Desire Petroleum

<>Desire Petroleum plc (Desire) is a UK company listed on the Alternative Investment Market (AIM) dedicated to exploring for oil and gas in the North Falkland Basin.

Desire has recently completed a 6 well exploration programme. The Liz well encountered dry gas and gas condensate at 2 separate levels while other wells recorded shows.
Together with the Rockhopper Exploration Sea Lion oil discovery in the licence to the north, these wells have provided significant encouragement for the potential of the North Falkland Basin. The oil at Sea Lion is of particular interest as this has demonstrated that oil is trapped in potentially significant quantities in a fan sandstone on the east flank of the basin. It is believed that over 50% of this east flank play fairway is on Desire operated acreage.

Desire has now completed new 3D seismic acquisition which provides coverage over the east flank play, Ann, Pam and Helen prospects. The results from fast-track processing of priority areas are provided in the 2011 CPR. A farm-out to Rockhopper has been announced. The revised equities are shown on the licence map (subject to regulatory approval and completion of the farm-in well). Desire Petroleum

Rockhopper Exploration

British Geological Survey

Argos Resources



Latest Press Realeses from Desire

Here ya go folks, latest targets:-

Ladies and Gentlemen,

OK, in the last few weeks we've seen a bit more news bubbling and taken on board some new players too. Time to put my neck on the line again.

We are still probably a month+ away from any definitive news but the ball is rolling and during August I'm expecting that news flow will increase.

PX Targets
Rest of this week, well, px has again tried to test 38p without success and unless something comes from Shell tomorrow which refers to Falklands I envisage this stock 'sulking' back a bit so px range this week 34p - 38p
I think its unlikely to sit any lower than this but intra day this stock does have a habit recently of dipping before support drives it back up. I for one will be buying like mad if it does briefly fall below 34p.

First week in August, well, I'm in Iceland so I'll miss the fun but my pricing model indicates a very substancial price move up! I've re-run my numbers and still I get the following:- 42p - 46p.

So in summary for next 5 - 7 working days looking to suggest slight dip near term then very end of week/start on next a concerted push straight through the 38p level.

Please keep the comments and info coming. I for one am now getting very excited about this stock.

Good luck and happy hunting folks
JPDM FM

Sorry to hear about the job JP, but a man with your skills will go far , am a great beliver of one door closers another one opens be lucky markymar.

Capt CP is not in the Falklands nor is he going in near future says a splash

JPDM, you've called this one so spot on it's uncanny! Looks like tomorrow AM could be a good time to buy (what do you think Stu?), good luck with the job hunting, not much call for city boys in Devon I'm afraid!

Oil industry targets South Atlantic.



Repsol-YPF Argentinas main hydrocarbons producer and other foreign companies will be investing over 300 million US dollars in oil and gas exploration in the South Atlantic and offshore Buenos Aires province during 2005.



Strong international oil prices and the liberation of the natural gas price in Argentina are seen as the main driving force behind the new push following one of the countrys worst energy crisis that forced serious restrictions in overseas natural gas shipments particularly to Chile.
According to the Argentine press, French owned Total Austral, Wintershall from Germany and Anglo-argentine Pan American Energy will be investing in the coming nine months 114 million US dollars in the austral basin, Southwest Atlantic.

The group already has invested 256 million US dollars in the area and expects a production between 4 and 7 million cubic meters of natural gas from seven wells which will be drilled beginning next September.

Respsol-YPF has also plans to invest 70 million US dollars in the austral basin taking advantage of wells drilled several years ago and which remain locked.

Further south, offshore Tierra del Fuego, several of these companies will continue exploring the area which is rich in natural gas.

Repsol-YPF associated with the American company Pioneer has plans to explore for hydrocarbons offshore Buenos Aires province, once the Argentine government gives the official authorization. Petrobras is also interested in the same basin.

This is the less developed of Argentine basins but some exploratory drilling has signaled the possible presence of hydrocarbons, said Walter Schmale president of the Argentine Oil and Gas Institute.

