ELIXIR ENERGY LIMITED — Capital/Financing Update 2012

Mar 14, 2012

ASX ANNOUNCEMENT

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ABN 51 108 230 995

15 March 2012

Company Announcements Platform Australian Securities Exchange Level 4 20 Bridge Street SYDNEY NSW 2000

By E-Lodgement

Non-Renounceable Entitlement Issue

Notice Pursuant to section 708AA(2)(f) of the Corporations Act 2001 (“Act”)

Elixir Petroleum Limited (ASX:EXR) (“Company” or “Elixir”) announced on 2 March 2012 that it will be offering eligible shareholders the opportunity to acquire additional fully paid ordinary shares in the capital of the Company ("Shares") via a pro rata, non-renounceable entitlement issue (“Entitlement Issue”) on the basis of one (1) Share for every six (6) Shares held on the record date, being 13 March 2012.

Shares under the Entitlement Issue will be offered at $0.05 per Share. The maximum number of Shares which may be issued under the Entitlement Issue is approximately 36,214,745.

The Offer Document will be mailed to eligible shareholders on 16 March 2012, together with personalised entitlement and acceptance forms. For information purposes, a sample copy of the Offer Document has been attached to this notice.

As previously announced, the Entitlement Issue is fully underwritten by New Standard Energy Limited (ASX:NSE). Terms and conditions of the underwriting arrangements are set out in the Offer Document.

NOTICE UNDER s709AA OF THE ACT

The Company hereby notifies ASX under paragraph 708AA 2(f) of the Act that:

1. The Company will offer the Shares without disclosure to investors under Part 6D.2 of the Act;

2. The Company is providing this notice under paragraph 2(f) of section 708AA of the Act;

3. As at the date of this notice, the Company has:

4. a. Complied with the provisions of Chapter 2M of the Act as they apply to the Company; and

ASX CODE: EXR www.elixirpetroleum.com

Elixir Petroleum Limited

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

• b. Complied with section 674 of the Act;

• As at the date of this notice, there is no information:

• a. that has been excluded from a continuous disclosure notice in accordance with the ASX Listing Rules; and

• b. that investors and their professional advisers would reasonably require for the purpose of making an informed assessment of:

  • i. the assets and liabilities, financial position and performance, profits and losses and prospects of the Company; or

  • ii. the rights and liabilities attaching to the Shares; and

• The issue of Shares under the Rights Issue is not expected to have any effect on the control of the Company.

Yours sincerely,

ELIXIR PETROLEUM LIMITED

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Julie Foster Company Secretary

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

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ABN 51 108 230 995

NON-RENOUNCEABLE RIGHTS ISSUE OFFER DOCUMENT

For

A non-renounceable pro rata fully underwritten offer of New Shares at an issue price of $0.05 each on the basis of one (1) New Share for every six (6) Shares held on the Record Date .

This document is not a prospectus.

It does not contain all of the information that an investor would find in a prospectus or which may be required in order to make an informed investment decision regarding, or about the rights attaching to, the New Shares offered by this document.

This document is important and requires your immediate attention.

It should be read in its entirety. If you do not understand its content, or are in doubt as to the course you should follow, you should consult your stockbroker or professional adviser without delay.

This Offer opens at 9.00am (AEDT) on 16 March 2012 and closes at 5.00pm (AEDT) on 30 March 2012. Valid acceptances must be received before the Offer closes.

Please read the instructions in this document and on the accompanying Entitlement and Acceptance Form regarding the acceptance of your entitlement.

NOT FOR RELEASE INTO THE UNITED STATES OR TO U.S. PERSONS OR IN ANY JURISDICTION WHERE THIS DOCUMENT DOES NOT COMPLY WITH THE RELEVANT REGULATIONS

Important Information

No person is authorised to give any information or to make any representation in connection with the Offer which is not contained in this Offer Document. Any information or representation not so contained may not be relied on as having been authorised by the Company in connection with the Offer.

Eligibility

Applications for New Shares by Eligible Shareholders can only be made on an original Entitlement and Acceptance Form, as sent with this Offer Document. The Entitlement and Acceptance Form sets out an Eligible Shareholder's entitlement to participate in the Offer.

