A B N 5 1 1 0 8 2 3 0 9 9 5

Interim Financial Report for the half-year ended 3 1 D e c e m b e r 2 0 1 1

Page

Corporate directory 1

Directors’ report 2

Auditor’s independence declaration 7

Independent review report 8

Directors’ declaration 10

Consolidated statement of comprehensive income 11

Consolidated statement of financial position 12

Consolidated statement of changes in equity 13

Consolidated statement of cash flows 14

Notes to the consolidated financial statements 15

Corporate Directory

1

Directors Mr Alan Watson – Non Executive Chairman

(appointed 5 October 2011)

Mr Andrew Ross – Managing Director

Mr John Robertson – Non-Executive Director

Mr Michael Price – Non-Executive Director

Company Secretary Ms Julie Foster

Registered and Principal Administration Office Level 20, 77 St Georges Terrace

Perth WA 6000

Telephone: (+61) 8 9440 2650

Facsimile: (+61) 8 9440 2699

UK Operations Office 8 The Courtyard

Eastern Road, Bracknell

Berkshire RG12 2XB

United Kingdom

Telephone: (+44) 1344 426 170

Facsimile: (+44) 1344 360 268

Email info@elixirpetroleum.com

Bankers National Australia Bank Limited

Ground Floor, 50 St Georges Terrace

Perth WA 6000

Barclays Bank plc

5 The North Colonnade

Canary Wharf

London E14 4BB

Auditors BDO Audit (WA) Pty Ltd

38 Station Street

Subiaco WA 6008

Share Registry Computershare Investor Services Pty Ltd

Level 2

45 St Georges Terrace

Perth WA 6000

Stock Exchange Listing Australian Securities Exchange

Home Exchange: Perth, Western Australia

Ticker Code: EXR

Website www.elixirpetroleum.com

Directors’ Report

2

The Directors of Elixir Petroleum Limited present their report on the Consolidated Entity, consisting of Elixir Petroleum Limited (“the Company” or “Elixir”) and the entities it controlled during the half-year ended 31 December 2011 (“Consolidated Entity” or “Group”). DIRECTORS The names of the Directors of Elixir Petroleum Limited in office during the half-year and until the date of this report are: Mr Alan Watson (Non-Executive Chairman) appointed 5 October 2011 and appointed Non-Executive Chairman 29 November 2011

Mr Andrew Ross (Managing Director)

Mr John Robertson (Non-Executive Director)

Mr Michael Price (Non-Executive Director)

Mr Jonathan Stewart (Non-Executive Chairman) resigned 29 November 2011

Mr Iain Knott (Executive Director - Exploration) resigned 22 July 2011 Unless otherwise stated, all Directors were in office from the beginning of the half-year until the date of this report. REVIEW AND RESULTS OF OPERATIONS Operating Results For the half-year ended 31 December 2011, the Company recorded an after tax loss of $1,965,446 (31 December 2010: loss of $1,383,592). Corporate and Financial In October 2011, the Company received commitments to place 28,300,000 new shares at $0.04 per share, to raise $1,132,000 (before costs). The placement was completed under Elixir’s 15% placement capacity to predominantly existing Elixir shareholders. The Placement did not require shareholder approval. At 31 December 2011, Elixir held cash on hand of $1,413,583 (30 June 2011: $1,320,069). The Elixir Group remains debt free. Following the conclusion of the reporting period, the Company announced on 2 March 2012 a capital raising by way of a placement and fully underwritten, pro rata, non-renounceable entitlement issue to raise up to $2,200,000 (before costs). It is expected that the offer will close on 30 March 2012. Summary Review of Operations During the half-year ended 31 December 2011, the Company produced oil and gas in the Gulf of Mexico and conducted exploration activities onshore in the Paris Basin, France and offshore in the UK North Sea. EXPLORATION INTERESTS France Project Name: Moselle Permit Location: North-Eastern France Ownership: 100% Working Interest Operator: Elixir Petroleum (Moselle) Limited The Moselle Permit is a 5,360 km2 (1.34 million acre) onshore exploration block located in the eastern part of the Paris Basin in North-Eastern France. The Permit is prospective for four main play types within the Triassic and