But Mr. Schmale also pointed out that to make findings drilling is essential, but this means favorable geological, price, fiscal and contract certainty conditions, since the oil industry works with a future horizon and an offshore project demands between 7 and 10 years before reaching production

Investors Chronicle
IC view of oil shares: fairly priced stocks are AMINEX, ANTRIM ENERGY,
PETROCELTIC, TEXAS OIL & GAS, IMPERIAL ENERGY; speculative buys are BLACK ROCK
OIL & GAS, DESIRE PETROLEUM, EMERALD ENERGY, HEREWARD VENTURES; good value are
CENTURION ENERGY, EDINBURGH OIL & GAS, JKX OIL & GAS, MELROSE RESOURCES, NELSON
RESOURCES, FIRST CALGARY PETROLEUMS, PAN ANDEAN, SEFTON RESOURCES, WESTMOUNT;
one with good-looking assets with plenty of upside is HARDMAN RESOURCES; two
whose upside remains attractive are NORTHERN PETROLEUM and REGAL PETROLEUM; good
spread of risk WESTMOUNT; purely speculative PETREL RESOURCES; could go bust;
sell RAMCO ENERGY; balanced portfolio with strong upside; buy STERLING ENERGY

What no Fortune oil ?

In an interview with Mr Phipps dated 21st july they had finished interpretation on the Tuesday the 20th and the data will interpret.
Then if you read the Artical below he says should take 6 weeks to interpret, well we are in week 6 now, give or take a few days.



SEISMIC data collected in the Falklands is undergoing a fast track processing route and should be ready for interpretation at the end of the month.
Penguin News yesterday contacted Dr Colin Phipps, Chairman of Desire Petroleum plc, to ask if he could confirm rumours that oil giant Shell had shown interest in returning to the Falklands to carry out exploratory drilling.
Dr Phipps said he could say nothing about, ...who might or might not be coming in. This is something that would have to be put out to the Stock Exchange.
However he said all the 3D seismic data recently collected in the Falklands has been loaded for fast track processing, ...and it all should be ready for interpretation at the end of this month or the beginning of next month.
He said the data will take approximately six weeks to interpret, ...then well know what our principle objectives are and we will be able to sit down and hopefully organise a deal for exploratory drilling in tranches C and D.

I think you must have put a jinx on it now down 2.0(6%)............Seriously I think they are have amazing potential and from what we know there should be significant news between now and Christmas.Its one thing identifying a good opportunity , the other is then having the patience for that potential to become a reality

Willfagg, good choice again, do I know you ha ha! As Markymar states above, news should be out either this week or next although it will ultimately be driven by the farm in partners. I still see the odds of DES being succesful as greater than most, technology has improved dramatically and if there is oil down there in quantities then the boys can bring it up, is the south atlantic more inhospitable than the north sea, probably but if there is black gold then it doesn't matter a jot. These are a gamble but a better bet than at the bookies!

Shell hit free flowing oil and was capped it was $10 a barrel they left for other things going on because it would cost back then $ 14 to pull it out.

Times have changed and so has the price of oil for good and gas.
I have not spoken about gas but look at the UK now next year we will inport gas and look at the likes of South Americia.

Times have changed and so have the prospects of Desire.

Markymar, some interesting notes in the weekend press. Apparently we will be struggling to provide enough gas to fuel the gas burning power stations next year and British Gas are going to build a liquification plant on the coast of Brazil, i guess that could be geographically significant. The upward pressure on oil as a resource will continue as the world economy grows, oil is not going to go down in price until production increases or growth slows right down or turns negative, neither of these will happens until at least the medium term at best! The economics behind a find for desire at current prices is impelling, they should have no problem fidning a farm in partner whatever the cost!

Economics by definition is the study of scarcity, that is the definition! I have a ph.d in economics and oil is just a comodity with a fixed (inelastic) supply and long term increasing demand, the price will go up and so will Des' share price if the reserves are significant!