Overseas shareholders

No action has been taken to permit the offer of New Shares under this Offer Document in any jurisdiction other than Australia and New Zealand. The distribution of this Offer Document in jurisdictions outside Australia and New Zealand may be restricted by law and therefore persons outside of Australia and New Zealand into whose possession this document comes should seek advice on, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of applicable securities laws. Applications from Eligible Shareholders with a registered address in a jurisdiction other than Australia or New Zealand will not be accepted.

This Offer Document does not constitute an offer of New Shares in any jurisdiction where, or to any person to whom, it would be unlawful to issue this Offer Document.

Privacy

The Company collects information about each Applicant provided on an Entitlement and Acceptance Form for the purposes of processing the application and, if the application is successful, to administer the Applicant’s security holding in the Company.

By submitting an Entitlement and Acceptance Form, each Applicant agrees that the Company may use the information provided by an Applicant on the Entitlement and Acceptance Form for the purposes set out in this privacy disclosure statement and may disclose it for those purposes to the share registry, the Company’s related bodies corporate, agents, contractors and third party service providers, including mailing houses and professional advisers, and to the ASX and regulatory authorities.

If you do not provide the information required on the Entitlement and Acceptance Form, the Company may not be able to accept or process your Application. An Applicant has a right to gain access to the information that the Company holds about that person subject to certain exemptions under law. A fee may be charged for access. Access requests must be made in writing to the Company’s registered office.

This document is not a prospectus and does not contain all of the information that an investor would find in a prospectus or which may be required to make an informed investment decision regarding, or about the rights attaching to, the New Shares offered by this Offer Document.

TABLE OF CONTENTS

SECTION	CONTENTS	PAGE
1	DETAILS OF THE OFFER	1
2	ACTION REQUIRED BY SHAREHOLDERS	5
3	RISK FACTORS	6
4	DEFINED TERMS	12

DETAILS OF THE OFFER

1.1 The Offer

The Company is making a non-renounceable fully underwritten pro rata offer of New Shares at an issue price of $0.05 each on the basis of one (1) New Share for every six (6) Shares held on the Record Date ( Offer ).

As outlined in the Company’s announcement dated 2 March 2012, proceeds from the Offer will be used by the Company to fund the progress of well planning and the farmout of the Moselle Permit in France, as well as to investigate new asset acquisition opportunities and for general working capital purposes.

As at the Record Date, the Company has on issue 217,288,471 Shares. The Company expects that up to approximately 36,214,745 New Shares will be issued under the Offer.

Where the determination of the entitlement of any Eligible Shareholder results in a fraction of a New Share, such fraction will be rounded up to the nearest whole New Share.

The Offer has been fully underwritten by New Standard Energy Limited (ASX:NSE) ( NSE ) on the terms and conditions summarised in section 1.5 of this Offer Document.

NSE has also been offered the opportunity to top-up its holding, to be exercised at its election, in circumstances where post the Placement and acceptance of any shortfall shares under the Offer, NSE holds less than a 15% shareholding interest in Elixir on an as enlarged basis ( Top-Up ).

If the Top-Up accrues to NSE and is exercised, NSE will at its discretion be able to take up further shares ( Top-Up Shares ) after the closure of the Offer to a maximum of 15% of the enlarged share capital of the Company.

Any Top-Up Shares issued will be issued within the Company’s 15% placing capacity at $0.0625 per share and otherwise on the same terms as the Shares issued pursuant to the Placement.

1.2 Timetable

Timetable for the Entitlement Issue	Date
Announcement of Entitlements Issue, Appendix 3B and first Cleansing Notice	2 March 2012
Notice sent to securityholders	5 March 2012
Ex Date (date from which securities commence trading without the entitlement to participateintheEntitlementIssue)	6 March 2012
Record Date (date for determining entitlements of Eligible Shareholders to participate in the Entitlement Issue)	13 March 2012
Offer Document lodged with ASX	15 March 2012
Offer Document Despatched to Eligible Shareholders (expected date of despatchofOffer Document andEntitlement andAcceptanceForms)	16 March 2012
OpeningDate	16 March 2012
ClosingDate (5pm AEDT)*	30 March 2012
Securities quoted ona deferred settlement basis	2 April 2012
Company tonotifyASXofundersubscriptions (ifany)**	4 April 2012
AllotmentDate**	5 April 2012
Cleansing statementlodgedwith ASX **	5 April 2012
Despatch holding statements**	5 April 2012

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• Subject to the Listing Rules, the Directors reserve the right to extend the Closing Date for the Offer at their discretion. Should this occur, the extension will have a consequential effect on the anticipated date of issue for the New Shares.