Directors’ Report

3

Carboniferous aged sequences, which include conventionally reservoired oil and gas and a giant tight gas and play with associated hydrocarbon liquids. The Permit was awarded in January 2009 for an initial five year term. Elixir acquired operatorship in April 2010 and holds a 100% working interest in the Permit. Regionally, approximately seventy wells have penetrated the Triassic interval and a further twenty five wells have penetrated the Carboniferous interval, being the two primary sequences in the Saar-Lorraine Basin. The wells have been drilled over a period spanning nearly 60 years with at least 78% of the Carboniferous well penetrations having recorded oil and/or gas shows throughout the target intervals. At least two wells are known to have produced gas to surface from the Carboniferous interval. A large geological database containing information on 115 regional wells has been assembled. The database contains over 800 kilometres of digitised wireline well log data from 40 wells, over 600 core and cuttings samples from 2,700 metres of available core taken from three key wells and over 550 geochemical assays conducted on rock samples from eleven wells located in, and adjacent to, the Permit. The database also contains over 1,000 line kilometres of 2D seismic data over the permit which was reprocessed and reinterpreted during 2011. During the period under review a further 321 line kilometres of 2D was reprocessed and interpreted (Phase 4). At the date of this report, the total reprocessed and reinterpreted 2D seismic dataset stands at 1,362 line kilometres. The balance of the remaining digital raw seismic data over the permit of approximately 1,500 line kilometres has also been purchased, together with a 25km2 3D seismic survey. Mapping of a number of conventional hydrocarbon prospects and leads was competed in September 2011 and volumetric calculations were produced. A total of nineteen conventional prospects and leads were identified on the Permit in the Carboniferous and Triassic sections. Netherland Sewell & Associates Inc. (“NSAI”) independently verified the original hydrocarbon-in-place volume for the identified prospects and leads at a mean unrisked Original Oil In-Place (“OOIP”) of 2.1 billion barrels (“Bbbls”) of oil. Alternatively, if the prospects and leads are gas charged, a mean unrisked Original Gas In-Place (“OGIP”) estimate of 2.2 trillion cubic feet (“TCF”) of gas has been provided by NSAI. In addition to the volumetric assessment of the conventional prospectivity, NSAI also provided an independent assessment of the unconventional resource potential on the permit. NSAI provided an undiscovered, best estimate volume for unconventional resources of 165 Bbbls of OOIP and 650 TCF of OGIP. It has been assessed that, on average, over 3,000m of the Carboniferous aged source rock currently lies in the thermal maturity window. Post the publication of the NSAI reports, Elixir has reprocessed and interpreted additional 2D seismic data (Phase 4). This new data has increased the number of conventional prospects and leads from nineteen to thirty four. Using a similar methodology to that adopted by NSAI (2007 PRMS by SPE), the mean prospective unrisked in-place volume has increased approximately threefold from the original NSAI report to 6.8 Bbbls of OOIP or 6.3TCF of OGIP. The mean risked prospective recoverable resource estimate for all 34 conventional prospects and leads is 161 mmbbls of oil or 559 Bcf of gas. Technical studies designed to assess both the conventional and unconventional prospectivity within the permit area, including additional geochemical analyses, porosity / permeability analyses of sands, a detailed chemostratigraphy study and gravity data interpretation over approximately 28,400km2 of land in, and adjacent to, the Moselle Permit, were all completed in the period and reports finalised. The studies are at an advanced stage of integration and have significantly improved characterisation of the sub-plays within the permit and the hydrocarbon volumetric potential for both conventional and unconventional systems. At the conclusion of the reporting period ongoing technical work was focused on interpreting and integrating the most recently processed 2D seismic data to identify optimal well locations for the drilling of multi-horizon conventional prospects. During the period under review discussions were held with the local authority based in Lorraine to establish the well permitting process and associated timelines. Well engineering services have been procured and activities in early 2012 will establish outline well designs and costs. The Company has announced that its ambition is to commence drilling activities in Q4, 2012. CIBC World Markets Plc has been appointed to provide advisory and investment banking services in relation to the farmout of an interest in the Moselle Permit. Farm-out activities commenced in mid-December with detailed management presentations being provided to a number of interested parties. Data room and seismic workstation reviews are currently ongoing with interested parties and the process is expected to culminate in Q2, 2012.

