ELIXIR ENERGY LIMITED — Proxy Solicitation & Information Statement 2008

May 15, 2008

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A B N 5 1 1 0 8 2 3 0 9 9 5

Notice of General Meeting

A General Meeting of the Company will be held at 10.00 am on Thursday, 26 June (WST) at Level 20, 77 St Georges Terrace, Perth, Western Australia.

This Notice should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their accountant, stockbroker or other professional adviser prior to voting.

Should you wish to discuss any matter please do not hesitate to contact the Company Secretary by telephone on +61 8 9440 2650.

ELIXIR PETROLEUM LIMITED

ABN 51 108 230 995

NOTICE OF GENERAL MEETING

Notice is hereby given that a General Meeting of Shareholders of the Company will be held at 10.00am on Thursday, 26 June 2008 (WST) at Level 20, 77 St Georges Terrace, Perth Western Australia ("Meeting").

The attached Proxy Form forms part of this Notice of General Meeting (“Notice”).

Please note terms used in the resolution contained in this Notice have the same meaning as set out in the glossary of the Explanatory Statement accompanying this Notice.

The Directors have determined pursuant to regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered as Shareholders of the Company at 5.00 pm on Tuesday, 24 June 2008 (WST).

AGENDA

1. Approval of Elixir Petroleum Limited Employee Option Plan

To consider, and if thought fit, to pass with or without amendment, the following resolution as an ordinary resolution:

"That, for the purposes of Exception 9 of ASX Listing Rule 7.2, section 260C(4) of the Corporations Act, and for all other purposes, approval is hereby given for up to 15,000,000 Options proposed to be granted under the “Elixir Petroleum Limited Employee Option Plan” which is constituted and administered in accordance with the Terms and Conditions of the Elixir Petroleum Limited Employee Option Plan Rules which are tabled by the Chairman at the Meeting and marked “A” for identification purposes.”

Voting exclusion statement

In accordance with ASX Listing Rule 14.11.1, the Company will disregard any votes cast on Resolution 1 by any Director of the Company and their associates.

However, the Company need not disregard a vote if:

• (a) it is cast by a person as proxy for a person who is entitled to vote in accordance with the directions on the proxy form; or

• (b) it is cast by the person chairing the meeting as proxy for a person who is entitled to vote in accordance with the direction on the proxy form to vote as the proxy decides.

2. Issue of Options to Trevor Benson under the Elixir Petroleum Limited Employee Option Plan

To consider and, if thought fit, pass the following resolution as an ordinary resolution of shareholders of the Company:

“That, conditional upon Resolution 1 being approved, for the purposes of ASX Listing Rule 10.14, and for all other purposes, approval is hereby given for the issue of up to 250,000 Options under the Elixir Petroleum Limited Employee Option Plan to Mr Trevor Benson, a Director of the Company, on the terms described in the Explanatory Statement which forms part of this Notice of Meeting.”

Voting exclusion statement

In accordance with ASX Listing Rule 14.11, the Company will disregard any votes cast on Resolution 2 by any Director of the Company and their associates.

However, the Company need not disregard a vote if:

(a) it is cast by a person as proxy for a person who is entitled to vote in accordance with the directions on the proxy form; or

Elixir Petroleum Limited – Notice of General Meeting - June 2008

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• (b) it is cast by the person chairing the meeting as proxy for a person who is entitled to vote in accordance with the direction on the proxy form to vote as the proxy decides.

3. Issue of Options to Iain Knott under the Elixir Petroleum Limited Employee Option Plan

To consider and, if thought fit, pass the following resolution as an ordinary resolution of shareholders of the Company:

“That, conditional upon Resolution 1 being approved, for the purposes of ASX Listing Rule 10.14, and for all other purposes, approval is hereby given for the issue of up to 2,500,000 Options under the Elixir Petroleum Limited Employee Option Plan to Mr Iain Knott, a Director of the Company, on the terms described in the Explanatory Statement which forms part of this Notice of Meeting.”

Voting exclusion statement

In accordance with ASX Listing Rule 14.11, the Company will disregard any votes cast on Resolution 3 by any Director of the Company and their associates.

However, the Company need not disregard a vote if:

• (a) it is cast by a person as proxy for a person who is entitled to vote in accordance with the directions on the proxy form; or (b) it is cast by the person chairing the meeting as proxy for a person who is entitled to vote in accordance with the direction on the proxy form to vote as the proxy decides.

4. Issue of Options to John Robertson under the Elixir Petroleum Limited Employee Option Plan

To consider and, if thought fit, pass the following resolution as an ordinary resolution of shareholders of the Company:

“That, conditional upon Resolution 1 being approved, for the purposes of ASX Listing Rule 10.14, and for all other purposes, approval is hereby given for the issue of up to 250,000 Options under the Elixir Petroleum Limited Employee Option Plan to Mr John Robertson, a Director of the Company, on the terms described in the Explanatory Statement which forms part of this Notice of Meeting.”

Voting exclusion statement

In accordance with ASX Listing Rule 14.11, the Company will disregard any votes cast on Resolution 4 by any Director of the Company and their associates.