• ** These dates are indicative only.

1.3 Entitlements and acceptance

The entitlement of Eligible Shareholders to participate in the Offer was determined on the Record Date. Your entitlement is shown on the Entitlement and Acceptance Form accompanying this Offer Document.

Acceptances must not exceed your maximum entitlement (as shown on the Entitlement and Acceptance Form), although you may accept a lesser number of New Shares should you wish to take up only part of your entitlement. If your acceptance exceeds your entitlement, your acceptance will be deemed to be for your maximum entitlement and any surplus application monies will be returned to you.

1.4

No rights trading

The rights to New Shares under the Offer are non-renounceable. Accordingly, there will be no trading of rights on the ASX and you may not dispose of your rights to subscribe for New Shares under the Offer to any other party. If you do not take up your entitlement to New Shares under the Offer by the Closing Date, the Offer to you will lapse.

1.5

Underwriting

The Company has entered into an underwriting agreement with New Standard Energy Limited (ASX:NSE) ( Underwriter ), pursuant to which the Offer has, subject to certain terms and conditions, been fully underwritten. No fee is payable to the Underwriter in respect of the provision of the underwriting services.

The Underwriter has the right to terminate the underwriting agreement on the occurrence of certain events ( Termination Events ). These Termination Events include the following specific events:

• Material Change - a change occurs after the date of the underwriting agreement affecting or relating to the:

• Company or a subsidiary; or

• the industry in which the Company or a subsidiary operates;

which in the reasonable opinion of the Underwriter has, or is likely to have, a material adverse effect or materially change the operations of the Company.

• Market Movement – at any time after the date of the agreement the All Ordinaries Index is 15% or more below its level immediately preceding the date of the underwriting agreement.

• Oil Price Movement – at any time after the date of the underwriting agreement the Oil Price is 25% or more below its level as at the date immediately preceding the date of the underwriting agreement.

Other Termination Events include contravention of applicable laws and regulations, insolvency, outbreak of war or hostilities in various locations, misleading statements in this Offer Document, criminal charges or convictions relating to any Director, suspension of quotation and new circumstances that in the reasonable opinion of the Underwriter has, or is likely to have, a material adverse effect.

Should the underwriting agreement be terminated, the Directors reserve the right to place any shortfall at their discretion.

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1.6 Opening and Closing Dates

The Offer opens on the Opening Date, namely Friday, 16 March 2012. The Company will accept Entitlement and Acceptance Forms until 5:00 pm (AEDT) on the Closing Date (Friday, 30 March 2012), or such other date as the Directors in their absolute discretion shall determine, subject to the Listing Rules.

1.7 Issue and despatch

The expected dates for issue of New Shares offered by this Offer Document and despatch of holding statements is expected to occur on the dates specified in the Timetable set out in Section 1.2.

It is the responsibility of applicants to determine their allocation prior to trading in the New Shares. Applicants who sell New Shares before they receive their holding statements will do so at their own risk.

1.8 ASX listing

Application will be made to the ASX for the official quotation of the New Shares. If the ASX does not grant quotation of the New Shares, the Company will repay, as soon as practicable, without interest, all application monies received pursuant to the Offer.

1.9 CHESS

The Company participates in the Clearing House Electronic Subregister System, known as CHESS. ASX Settlement and Transfer Corporation Pty Ltd ACN 008 504 532 ( ASTC ), a wholly-owned subsidiary of the ASX, operates CHESS in accordance with the Listing Rules and Securities Clearing House Business Rules.

Under CHESS, Applicants will not receive a certificate but will receive a statement of their holding of New Shares.

If you are registered in the Issuer Sponsored subregister, your statement will be despatched by Computershare Investor Services Pty Ltd and will contain the number of New Shares issued to you under this Offer Document and your security holder reference number.

A CHESS statement or Issuer Sponsored statement will routinely be sent to Shareholders at the end of any calendar month during which the balance of their holding changes. Shareholders may request a statement at any other time, however there may be a charge associated with the provision of this service.

1.10 Overseas Shareholders

No Offer will be made to Eligible Shareholders with a registered address outside Australia and New Zealand.

New Shares to which any Eligible Shareholders who do not have a registered address in Australia or New Zealand would otherwise be entitled will form part of the shortfall issued to the Underwriter or their nominees (or alternatively, may be placed at the discretion of the Directors in the event that the underwriting agreement is terminated).