Directors’ Report

4

UK North Sea Project Name: Tiger Prospect (Block 211/12b) Location: Northern UK North Sea Ownership: 100% Working Interest Operator: Elixir Petroleum (Europe) Limited Block 211/12b is located in the northern sector of the UK North Sea, approximately 160 kilometres north east of the Shetland Islands, in a water depth of approximately 186 metres. Block 211/12b contains a mapped prospect named ‘Tiger’ which holds a best estimate recoverable resource of 90 mmbbls of oil. The Block lies 5 kilometres to the east of the Magnus Field which was brought into production in 1983 by BP with an in-place volume of approximately 1.5 billion barrels of oil. The Block was awarded for a licence term of four years with a drill or drop decision required by February 2013 Elixir signed a conditional farmin agreement on Block 211/12b in July 2011. The agreement was subject to the satisfaction of certain conditions precedent, including the obtaining of the consent of the UK Secretary of State for Energy and Climate Change (“DECC”) for the proposed farminee to act as operator of the licence and for the assignment of an interest in the licence. Although the proposed farminee was able to ultimately achieve the consent of the UK regulator to the farmin and the assignment of operatorship, the farminee’s source of funding failed to perform its obligations under its contracted funding arrangements. Elixir worked with the proposed farminee to achieve completion of the transaction, but ultimately the farminee was unable to secure alternative funding. Consequently, Elixir advised the proposed farminee of the termination of the farmin agreement in late December 2011. Tiger is currently being re-offered to industry. Project Name: Mulle Project (Prospect (Block 211/22b and 211/27d) Location: Northern UK North Sea Ownership: 40% Working Interest Operator: Elixir Petroleum (Europe) Limited The Mulle Project joint venture elected to relinquish the licence in September 2011 at the conclusion of the five year licence term. Project Name: Dumas Project (Block 13/25a (split)) Location: Central UK North Sea Ownership: 100% Working Interest Operator: Elixir Petroleum (Europe) Limited Elixir acquired the southern part of Block 30/25 in the 26th Seaward Licensing Round in late 2010. Block 30/25a contains a Lower Cretaceous and three Upper Cretaceous aged oil prospects that have been mapped on 2D seismic data. Additional 3D seismic data over the Block area was purchased during the period under review and seismic interpretation and prospect mapping studies are ongoing. Project Name: Newly Awarded Acreage (Block 12/18 & 19a (split)) Location: Inner Moray Firth, UK North Sea Ownership: 100% Working Interest Operator: Elixir Petroleum (Europe) Limited In late December 2011 the Company was offered Blocks 12/18 and 12/19a (split) (“Blocks”) by the DECC as part of the 26th UK Seaward Licensing Round. The Blocks are located in the Inner Moray Firth area of the UK North Sea and have been offered to Elixir under promote licences as 100% interest holder and operator. The work obligations associated with the Blocks comprise the purchase of 3D seismic data and require a drill-or-drop decision to be made by early 2014. The Blocks are contiguous and are located approximately 150 km north east of Inverness, in a water depth of approximately 75m. The Blocks lie to the north east of the Beatrice oil field located in Block 11/30a and to the west of the Captain oil field in Block 13/22a. A single large stratigraphic prospect has been identified in the Middle Jurassic Beatrice Formation on the northerly edge of the Smith Bank High. The prospect is predicted to have Beatrice Formation sands as the reservoir, which has been identified as an acoustic impedance anomaly on several 2D seismic lines. No wells to date have targeted the Smith Bank High in the Blocks.