However, the Company need not disregard a vote if:

• (a) it is cast by a person as proxy for a person who is entitled to vote in accordance with the directions on the proxy form; or (b) it is cast by the person chairing the meeting as proxy for a person who is entitled to vote in accordance with the direction on the proxy form to vote as the proxy decides.

5. Issue of Options to Andrew Ross under the Elixir Petroleum Limited Employee Option Plan

To consider and, if thought fit, pass the following resolution as an ordinary resolution of shareholders of the Company:

“That, conditional upon Resolution 1 being approved, for the purposes of ASX Listing Rule 10.14, and for all other purposes, approval is hereby given for the issue of up to 2,500,000 Options under the Elixir Petroleum Limited Employee Option Plan to Mr Andrew Ross, a Director of the Company, on the terms described in the Explanatory Statement which forms part of this Notice of Meeting.”

Voting exclusion statement

In accordance with ASX Listing Rule 14.11, the Company will disregard any votes cast on Resolution 5 by any Director of the Company and their associates.

However, the Company need not disregard a vote if:

• (a) it is cast by a person as proxy for a person who is entitled to vote in accordance with the directions on the proxy form; or (b) it is cast by the person chairing the meeting as proxy for a person who is entitled to vote in accordance with the direction on the proxy form to vote as the proxy decides.

Elixir Petroleum Limited – Notice of General Meeting - June 2008

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6. Issue of Options to Jonathan Stewart under the Elixir Petroleum Limited Option Employee Plan

To consider and, if thought fit, pass the following resolution as an ordinary resolution of shareholders of the Company:

“That, conditional upon Resolution 1 being approved, for the purposes of ASX Listing Rule 10.14, and for all other purposes, approval is hereby given for the issue of up to 2,500,000 Options under the Elixir Petroleum Limited Employee Option Plan to Mr Jonathan Stewart, a Director of the Company, on the terms described in the Explanatory Statement which forms part of this Notice of Meeting.”

Voting exclusion statement

In accordance with ASX Listing Rule 14.11, the Company will disregard any votes cast on Resolution 6 by any Director of the Company and their associates.

However, the Company need not disregard a vote if:

• (a) it is cast by a person as proxy for a person who is entitled to vote in accordance with the directions on the proxy form; or (b) it is cast by the person chairing the meeting as proxy for a person who is entitled to vote in accordance with the direction on the proxy form to vote as the proxy decides.

By Order of the Board

Alex Neuling Secretary 16 May 2008

Elixir Petroleum Limited – Notice of General Meeting - June 2008

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EXPLANATORY STATEMENT

This Explanatory Statement has been prepared for the information of Shareholders in relation to the business to be conducted at the Meeting.

The purpose of this Explanatory Statement is to provide Shareholders with all information known to the Company which is material to a decision on how to vote on the resolution in the accompanying Notice. If you have any questions regarding the matters set out in this Explanatory Statement or the preceding Notice, please contact the Company, your stockbroker or other professional adviser.

This Explanatory Statement should be read in conjunction with the Notice. Capitalised terms in the Explanatory Statement are defined in the Glossary.

1. Resolution 1 – Approval of the Elixir Petroleum Limited Employee Option Plan

The Company seeks Shareholder approval for the Elixir Petroleum Limited Employee Option Plan (“Plan”). The Plan is intended to provide employees and Directors of, and consultants to, the Company (“Group Employees”) with an incentive to work towards improving the performance of the Company and the Company’s share price through the receipt of Options.

A copy of the Plan was released to the ASX on 16 May 2008 and a summary of the Plan is set out below.

Under the Plan, the Board may offer Options to Group Employees whom the Board determines should be entitled to participate in the Plan for no initial consideration (however an exercise price is applicable upon conversion). The Board may in its absolute discretion determine criteria to apply to a Group Employee to be able to participate in the Plan including, without limitation, a minimum period of service.

The Company will not apply for ASX quotation of any Options issued under the Plan. The exercise price per Option will be determined by the Board and specified in the offer to the Group Employee.

The Board may determine and specify in the offer to the Group Employee:

• (a) the time periods or other conditions, such as the achievement of performance hurdles, that must be satisfied before Options are vested; and/or

• (b) any other vesting conditions that must be satisfied before Options can be exercised.

The Board will determine the performance hurdles to be applied to awards under the Plan taking into account the Company’s strategies and in accordance with the Company’s remuneration policies. Generally, any awards granted under the Plan for which performance hurdles are not met, will not vest.

Options will be exercisable during the option exercise period specified by the Board in the offer to the Group Employee. Subject to the satisfaction of any applicable vesting conditions before Options can be exercised, Options are exercisable during the specified exercise period by giving notice of the exercise to the Company and by paying the exercise price for the Options exercised. Each Option entitles the holder to subscribe for one Share. The Shares allotted upon exercise of the Options will rank equally in all respects with all other issued Shares of the Company. The Company will apply for official quotation of those Shares on the ASX after they are issued.

Generally, if an Optionholder ceases employment or engagement, Options will lapse. An Optionholder will not be entitled to participate in new issues of Shares or other securities made by the Company to holders of its Shares in respect of his or her Options unless the Options are exercised before the record date for determining entitlements to the issue.

