GOIL Granby Oil

    6 October, 2006

                           ELIXIR PETROLEUM LIMITED                            

                          ("Elixir" or "the Company")                          

                            ALBION FARMIN PROPOSAL                             

Elixir Petroleum Limited (ticker symbols - ASX: EXR, AIM: ELP) ("Elixir" or
"the Company") advises that the proposed farm-out agreement with Canadian oil
and gas company, Albion Petroleum, has expired.

Albion was intending to farm-in to a number of Elixir's Central North Sea
licences to secure working interests of up to 12.5%. Albion has been unable to
complete the transaction in the required timeframe and demonstrate its
financial capacity.

However the withdrawal of Albion is expected to have minimal impact on Elixir's
forward drilling plans.

Albion's interest in the forthcoming Guinea well on Block 15/13b has been taken
up by Gas Plus Italiana SpA, which has increased its participating interest on
the same terms as originally proposed by the Albion deal. Consequently, there
is no commercial impact on Elixir or its co-venturer Granby Oil and Gas plc for
the Guinea well, which will be operated by Nexen and is expected to begin
drilling operations in early November.

The Company continues to make good progress towards farming-out other licences
for drilling during 2007.

For further information please contact:

Elixir Petroleum Limited                                                       
                                                                               
Russell Langusch, Managing Director                +44 207 484 5623 (UK office)
                                                                               
                                                     +44 7840 523 771 (UK cell)
                                                                               
                                                    +61 411 725 858 (Aust cell)
                                                                               
                                          E-mail: rlangusch@elixirpetroleum.com
                                                                               
Bankside Consultants                                                           
                                                                               
Michael Padley/Susan Scott                                     +44 207 367 8888
                                                                               



END

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