This Offer Document and accompanying Entitlement and Acceptance Form do not, nor are they intended to, constitute an offer in any place in which, or to any person to whom, it would not be lawful to make such an offer.

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1.11 Taxation implications

The Directors do not consider it appropriate to give Shareholders advice regarding the taxation consequences of subscribing for New Shares under this Offer Document. The Company, its advisers and its officers do not accept any responsibility or liability for any such taxation consequences to Shareholders.

Shareholders should consult their professional tax adviser in connection with subscribing for New Shares under this Offer Document.

1.12 Risk factors

An investment in New Shares should be regarded as speculative. In addition to the general risks applicable to all investments in listed securities, there are specific risks associated with an investment in the Company which are described in Section 3.

1.13 Effect of the Offer on control of the Company

The potential effect the Offer will have on each Shareholder's percentage interest in the total issued shares of the Company is as follows:

• (a) if all Eligible Shareholders take up their entitlement, each Eligible Shareholder's percentage interest in the total issued shares of the Company will remain the same and will not be diluted; or

• (b) if some but not all Eligible Shareholders take up their entitlement, and the shortfall is taken up under the underwriting arrangement, the percentage interest in the total issued Shares of each Eligible Shareholder who does not take up their entitlement will be diluted and the percentage interest of the total issued Shares of each Eligible Shareholder who does take up their entitlement will remain the same. The precise level of change in the percentage interests will depend on the take up of entitlements.

It is not expected that the Offer will have any material effect on control of the Company. The capital structure of the Company on completion of the Offer will be as follows:

(a) Shares currently on issue - 217,288,471 (b) Shares offered under the Offer (estimated) - 36,214,745 (c) Total shares on issue on completion of the Offer (estimated) - 253,503,216

1.14 Disclaimer by the Underwriter

The Underwriter has not been involved in the preparation of this Offer Document and takes no responsibility for its contents.

1.15 Enquiries concerning Offer Document

If you have any questions in relation to the non-renounceable pro rata issue of New Shares or about any of the enclosed documents, please contact:

Computershare Investor Services Pty Ltd

Telephone: 1300 73 03 18 (within Australia) or +61 (0)3 9415 4000 (outside Australia)

Email: web.queries@computershare.com.au

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Section 2 ACTION REQUIRED BY SHAREHOLDERS

2.1 Acceptance of your MAXIMUM entitlement under this Offer Document

If you wish to accept your entitlement to New Shares under this Offer Document in full, you must either complete a BPAY® payment in accordance with the instructions referred to in this Offer Document and on the Entitlement and Acceptance Form, or alternatively, you must complete and return the payment slip on the Entitlement and Acceptance Form which accompanies this Offer Document together with your payment by cheque to reach the Company’s share registry prior to the Closing Date. Please read the instructions carefully.

Entitlements may be accepted electronically using BPAY®, in which case you are not required to return the Entitlement and Acceptance Form. You can simply make payment for the total number of New Shares accepted by using the biller code and the personalised reference number set out in your Entitlement and Acceptance Form.

You must ensure that your acceptance and payment by BPAY® is received no later than 5pm (AEDT) on Friday, 30 March 2012. Instructions for making payment by BPAY® are set out in your Entitlement and Acceptance Form. You should be aware that your own financial institution may impose earlier cut-off times with regards to electronic payments and you should therefore take this into consideration when making payment.

If you wish to pay by cheque, please complete the Entitlement and Acceptance Form by filling in the details in the spaces provided on the payment slip and attach a cheque for the Application Monies indicated on the Entitlement and Acceptance Form. Completed Entitlement and Acceptance Forms must be accompanied by a cheque in Australian dollars, crossed “Not Negotiable” and made payable to “Elixir Petroleum – ENT Offer” and received at any time after the issue of this Offer Document, and on or before the Closing Date, at the Company’s share registry at:

By Post : Computershare Investor Services Pty Limited GPO Box 505 MELBOURNE VIC 3001

The Company shall not be responsible for any delay in the receipt of BPAY payments or postal or delivery delays.

2.2 Acceptance of PART of your entitlement under this Offer Document

If you wish to accept only part of your entitlement to New Shares under this Offer Document, you must either complete a BPAY payment in accordance with the instructions referred to in this Offer Document and on the Entitlement and Acceptance Form, or alternatively, you must complete and return the Entitlement and Acceptance Form which accompanies this Offer Document together with your payment by cheque to reach the Company’s share registry prior to the Closing Date. Please read the instructions carefully.

