletion activities, Well A1 would continue to be produced from the deeper horizon until the MMS minimum prescribed production rate was reached. At that point, a work boat would return to the HI-268A platform to close the lower sliding sleeves in Wells A1 and A2, effectively shutting-in the deeper horizons, and would then open the upper sets of sleeves over the shallower horizons allowing these horizons to then be produced.

The recompletion activities were planned to be undertaken in late June, and then depending on the rate of decline in production from Well A1, the subsequent sleeve manipulation would most likely occur within a few months thereafter.

In late April 2010, the BP operated Macondo exploration well offshore Louisiana suffered a catastrophic blowout. As a result, this has led to a severe demand for support vessels of the kind required to assist in the recompletion of Well A1. The unprecedented increase in demand has resulted in significant price escalation for vessels. The High Island joint venture therefore agreed to postpone the workover operation until day rates return to normal values for support vessels and the associated services. If the Macondo well is successfully plugged in the coming weeks, it is expected that normalcy in both availability and day rates will return shortly thereafter, at which point the recompletion of Well A1 will be undertaken.

The following table summarises the production achieved from High Island during the quarter:

High Island 268A		Gas Production	Gas Production	Gas Production			Oil Production	Oil Production	Oil Production
	Total Jun Qtr (MMscf)	Total Mar Qtr (MMscf)	Avg Daily Jun Qtr (MMscf/d)	Avg Daily Mar Qtr (MMscf/d)	Change (%)	Total Jun Qtr (Bbls)	Total Mar Qtr (Bbls)	Avg Daily Jun Qtr (Bbls/d)	Avg Daily Mar Qtr (Bbls/d)	Change (%)
Project (100%)	32.3	27.7	0.35	0.31	+17%	10,394	12,738	114	142	-18%
Elixir (30% WI)	9.7	8.3	0.11	0.09	+17%	3,118	3,821	34.3	42	-18%

Production uptimes for the quarter for Wells A1 and A2 were 94% and 90% respectively. The uptime result was partially impacted as a result of a four day shut-down due to process maintenance requirements. Production was intermittent as a result of capacity constraints on the Maritech HI-442 production facilities. At times during the quarter the A2 well was shut-in or severely choked back, leading to the lower production uptime figures. There were no reported safety incidents in the period.

Project Name: Pompano Gas Project (Block 446-L SE/4) Location: Brazos Area, Offshore Texas, USA Ownership: 25% Working Interest (18.125% Net Revenue Interest) Operator: AnaTexas Offshore Inc.

The Pompano field lies within the Brazos Area of the Gulf of Mexico and is located approximately 6 kilometres offshore the Texas coast and 110 kilometres south of Houston. The field has two production wells, with each producing from two separate reservoirs. The field has produced approximately 5.11 Bcf of gas and 5,000 Bbls of condensate (100% project) since the commencement of production in March 2008.

The following table summarises the production achieved from Pompano for the reporting period:

2

Pompano Field – Brazos Block 446-L		Gas Production	Gas Production	Gas Production			Oil Production	Oil Production	Oil Production
	Total Jun Qtr (MMscf)	Total Mar Qtr (MMscf)	Avg Daily Jun Qtr (MMscf/d)	Avg Daily Mar Qtr (MMscf/d)	Change (%)	Total Jun Qtr (Bbls)	Total Mar Qtr (Bbls)	Avg Daily Jun Qtr (Bbls/d)	Avg Daily Mar Qtr (Bbls/d)	Change (%)
Project (100%)	516	535	5.7	5.9	-5%	482	179	5.3	2.0	+269%
Elixir (25% WI)	129	134	1.4	1.5	-5%	121	45	1.3	0.5	+269%

The field achieved a 100% uptime result over the quarter with no safety incidents reported. The field produced at a steady rate with monthly averages varying between 5.84 and 5.54 mmscf/d.

