Pompano Project Update

18 March 2008 ELIXIR PETROLEUM LIMITED (AIM: ELP) POMPANO PROJECT - OPERATIONAL UPDATE Elixir Petroleum Limited ("Elixir") is pleased to provide an update on drilling operations at the Pompano Gas Field at Brazos Block 446-L SE/4. Since the last update announcement, the operator of the Pompano Project, AnaTexas Offshore Inc, has advised that the logging operations in the 9 7/8" hole section have been successfully completed and the 7 5/8" casing has been run and cemented at a depth of 8,154 ft Measured Depth ("MD"). The most recent update from the operator, at 15:00hrs 17/03/08 (US/CST), reports that the rig was running in with a drilling assembly to start the final 6 ¿" hole section to a planned depth of 9,358ft MD. The Participants in Well #2 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 #2 will be reduced by 5.5% pursuant to a 'back-in' arrangement with the Operator once Elixir has recouped 120% of its total investment in the well. For further information please contact: Elixir Petroleum Limited +61 8 9440 2650 Alex Neuling, Company Secretary Bankside Consultants +44 207 367 8888 Michael Padley / Louise Davis Seymour Pierce Limited +44 207 107 8000 Jonathan Wright Please note: In accordance with the requirements of the Operator, hydrocarbon shows will only be reported following logging and evaluation of the well after reaching Total Depth. 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 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 was directionally drilled in January 2008 from the field's existing "B" satellite platform to 7,825 feet measured depth. Well #1 intersected three gas bearing sands located between 6,700 feet and 7,426 feet measured depth which have been successfully flow tested. Production commenced from this well on Sunday 9th March 2008 from the B and 6700A sands. Well #2 spudded in late February 2008 and is being directionally drilled from the field's existing "A" Production Platform to 9,358 feet measured depth. Well #2 is targeting several sands which are anticipated to contain a combination of proved, probable and possible gas reserves. The Pompano Project will use the field's extensive existing production and pipeline facilities, which will achieve a significant capital cost saving and a reduction in time to production for the project. ---END OF MESSAGE---