Entitlements may be accepted electronically using BPAY, in which case you are not required to return the Entitlement and Acceptance Form. You can simply make payment for the total number of New Shares accepted by using the biller code and the personalised reference number set out in your Entitlement and Acceptance Form.

You must ensure that your acceptance and payment by BPAY is received no later than 5pm (AEDT) on Friday, 30 March 2012. Instructions for making payment by BPAY are set out in your Entitlement and Acceptance Form. You should be aware that your own financial institution may impose earlier cut-off times with regards to electronic payments and you should therefore take this into consideration when making payment.

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If you wish to pay by cheque, please complete the Entitlement and Acceptance Form by filling in the details in the spaces provided on the payment slip, including the number of New Shares you wish to accept and attach a cheque for the Application Monies, calculated at $0.05 per New Share accepted. Completed Entitlement and Acceptance Forms must be accompanied by a cheque in Australian dollars, crossed “Not Negotiable” and made payable to “Elixir Petroleum – ENT Offer” and received at any time after the issue of this Offer Document, and on or before the Closing Date, at the Company’s share registry at:

By Post : Computershare Investor Services Pty Limited GPO Box 505 MELBOURNE VIC 3001

The Company shall not be responsible for any delay in the receipt of BPAY payments or postal or delivery delays.

Section 3 RISK FACTORS

The New Shares offered under this Offer Document are considered speculative . The Directors strongly recommend Eligible Shareholders examine the contents of this Offer Document and consult their professional advisers before deciding whether to apply for New Shares pursuant to this Offer. In addition, Eligible Shareholders should be aware that there are risks associated with investment in the Company. There are certain general risks and certain specific risks which relate directly to the Company's business and are largely beyond the control of the Company and its Directors because of the nature of the business of the Company.

The summary of risk factors described below ought not to be taken as exhaustive of the risks faced by the Company or by Eligible Shareholders. The risk factors described below, and others not specifically referred to below, may in the future materially affect the financial performance of the Company and the value of the New Shares offered under this Offer Document. The New Shares to be issued pursuant to this Offer Document carry no guarantee with respect to the payment of dividends, returns of capital or the market value of those New Shares.

Oil and Gas Industry Risks

The Company operates in the oil and gas sector and is subject to risks relating to exploration, drilling and production of oil and gas which may not generally be associated with other sectors. The exploitation of oil and gas reserves and successful project development is considered to be of a high risk nature and contains inherent risks including, but not limited to:

a) Hydrocarbon Product Price and Volatility

The demand for, and price of, oil and natural gas is dependent on a variety of factors, including supply and demand, the level of consumer product demand, weather conditions, the price and availability of alternative fuels, actions taken by governments and international cartels, and global economic and political developments.

The market price of hydrocarbon products is volatile and cannot be controlled. Oil and gas prices have fluctuated widely in recent years. If the price of hydrocarbons should drop significantly and remain depressed, the economic prospects of the projects which the Company has an interest in could be significantly reduced or rendered uneconomic. There is no assurance that, even if significant quantities of hydrocarbon products are discovered, a profitable market may exist for their sale.

The marketability of hydrocarbons is also affected by numerous other factors beyond the control of the Company, including government regulations relating to royalties, allowable production and importing and exporting of oil and gas and petroleum products, the effect of which cannot be accurately predicted.

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b) Exploration and Development Risks

Oil and gas exploration involves significant risk which only occasionally provides high rewards. There is no assurance that exploration and development of the prospects in the Company’s oil and gas properties, or any other projects that may be acquired in the future, will result in the discovery of an economic oil and gas deposit. Even if an apparently viable deposit is identified, there is no guarantee that it can be profitably exploited.

Furthermore, the Company will only proceed to the next stage of exploration or development when data supports the existence of an economically viable oil and gas deposit. Should the empirical data not support the existence of an economically viable oil and gas deposit, the Company will not proceed to the next stage of exploration or development.

c) Drilling Risks

Oil and gas drilling activities are subject to numerous risks, many of which are beyond the Company's control. The Company's drilling operations may be curtailed, delayed or cancelled due to a number of factors including weather conditions, mechanical difficulties, shortage or delays in the delivery of rigs and/or other equipment and compliance with governmental requirements. Hazards incident to the exploration and development of oil and gas properties such as unusual or unexpected formations, pressures or other factors are inherent in drilling and operating wells and may be encountered by the Company.