Directors’ Report

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The forward work programme to be undertaken during 2012 will focus on the interpretation of the 3D seismic data set to evaluate and further de-risk the prospect. PRODUCTION INTERESTS Gulf of Mexico Project Name: High Island Project (Block 268A) Location: High Island Area, Offshore Texas, USA Ownership: 30% Working Interest (22.5% Net Revenue Interest) Operator: Peregrine Oil and Gas, LP The High Island field is located approximately 65 kilometres southeast of Houston, Texas in the Gulf of Mexico and was brought into production in September 2007. Wells A-1 and A-2 at High Island discovered gas and condensate pay in two separate accumulations, with each well currently producing from only the lower of the two reservoir zones to a regional processing facility, the Maritech HI-442 platform. In the six month period to 31 December 2011, the following production results were achieved at High Island: High Island Field – 268-A Gas Production Oil Production

Total Dec Half (MMscf)

Avg Daily Dec Half (MMscf/d)

Total Dec Half (Bbls)

Avg Daily Dec Half (Bbls/d)

Project (100%) 97.3 0.53 11,336 61.3

Elixir (30% WI) 29.2 0.16 3,401 18.4

The High Island field has produced approximately 4.19 Bcf of gas and 180,800 bbls of condensate (100% project) in the period from the commencement of production in September 2007 to the date of this report. Production revenue from High Island for the half year to 31 December 2011 totalled approximately US$284,000. The average price realised for the sale of gas produced in these months was US$3.33/Mcf, and for oil was US$89.82/Bbl. There were no reported safety incidents in the period. Project Name: Pompano Gas Project (Block 446-L SE/4) Location: Brazos Area, Offshore Texas, USA Ownership: 25% Working Interest (18.125% Net Revenue Interest) Operator: AnaTexas Offshore Inc. The Pompano field lies within the Brazos Area of the Gulf of Mexico and is located approximately 6 kilometres offshore the east Texas coast and 110 kilometres south of Houston. The field has been producing from two wells, with production from three separate reservoirs. The field has produced approximately 6.35 Bcf of gas and 6,300 bbls of condensate (100% project) since the commencement of production in March 2008. As previously reported, workovers undertaken in July 2011 on the two previously producing Pompano wells were unsuccessful at re-establishing production from the wells. We understand that the operator has been producing the wells cyclically by blowing-down built up pressure in the wells on a monthly basis which has resulted in the production of small quantities of gas during the reporting period. Elixir elected not to participate in the unsuccessful workover operations and consequently is not a participant in the wells. Elixir is considering its options with respect to its interest in the Pompano field.

Directors’ Report

6

EVENTS OCCURRING AFTER REPORTING DATE The following events occurred subsequent to the end of the reporting period: (a) On 11 January 2012, Elixir announced it had secured Blocks 12/18 and 12/19a (split) located in the Inner

Moray Firth area of the UK North Sea.

(b) On 2 March 2012, Elixir announced a capital raising by way of a placement of 6.4 million ordinary shares at $0.0625 to raise $400,000 and a pro-rata, non-renounceable entitlement issue to eligible Elixir shareholders on the basis of 1 share for every 6 held at the record date at $0.05 to raise approximately $1.8 million (before the costs of the issue). The placement will be made to New Standard Energy (ASX: NSE) who have agreed to fully underwrite the entitlement issue for no fee. NSE have also been granted the option, at their election, to top up their shareholding to 15% post the placement and take up of any of the shortfall under the underwritten entitlements issue at $0.0625 / share.

Other than as disclosed elsewhere in this half-year financial report, no event has arisen since 31 December 2011 that would be likely to materially affect the operations of the Consolidated Entity, the results of the Consolidated Entity or the state of affairs of the Consolidated Entity. AUDITOR’S INDEPENDENCE DECLARATION The Auditor’s independence declaration is included on page 7 of the half-year financial report. Signed in accordance with a resolution of the Directors made pursuant to s.306 (3) of the Corporations Act 2001. On behalf of the Directors

ANDREW ROSS Managing Director Perth, Western Australia 14 March 2012

Information contained in this report with respect to the Tiger Prospect and the Moselle Permit, was compiled by Elixir or from material provided by the project operators and reviewed by the Elixir’s Exploration Manager, Iain Knott, BSc, MSc, FGS, AAPG, who has had more than 25 years experience in the practice of geology, including more than 5 years experience in petroleum geology. Mr Knott consents to the inclusion in this report of the information in the form and context in which it appears

Auditor’s Independence Declaration

7

Independent Review Report

8

Independent Review Report

9

Directors’ Declaration

10

The Directors declare that: (a) The consolidated financial statements and notes set out on pages 11 to 19 are in accordance with the

