Elixir Petroleum Limited intends to continue with its efficient exploration strategy. For relatively modest outlays, the Company gains exposure to North Sea exploration plays with large potential upside. The area still offers drillable prospects with the potential to host discoveries of several hundred million barrels of oil.

Success in any one of these exploration ventures would have a large positive impact on the Company’s worth.

Cash and near cash reserves currently stand at about A$9.7 million (£3.8 million) or equivalent to 13.6 cents per share. Given the Company’s economical approach to funding exploration where farminees largely carry Elixir’s costs through the initial drilling phase, the Company does not require more capital for the present to continue with its high potential exploration program.

Focus on Northern North Sea

The drilling results to date along the northern margins of the Central North Sea basin on acreage generated by the alliance with Granby Oil & Gas have proved disappointing. This alliance which operated for the 22nd and 23rd UKCS licensing rounds has now ceased.

Elixir now intends to focus on its self-generated Northern North Sea licences to fully assess the significant prospectivity right in the centre of this prolific oil

producing basin.

Block 211/18b (Leopard) (EXR 56% interest)

The giant Leopard prospect in Block 211/18b has already been part-farmed out. RWE Dea is taking up a 30% interest in return for paying more than 50% of the costs of a Leopard well. Given very encouraging seismic results linking Leopard with its Norwegian analog, the Borg oil field, the Company is confident of farming-out the remainder of the cost exposure so that Elixir is free-carried through the well with a residual interest in the region of 35-40%.

By Elixir’s mapping Leopard is estimated to contain oil in place at the midcase level in excess of 1 billion barrels, if hydrocarbons are present. Assuming typical recovery factors for the region, this volume would equate to around 370 million barrels of gross recoverable reserves.