Project Update

    RNS Number : 3817L
  Elixir Petroleum Ltd
  09 January 2009
   
    Elixir Petroleum Limited
    (AIM : ELP)
     9 January 2009
     UPDATE ON GULF OF MEXICO PRODUCTION OPERATIONS 

    Elixir Petroleum Limited ("Elixir"), the international oil and gas exploration and production company, provides an update on production
operations at the Pompano and High Island Fields located offshore Texas in the Gulf of Mexico. 
    
Pompano Field
    As previously announced, well SL 103229ž1 ("Well ž1") was shut-in in mid-October pending a remedial workover to address sand bridging
issues encountered in the upper 6700 Sand reservoir and unexpected water production from the lower B Sand reservoir. 
    Elixir is pleased to report that it has been advised by the field operator, AnaTexas Offshore Inc. ("ATO"), that production has been
reinstated from the 6700 Sand reservoir in Well ž1. The sand bridges in the 6700 Sand completion have cleared without intervention and
production has been restored from this reservoir at a rate of approximately 1 million cubic feet of gas per day. 
    Notwithstanding the natural restoration of production from the 6700 Sand reservoir, a planned workover of Well ž1 will also include a
solution to address the underlying cause of the sand bridging in this reservoir. The workover will also seek to resolve the water and sand
production from the B Sand reservoir, which is believed to originate from the deeper B2 Sand and is being produced via a poor annular cement
bond. This problem has inhibited production from the B Sand reservoir in Well ž1. Elixir expects to receive a final recommendation from ATO
for the workover of Well ž1 in the coming weeks, with operations to commence shortly thereafter. 
    Well SL 103230 ž1 ("Well ž2") production continues to perform to expectations.
    
High Island Field
    Elixir has been advised by the field operator, Peregrine Oil & Gas LLC ("Peregrine"), that repairs to the High Island Offshore System
("HIOS"), which was damaged during the passage of Hurricane Ike in mid-September, are now complete. The HIOS is the regional pipeline system
through which gas produced at the High Island Field is exported to market.  
    Peregrine has reported that, with the completion of repairs and the re-commissioning of the HIOS by the pipeline owner, the two wells at
High Island are now being brought back online and production has restarted. An update on production rates will be provided once steady state
production has been resumed.
    Commenting on the announcement, Elixir's Managing Director, Andrew Ross said:
    "The reinstatement of production from the upper reservoir in Well ž1 at Pompano and from both wells at High Island is great news and
will further add to Elixir's cashflow from its Gulf of Mexico operations." 
    He added, "we are also looking forward to the commencement of the workover of Well ž1 at Pompano and to re-establishing higher flow
rates from that well."  
    Information contained in this report with respect to the High Island and Pompano Projects was compiled by Elixir or from material
provided by the project operators 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.
    
For further information on Elixir, please visit the Company'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]
                                                                                                   
  
 Conduit PR
 Jonathan Charles
 Tel: [phone]



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