Elixir to raise $14.5m

Perth based Elixir Petroleum Ltd will aim to raise $14.5 million through a share placement, with funds to be used for additional development of its gas project in the Gulf of Mexico, as well as to support projects in Sierra Leone.

Full announcement below:

Elixir Petroleum Limited is pleased to announce a capital raising to consist of a placement and underwritten entitlements issue of up to 53.64 million shares to raise up to A$14.5 million at a price of $0.27 per share.

The capital raising consists of:
- A placement of a first tranche of 24.15 million shares at $0.27 per share to professional and
sophisticated investors to raise approximately $6.52 million before issue costs
("Placement");
- An additional placement of a further tranche of 9.35 million shares, subject to shareholder
approval, at $0.27 per share to professional and sophisticated investors to raise approximately $2.52 million before issue costs ("Additional Placement"); and
- A fully underwritten non-renounceable entitlements issue at $0.27 per share on the basis of
one (1) share for every eight (8) shares held to raise approximately A$5.44 million before
issue costs ("Entitlements Issue").

The proceeds of the capital raising will be used to:
- Fund additional development wells under an accelerated drilling programme at the
Company's Pompano Gas Project in the Gulf of Mexico;

- Fund the Company's 35% working interest share of the 2008 work programme in respect of
Block SL-4 offshore Sierra Leone;

- Provide greater flexibility to the Company in its participation in appraisal and exploration
programmes across its existing North Sea asset portfolio;

- Support its recent North Sea 25 P Round Licensing Applications, a condition of which in some cases includes certain minimum balance sheet requirements;

- Allow the Company to grow its existing Gulf of Mexico shallow water production base
through participation in additional exploration, appraisal and development opportunities; and

- For general working capital purposes

The issue price of $0.27 per share represents a discount of 12.3% to the Volume Weighted Average Price ("VWAP") of Elixir's shares of $0.308 over the 5 prior trading days on the ASX.

The Company also announces the appointment of Blue Oar Securities Plc as its nominated adviser and broker to the AIM market. Blue Oar has nomad representatives in the UK and Australia as well a wholly owned Australian corporate advisory practice, Inteq Limited.

Attached to this announcement is an updated presentation which will be utilised as the basis of
presentations to clients of Blue Oar, Australian brokers and other institutional and non-institutional investors.

Commenting on the capital raising and the adviser appointment, Elixir's Chairman, Jon Stewart said:
"We are delighted with the support we have received from supporting brokers and our shareholders.
We are pleased to provide an opportunity for existing shareholders to participate in this fundraising through the entitlements issue.

"This financing will help the Company meet a number of strategic and operating objectives. It is
management's intention to use Elixir's new balance sheet strength, together with its growing cashflow from production, to take advantage of existing opportunities within its portfolio and to aggressively pursue other new projects.

"We are also very pleased to have retained Blue Oar Securities Plc and Inteq as our advisers on the AIM market and the ASX. We consider our balanced portfolio of producing assets, appraisal interests and high impact exploration an attractive and relevant opportunity for the UK investment market and we intend to develop that market in conjunction with our efforts in the Australian
investment market."