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

Actually it is.......but on the share cert it says Mrs Barbara ....... and I don't look like a Barbara, bit more like a barbarian!

May 2005 New Licences in North Falkland Basin issued to Rockhopper Exploration
Rockhopper Exploration has been awarded a further two Production Licences (PL 032 and PL 033) covering blocks 14/5 and 14/10 (PL 032) and 15/1, 15/2, 15/6 and 15/7 (PL 033) in the North Falkland Basin. These blocks were previously held by Shell and Agip, who drilled two wells there as part of the 1998 drilling campaign. Both the Shell wells encountered hydrocarbons; one flowed gas to surface and the other flowed live oil to surface. Rockhopper plan a minimum 685 sq km 3D survey over the most prospective parts of these licences, and have also committed to drill a well to test the most attractive prospect within the first 5 years of the licence.

This award brings the number of blocks held in the North Falkland Basin by Rockhopper Exploration to 22, see map.

May 2005 Falkland Oil and Gas Ltd (FOGL)
FOGL have, during the Austral summer, been using the GSI Admiral to collect new 2D seismic data across their extensive licence holdings in the southern basins (see map). They have acquired almost 9,500 km of new data, and have plans in place to acquire more in the near future. FOGL report that they have identified a number of interesting leads on this survey, a substantial part of which extends into previously un-surveyed territory.

April 2005 Borders and Southern Petroleum (BSP) commence new seismic survey
BSP have commenced a new survey over their deepwater, South Falkland Basin acreage, adjacent to the South American/Scotia plate boundary. This new survey, of approximately 2,500 km, covers a number of interesting features, as well as extending into previously largely un-surveyed territory.

April 2005 Falkland Islands visit by Desire Petroleum and their contracted drilling manager.
The Chairman and Chief Executive of Desire Petroleum visited the Islands in April 2005 together with the CEO of Peak Well Management, whom they have contracted to run the next phase of offshore drilling in the North Falkland Basin. These three executives were in the Falklands to engage in high-level talks with Government, and also to start the planning process for the next round of drilling.

Hi all

Thanks for all the postings.

Lets hope for a bullish AGM. DES is back at the support level again, todays candle looks quite bearish. The market seems to be rejecting the higher prices for DES at the moment. We need some positive news about the rig to move DES up again.







Good Luck All

Eddie

Capt and Ruddyy

Pretty much decided to attend AGM.

Intend to visit coffee shops opposite or in vicinity of Reform Club at 4.45pm.

Will be carrying Desire Report and copy of Racing Post (my bible). If you don't see me try and grab me in meeting for perhaps something a bit stronger after. Probably just one (maybe two) can't stay late.

Wife says I shouldn't meet people from the internet!!!!

fatoldgit-Have a good time and i wish i was there with you and the rest of the clang.

Next year Marky........we will know our fate and hopefully be rich spives.

Lots to drink then I think.

Thanks for all your hard work.you kept things going in dark hours.Awok

Capt.& Ruddyy

Sorry crisis with the cat.....wife demands trip to vet to have its effing eye seen to. Cannot now make it.

Hope all goes well. AWOK

http://www.falklandnews.com/public/story.cfm?get=3261&source=3


Afternon all,

Just a small part of the speech and the Governor thinks early 2006 we will be drilling.owok thank you for that and sorry you could not make it.

Falklands: State of the Nation Address
May 24, 2005
by H. E. the Governor Mr. Howard Pearce

THE GOVERNORS ANNUAL ADDRESS TO THE NATION,

24 MAY 2005



http://www.falklandnews.com/public/story.cfm?get=3261&source=3


I cannot leave economic issues without saying a word about minerals development, both on and offshore. I should say at the outset that, unless and until a commercial resource is found - whether gold onshore or hydrocarbons offshore - , the prospects remain by definition speculative. There is no case yet for counting our chickens. That said, the companies have been much encouraged by the survey work they have undertaken so far. Exploratory onshore drilling for gold is already underway. Following some positive results from their seismic work, Desire Petroleum are hoping to bring a rig down here early next year to drill exploratory wells to the north of the Islands. Falklands Oil and Gas Limited will be undertaking a substantial further tranche of seismic work in their blocks to the south and south-east of the Falklands to define further the prospects in that area, with a view to drilling in due course. A commercial discovery of offshore hydrocarbons could have exciting and far-reaching consequences for the Islands. It is not too early to be thinking through some of the implications

Capt and Ruddy ---from mug ---where is Capts parrot


Mug Punter - 24 May'05 - 15:58 - 15307 of 15308


Those of you going to the AGM had better watch out for Capt Guns and Ruddy.

They are both in cahoots with each other and if you're not careful they'll cajole you into going to a watering hole after the meeting has finally broken up and things may well get out of hand later on in the evening.

Ruddy tends to work the front of the room and is likely to be wearing a tweed grouse shooting jacket and may well be carrying a shooting stick.