Corporations Act 2001, including:

i. complying with Accounting Standard AASB 134 “Interim Financial Reporting”, and the Corporations Regulations 2001; and

ii. giving a true and fair view of the Consolidated Entity’s financial position as at 31 December 2011 and of its performance for the half-year ended on that date; and

(b) there are reasonable grounds to believe that Elixir Petroleum Limited will be able to pay its debts as and

when they become due and payable. This declaration is signed in accordance with a resolution of the Directors made pursuant to section 306(3)(a) of the Corporations Act 2001. On behalf of the Directors

ANDREW ROSS Managing Director Perth, Western Australia 14 March 2012

Consolidated statement of comprehensive income For the half-year ended 31 December 2011

11

Consolidated Note 31-Dec-2011 31-Dec-2010 $ $

Revenue from oil and gas sales 284,379 543,904 Other income 17,915 37,845 Total Income 302,294 581,749 Operating and production costs (304,254) (169,481) General and administrative costs (251,449) (519,344) Other - (182,867) Depreciation, depletion and amortisation expense (72,316) (367,504) Exploration and evaluation expense (55,531) (208,145) Impairment of oil and gas properties (1,584,190) (518,000) Loss from continuing operations before income tax expense (2) (1,965,446) (1,383,592) Income tax expense / benefit - - Loss attributable to owners of the Company (1,965,446) (1,383,592) Other comprehensive income Foreign currency translation differences (1,769) (802,564) Other comprehensive income for the half-year (1,769) (802,564) Total comprehensive income for the half-year attributable to members of the Company (1,967,215) (2,186,156) (Loss) per share

Basic and diluted loss per share (cents per share) (0.97) (0.70)

The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.

Consolidated statement of financial position As at 31 December 2011

12

Consolidated

Note 31-Dec-2011 30-Jun-2011 $ $ Assets Current assets

Cash and cash equivalents 1,413,583 1,320,069 Trade and other receivables 549,618 784,633 Total current assets 1,963,201 2,104,702

Non-current assets Receivables 576,447 553,451 Oil and Gas Properties (4) 311,261 1,712,167 Other plant and equipment 8,340 17,179 Deferred exploration, evaluation and development expenditure (5) 2,572,413 1,769,126 Total non-current assets 3,468,461 4,051,923

Total assets 5,431,662 6,156,625

Liabilities Current liabilities Trade and other payables 629,769 402,084 Provisions 47,592 307,209 Total current liabilities 677,361 709,293

Non-current liabilities Provisions 1,354,588 1,126,344 Total non-current liabilities 1,354,588 1,126,344

Total liabilities 2,031,949 1,835,637

Net assets 3,399,713 4,320,988 Equity Contributed equity 61,690,306 60,644,366 Reserves 1,697,485 1,699,254 Accumulated losses (59,988,078) (58,022,632) Total parent entity interest in equity 3,399,713 4,320,988

The above consolidated statement of financial position should be read in conjunction with the accompanying notes.

Consolidated statement of changes in equity For the half-year ended 31 December 2011

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Consolidated

Contributed Equity

Option Premium Reserve

Share Based

Payment Reserve

Foreign Currency

Translation Reserve

Accumulated Losses Total

$ $ $ $ $ $ Balance at 1 July 2010 60,644,366 1,773,184 871,300 (54,636) (54,659,111) 8,575,102 (Loss) for the half-year - - - - (1,383,592) (1,383,592) Other comprehensive income Exchange difference on translation of foreign operations

- - - (802,564) - (802,564)

Total comprehensive income for the half-year

- - - (802,564) (1,383,592) (2,186,156)

Transactions with owners, in their capacity as owners

- - - - - -

Balance at 31 December 2010 60,644,365 1,773,184 871,300 (857,200) (56,042,703) 6,388,946 Balance at 1 July 2011 60,644,366 1,773,184 871,300 (945,230) (58,022,632) 4,320,988 (Loss) for the half-year - - - - (1,965,446) (1,965,446) Other comprehensive income Exchange difference on translation of foreign operations

- - - (1,769) - (1,769)

Total comprehensive income for the half-year

- - - (1,769) (1,965,446) (1,967,215)