Completion of a well does not assure a profit on the investment, or recovery of drilling, completion and operating costs. While drilling may yield some hydrocarbons there can be no guarantee that the discovery will be sufficiently productive to justify commercial development or cover operating costs.

d) Commercialisation of Discoveries

It may not always be possible for the Company to participate in the exploitation of successful discoveries made in any areas in which the Company has an interest. Such exploitation will involve the need to obtain the necessary licences or clearances from the relevant authorities, which may require conditions to be satisfied and/or the exercise of discretions by such authorities. It may or may not be possible for such conditions to be satisfied. Further the decision to proceed to further exploitation may require the participation of other companies whose interests and objectives may not be the same as the Company. Such further work may require the Company to meet or commit to financing obligations for which it may not have planned.

e) Operating Risks

Industry operating risks include the risk of fire, explosions, blow-outs, pipe failure, abnormally pressured formations and environmental hazards such as accidental spills or leakage of petroleum liquids, gas leaks, ruptures or discharges of toxic gasses, the occurrence of any of which could result in substantial losses to the Company due to injury or loss of life, severe damage to, or destruction of property, natural resources and equipment, pollution or other environmental damage, cleanup responsibilities, regulatory investigation and penalties and suspension of operations, the occurrence of any of which could result in substantial losses to the Company. Damages occurring as a result of such risks may give rise to claims against the Company. The occurrence of an event that is not covered, or fully covered, by insurance could have a material adverse effect on the business, financial condition and results of operations of the Company.

Although the Company believes that it or the operator will carry adequate insurance with respect to its operations in accordance with industry practice, in certain circumstances the Company's, or the operator's, insurance may not cover, or be adequate to cover, the consequence of such events. In addition, the Company may be subject to liability for pollution, blow-outs or other hazards against which the Company or the operator does not insure or against which it may elect not to insure because of high premium costs or other reasons.

f) Secondary Recovery Operations

Secondary recovery operations may be used by the Company on a project the Company has an interest in. Costs are also higher during the later stages of the life of the project as production declines. The degree of success, if any, of any secondary recovery program depends on a large number of factors beyond the control of the Company.

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g) Hydrocarbon Reserve Estimates

Hydrocarbon reserve estimates are expressions of judgement based on knowledge, experience and industry practice. Estimates that were valid when made may change significantly when new information becomes available.

In addition, reserve estimates are necessarily imprecise and depend to some extent on interpretations, which may prove inaccurate. Should the Company encounter oil and/or gas deposits or formations different from those predicted by past drilling, sampling and similar examinations, then reserve estimates may have to be adjusted and production plans may have to be altered in a way which could adversely affect the Company's operations.

h) Competition

The Company will compete with other companies, including major oil companies. Some of these companies have greater financial and other resources than the Company and, as a result, may be in a better position to compete for future business opportunities. Many of the Company’s competitors not only explore for and produce oil and gas, but also carry out refining operations and market petroleum and other products on a worldwide basis. There can be no assurance that the Company will compete effectively with these companies and other industry participants and thereby be successful in acquiring additional oil and gas assets on reasonable commercial terms.

i) Claims by Indigenous Inhabitants

The current and future oil and gas assets of the Company may be subject to land claims by indigenous people. Should this occur, the Company’s ability to conduct exploration and/or development and production activities may be affected, which may have a material adverse effect on the Company’s financial performance and the price at which its securities trade.

The Company is not currently aware of any land claims or potential claims by indigenous people in respect of its exploration and production activities that could significantly affect its licence tenure or any future production operations.

j) Insurance

Insurance of all risks associated with oil and gas exploration and production is not always available and, where insurance is available, the cost may be high. The Company will have insurance in place considered appropriate for the Company’s needs. The Company may not be insured against all losses due to either the insurance not being available, or due to the premium being excessive in relation to the benefits accruing.

k) Environmental and Other Regulatory Requirements

The Company’s operations will be subject to environmental laws, including but not limited to, those governing the management of waste, the protection of water and air quality, the discharge of materials into the environment, and the preservation of natural resources which may impact and influence the Company’s operations. If the Company fails to comply with environmental laws regarding the discharge of oil, gas, or other materials into the air, soil or water it may be subject to liabilities to the government and third parties, including civil and criminal penalties.