If the Company undergoes a reorganisation of capital (other than by way of a bonus issue or issue for cash) or undertakes a pro-rata issue (other than a bonus issue) of securities, the terms of the Options and the rights of the participants will be changed to the extent necessary to comply with the Listing Rules.

The full Terms and Conditions of the Plan are available on the website of the Company (www.elixirpetroleum.com), go to “About Elixir”, and then “Corporate Governance”.

Elixir Petroleum Limited – Notice of General Meeting - June 2008

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Legislative Requirements

Section 260C(4) of the Corporations Act 2001 , which applies to the Company, permits the Company to provide financial assistance to persons for the purpose of acquiring shares in the Company under an employee share scheme provided shareholder approval is obtained.

Under Exception 9 of ASX Listing Rule 7.2, an issue of securities under an employee incentive scheme is an exception to Listing Rule 7.1 (which contains the restrictions relating to issues exceeding 15% of the issued capital of a listed company in the 12 months before the date of issue) if, within three years before the date of the issue, shareholders have approved the issue of shares as an exception to Listing Rule 7.1.

No Options have yet been granted under the Plan, under which a maximum of 15,000,000 Options can be granted. Resolutions 2 to 6 deal with the proposed grant of 8,000,000 Options under the Plan to Directors of the Company.

A Voting Exclusion Statement is set out under the resolution in the Notice of Meeting.

2. Resolutions 2, 3, 4, 5 and 6: Issue of Options to Trevor Benson, Iain Knott, John Robertson, Andrew Ross and Jonathan Stewart under the Elixir Petroleum Limited Employee Option Plan

Subject to the passing of Resolution 1, Resolutions 2 to 6 seek Shareholder approval to issue Options to five Directors of the Company, Trevor Benson, Iain Knott, John Robertson, Andrew Ross and Jonathan Stewart under the Plan.

The Board wishes to grant its Directors with Options as a reward and incentive, as follows:

Trevor Benson (Resolution 2)

Number of Options	Exercise Price	Expiry	Performance Conditions	Maximum number of shares to be issued if exercised
250,000	$0.25	31/3/2011	Not exercisable prior to1July2008	250,000
250,000				250,000

Iain Knott (Resolution 3)

Number of Options	Exercise Price	Expiry	Performance Conditions	Maximum number of shares to be issued if exercised
750,000	$0.25	31/3/2011	Not exercisable prior to1July2008	750,000
1,000,000	$0.30	31/3/2012	Not exercisable prior to 31 March 2009	1,000,000
750,000	$0.35	31/3/2013	Not exercisable prior to 31 March 2010	750,000
2,500,000				2,500,000

John Robertson (Resolution 4)

Number of Options	Exercise Price	Expiry	Performance Conditions	Maximum number of shares to be issued if exercised
250,000	$0.25	31/3/2011	Not exercisable prior to1July2008	250,000
250,000				250,000

Elixir Petroleum Limited – Notice of General Meeting - June 2008

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Andrew Ross (Resolution 5)

Number of Options	Exercise Price	Expiry	Performance Conditions	Maximum number of shares to be issued if exercised
1,250,000	$0.30	31/3/2012	Not exercisable prior to 31 March 2009	1,250,000
1,250,000	$0.35	31/3/2013	Not exercisable prior to 31 March 2010	1,250,000
2,500,000				2,500,000

Jonathan Stewart (Resolution 6)

Number of Options	Exercise Price	Expiry	Performance Conditions	Maximum number of shares to be issued if exercised
750,000	$0.25	31/3/2011	Not exercisable prior to1July2008	750,000
1,000,000	$0.30	31/3/2012	Not exercisable prior to 31 March 2009	1,000,000
750,000	$0.35	31/3/2013	Not exercisable prior to 31 March 2010	750,000
2,500,000				2,500,000

Pursuant to the requirements of ASX Listing Rule 10.14 and 10.15, the following information is provided with regard to Messrs Benson, Knott, Robertson, Ross and Stewart and Resolutions 2 to 6, respectively:

• Messrs Benson, Knott, Robertson, Ross and Stewart are Directors of the Company.

• The number of Options to be granted to each Director is shown in the table above. All Options are Options over Ordinary Shares which may be converted on a one-for-one basis; therefore the maximum number of shares which may be issued upon exercise of Options is as shown in the table above.

• The Options will be issued at no cost to the Directors under the Plan. Options may be exercised at $0.25, $0.30 and $0.35 each, as detailed in the above table.

• There have been no prior offers under the Plan. For the purposes of ASX Listing Rule 10.15.4, no person referred to in Listing Rule 10.14 has received any securities under the Plan, nor currently holds any options in the Company.

• The Directors of the Company are entitled to participate in the Plan. The current Directors of the Company are: Trevor Benson, Iain Knott, John Robertson, Andrew Ross and Jonathan Stewart.

• A Voting Exclusion Statement is set out under Resolutions 2 to 6 in the Notice of Meeting.

• There is no loan attaching to the offer under the Plan.

• The Company will allot the Options for which approval is sought under Resolutions 2 to 6 within a week after the General Meeting.

