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Elixir Petroleum Ltd (ELP)

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Wednesday 30 April, 2008

Elixir Petroleum Ltd

Quarterly Update

Elixir Petroleum Ltd
30 April 2008


                            Elixir Petroleum Limited
                   ('Elixir' or the 'Company': Ticker (ELP))

                                 30 April, 2008

                      QUARTERLY ACTIVITIES REPORT FOR THE
                           PERIOD ENDED 31 MARCH 2007

HIGHLIGHTS

*        Quarterly production revenue from High Island 268-A of US$2.38 million
*        Pompano Well #1 intersected commercial gas pay and was completed as a
         producer
*        Pompano JV elected to commence drilling Pompano Well #2
*        Farm out activities continue on several UK North Sea licences
*        Farmed into and assumed operatorship of highly prospective Block SL-4
         offshore Sierra Leone, West Africa
*        Commenced 1,222 km2 3D seismic data acquisition programme over Block
         SL-4

STRATEGY

Elixir is an internationally focused upstream oil and gas company with a
diversified portfolio of offshore petroleum interests across the exploration,
appraisal, development and production lifecycle.

Elixir's business strategy is to acquire interests in exploration licences with
high impact potential, to work up prospects internally and to farm these out to
industry to drill, typically on a full carry basis. Complementing this
exploration strategy is the addition of lower risk oil and gas development
projects with appraisal upside located in the shallow waters of the Gulf of
Mexico. These projects typically demonstrate a short cycle time to production
and provide cashflow for the Elixir Group.

The Board of Elixir considers it important to remain flexible in the pursuit of
new business opportunities which are judged to be complementary to its existing
business activities and able to deliver superior growth in shareholder value.

DEVELOPMENT AND PRODUCTION

Gulf of Mexico

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

Wells A-1 and A-2 at High island discovered gas and condensate pay in two
separate accumulations, with each well currently only producing from the lower
of the two reservoir zones. In the three month period to 31 March 2007, the
following production results were achieved:

High            Gas Production                        Oil Production
Island
268-A
        Total   Total   Avg    Avg    Change  Total    Total    Avg   Avg   Change
        Mar Qtr Dec Qtr Daily  Daily  (%)     Mar Qtr  Dec Qtr  Daily Daily (%)
        (MMscf) (MMscf) Mar    Dec            (Bbls)   (Bbls)   Mar   Dec
                        Qtr    Qtr                              Qtr   Qtr
                        (MMscf (MMscf                           (Bbls (Bbls
                        /d)    /d)                              /d)   /d)
Project   568   1,418    6.2   15.4   -59.7   30,373   16,860   338   183   +184.7
(100%)
Elixir
(30% WI)170.4     468    1.9    4.5   -57.8    9,112    5,058   100    55   +181.8

There was a total of 5.8 days downtime during this period, giving an average
uptime of 93.7%. There were no safety incidents reported in the period.

In the normal course a lag of two months is experienced from the month of
production to receipt of sales income. Accordingly, receipts in the quarter were
for production in the months of November 2007 to January 2008. Sale receipts for
the months of November 2007 to January 2008 totalled approximately US$2.38
million. The average price realised for the sale of gas produced in these months
was US$7.12/Mcf, and for oil was US$90.90/Bbl.

Production of gas and oil from Well A-2 remains relatively stable, although the
well is exhibiting a slow, natural decline in production over time, which is in
accordance with expectations.

As reported last quarter, a significant increase in oil and water production
from Well A-1 has been observed. This was expected, and is believed to be due to
the presence of an oil rim which overlays the water leg in the reservoir.
Following three months of stable production from Well A-1 to late December 2007,
it is thought that the oil / water contact in the reservoir has now risen, such
that the oil rim and underlying water leg is being accessed and produced by the
well bore.

The increase in oil and water production has reduced the ability of the well to
produce gas from the lowest perforated interval in the well. Consequently, along
with the increase in oil and water production, we have observed a related
decline in gas production from Well A-1 in the quarter. Once gas and oil rates
stabilised in January, their trends have subsequently indicated a gentle decline
in pressure and further movements of contacts with slowly increasing water cut
and decreasing oil.

The High Island joint venture has agreed to continue to produce the lowest zone
in Well A-1 to attempt to recover as much oil as possible. If over time the well
is not able to continue to lift the volumes of oil and water delivered by the
reservoir at this level, the sliding sleeve over the lowest perforations in the
well will be closed and a sliding sleeve approximately 50 feet shallower up the
wellbore (but still in the same reservoir zone), will be opened. In undertaking
this operation, it is anticipated that higher gas flow rates will be
re-established in Well A-1 from this reservoir interval. Additional reservoir
modelling studies are currently being undertaken to assist with our
understanding of the flow behaviour of Well A-1.

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

The Pompano gas field lies in the Gulf of Mexico, in Brazos Block 446-L SE/4,
which is approximately 90 miles southwest of Houston, Texas. The first well on
Pompano, SL103229#1 ('Well #1'), was directionally drilled from a new caisson
installed adjacent to the field's existing 'B' satellite platform during the
quarter.

