Operations Update

    RNS Number : 9728F
  Elixir Petroleum Ltd
  16 October 2008
   

    Elixir Petroleum Limited
    (AIM : ELP)

    16 October 2008
    
OPERATIONS AND PRODUCTION UPDATE

    POMPANO FIELD - OPERATIONS UPDATE

    Elixir Petroleum Limited ("Elixir"), the international oil and gas exploration and production company (ASX:EXR, AIM:ELP), provides the
following update on progress at the latest well to be drilled at the Pompano field and production from the existing wells.

    Well SL 103320 ž4 ("Well ž3")

    Since our last announcement, the operator at the Pompano Project, AnaTexas Offshore Inc., has advised that the 7 5/8" casing was run to
a depth of 7,974 feet and cemented in place. The 6 3/4" hole section was then drilled to a final depth of 8,314 feet. 

    The 6700 ft Sand encountered productive gas with a total net pay of 12 feet. Below the 6700 ft sand the pre-drill structural
interpretation proved not to be accurate leading to the B, C and E Sand objectives being water wet.

    The well will be temporarily suspended to allow the data gathered from drilling and logging to be fully evaluated and referenced back to
the available 3D seismic. A decision will then be made if a completion of the 6700 ft Sand is warranted and/or whether a sidetrack of Well
ž3 should be drilled to access adjacent targets.

    Well SL 103229 ž1 ("Well ž1")

    The above well was the first in the Pompano re-development program and has recently experienced declining production rates. The major
cause of this decline has been assessed as a poor cement job between the B Sand (gas bearing and productive) and the deeper B-2 Sand (water
bearing).  This has allowed the water from the B-2 Sand to dominate flow. 

    Whilst this well was shut-in during Hurricane Ike, reservoir pressures were measured and are as expected and normal for the original
reserve estimates in both the upper (6700 Sand) and lower (B Sand) completions. Over recent days, the B-2 water production has increased
leading to the well being shut in.

    To rectify this problem a workover is proposed to attempt to restore production from this well to pre-decline levels of approximately 5
- 7 million cubic feet per day. A work over rig is currently being sourced to commence this work as soon as possible.

    Well SL 103230 ž1 ("Well ž2")

    The production at this well is performing to expectation.


    The Participants in Well ž3 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.


    For further information, please visit Elixir's website at www.elixirpetroleum.com or contact:


 Elixir Petroleum Limited                           Blue Oar Securities Plc
 Alex Neuling                                      Jerry Keen / Olly Cairns
 Tel: [phone]              Tel: [phone]
                                                                       1631


 Conduit PR
 Jonathan Charles / Sarah
 Alexander
 Tel: [phone]



    Information contained in this report with respect to the Pompano Project, was compiled by Elixir, or from material provided by the
project operator 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.

This information is provided by RNS
The company news service from the London Stock Exchange
 
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