The two primary zones that continue to contribute to production are the B Sand in Well ATO #1 and the E Sand in Well ATO #2, with over 95% of the daily total coming from these two horizons. Minor contributions are made from the B Sand in Well ATO #2. At this point, no immediate additional work is planned for the Pompano field, however some platform maintenance activities are scheduled for early Q4, 2010.

APPRAISAL

UK North Sea

Project Name: Mulle Prospect (Block 211/22b and 211/27d) Location: Northern UK North Sea Ownership: 40% Working Interest Operator: DNO (UK) Limited

The Mulle accumulation lies in Block 211/22b on the south-western extension of the Osprey ridge and is adjacent to the proposed Causeway oil field development.

The operator of Block 211/22b has published a most likely contingent resource estimate for Mulle of 18 million barrels of oil. This equates to a most likely net contingent recoverable oil resource to Elixir of almost 7 million barrels. This resource estimate excludes the anticipated increase in resources from the award of Block 211/27d to the Mulle joint venture in 2009, which contains a mapped southern extension to the field.

The operator is currently finalising a phased appraisal work programme that is anticipated to reduce the upfront capex commitment for potential farm-in partners. The outcome of these studies is due to be reviewed in August with a view to re-marketing the project to industry in Q4, 2010. The current licence term for Blocks 211/22b and 27d does not expire until late 2011.

EXPLORATION

France

Project Name: Moselle Permit Location: Northeastern France Ownership: 100% Working Interest Operator: Elixir Petroleum (Moselle) Limited

The Moselle Permit is a 5,360 km[2] onshore exploration block located in north-eastern France. The Permit is prospective for a number of different play types, including conventional oil and gas, unconventional gas (i.e. tight sand and shale gas) and coal bed methane. Over 4,000 kilometres of 2D

3

seismic exists over the block and several dozen oil and gas wells have been drilled in around the Permit area over the past 60 years, with the last well drilled in the Permit in 1995. The Permit was awarded in January 2009 for an initial five year term. Elixir acquired operatorship and a 100% working interest in the Permit in April 2010.

Following the completion of the acquisition of the Permit, Elixir has embarked upon an extensive data gathering exercise and has initiated a number of technical studies designed to assess the prospectivity of the permit area, particularly for unconventional shale gas. It expected that the outcomes of the studies will allow for the generation of an in-place hydrocarbon resource estimate for the Permit area.

A database containing information and digitised logs on over 100 regional wells has been assembled, with 24 of these wells located within the Permit area. A 500 kilometre, 2D seismic grid has been established with the reprocessing of the first 200 kilometres of seismic data now complete. The reprocessing of the final 300 kilometres of 2D data is due to be completed prior to the end of Q3, 2010. The interpretation of the reprocessed seismic has also commenced, with initial results expected from the first batch of seismic within the next two months.

Five key wells in, and adjacent to, the Permit area have been identified as wells of interest from the perspective of evaluating unconventional gas shale potential in the Westphalian and Stephanian aged Carboniferous coal and shale measures. Core and cuttings have been located and sampled from these five wells for geochemistry and petrophysical analysis. The results from this work are expected during Q3, 2010. The analytical programme is being conducted by a world leading consultant group in evaluating unconventional shales, Core Laboratories.

==> picture [240 x 55] intentionally omitted <==

==> picture [240 x 54] intentionally omitted <==

==> picture [240 x 54] intentionally omitted <==

==> picture [240 x 54] intentionally omitted <==

==> picture [240 x 54] intentionally omitted <==

==> picture [240 x 55] intentionally omitted <==

Elixir participated in the inaugural Lorraine Basin operators meeting in May 2010. The meeting was held in Commercy, France and Elixir was invited to observe coiled tubing drilling operations being conducted at the PLM2 well site in the Atilla Permit area, located immediately adjacent to the Moselle Permit’s western boundary.