The Capt on the other hand is normally to be found on the back row. He'll probably be wearing a Winston Churchill style homberger hat this time but don't be fooled by that false beard!

Pity I can't be there guys - I was looking forward to sporting the white flannels and striped blazer for the first time this year along with the panama hat of course !

Looking forward to some feedback.

Hi all

DES is sitting right on the support of the hammer, which has a lower shadow at 0.3200p. Date 29/04/05. Lets hope we move up from this tomorrow. Hope we get some good news from the AGM.







Good Luck All

Eddie

Why the drop today? Has anyone heard anything?

Market psychology/sentiment

Theres been a fair amount of talk about shorters and MMs manipulating prices on the bbs lately and in light of current sp (30p), Ive been crunching a few numbers to see what the risk rewards are on the downside.
If the market were to trade down to the average closing price of the rally from the all time low to the Jan 2005 high (6p 462.5p) which is at 21.5p, a shorter would make about 28.5% - equivalent to a rally to 38.5p. If it trades down to the average of all daily closes since the all time low (6p) which is at 17.3p, the profit would be 42%, or the same as a rally to 42.5p and if the market collapses to the 6p low thered be an 80% profit equivalent to a rally to 54p.
Now, on the basis of what we know, i.e. Certainty of oil (albeit uncertainty of recoverable quantity), that a rig announcement will attract buying interest and that drilling is an inevitability, the odds are most certainly becoming stacked against shorters especially as time goes by.
So I propose that selling interest will definitely diminish because only a fool would expect the likelihood of bearish news to be greater now, than after the 1998 crash. To make the profits outlined above a speculator would be hoping to see either lower levels that have not been seen for a year, or higher levels that have been seen within the past few weeks.
I have previously posted my nearterm bear targets (30.5p and then 26p) and I stand by that call. NOTE - I see the latter as the terminus of the bear from 462.5p and then re-establishment of the long term bull-trend.

Lynnzal

Hi all

berlingo hope your getting good weather.

No AGM update yet ?

Capt & Ruddy must have gone on a right bender.

Thanks lynnzal. Intersting theory. The idea of a new bull trend sounds good.

DES had higher volume today, this may suggest interest around the 0.2800p area. The low of the day was 0.2850p. The bottom of the rising window date 08/11/04 was at 0.2800p. This was the start of the bull trend that took DES to its recent highs. Todays candle is a hammer, which is said to be hammering out the bottom. I think this hammer is more significant than the last, due to the length of the lower shadow. The lower shadow is where the market is rejecting the lower price. We should look to this hammer now as our new support which is down to 0.2850p, (the previous hammer is now invalid). We must look for confirmation to see if the hammer is a reversal signal.







Good Luck all

Eddie

Thank you Eddie, have not time today to update thread untill now and will post high lights of people who have been to the AGM.Will send post card soon.

From Capt Duckling and this man knows his stuff as no of him and he knows his stuff in this field.

Questions for the AIM


1 There has been talk of hitting multiple targets with the same wellbore. Do the targets overlay directly or will there be some directional work required?
1a If yes there will be directional work required, how much deviation will they tolerate in these exploration wild cats?

A: They plan on drilling 3 wells with multiple targets (2 or 3 zones per well). All wells will be vertical, no directional work or sidetracks.

2 Has a pore pressure study been conducted or is one planned?

A: The Shell wells did not hit any overpressure and it is not anticipated here. Nor is shallow gas.

3 Do the board intend to use both MWD and Wireline logging or just one type of logging?

A: This question was not asked but anybody doing this sort of drilling should run wireline logs as MWD is limited.

4 As has been made clear in the press drilling rigs are in short supply. Currently both MWD and Wireline logging tools are in short supply. Has any attempt been made to secure the use of these tools for the up coming campaign?

A: All services are available, just a rig is needed. Casing plans have been identified including casing points and grade required.

5 If the board had complete control of the logistics when would be the preferred spud date for the first well?

A: Tommorrow !!!!

6 Apparently we will drill three wells. Have the geological targets for these, and therefore the well plans for these wells been completed?

A: Yes.

6a If yes, have the well plans been completed by Peak in house or a third party?

A: Peak.

7. How much have the board planned as the cost of each of these wells and how much has been built in for contingency?

A: each well is anticipated to take 30 days drilling time. There is then additional time for any flow tests; between 5 and 15 days per well (5 days a zone is my gues).
Targets (3 of these)....

Liz TD: 3400m
Anna TD: 4300m
Beth TD: 3100m
Rachel TD: 2900m
Ann TD: 2100m

Another man who knows his sesmic Capt Guns and respected for his posts.

AGM.

Discussions in progress with a drilling company with regards to suitable rigs.
i.e. one capable of drilling in up to 500mts. water depth.
They are not going for over kill with a 6th generation all weather rig.

I got the impression the option clauses on any suitable rig is the hold up.

There was a technical presentation by Dr.Duncan.
IMHO the technical side is better than 1 year ago and I thought it was very good then.