Well #1 was designed to test several potentially gas bearing sands located
between 3,800 feet and 7,900 feet Measured Depth ('MD'). Well #1 reached total
depth on 26 January 2008 at 7,821 feet MD. Gas returns in the mud were
encountered whilst drilling the primary targets. Several zones were logged while
drilling and were found to be gas bearing in the 6,700, A and B Sands. Following
measurement of formation pressures, the logged pay encountered was considered
commercial and the joint venture elected to complete Well #1 as a producer.

Completion activities on Well #1, together with platform and flow line
refurbishment activities were finalised in late February and the well was placed
on production on 9 March 2008, some 8 weeks after spudding the well. Initial
production rates of approximately 7 MMscf/d were achieved. In the 3 weeks from
the commencement of production to the end of the quarter, the following
production results were achieved:

Pompano               Gas Production                   Condensate Production
Field
Brazos Block
446-L
              Total Mar Qtr  Avg Daily Mar Qtr  Total Mar Qtr  Avg Daily Mar Qtr
              (MMscf)        (MMscf/d)          (Bbls)         (Bbls/d)
Project        130.0          5.7                240.0          10.4
(100%)
Elixir (25%     32.5          1.4                 60.0           2.6
WI)                 

There was a total of 0.6 days downtime during this period, giving an average
uptime of 97%, which is an excellent result for a commissioning and start-up
period. There were no safety incidents reported in the period. First receipts
from sales of gas and condensate are due to be received in May 2008.

Following the success of Well #1, the joint venture participants elected to
drill SL103230#1 ('Well #2') at Pompano immediately upon the finalisation of
completion activities on Well #1. At the conclusion of the quarter, Well #2 had
reached Total Depth of 8,981 ft and preparations were underway for logging the
final hole section. At the date of this report, logging, testing and completion
activities had concluded and Well #2 was being prepared to be placed on
production.

APPRAISAL

UK North Sea

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

During the drilling of the Jaguar well in early 2006 significant hydrocarbon
shows were encountered in the Brent Formation. Subsequent technical work has
indicated the potential for oil entrapment up-dip of the Jaguar well location.
This up-dip accumulation, which was penetrated by a discovery well drilled in
the 1970's, has been named Mulle by the joint venture.

The Mulle accumulation lies on the south-western extension of the Osprey ridge
and is adjacent to the proposed Causeway oil field development which has
achieved flow rates of up to 14,500 barrels of oil per day on test.

An appraisal well and testing programme is being planned for the Mulle
accumulation in order to further define the areal extent of the reservoir, to
identify oil/water contacts and to test reservoir deliverability. The joint
venture has agreed to invite partners into the project to participate in the
proposed appraisal programme. To this end, an online data-room is being prepared
which will be opened shortly for a select group of invitees. Synergies are being
considered with respect to the Causeway development, planning for which is at an
advanced stage.

EXPLORATION

UK North Sea
Project Name:             Leopard Prospect (Block 211/18b)
Location:                 Northern UK North Sea
Ownership:                56% Working Interest
Operator:                 Elixir Petroleum Limited

Block 211/18b (Licence P1381) is a traditional licence awarded in the 23rd
Seaward Licensing Round in December 2005. The interest holders in P1381 are
Elixir (56%), RWE Dea UK SNS Limited (30%) and Sosina Exploration Ltd (14%).
Under the terms of a farm in agreement finalised with RWE in August 2007, RWE
will be contributing on a promoted basis to the cost of drilling an exploration
well on the Leopard prospect which lies within the block.

Efforts to secure another farminee in order to largely cover Elixir's and
Sosina's cost exposures in the proposed Leopard well are ongoing with several
companies currently assessing the opportunity.
Testing of 3D seismic data relating to a site survey was initiated during the
quarter, a prior requirement to drilling operations commencing. In the event a
full site survey is required, discussions have also been initiated with
contractors on the availability of survey boats for second half of 2008. The
availability of suitable drilling rigs has improved over recent months with
opportunistic wells slots becoming available in late 2008. Provided the Leopard
farmout can be concluded in the near term, we remain confident that the well can
be drilled during 2H, 2008.

Project Name:             Bobcat Prospect (Block 21/16b)
Location:                 Central UK North Sea
Ownership:                40% Working Interest
Operator:                 Elixir Petroleum Limited

Good progress has been made on Promote Licence Block 21/16b during the quarter
with all pre-requisite technical work having been finalised to allow farm out
activities to commence. State-of-the-art fluid inclusion studies of a number of
wells already drilled in the area have demonstrated the movement of hydrocarbons
through the area and proved a hydrocarbon migration pathway across the block.
The studies have also revealed that a historic well drilled on the block that
was formerly thought to be a dry hole, in fact contains hydrocarbon shows and
provides additional support for the Bobcat prospect.

A data room will be opened at the end of April to market the opportunity to
industry.

Project Name:             Fat Cat Prospect (Block 13/25)
Location:                 Central UK North Sea
Ownership:                12.5% Working Interest
Operator:                 Petro-Canada

Block 13/25 (Licence P1404) is a promote licence that was awarded in the 23rd
Seaward Licensing Round in December 2005. The initial approval of the merger of
Block 13/25 with the adjacent Block 13/24d was achieved in late 2007, with
Petro-Canada assuming operatorship of the merged block. The relinquishment of
part of the northern section of 13/25 was also approved at the same time.