Fingers crossed ehall, there could not be a better time than now.

Gnarlysurfer will soon be on iii markymar, nice to see some support for the SP today, should give a further lifty for tomorrow.

Hope to see you there . Not long now either way i have made the right choice and i wont regret a minute, I have learnt so much with this share about myself and been through so many lows and have not sold.

Interim Results for the six months ended 30 June 2004

Chairman's Statement

Following the completion of the acquisition of the 804 sq.kms. of
three-dimensional (3-D) seismic data over Tranches C and D in the North Falkland
Basin on 1st April 2004, it has been a particularly busy time for the Company.
As stated in the 2003 Annual Report, the final processing of the 3-D data will
not be completed until September but, in order to begin detailed geological
interpretation of the data prior to September, it was decided to implement a
fast-track, processing programme which would produce processed data in near
final form. This fast-track processing was completed in July and detailed
interpretation, which is being carried out by Hydrosearch Associates Limited,
has begun. This interpretive work will still be subject to any modifications
which the final processing may require but data quality appears to be such that
few, if any, major modifications are anticipated. The fast-track interpretation
will, therefore, provide the Company with an early basis for continuing
discussions with potential farm-in partners.

It has already been established that the North Falkland Basin contains one of
the World's richest oil-source rocks and that substantial quantities of oil have
been generated and expelled from it. The principal objective of the geological
interpretation is, therefore, to identify potential oil accumulations which, in
turn, involves the identification of suitable structures (both tectonic and
sedimentary) and reservoirs in which economically producible reserves of oil may
have accumulated. At current oil prices, reserves as low as thirty million
barrels of recoverable oil would be commercial and the main tasks are to map the
structures and/or sand bodies most likely to be prospective. Structural mapping
is already underway and it is intended to apply various forms of attribute
analysis to aid in the identification of reservoir sands. At the same time, work
will be undertaken to identify direct hydrocarbon indicators (DHI's) which may
enhance drilling confidence levels.

Interpretation of all of these factors is still at an early stage but a number
of significant features are already emerging. The 3-D seismic data quality is
very much better than the existing 2-D data and it is now clear that there are
many more structural leads than previously recognised. It follows that, if there
is good reservoir development, there are likely to be many more drilling targets
than those defined by the 2-D seismic. Accordingly, interpretive work is being
directed at defining the largest prospects first.

Attribute analysis designed to identify sand bodies has not yet begun but
initial, geological interpretations indicate that the new geological model
developed by the Company appears to be a valid one.

Given the amount of oil generated in the North Falkland Basin, it is not
surprising that several DHI's are discernable. In particular, gas chimneys and
amplitude anomalies are present. In themselves, these do not always indicate oil
accumulations (much less commercial accumulations) but, taken together with the
geological and attribute analysis data, they are a welcome indication of
potential oil-bearing prospects.

In general, the 3-D seismic has certainly enhanced the prospectivity of the
North Falkland Basin. It is still expected that final interpretation of the
combined 3-D and 2-D data will be ready later in the year. However, even prior
to a final report being available, discussions are continuing with potential
farm-in partners and it is still hoped that drilling could restart at some time
during 2005. Much will depend upon the final size and quality of the prospects
generated and on rig availability, but, failing any major setbacks, the
prospects for a resumption of drilling look much better than for some time.

The Company remains sufficiently well-funded to complete the farm-out process,
the result of which will determine what additional funding, if any, may be
required.

Yours sincerely

Dr Colin Phipps


Comment: Not sure why the big price drop, sometimes investors expect fireworks to light up the sky and suddnely provide the exact results that they ask for. The results indicate that drilling will start in 2005 which is as early as can be expected and discussions with farm in partners are ongoing so the short termers who are now probably selling at a loss are again shooting themselves in the foot but I guess that is their choice. As the statement is braodly positive on drilling next year, I think that the outlook is positive rather than negative for the company.