Pompano Project Update

Elixir Petroleum Limited (AIM: ELP) POMPANO PROJECT UPDATE Elixir Petroleum Limited ("Elixir" or "the Company") is pleased to provide an update on drilling activities at the Pompano Project. Well No. SL 103229 ("Well #1") reached total depth on Saturday 26 January 2008 at 7,821 feet Measured Depth. 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 sands, the A sands and the B sands. Following measurement of formation pressures, the logged pay encountered is considered commercial and the joint venture has elected to complete Well #1 as a producer. Completion activities will commence immediately together with platform and flow line refurbishment. It is expected that the completion of Well #1 will take 15 days. Elixir's Managing Director, Andrew Ross, said: "We are very pleased with drilling results from our first well at the Pompano Project and are looking forward to starting completion activities." 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 the operator, 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/ Sarah Jacobs 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 has been directionally drilled from the field's existing "B" satellite platform to 7,821 feet measured depth. Well #1 was designed to test several 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. 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. ---END OF MESSAGE---