Recent Regional Acquisition Activity

In May 2010, Toreador Resources Corporation announced that it had farmed out a 50% working interest in its Paris Basin unconventional shale oil acreage to Hess Corporation for a cash and work programme commitment totalling up to US$285 million. The transaction excludes Toreador’s producing conventional oil fields within the Paris Basin.

Toreador currently holds permits covering 680,000 acres and is expecting to be awarded a further 360,000 acres within which they believe there exists oil shale potential. This transaction further demonstrates the international interest in unconventional resource plays in Western Europe and also provides a useful valuation yardstick for future similar transactions within the Paris Basin.

Figure 1: Well Core Sampling in France (July 2010)

UK North Sea

4

Project Name: Tiger Prospect (Block 211/12b) Location: Northern UK North Sea Ownership: 100% Working Interest Operator: Elixir Petroleum (Europe) Limited

Block 211/12b is located in the northern sector of the UK North Sea, approximately 160 kilometres north east of the Shetland Islands, in a water depth of approximately 186 metres. The Block contains the Tiger prospect, which lies 5 kilometres to the east of the Magnus field. The Magnus field was brought into production in 1983 by BP with an in-place volume of approximately 1.54 billion barrels of oil.

The target reservoir in the Tiger prospect is the Magnus Sandstone Member, over 500 feet of which was encountered in Well 211/12b-15. This well was drilled down-dip of the Tiger Prospect in 1992. The equivalent sands in the nearby Magnus Field have excellent porosity and permeability characteristics. Evidence from the 211/12b-15 well also indicates the presence of a nearby hydrocarbon column. Reservoir presence and hydrocarbon charge for the Tiger prospect are considered to be low risks.

The technical work programme has been completed and the farm-in opportunity is now being marketed to industry participants. The Block has a licence term of 4 years with a drill-or-drop decision required by February 2012.

Gulf of Mexico

Project Name: Red Fish Prospect (Block 479-L N/2 and NE/4) Location: Brazos Area, Offshore Texas, USA Ownership: 25% Working Interest (18.125% Net Revenue Interest) Operator: AnaTexas Offshore Inc.

No significant additional activity was undertaken on this prospect in the June 2010 quarter.

FINANCIAL SUMMARY AND OTHER MATTERS

At the end of the reporting period, Elixir held cash on hand of approximately $5.08 million. Receipts from production received in the June 2010 quarter were approximately $703,000. The Elixir Group is debt free.

Please find attached the Company’s Appendix 5B for the 3 month period to 30 June 2010.

Yours sincerely, ELIXIR PETROLEUM LIMITED

==> picture [145 x 36] intentionally omitted <==

Andrew Ross Managing Director

For further information, please visit the Company's website at www.elixirpetroleum.com, or contact:

Information contained in this report with respect to the High Island and Pompano Projects and the Red Fish Prospect, was compiled by Elixir or from material provided by the project operators and reviewed by Elixir’s Operations Manager, Ian Lusted, BSc (Hons),SPE , who has had more than 15 years experience in the practice of petroleum engineering. Mr Lusted consents to the inclusion in this report of the information in the form and context in which it appears.

Information contained in this report with respect to the Mulle and Tiger Projects and the Moselle Permit was compiled by Elixir and reviewed by Elixir’s Exploration Director, Iain Knott, BSc, MSc, FGS, AAPG, who has had more than 25 years experience in the practice of geology, including more than 5 years experience in petroleum geology. Mr Knott consents to the inclusion in this report of the information in the form and context in which it appears.

5

Appendix 5B Mining exploration entity quarterly report

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001, 01/06/10.

Name of entity

ELIXIR PETROLEUM LIMITED

	ABN 51 108 230 995 Consolidated statement of cash flows		Quarter ended(“currentquarter”) 30 June 2010	Quarter ended(“currentquarter”) 30 June 2010
			30 June 2010
Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) administration 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other – Recovery from JV Net Operating Cash Flows			Current quarter $A’000	Year to date (12 months) $A’000
			703 (1,406) (3) (602) (151) - 51 - - 15	2,304 (2,548) (68) (1,450) (1,382) - 237 - - 175
			(1,393)	(2,732)
Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets 1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material) Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)			- - - - - - - - -	- - - - - - - - -
			-	-
			(1,393)	(2,732)

• See chapter 19 for defined terms.

