Pompano Project Update

FOR IMMEDIATE RELEASE 14 January, 2008 ELIXIR PETROLEUM LIMITED POMPANO PROJECT UPDATE Elixir Petroleum Limited ("Elixir" or "the Company") is pleased to provide an update on activities at the Pompano Project. The operator of the Pompano Project, AnaTexas Offshore Inc. ("AnaTexas") has advised that Well SL 103229 #1 ("Well #1") spudded at 15:30hrs on Saturday, 12 January 2008 (US/CST). At the time of the Operator's report at 06:00 hours on 13 January 2008 (US/CST), Well #1 had been drilled to a depth of 808 feet below the rotary table on the rig floor and a short wiper trip was being undertaken prior to pulling out of the hole to run and cement the 16" casing string. While operations are underway, the Company will issue routine drilling releases every Tuesday or at any such time that material matters require an earlier release. The Participants in Well #1 and their respective working interests are: Elixir Petroleum Ltd * 25.0% Buccaneer Energy Ltd * 65.0% Baron Petroleum Inc. 7.5% Streamline Exploration Inc. 2.5% 100% * Interests held indirectly via their respective shareholdings in wholly-owned subsidiaries. Elixir's 25% working interest in Well #1 will be reduced by 5.0% pursuant to a 'back-in' arrangement with AnaTexas once Elixir has recouped its total investment in the well, plus 20%. For further information please contact: Elixir Petroleum Limited Alex Neuling, Company Secretary +61 8 9440 2650 Bankside Consultants Michael Padley / Susan Scott +44 207 367 8888 Seymour Pierce Limited +44 207 107 8000 Jonathan Wright Pompano Project - Background The Pompano gas field lies offshore in the Gulf of Mexico, in Brazos Block 446-L SE/4, which is approximately 90 miles southwest of Houston Texas. The field is approximately 7 miles offshore in 55 feet of water. The Pompano gas field was discovered in 1966 and has produced over 120 billion cubic feet of gas prior to being shut-in in 2003. The Pompano Project is essentially a re-development of the Pompano gas field with new well locations based on modern 3D seismic data. Well #1 will be directionally drilled from the field's existing "B" satellite platform to 7,941 feet measured depth. Well #1 is expected to take 30 days to drill and complete on a trouble free basis. Well #1 is designed to test seven potentially gas bearing sands located between 3,800 feet and 7,900 feet measured depth. Several of these sands have been productive down dip of the Well #1 location, or nearby within the Pompano field. If successful, the Pompano Project will use the field's extensive existing production and pipeline facilities. This will achieve a significant capital cost saving and a reduction in time to production for the project. Information contained in this report with respect to the Pompano Project, was compiled from material provided by the project operators and reviewed by P D Allchurch, BSc, FAIMM, MPESA, who has had 40 years experience in the practice of geology including more than 5 years experience in petroleum geology. Mr Allchurch consents to the inclusion in this report of the information in the form and context in which it appears. ---END OF MESSAGE---