Elixir Petroleum Limited – Notice of General Meeting - June 2008

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Glossary

In this Explanatory Statement, the following terms have the following meanings unless the context otherwise requires:

ASX	ASX Limited ABN 98 008 624 691 and, where the context permits, the
	Australian Securities Exchange operated by ASX Limited
Board	means the board of Directors
Chair or Chairman	means Mr Jonathan Stewart or such other person appointed chairman in
	accordance with the Constitution
Company or Elixir	means Elixir Petroleum Limited (ABN 51 108 230 995)
Constitution	means the constitution of the Company
Corporations Act	means the_Corporations Act 2001 (Cth)_
Director	means a director of the Company
Explanatory Statement	means the information attached to the Notice, which provides information to
	Shareholders about the resolutions contained in the Notice
Group Employee	means an employee or Director of, or consultant to, the Company (as
	determined by the Directors)
Listing Rules	mean the listing rules of ASX
Meeting	means the general meeting convened by the Notice
Notice	means the notice of meeting which accompanies this Explanatory Statement
Option	means an option which entitles the holder to subscribe for one Share on the
	terms and conditions set out in this Notice and Explanatory Statement
Proxy Form	means the proxy voting form attached to the Notice
Share	means a fully paid ordinary share in the capital of the Company
Shareholder	means a holder of a Share
WST	means Australian Western Standard Time

Elixir Petroleum Limited – Notice of General Meeting - June 2008

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ELIXIR PETROLEUM LIMITED

ABN 51 108 230 995

P R O X Y F O R M

The Company Secretary Elixir Petroleum Limited

By delivery: Level 20, 77 St Georges Terrace PERTH WA 6000

By post: By facsimile: GPO Box 2530 +61 8 9440 2699 PERTH WA 6001

I/We 1 _____________ of[2] ______________

being a Shareholder/Shareholders of the Company and entitled to _______

votes in the Company, hereby appoint[3] ___________

or failing such appointment the Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the General Meeting of the Company to be held at 10.00 am on Thursday, 26 June 2008 (WST) at Level 20, 77 St Georges Terrace, Perth, Western Australia and at any adjournment thereof in the manner indicated below or, in the absence of indication, as he thinks fit. If 2 proxies are appointed, the proportion or number of votes this proxy is authorised to exercise is * [ ]% of the Shareholder’s votes*/ [ ] of the Shareholder’s votes. (An additional Proxy Form will be supplied by the Company, on request).

INSTRUCTIONS AS TO VOTING ON THE RESOLUTION

The proxy is to vote for or against the Resolution referred to in the Notice as follows:

			For	For	Against Abstain	Against Abstain
Resolution	1	Approval of Elixir Petroleum Limited Employee Option Plan
Resolution	2	Issue of Options to Trevor Benson
Resolution	3	Issue of Options to Iain Knott
Resolution	4	Issue of Options to John Robertson
Resolution	5	Issue of Options to Andrew Ross
Resolution	6	Issue of Options to Jonathan Stewart

If the Chair of the meeting is appointed as your proxy, or may be appointed by default and you do not wish to direct your proxy how to vote as your proxy in respect of Resolution 1, please place a mark in this box.

By marking this box, you acknowledge that the Chair of the meeting may exercise your proxy even if he has an interest in the outcome of Resolution 1 and that votes cast by the Chair of the meeting for Resolution 1 other than as proxy holder will be disregarded because of that interest. If you do not mark this box, and you have not directed your proxy how to vote, the Chair will not cast your vote on Resolution 1 and your vote will not be counted in calculating the required majority if a poll is called on Resolution 1.

The Chairman intends to vote in favour of the Resolution in relation to undirected proxies.

Authorised signature/s This section must be signed in accordance with the instructions overleaf to enable your voting instructions to be implemented.

Individual or Shareholder 1 Sole Director and Sole Company Secretary _______ Contact Name	Shareholder 2 Director _____ Contact Daytime Telephone	Shareholder 3
		Director/Company Secretary ______ Date

1Insert name of shareholder 2Insert address of shareholder 3 Insert name and address of proxy *Omit if not applicable

Elixir Petroleum Limited – Notice of General Meeting - June 2008

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Proxy Notes:

A Shareholder entitled to attend and vote at the Meeting may appoint a person or a corporation as the Shareholder's proxy to attend and vote for the Shareholder at that Meeting. If the Shareholder is entitled to cast 2 or more votes at the Meeting the Shareholder may appoint not more than 2 proxies. Where the Shareholder appoints more than one proxy the Shareholder may specify the proportion or number of votes each proxy is appointed to exercise. If such proportion or number of votes is not specified each proxy may exercise half of the Shareholder's votes. A proxy may, but need not be, a Shareholder of the Company.

If a Shareholder appoints a corporation as the Shareholder’s proxy to attend and vote for the Shareholder at that meeting, the representative of the corporation to attend the meeting must produce the appropriate Certificate of Appointment of Representation prior to admission. A form of the certificate may be obtained from the Company’s share registry.

