ELP Elixir Pet.

    RNS Number : 0186K
  Elixir Petroleum Ltd
  12 December 2008
   

    Elixir Petroleum Limited
    (AIM : ELP)

    12 December 2008

    UPDATE ON BLOCK SL-4 

    Elixir Petroleum Limited ("Elixir"), the international oil and gas exploration and production company provides an update on matters
associated with Block SL-4, located offshore the Republic of Sierra Leone. 

    Default of Partner

    As previously advised, a notice of default was issued in late September by Elixir's subsidiary entity, Elixir Petroleum (UK) Limited
("Elixir (UK)"), the operator of Block SL-4, to its partner in the project, Prontinal Limited ("Prontinal") for failing to meet its payment
obligations in respect of the Block. The obligations primarily relate to the payment of monies which remain outstanding to the seismic
contractor who acquired 3D seismic over Block SL-4. Since that time, Elixir (UK) has been involved in detailed negotiations with Prontinal
in a good faith attempt to settle the dispute. Unfortunately, these negotiations have not reached a satisfactory conclusion.  

    As Prontinal has not remedied its default within the time period allowed, Elixir (UK) has issued a notice of forfeiture to Prontinal.
The notice provides that the whole of Prontinal's interest in Block SL-4 is now held by Elixir (UK). Elixir (UK) has been in communication
with the Sierra Leone Petroleum Resource Unit and advised them of this fact and that Prontinal is no longer a participant in Block SL-4. 

    The notice of forfeiture issued to Prontinal also included a demand for the immediate payment of all monies owing by Prontinal to the
joint venture. To date, Prontinal has not paid this amount, and so steps are now being taken to enforce this demand. Prontinal has indicated
it will be contesting the demand, default and forfeiture notices. Elixir (UK) has formed the view that any challenge to the default and
forfeiture process by Prontinal will be without merit.

    Demand by Seismic Contractor

    Elixir (UK) has received a statutory demand for payment in the amount of approximately US$2.58m from the seismic contractor who
undertook the acquisition of the 3D seismic over Block SL-4. Elixir (UK) has taken legal advice in relation to this matter and is taking
measures to have the Statutory Demand set aside. 

    Elixir will keep the market informed of developments as they arise in relation to this matter.

    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: (+61) 8 9440 2650          Tel: (+44) 207 448 4400 / (+61) 8 6430 1631


 Conduit PR
 Jonathan Charles
 Tel: (+44) 207 429 6666



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