Transactions with owners, in their capacity as owners

Contributed equity net of transaction costs

1,045,940 - - - - 1,045,940

1,045,940 - - - - 1,045,940 Balance at 31 December 2011 61,690,306 1,773,184 871,300 (946,999) (59,988,078) 3,399,713 The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

Consolidated statement of cash flows For the half-year ended 31 December 2011

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Consolidated Note 31-Dec-2011 31-Dec-2010 $ $ Cash flows from operating activities Receipts from sales 297,493 839,393 Payments to suppliers and employees (571,469) (1,033,868) Net cash (outflow) from operating activities (273,976) (194,475) Cash flows from investing activities Payments for capitalised exploration, evaluation and development (696,365) (1,274,541) Interest received 6,989 37,845 Net cash (outflow) from investing activities (689,376) (1,236,696) Cash flows from financing activities Proceeds from issues of shares 1,132,000 - Share issue costs (86,060) - Net cash inflow from financing activities 1,045,940 - Net increase / (decrease) in cash and cash equivalents 82,588 (1,431,171) Cash and cash equivalents at the beginning of the period 1,320,069 5,084,315 Effect of exchange rate changes on foreign currency denominated cash balances 10,926 (182,867) Cash and cash equivalents at the end of the period 1,413,583 3,470,277

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.

Notes to the financial statements For the half-year ended 31 December 2011

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1. Significant accounting policies Basis of preparation (a) Statement of compliance

These financial statements are general purpose financial statements for the half-year reporting period ended 31 December 2011, which have been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001. This half-year financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2011 and any public announcements made by Elixir Petroleum Limited during the half-year reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001. The accounting policies adopted are consistent with those of the previous financial year and the corresponding half-year reporting period. Going concern The financial statements have been prepared on the going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business. The Group incurred a net loss of $1,965,446 for the half year ended 31 December 2011 and had net cash outflow from operations of $273,976 for the period. Notwithstanding this, the financial report has been prepared on a going concern basis. The ability of the consolidated entity to continue as a going concern is dependent upon a successful future capital raising. As at the date of this report Elixir expects to successfully raise capital in the future to supplement working capital requirements. However, should the entity be unable to continue as a going concern it may be required to realise its assets and extinguish its liabilities at amounts different from those stated in the financial statements. 2. Loss for the half-year Loss for the half-year includes the following items which are significant because of their nature, size or incidence:

Consolidated 31-Dec-2011 31-Dec-2010 $ $ Amortisation of oil and gas properties 63,264 356,578 Depreciation of plant and equipment 9,052 10,926 72,316 367,504 Exploration and evaluation expense 55,531 208,145 Impairment of oil and gas properties 1,584,190 518,000

Notes to the financial statements For the half-year ended 31 December 2011

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3. Segment information Management has determined, based on the reports reviewed by the Board of Directors that are used to make strategic decisions, that the Group has three reportable segments being oil and gas exploration and production in the United Kingdom (UK), oil and gas exploration and production in France and oil and gas exploration and production in the United States of America (USA). The Group’s management and administration office is located in Australia. The Board of Directors review internal management reports on a monthly basis that are consistent with the information provided in the statement of comprehensive income, statement of financial position and cash flow statement. As a result no reconciliation is required, because the information as presented is used by the Board to make strategic decisions.

Reportable segment revenue Revenue, including interest income, is disclosed below based on the reportable segment: 31-Dec-2011 31-Dec-2010 $ $ Revenue from oil and gas exploration and production - UK - - Revenue from oil and gas exploration and production - France - - Revenue from oil and gas exploration and production – USA 284,379 543,904 Revenue from other corporate activities 17,915 37,845 302,294 581,749

Reportable segment assets Assets are disclosed below based on the reportable segment: 31-Dec-2011 30-Jun-2011 $ $ Asset from oil and gas exploration and production – UK 329,773 291,455 Asset from oil and gas exploration and production – France 2,249,831 1,511,517 Asset from oil and gas exploration and production – USA 1,296,604 2,903,218 Assets from other corporate activities:

Cash and cash equivalents 1,413,583 1,320,069 Other corporate assets 141,871 130,366