You must sign this form as follows in the spaces provided:

Joint Holding: where the holding is in more than one name all of the holders must sign. Power of Attorney: if signed under a Power of Attorney, you must have already lodged it with the registry, or alternatively, attach a certified photocopy of the Power of Attorney to this Proxy Form when you return it.

Companies: a Director can sign jointly with another Director or a Company Secretary. A sole Director who is also a sole Company Secretary can also sign. Please indicate the office held by signing in the appropriate space.

If a representative of the corporation is to attend the Meeting the appropriate "Certificate of Appointment of Representative" should be produced prior to admission. A form of the certificate may be obtained from the Company’s Share Registry.

Proxy Forms (and the power of attorney or other authority, if any, under which the Proxy Form is signed) or a copy or facsimile which appears on its face to be an authentic copy of the Proxy Form (and the power of attorney or other authority) must be deposited at or received by facsimile transmission at the Perth office of the Company (Level 20, 77 St Georges Terrace, Perth, WA, 6000, or by post to GPO Box 2530, Perth, WA, 6001 or Facsimile (08) 9440 2699 if faxed from within Australia or +618 9440 2699 if faxed from outside Australia) not less than 48 hours prior to the time of commencement of the Meeting (WST).

Elixir Petroleum Limited – Notice of General Meeting - June 2008

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ELIXIR PETROLEUM LIMITED EMPLOYEE OPTION PLAN

1. DEFINITIONS AND INTERPRETATION

1.1 Definitions

In these Rules, unless the contrary intention appears:

“ Associated Company ” means at any time any body corporate that at that time is a related body corporate of the Company within the meaning of section 50 of the Corporations Act;

“ ASX ” means the ASX Limited (ABN 98 008 624 691) and the market conducted by it;

“ Board ” means the directors acting as the board of directors of the Company;

“ Business Day ” means a day on which the ASX is open for trading in securities;

“ Certificate ” means the certificate issued by the Company to a Holder in respect of an Option;

“ Company ” means Elixir Petroleum Limited (ABN 51 108 230 995);

“ Director ” means a director of a Group Company from time to time;

“ Eligible Person ” means at any time a person:

• (a) who then is an employee (whether full-time or part-time) of a Group Company, and includes Directors; or

• (b) to whom the Directors in their absolute discretion invite to participate in the Plan but to whom an offer of Options under this Plan need not require disclosure under the Corporations Act or any similar Law in any jurisdiction outside Australia;

“ Exercise Price ” means, in respect of an Option, the subscription price per Share, determined in accordance with clause 12, payable by a Holder on exercise of the Option;

“ Expiry Date ” means, in relation to an Option, the period determined by Directors as being the expiry date of the Option as described in the schedule to these Rules;

" Government Agency " means:

• (a) any national, state or territory government, or department thereof; or

• (b) any instrumentality, board, commission, court, or agency of any thereof, however constituted;

“ Grant Date ” means, in relation to an Option, the date on which the Company grants that Option;

“ Group ” means, collectively the Company and each of the Associated Companies;

“ Group Company ” means the Company or any Associated Company;

“ Holder ” means, in relation to an Option, the person (which include a Participant or a Permitted Nominee) entered in the Company’s register of options as the holder of that Option;

APPROVED BY THE ELIXIR PETROLEUM BOARD ON 15 MAY 2008

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“ Law ” means all laws, ordinances, treaties, conventions, judgments, decrees, injunctions, writs and orders of any court, arbitrator or Government Agency and rules, regulations, orders, interpretations, directives, licenses and permits of any Government Agency, in each case, which a party is required to comply with;

“ Listing Rules ” means the Official Listing Rules of ASX;

“ Market Value ” means:

• (a) the average closing sale price per Share (weighted by reference to volume) recorded on the ASX during the five trading days immediately preceding the day on which the Board resolves to offer an Option (excluding special crossings and overnight sales); or

• (b) in circumstances where there has been no trading in the Shares during the five trading days immediately preceding the day on which the Board resolved to offer an Option, the last sale price recorded on the ASX (excluding special crossings and overnight sales);

“ Option ” means an Option issued under the Plan to subscribe (subject to clause 11) for a Share;

“ Participant ” means an Eligible Employee whose acceptance in accordance with clause 5.2(a) is accepted by the Board and who is granted Options under the Plan in accordance with clause 5.4 (or who renounces Options in favour of a Permitted Nominee in accordance with clause 5.4 where the context permits);

“ Performance Conditions ” are set out in Schedule 1;

“ Permanent Disablement ” means in relation to a Participant, that the Participant has, in the opinion of the Board, after considering such medical and other evidence as it sees fit, become permanently incapacitated to such an extent as to render the Participant unlikely ever to engage in any occupation for which he is reasonably qualified by education, training or experience;

“ Permitted Nominee ” has the meaning given to it by clause 5.4;

“ Plan ” means the Elixir Petroleum Limited Employee Option Plan established in accordance with these Rules;

“ Redundancy ” means, in relation to a Participant, a determination by the Board that the relevant Group Company’s need to employ a person for the particular kind of work carried out by the Participant has ceased (but, for the avoidance of any doubt, does not include the dismissal of any Participant for personal or disciplinary reasons or where the Participant leaves the employ of any Group Company of his own accord);