Existing and possible future environmental legislation, regulations and actions could cause additional expense, capital expenditures, restrictions and delays in the activities of the Company, the extent of which cannot be predicted. Before exploration and production activity can commence on any property, the Company must obtain regulatory approvals and there is no assurance that such approvals will be obtained.

The Company may from time to time in the future agree to, indemnify sellers or lessors of producing properties against some liabilities for environmental claims associated with these properties.

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• l) Venture Parties and Contractors

Oil and Gas ventures are typically operated under Joint Operating Agreements, which include provisions that often require certain decisions relating to the exploitation of oil and gas properties to be passed with unanimous or majority approval of all participants. Where a venture partner does not act in the best commercial interest of the project, it could have a material adverse effect on the interests of the Company.

The Directors are unable to predict the risk of:

• financial failure, non compliance with obligations or default by a participant in any venture to which the Company is, or may become, a party; or

• insolvency or other managerial failure by any of the contractors used by the Company in its exploration activities; or

• insolvency or other managerial failure by any of the other service provider use by the Company for any activity.

• m) Minority Interest in Projects

There exists a risk that the Company, as a minority participant in its oil and gas properties, may have the value of its interest in such properties reduced by actions undertaken by the majority venture participants.

Oil and Gas Operations in France

n) Petroleum Permits

Oil and Gas exploration and production activities are carried out under permits awarded to parties by the French Government in accordance with the terms of the Mining Code 1955 and associated regulations. During the exploration phase, and prior to the determination of a production area, permits have a fixed duration.

o) Regulation in France – Use of Hydraulic Fracture Stimulation

The Company’s Moselle Project in France comprises both conventional and unconventional hydrocarbon resources. The typical method of stimulating wells in unconventional environments to achieve commercial flow rates is through the use of hydraulic fracture stimulation ( Fracking ). The French Government has recently passed legislation that prohibits the use of Fracking as a stimulation technique in France. As a result, the Company’s current exploration activities at the Moselle Project focus on a portfolio of conventional prospects.

The Company believes that as Fracking techniques evolve and are better defined and as economic and social conditions in France and Europe change, the French Government may revisit its decision to ban Fracking. The Company may also consider alternative methods of exploring for unconventional hydrocarbon resources without Fracking. However, there is a risk that, if the ban on Fracking remains in force in France and alternative methods of exploration, other than Fracking, are unsuitable, then the Company may not be able to access the unconventional hydrocarbon resources within the Moselle Project.

Oil and Gas Operations in the United States

p) Petroleum land leases and licences

Oil and Gas exploration and production are activities usually carried out under licences and / or leases which have a fixed duration and are issued by the minerals rights holder.

These leases may or may not be extended in duration.

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These leases and licences usually specify royalties or other forms of compensation payable to government or landholders (in relation to the company’s US leases). Amounts payable may change due to decisions of the legislator or the courts and such changes might impact the cost base and hence the profitability of a particular project. The leases in the US are also subject to competition and there can be no assurance that the company will be able to compete effectively with other industry participants to extend or maintain its leases (not otherwise secured or held by production) on reasonable commercial terms.

The leases and licences might also contain conditions relating to operations including, but not limited to, environmental management issues, occupational health and safety, operating procedures, plant and equipment design specifications. Such conditions or regulations might be subject to change from time to time and might impact the cost base and hence the profitability of a particular project.

q) Regulation in the United States – General

The oil and gas industry in the United States of America is extensively regulated. Extensive federal, state, local and foreign laws and regulations relating to the exploration for and development, production, gathering and marketing of oil and gas will affect the Company's operations with respect to its United States based projects. From time to time, regulatory agencies have imposed price controls and limitations on production. Numerous environmental laws impact and influence our operations. As with the industry in general, compliance with existing and anticipated regulations increases the overall cost of business. Environmental regulations have historically been subject to frequent change and, therefore, one cannot predict with certainty the future costs or other future impacts of environmental regulations on future operations. If the Company fails to comply with environmental laws it may be subject to liabilities to the government and third parties, including civil and criminal penalties. New laws or regulations, or modifications of or new interpretations of existing laws and regulations, may increase substantially the cost of compliance or adversely affect oil and gas operations and financial conditions.

r) Regulation in the United States – Sale of Oil and Gas

Most sales of natural gas in the United States are not currently regulated and are generally made at market prices. The price realised from the sale of these products is affected by a number of factors, including the cost of transporting the products to market.

s) Regulation in the United States – Exploration and Production

Oil and natural gas exploration, production and related operations are subject to extensive rules and regulations promulgated by federal, state and local agencies. Failure to comply with such rules and regulations can result in substantial penalties. The regulatory burden on the oil and gas industry increases the cost of doing business and affects profitability. Because such rules and regulations are frequently amended or reinterpreted, the Company is unable to predict the future cost or impact of complying with such laws.