Appendix 5B Page 1

30/9/2001

Appendix 5B Mining exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward)	1.13 Total operating and investing cash flows (brought forward)	(1,393)	(1,393)	(2,732)
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other (provide details if material) Net financing cash flows		- - - - - -		- - - - - -
		-		-
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end of quarter		(1,393) 6,387 90		(2,732) 8,081 (265)
		5,084		5,084
Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities
1.2 1.2	Aggregate amount of payments to the parties included in item 1.2 Aggregate amount of loans to the parties included in item 1.10			Current quarter $A'000
				119
				-
	Explanation necessary for an understanding of the transactions
	Payments include: Directors’ fees and salaries. All payments are on normal commercial terms.

• See chapter 19 for defined terms.

Appendix 5B Page 2

30/9/2001

Appendix 5B Mining exploration entity quarterly report

Financing facilities available

Add notes as necessary for an understanding of the position.

3.1 Loan facilities 3.2 Credit standby arrangements	Amount available $A’000	Amount used $A’000
	-	-
	-	-

Estimated cash outflows for next quarter

4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration	$A’000
	445
	465
	218
	543
Total	1,671

Reconciliation of cash

Reconciliation of cash
Reconciliation of cash at the end of the quarter (as	Current quarter	Previous quarter
shown in the consolidated statement of cash flows) to	$A’000	$A’000
the related items in the accounts is as follows.
5.1 Cash on hand and at bank	5,084	6,387
5.2 Deposits at call	-	-
5.3 Bank overdraft	-	-
5.4 Other (provide details)	-	-
Total: cash at end of quarter(item 1.22)	5,084	6,387

Changes in interests in mining tenements

6.1 Interests in mining tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements acquired or increased	Tenement reference	Nature of interest (note (2))	Interest at beginning ofquarter	Interest at end of quarter
	-	-	-	-
	Moselle Permit	Working interest	0%	100%

• See chapter 19 for defined terms.

Appendix 5B Page 3

30/9/2001

Appendix 5B Mining exploration entity quarterly report

Issued and quoted securities at end of current quarter

Description includes rate of interest and any redemption or conversion rights together with prices and dates.

	Total number	Number quoted	Issue price per security (see note 3) (cents)	Amount paid up per security (see note 3) (cents)
7.1 Preference ~~+~~securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs, redemptions	-	-	-	-
	- -	- -	- -	- -
7.3 ~~+~~Ordinary securities 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs	188,988,472	188,988,472	Various	FullyPaid
	- -	- -	- -	- -
7.5 ~~+~~Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted	-	-	-	-
	- -	- -	- -	- -
7.7 Options Employee Options Tranche 1 Employee Options Tranche 2 Employee Options Tranche 3 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter Ambrian Options	1,750,000 3,250,000 2,750000 7,750,000		Exercise price $0.25 $0.30 $0.35	Expiry date 31 Mar 2011 31 Mar 2012 31 Mar 2013
	637,148		$0.60	16 May 2010
7.11 Debentures (totals only)
7.12 Unsecured notes(totals only)

• See chapter 19 for defined terms.

Appendix 5B Page 4

30/9/2001

Appendix 5B Mining exploration entity quarterly report

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).

• 2 This statement does / ~~does not*~~ (delete one) give a true and fair view of the matters disclosed.

Sign here: ............................................................ Date: 30 July 2010 ( ~~Director/~~ Company secretary)

Print name: Julie Foster

Notes

• 1 The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

• 2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

• 3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities .

• 4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.

• 5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

== == == == ==

• See chapter 19 for defined terms.

Appendix 5B Page 5

30/9/2001