“ Retirement ” means, in relation to a Participant, termination of employment with any Group Company by reason of the attainment of such age of retirement as determined by the Board;

“ Rules ” means these rules, as amended from time to time;

“ Shares ” means fully paid ordinary shares in the capital of the Company; and

“ Taxes ” includes any tax (whether direct or indirect), levy, impost, deduction, charge, rate, contribution, duty or withholding which is assessed (or deemed to be assessed), levied, imposed or made by any government or any governmental, semi-governmental or judicial entity or authority together with any interest, penalty, fine, charge, fee or other amount assessed (or deemed to be assessed), levied, imposed or made on or in respect of any of all of the foregoing;

APPROVED BY THE ELIXIR PETROLEUM BOARD ON 15 MAY 2008

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1.2 Interpretation

In these Rules, unless the contrary intention appears:

• (a) where an expression is defined, another part of speech or grammatical form of that expression has a corresponding meaning;

• (b) the singular includes the plural and vice versa;

• (c) a reference to a gender includes all genders;

• (d) Part refers to part of these Rules; and

• (e) an expression defined in, or given a meaning for the purposes of the Corporations Act or the Listing Rules has the same meaning where used in these Rules.

2. ESTABLISHMENT AND TERMINATION OF THE PLAN

• 2.1 The Board may establish and administer the Plan in accordance with the terms and conditions set out in these Rules and otherwise as it determines from time to time in its absolute discretion.

• 2.2 The Board may terminate the Plan, or suspend its operation for any period it considers desirable, at any time that it considers appropriate.

• 2.3 The Board may not grant any further Options after the Plan has been terminated. However, these Rules will continue to apply to Options on issue at the date of such termination until the last of those Options lapses or is exercised.

3. ISSUE LIMITATIONS

The Board may in its absolute and unfettered discretion, decide to set a limit on the number of Options that may be issued under the Plan. If the Board does set a limit pursuant to this clause, then no further Options can be issued and no further offer to issue Options under that Plan can be made pursuant to clause 5.1 if the total number of Options:

• (a) already issued; and

• (b) the subject of all outstanding invitations made pursuant to clause 5.1,

would exceed that limit.

4. ENTITLEMENT TO PARTICIPATE

• 4.1 The Board may from time to time determine in its absolute and uncontrolled discretion that any Eligible Person is entitled to participate in the Plan and the extent of that participation. The determination of the Board shall be binding and neither the Board nor any director of the Company shall be obliged to give any reason for a determination.

• 4.2 The Board may exercise its powers in relation to the participation of any Eligible Person on any number of occasions.

• 4.3 The Plan shall not form part of any contract of employment between any Group Company and any of its employees and shall not confer directly or indirectly on any such employee any legal or equitable right whatsoever against any Group Company.

APPROVED BY THE ELIXIR PETROLEUM BOARD ON 15 MAY 2008

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5. OFFER OF OPTIONS

• 5.1 Subject to these Rules and the Listing Rules (if applicable), the Company may offer Options to any Eligible Persons at such times and on such terms as the Board considers appropriate in its absolute and uncontrolled discretion. Each offer must state:

• (a) that the Eligible Person to whom it is addressed may accept the whole or any lesser numbers of Options offered. The offer may stipulate a minimum number of Options and any multiple of such minimum or any other number which may be accepted;

• (b) the period within which the offer may be accepted; and

• (c) any other matters which the Board may determine, including, but not limited to any Performance Conditions.

• 5.2 Upon receipt of an offer of Options, an Eligible Person may, within the period specified in the offer:

• (a) accept the whole or any lesser number of Options offered by notice in writing to the Board; or

• (b) nominate a nominee in whose favour the Eligible Person wishes to renounce the offer by notice in writing to the Board. The Board may, in its absolute and uncontrolled discretion, resolve not to allow such renouncement of an offer in favour of a nominee without giving any reason for such decision.

• 5.3 Each Option will be issued at no cost to the Eligible Person.

• 5.4 Upon:

• (a) receipt of an acceptance in the form described in paragraph 5.2(a); or

• (b) the Board resolving to allow a renunciation of an offer in favour of a nominee (“Permitted Nominee”) and the Permitted Nominee accepting the whole or any lesser number of Options offered by notice in writing to the Board,

then the Eligible Person or the Permitted Nominee, as the case may be, will be taken to have agreed to be bound by the Rules and will be granted Options subject to these Rules.

• 5.5 Certificates for Options will be dispatched within 10 Business Days after their Grant Date (or within such lesser period (if any as may be required by the Listing Rules (if applicable)).

• 5.6 If Options are issued to a Permitted Nominee of an Eligible Person, the Eligible Person must, without limiting any provision in these Rules, ensure that the Permitted Nominee complies with these Rules.

6. QUOTATION

• 6.1 The Company will not apply for official quotation by ASX of any Options.

• 6.2 The Company will apply to the ASX for official quotation of Shares issued on the exercise of Options.

7. TRANSFER OF OPTIONS

Subject to clause 10.2, Options are only transferable following satisfaction of the relevant Performance Conditions, or otherwise with Board approval.