5,431,662 6,156,625

Reportable segment loss Loss is disclosed below based on the reportable segment: 31-Dec-2011 31-Dec-2010 $ $ (Loss) from oil and gas exploration and production – UK (68,082) (11,431) (Loss) from oil and gas exploration and production – France (3,323) (196,714) (Loss) from oil and gas exploration and production – USA (1,660,326) (506,740) (Loss) from other corporate activities (233,715) (668,707) (1,965,446) (1,383,592)

Notes to the financial statements For the half-year ended 31 December 2011

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4. Oil and gas properties Consolidated 31-Dec-2011 30-Jun-2011 $ $ Producing projects At cost 32,548,225 31,075,547 Accumulated amortisation (17,864,993) (17,090,740) Impairment (14,371,971) (12,272,640) Net carrying amount 311,261 1,712,167 Development projects At cost 1,889,726 1,814,338 Impairment provision (1,889,726) (1,814,338) Net carrying amount - - Total 311,261 1,712,167 A reconciliation of movements in oil and gas properties during the period is as follows: Consolidated 31-Dec-2011 30-Jun-2011 $ $ Balance at the beginning of the financial period 1,712,167 2,507,949 Additions 181,445 41,604 Amortisation expense (63,264) (428,834) Impairment1 (1,578,439) (377,414) Foreign currency movement 59,352 (31,138) Net carrying amount 311,261 1,712,167 1. In the absence of readily available market prices, the recoverable amount of oil and gas properties is

determined by the assets value in use. Value in use is calculated based on estimates of the present value of future cashflows discounted at asset specific rates and by reference to forecast commodity prices. During the period Elixir’s US based oil and gas projects were exposed to an approximate 49% decline in natural gas prices. As the decline in natural gas price was not considered temporary, the present value of estimated future cashflows also reflected the decline. Oil and gas properties for the period ended 31 December 2011 were therefore impaired to recoverable amount.

Notes to the financial statements For the half-year ended 31 December 2011

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5. Deferred exploration, evaluation and development

Consolidated 31-Dec-2011 30-Jun-2011 $ $ Opening balance 1,769,126 778,276 Capitalised expenditure 795,070 1,704,381 Impairment - (644,168) Foreign currency movement 8,217 (69,363) 2,572,413 1,769,126 The ultimate recoupment of exploration expenditure carried forward is dependent on successful development and exploitation, or alternatively sale, of the respective area of interest. 6. Dividends No dividend has been paid or is proposed in respect of the half-year ended 31 December 2011 (2010: None). 7. Commitments and Contingencies The Consolidated Entity has no material contingent assets or liabilities at reporting date and has no firm contractual commitments for expenditure not reflected in the financial statements other than: Consolidated 31-Dec-2011 30-Jun-2011 $ $ Capital commitments Within one year 98,266 94,365 More than one year but less than five years - - Total 98,266 94,365 Non-cancellable operation lease commitments Within one year 57,278 57,013 More than one year but less than five years 23,853 52,483 Total 81,131 109,496 The rental lease is held by Elixir Petroleum (Technical Services) Ltd. At 31 December 2011 the remaining lease term was 1.4 years (30 June 2011: 2 years).

Notes to the financial statements For the half-year ended 31 December 2011

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8. Events Occurring After Reporting Date The following events occurred subsequent to the end of the half year: (a) On 11 January 2012, Elixir announced it had secured Blocks 12/18 and 12/19a (split) located in the Inner

Moray Firth area of the UK North Sea.

(b) On 2 March 2012, Elixir announced a capital raising by way of a placement of 6.4 million ordinary shares at $0.0625 to raise $400,000 and a pro-rata, non-renounceable entitlement issue to eligible Elixir shareholders on the basis of 1 share for every 6 held at the record date at $0.05 to raise approximately $1.8 million (before the costs of the issue). The placement will be made to New Standard Energy (ASX: NSE) who have agreed to fully underwrite the entitlement issue for no fee. NSE have also been granted the option, at their election, to top up their shareholding to 15% post the placement and take up of any of the shortfall under the underwritten entitlements issue at $0.0625 / share.

Other than as disclosed elsewhere in this half-year financial report, no event has arisen since 31 December 2011 that would be likely to materially affect the operations of the Consolidated Entity, the results of the Consolidated Entity or the state of affairs of the Consolidated Entity.