Elixir Seeks Farminee to Assist Drilling Leopard in UK North Sea

Block 211/18b (Licence P1381) is a traditional licence awarded in the 23rd Seaward Licensing Round in December 2005. The interest holders in P1381 are Elixir (56%), RWE Dea UK SNS Limited (30%) and Sosina Exploration Ltd (14%). Under the terms of a farm in agreement finalised with RWE in August 2007, RWE will be contributing on a promoted basis to the cost of drilling an exploration well on the Leopard prospect which lies within the block.

Efforts to secure another farminee in order to largely cover Elixir's and Sosina's cost exposures in the proposed Leopard well are ongoing with several companies currently assessing the opportunity.

Testing of 3D seismic data relating to a site survey was initiated during the quarter, a prior requirement to drilling operations commencing. In the event a full site survey is required, discussions have also been initiated with contractors on the availability of survey boats for second half of 2008. The availability of suitable drilling rigs has improved over recent months with opportunistic wells slots becoming available in late 2008. Provided the Leopard farmout can be concluded in the near term, we remain confident that the well can be drilled during 2H, 2008.

Good progress has been made on Promote Licence Block 21/16b during the quarter with all pre-requisite technical work having been finalised to allow farm out activities to commence. State-of-the-art fluid inclusion studies of a number of wells already drilled in the area have demonstrated the movement of hydrocarbons through the area and proved a hydrocarbon migration pathway across the block. The studies have also revealed that a historic well drilled on the block that was formerly thought to be a dry hole, in fact contains hydrocarbon shows and provides additional support for the Bobcat prospect.

A data room will be opened at the end of April to market the opportunity to industry.

Block 13/25 (Licence P1404) is a promote licence that was awarded in the 23rd Seaward Licensing Round in December 2005. The initial approval of the merger of Block 13/25 with the adjacent Block 13/24d was achieved in late 2007, with Petro-Canada assuming operatorship of the merged block. The relinquishment of part of the northern section of 13/25 was also approved at the same time.

At the conclusion of the quarter the joint venture is still awaiting receipt of the Deed of Variation from the UK regulator, which confirms the change in the terms of the two merged licences and approves the forward work programme. When the Deed is received, a budget for 2008 and cash calls can be approved by the joint venture.

In the meantime, high resolution 2D data has been acquired over Blocks 13/25 and 13/24 by Petro-Canada and the 2D seismic data has been processed. The joint venture remains on schedule to complete the interpretation of the data set by the end of Q2, 2008.


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