APPROVED BY THE ELIXIR PETROLEUM BOARD ON 15 MAY 2008

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8. EXERCISE OF OPTIONS

• 8.1 Subject to these Rules (including for the avoidance of doubt, satisfaction of any Performance Conditions), Options may be exercised at any time during the period commencing after the Grant Date and ending on the Expiry Date.

• 8.2 Options not exercised on or before the Expiry Date will automatically lapse.

• 8.3 Unless the Board otherwise determines, options may be exercised by notice in writing to the Board delivered to the registered office of the Company (or another office such as a registry as nominated by the Company from time to time). The notice must specify the number of Options being exercised and must be accompanied by:

• (a) the Exercise Price for the number of Options specified in the notice; and

• (b) the Certificate for those Options, for cancellation by the Company.

The notice is only effective (and only becomes effective) when the Company has received value for the full amount of the Exercise Price (for example, if the Exercise Price is paid by cheque, by clearance of that cheque).

• 8.4 Subject to clause 8.2, unless the Board otherwise determines, within 10 Business Days after the notice referred to in clause 8.3 becomes effective (or within such lesser period (of any) as may be required by the Listing Rules), the Board must:

• (a) allot and issue the number of Shares specified in the notice to the Holder;

• (b) cancel the Certificate for the Options being exercised; and

• (c) if applicable, issue a new Certificate for any remaining Options covered by the Certificate accompanying the notice.

9. SHARES ALLOTTED ON EXERCISE OF OPTIONS

All Shares allotted upon exercise of Options rank pari passu in respect with Shares previously issued and, in particular, entitle the Holders to participate fully in:

• (a) dividends declared by the Company after the date of allotment; and

• (b) all issues of securities made or offered pro rata to holders of Shares.

10. CEASING TO BE AN ELIGIBLE PERSON

• 10.1 If at any time prior to the Expiry Date of any Options, a Participant ceases to meet the criteria which deemed them to be an Eligible Person at the time of offer for any reason other than Retirement, Permanent Disability or death, all Options held by such Participant or his Permitted Nominee (as the case may be), will, to the extent that they have not been exercised beforehand, automatically lapse on the first to occur of:

• (a) the expiry of the period one calendar month from the date of such occurrence; and

• (b) the Expiry Date.

• 10.2 If at any time prior to the Expiry Date of any Options a Holder dies, the deceased Holder’s legal personal representative may:

• (a) elect to be registered as the new Holder of the deceased Holder’s Options;

APPROVED BY THE ELIXIR PETROLEUM BOARD ON 15 MAY 2008

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• (b) whether or not he becomes so registered, exercise those Options as if he were the Holder of them in accordance with these Rules; and

• (c) if the deceased Holder had already given the Company a notice of exercise of his Options, pay the exercise Price in respect of those Options.

11. REORGANISATION OF CAPITAL AND CHANGE OF CONTROL

11.1 New Issues

Holders may only participate in new issues of securities to holders of Shares if any Option has been exercised and Shares allotted in respect of the Option before the record date for determining entitlements to the issue. The Company must give at least ten Business Days’ notice (or such greater prior of notice (if any) as may be required by the Listing Rules) to Holders of any new issue before the record date for determining the entitlements to the issue in accordance with the Listing Rules.

11.2 Bonus Issues

If there is a bonus share issue (“Bonus Issue”) to the holders of Shares, the number of Shares over which an Option is exercisable will be increased by the number of Shares which the Holder would have received if the Option had been exercised before the record date for the Bonus Issue (“Bonus Shares”). Upon issue, the Bonus Shares will rank pari passu in all respects with the other Shares of that class on issue at the date of issue of the Bonus Shares.

11.3 Pro Rata Issue

If there is a pro rata issue (other than a Bonus Issue) to the holder of Shares, the Exercise Price of an Option will be reduced according to the following formula:

A = O – E [P – (S + D)]

N + 1

A = the new exercise price of the Option

• O = the old exercise price of the Option

E = the number of Shares into which one Option is exercisable

• P = the average closing sale price per Share (weighted by reference to volume) recorded on the ASX during the five trading days immediately preceding the exrights date or ex-entitlements date (excluding special crossings and overnight sales and exchange traded option exercises)

• S = the subscription price for a security under the pro rata issue

• D = the dividend due but not yet paid on the existing underlying securities (except those to be issued under the pro rata issue)

• N = the number of securities with rights or entitlements that must be held to receive a right to one new security

11.4 Reorganisation of Capital

If, prior to the expiry of lapse of any Options, there is a reorganisation of the issued capital of the Company, those Options will be reorganised to the extent necessary to comply with the Listing Rules.

APPROVED BY THE ELIXIR PETROLEUM BOARD ON 15 MAY 2008

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11.5 Advice

In accordance with the Listing Rules, the Company must give notice to each Holder of any adjustment to the number of Shares for which the Holder is entitled to subscribe or to the Exercise Price pursuant to the provisions of clauses 11.2, 11.3 or 11.4.