Permits are required by the State for drilling operations, drilling bonds and the filing of reports concerning operations and they impose other requirements relating to the exploration and production of oil and gas. The Company is required to comply with various federal and state regulations regarding plugging and abandonment of oil and natural gas wells, which impose a substantial rehabilitation obligation on the Company, which may have a material adverse effect on the Company's financial performance.

Other Risks

t) Additional Requirements for Funding

The Company's funding requirements depend on numerous factors including the Company's ability to generate income from its oil and gas properties. It may require further financing in addition to amounts raised pursuant to the Offer and referred to in the Offer Document. Additional equity financing, if available, may be dilutive to Shareholders and at lower prices than the current market price. Debt financing, if available, may involve restrictions on financing and operating activities. If the Company is unable to obtain additional financing as needed, it may be required to reduce the scope of its operations or anticipated expansion.

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u) Changes in Legislation and Government Regulation

Changes to legislation or government policy in Australia, the United Kingdom, France and the United States of America, including changes to the taxation system, may affect future earnings and the relative attractiveness of investing in the Company. The Company cannot predict how existing, or future laws and regulations may be interpreted by enforcement agencies or court rulings, whether additional laws and regulations will be adopted, or the effect such changes may have on the Company’s business or financial condition.

v) Economic Conditions

Economic conditions in Australia, the United Kingdom, France, the United States of America and globally, may affect the performance of the Company. Factors such as currency fluctuations, inflation, interest rates, supply and demand and industrial disruption may have an impact on operating costs and share market prices. The Company's future possible revenue and securities price can be affected by these factors all of which are beyond the control of the Company or its Directors. Neither the Company nor the Directors warrant the future performance of the Company or any return on an investment in the Company. In addition, the Company's ability to raise additional capital, should it be required, may be affected.

w) Foreign Exchange Risk

The Company's operating oil and gas properties are located in the United States of America. As a result, revenues, cash flows, expenses, capital expenditure and commitments will be primarily denominated in United States dollars.

The Company's interest in the oil and gas properties is currently accounted for in United States dollars. This will result in the Company being exposed to the fluctuations and volatility of the US dollar and the Australian dollar exchange rates upon translation or repatriation of US dollars to Australian dollars.

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Section 4 DEFINED TERMS

“All Ordinaries Index” means the All Ordinaries Index published by Standard & Poor’s in respect of the financial market of ASX

" Applicant " refers to a person who submits an Entitlement and Acceptance Form and " Application " refers to the submission of an Entitlement and Acceptance Form

“ AEDT ” means Australian Eastern Daylight Time

" ASX " means ASX Limited (ACN 008 624 691) or, where the context permits, the Australian Securities Exchange operated by ASX Limited

" Closing Date " means 5.00pm (AEDT) Friday, 30 March 2012

" Company " means Elixir Petroleum Limited ACN 108 230 995

" Director " means a director of the Company

" Eligible Shareholder " means a Shareholder whose details appear on the Company's register of Shareholders as at the Record Date

" Entitlement and Acceptance Form " means the Entitlement and Acceptance Form accompanying this Offer Document

" Listing Rules " means the Listing Rules of the ASX

“ New Share ” means a new Share proposed to be issued pursuant to this Offer

“ NSE ” has the meaning in Section 1.1

" Offer " has the meaning in Section 1.1

" Offer Document " means this Offer Document dated Thursday, 15 March 2012

“Oil Price” means the West Texas Intermediate (WTI) crude oil spot price in US dollars as published in the Australian Financial Review (or if the Australian Financial Review is no longer published, a not dissimilar newspaper)

" Opening Date " means Friday, 16 March 2012

“ Placement ” means the Company’s placement of 6,400,000 Shares each at an issue price of $0.0625 to NSE to raise $400,000

" Record Date " means Friday, 13 March 2012

" Section " means a section of this Offer Document

" Share " means an ordinary fully paid share in the capital of the Company

" Shareholder " means a holder of Shares

“ Underwriter ” has the meaning in Section 1.5

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