RWE Takes Stake in Leopard Prospect

Elixir Petroleum has accepted an offer from RWE Dea UK SNS Limited (RWE) to farmin to the Company's northern North Sea Block 211/18b.

Block 211/18b (License P1381) is a traditional license awarded in the 23rd UKCS Licensing Round in December 2005. The current interest holders in P1381 are Elixir (80%) and its joint venture partner, Sosina Exploration Ltd (20%).

Under the terms of the farmin offer, RWE will secure a 30% interest in Block 211/18b by contributing on a promoted basis to the cost of drilling an exploration well on the Leopard prospect. The interests of Elixir and Sosina will decrease to 56% and 14% respectively as a result of the RWE farmin.

The offer is conditional upon the execution of a formal farmin agreement by 30 April 2007 and the consent of the Secretary of State for Trade and Industry to the license interest assignment.

The P1381 joint venture will be actively seeking to attract another farminee such that Elixir and Sosina's cost exposures to the planned Leopard well are largely covered.

Leopard is a large Upper Jurassic stratigraphic prospect within Block 211/18b which, based on Elixir's mapping, could contain prospective hydrocarbon resources up to several hundred million barrels of oil. The prospect has been mapped from modern 3D seismic. In addition it has been derisked by a long offset seismic line linking Leopard with a producing analog, the Borg oil field, across the median line in Norway.

Elixir's Managing Director, Russell Langusch, commented: 'We are delighted to be joined by a farmin partner of the calibre of RWE to drill such a high potential prospect as Leopard. We are confident of attracting another farminee to enable us to proceed with detailed planning of the exploration well.'

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