Production Commences at Pompano Project

12 March 2008 ELIXIR PETROLEUM LIMITED (AIM: ELP) POMPANO PROJECT COMMENCEMENT OF PRODUCTION Elixir Petroleum Limited ("Elixir") is pleased to announce that the operator of the Pompano Project, AnaTexas Offshore Inc., has advised that first production from Well SL 103229 #1 ("Well #1") was achieved on Sunday, 9 March 2008 (US/Central time). Well #1 has been completed with a dual string completion, allowing two sand intervals to be produced simultaneously. The Operator has commenced production from the 6700A Sands and the B Sands and is monitoring initial production rates, which are in accordance with expectations. Produced gas is being processed at the "A" Production Platform and then exported and sold from the platform via the existing gas sales pipeline (please see Schematic via the link below). It is anticipated that a stabilised, sustained production rate for Well #1 will be achieved in the next 7 to 10 days following the completion of all facilities commissioning activities. A further announcement will be made at that time. Commenting on the announcement, Elixir's Managing Director, Andrew Ross said: "We are delighted to have achieved first production and gas sales from the Pompano Project, a milestone which has been accomplished in less than 13 weeks from the commencement of in-field activities. We look forward to being able to report on further progress at Pompano in the coming weeks." The Participants in the Pompano Field 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 5.5% 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 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 ("MD"). Well #1 intersected three gas bearing sands located between 6,700 feet and 7,426 feet MD which were successfully flow tested. Well #1 is now on production. Well #2 spudded in late February 2008 and is being directionally drilled from the field's existing "A" Production Platform to 9,358 feet MD. Well #2 is targeting several sands which are anticipated to contain a combination of proved, probable and possible gas reserves. The Pompano Project is making use of the field's extensive existing production and pipeline facilities, which has resulted in a significant capital cost saving and a reduction in time to production for the project. ---END OF MESSAGE--- http://hugin.info/138280/R/1200188/245057.pdf