11.6 Takeovers and Compromise Arrangements

If:

• (a) a takeover bid (as defined in the Corporations Act) is made to acquire some or all of the Shares; or

• (b) under Part 5.1 of the Corporations Act, the Court sanctions a compromise or arrangement proposed for the purpose of, or in connection with, a scheme for the reconstruction of the Company or its amalgamation with any other body corporate,

which:

• (c) in the case of paragraph (a), has resulted in one person becoming, directly or indirectly, legally or beneficially entitled to 50% or more of the Shares; or

• (d) in the case of paragraph (b), if implemented, would result in one person becoming, directly or indirectly, legally or beneficially entitled to 50% or more of the Shares,

then the Participant can exercise his Options in accordance with clause 8, regardless of whether or not the Performance Conditions have been met.

12. EXERCISE PRICE OF OPTIONS

The Exercise Price of each Option will be determined by the Board when it resolves to offer the Option and while the Company is listed on the ASX.

13. ADMINISTRATION OF THE PLAN

• 13.1 The Board:

• (a) will administer the Plan in accordance with these Rules; and

• (b) may make and amend conditions for the operation of the Plan which are not inconsistent with these Rules.

• 13.2 A determination, decision, approval or opinion of the Board under these Rules will be in the absolute discretion of the Board.

• 13.3 In the absence of manifest error the determination, decision, approval or opinion of the Board will be final.

• 13.4 The Board may:

• (a) delegate such functions and powers, as it may consider appropriate for the efficient administration of the Plan, to persons whom the Board reasonably believes to be capable of performing those functions and exercising those powers; and

APPROVED BY THE ELIXIR PETROLEUM BOARD ON 15 MAY 2008

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• (b) take and rely on what the Board reasonably believes is independent professional or expert advice in or in relation to the exercise of any of the Board’s powers or discretions under these Rules.

14. NOTICES

• 14.1 Notice may be given by the Company to Eligible Persons or Holders in such manner as the Board may from time to time determine.

• 14.2 Any notice to be given by an Eligible Person or Holder to the Company under these Rules must be in writing:

• (a) directed to the Company Secretary of the Company at the following address:

Elixir Petroleum Limited Level 20 77 St Georges Terrace Perth WA 6000 Facsimile: (08) 9440 2699

• (b) hand delivered or sent by prepaid post or facsimile to that address; or

• (c) or an applicable email address notified at the time of offer of Options.

• 14.3 A notice given in accordance with clause 14.2 is taken to be received:

• (a) if hand delivered, on delivery;

• (b) if sent by prepaid post, seven Business Days after the date of posting;

• (c) if sent by facsimile, when the sender’s facsimile system generates a message confirming successful transmission of the total number of pages of the notice, unless the Company informs the sender within three Business Days that it has not received the entire notice; or

• (d) if by electronic mail, when the electronic communication enters the relevant information system(s).

15. AMENDMENT TO RULES

• 15.1 Subject to clause 15.2, the Board may amend these Rules at any time and from time to time.

• 15.2 At any time while the Company is included in the official list of the ASX, no amendment may be made to these Rules except in accordance with the Listing Rules or as otherwise permitted by the ASX.

16. RIGHTS OF HOLDERS

Nothing in these Rules:

• (a) confers on any person (including any employee or Director of the Company) the right to receive any Options;

• (b) confers on any Holder the right to continue as an employee or Director within the Group;

• (c) affects any rights which any member of the Group may have to terminate the employment of any Holder;

APPROVED BY THE ELIXIR PETROLEUM BOARD ON 15 MAY 2008

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• (d) may be used to increase damages in any action brought against any member of the Group in respect of any such termination; or

• (e) confers on any Participant the right to receive any dividend (whether or not declared) before an Option is exercised and Shares have been issued in respect of that Option.

17. COSTS AND EXPENSES

The Company must pay all costs, expenses and charges incurred in operating the Plan except that the Company is not responsible for payment of the Exercise Price or for any Taxes which may become payable in connection with the issue of Shares pursuant to an exercise of the Options or any other dealing with the Options.

18. CHOICE OF LAW AND JURISDICTION

• 18.1 The Plan and the rights of the Holders thereunder are governed by the laws of the State of Western Australia, Australia.

• 18.2 Each Holder irrevocably and unconditionally submits to the exclusive jurisdiction of the courts of the State of Western Australia, Australia and courts entitled to hear appeals from those courts.

APPROVED BY THE ELIXIR PETROLEUM BOARD ON 15 MAY 2008

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SCHEDULE 1 – PERFORMANCE CONDITIONS

2008 Offer

The Performance Conditions of the Options to be granted under the 2008 Offer accumulate as follows:

Tranche	Grant Date	Exercise Price	Expiry	Performance Conditions
1	1 July 2008	Options exercisable at 25 cents only upon achievement of Performance Conditions.	31 March 2011	• 1 July 2008, being the first date when the Options can be excised.
2	1 July 2008	Options exercisable at 30 cents only upon achievement of Performance Conditions.	31 March 2012	• 31 March 2009, being the first date when the Options can be excised.
3	1 July 2008	Options exercisable at 35 cents only upon achievement of Performance Conditions.	31 March 2013	• 31 March 2010, being the first date when the Options can be excised.

APPROVED BY THE ELIXIR PETROLEUM BOARD ON 15 MAY 2008

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