At the conclusion of the quarter the joint venture is still awaiting receipt of
the Deed of Variation from the UK regulator, which confirms the change in the
terms of the two merged licences and approves the forward work programme. When
the Deed is received, a budget for 2008 and cash calls can be approved by the
joint venture.

In the meantime, high resolution 2D data has been acquired over Blocks 13/25 and
13/24 by Petro-Canada and the 2D seismic data has been processed. The joint
venture remains on schedule to complete the interpretation of the data set by
the end of Q2, 2008.

West Africa - Sierra Leone

Project Name:             Block SL-4
Location:                 Offshore Sierra Leone
Ownership:                35% (comprising 15% Working Interest, and 20% Optional 
                          Interest)
Operator:                 Elixir Petroleum (UK) Limited

An interest in Block SL-4 was assigned to Elixir on 20 February 2008. At that
time, Elixir was also approved as operator of the licence. Block SL-4 comprises
an area of 4,429 km2 lying in water depths from 100m to over 3,500m offshore
Sierra Leone, West Africa.

As the operator of Block SL-4, Elixir contracted a leading seismic acquisition
contractor in March to undertake a 1,222 km2 3D seismic survey of the Block on
behalf of the joint venture. The 3D survey is designed to better define and
mature the large number of significant leads and play types identified from 2D
seismic data acquired over Block SL-4 in 2003.

The vessel conducting the survey commenced acquiring data on Block SL-4 on 30
March 2008 and at 28 April 2008 had acquired 437 km2, representing 36% of the
total shoot area. It remains our expectation that on a trouble free basis,
seismic acquisition activities will be completed and the vessel released by
early June 2008. The data acquired will be processed in Europe by the seismic
contractor, ahead of detailed interpretation studies by Elixir's exploration
team based in England.

The undertaking of the 3D seismic survey satisfies the agreed minimum work
programme for the First Exploration Period under the Petroleum Agreement
governing Block SL-4. Elixir will be required to contribute approximately
US$1.5m to the cost of the 3D survey in September 2008 and at that time can
elect to issue fully paid ordinary shares in Elixir to the value of
approximately US$2.0m in order to exercise the option over an additional 20%
interest in the project that it holds.

MINERAL ASSETS

Following the completion of the merger with Gawler Resources, Transition
Resources Limited ('Transition'), a wholly owned subsidiary of Elixir, now holds
a number of mineral licences located in the Northern Territory and South
Australia. The directors of Elixir had investigated the opportunity to demerge
Transition from the Elixir Group and for Transition to undertaking a capital
raising and to seek the admission of its shares to trading on the ASX.

After discussions with a number of market participants, and cognisant of the
number of IPO's that have not proceeded or have been postponed in the past 6
months, the directors have formed the view that in light of current weakness in
the Australian equity market for new mineral resource public offerings, a
successful IPO of Transition would not be achievable.

To that end the directors have engaged the services of a corporate finance
adviser to market the assets on the Company's behalf.

FINANCIAL SUMMARY

At the end of the March 2008 quarter, Elixir held cash on hand of approximately
$5.4m.

In January 2008, Elixir issued 8.57 million unsecured convertible loan notes to
Macquarie Bank Limited raising $3.0 million. The loan notes have a conversion
price of $0.35 and a 12 month term to expiry from the date of issue.

Options issued to former Gawler optionholders as part of the merger between
Elixir and Gawler expired on 5 February 2008. These options were exercisable at
$0.001 per option. At the date of expiry, the Company had received valid
exercise notices from optionholders representing approximately 97% of the total
options on issue. Those options that remained unexercised at the expiry date
were cancelled.

Please find attached the Company's Appendix 5B for the 3 month period to 31
March 2008.

REPORTING SCHEDULE

Elixir Petroleum's proposed reporting schedule for the remainder of the 2008
calendar year is as follows:

Item                                                   Expected Date
Quarterly Activities Report for Quarter ended 30 June   
2008                                                   Thursday, 31 July 2008
Full Year Financial Report                             Thursday, 28 August 2008
2008 Annual Report and Notice of Meeting               Thursday, 23 October 2008
Quarterly Activities Report for Quarter ended 30       Wednesday, 29 October
September 2008                                         2008
2008 Annual General Meeting                            Wednesday, 26 November
                                                       2008

Information contained in this report with respect to the UK North Sea Projects
and Block SL-4 offshore Sierra Leone, was compiled by Elixir or from material
provided by the project operators and reviewed by the Elixir's Exploration
Director, Iain Knott, BSc,MSc, FGS, AAPG, who has had more than 25 years
experience in the practice of geology, including more than 5 years experience in
petroleum geology. Mr Knott consents to the inclusion in this report in the form
and context in which it appears.

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

For further information please contact:

Elixir Petroleum Limited
Alex Neuling, Company Secretary
Tel: +61 8 9440 2650

Seymour Pierce Limited
Jonathan Wright
Tel: +44 207 107 8000



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