DES have gone into the 7 year phase of there licences now. (No loss of licence to worry about.) All blocks C+D+I+L.

Rockhoppers Oct-Nov 2005 clause is not seem as any problem whatsoever.

The chaiman confirmed that DES and Rockhopper were working very closley together.

So it's very much a case of as you were still.

--------------------------------------------------------------------------------

Nervous Novice from iii and a young fellow am told with a good future said the Capt

My notes in order I made at the AGM,

Starting with Colin Phipps, and I am not sure at what stage it went over to Ian Duncan, I do not do shorthand, but tried to get down any points.

Asked about Rock Hopper. We are in the final stages of the agreement with R/H, but we will be operating everything on their behalf.
Work is continuing on the 3D, we are looking at the most promising sites shown up on the 2D, have found new leads and are concentrating on these. Have decided on 2 of the 3 locations.
With drilling rigs, there has been a surge of activity in the last 3 months, we are talking earnestly with one company and hope for news soon. The rigs available are deep-water rigs, these are expensive and we do not need this.
Peak are over seeing everything, site surveys, safety and disaster insurance, all this paperwork needs to be in order, and it is no good having a rig on site until this is complete.
Learned from the 6well drills that a rig is needed for 90days, estimated time per drill 20days, contingency needed to keep the rig on.
Drilling Liz definite, Anna definite, other drill site not chosen yet. (Talked to Ian Duncan after the meeting, he told me they drill straight down and have 2 hits on each at different levels.)
Preferred drilling mobilisation, early 2006, share price is not the first consideration, organising rig and finding the oil is first, but all efforts are being made to drill as soon as possible.
He stated there is always room for another partner.
A rig from Brazil or West Africa would be ideal, as North Sea rig price would be very high.
The R/H surrounding, after 7years we had to give up 50% of our area, have kept what was considered the best location, we will work with and share with R/H all our data and the limited data we have of Shell, and they with us as they get into there own program.
When asked about time limits, we have 16years to find this oil, and if we have not fond it long before then, it probably would not be there.
Shell had a large gas show on one drilling, good quality, a mainland installation could turn this into top quality diesel, and no sulphur was showing.
Does not know of any majors being interested, and would not be able to say, but attitudes are changing.

So these are my notes, hope they are of interest, it was a small meeting, I estimated 45 shareholders, or who ever, it was very relaxed and the DES board answered all the questions I felt in a straight forward way, I came away relaxed and re assured, having talked and listened to them talking to people after the meeting, nice to meet you Capt. guns, hope you agree and can add to anything I missed.


Eddie thats about it early 2006 drilling if not before and we will chat soon as more.Its all going well and these share are bargin at this price and am happy to sit back and pay my 10% tax on profits in a year or two or more and carry on topping up as funds clear in the coming weeks and months.Bargin

Take care

Markymar

Hi all

Thanks for the AGM update, much apreciated.

Kind Regards

Eddie

Eddie that graph looks like an big oil slick or is it me to much Desire

Hi all

Hi markymar. Lets hope we don't have a slick. Just oil in the barrel.

Not been to well.

DES went down but didn't close bellow the new support (bottom of the hammer 0.2850p). Lets see what tomorrow brings. Won't bother with a chart today.


Good Luck All

Eddie

marky, is this your main residence then?

scaley

Dont understand the question Bobbybingo Scaley a fellow Geordie and a good chap.

http://www.bodecott.com/


Recent Activities: May 26th 2005 update.

FALKLAND ISLANDS EXPLORATION ACTIVITY

We have been involved in all areas of North Falkland exploration with several clients for nine years. Initial drilling results during 1998 were technically, but not commercially successful, i.e. oil was found but not produced.

At a meeting of the Petroleum Exploration Society in Aberdeen not too long ago, one member of the audience proclaimed that oil will not be produced commercially off the Falklands. This was reminiscent of those who in the late 1960s said they would drink every drop of oil produced north of 56 degrees in the North Sea. Both basins have already been proved petroliferous. The North Falkland Basin is in a similar state of evolution as the North sea was in the late 1960s.

The second phase of Falkland Exploration is gathering momentum. We are closely involved with evaluations of all Falkland licence areas through the activities of two clients.

DESIRE PETROLEUM

Desire are now formulating plans for drilling three of their eight or nine prospects in licences 3 & 4. Investor interest was high for the most recent fund-raising.

3d interpretation results confirm attractive seismic amplitudes, DHI's (Direct Hydrocarbon Indicators) and structural-stratigraphic pre-source rock prospects. These prospects are adjacent to a mature source-rock kitchen which contains one of the richest sapropelic (oil-prone) source rocks known in the world. Drilling beneath the Early Cretaceous source rock is analogous to drilling beneath the Kimmeridge Clay source rock of the North Sea insofar as some of the oil reservoirs are located beneath the source rock. The next three wells will test this untested pre-source play.

The area to be drilled has modest water depths which greatly assist the economic potential. Success can not of course be guaranteed with the first well, but it is to be hoped that that at least one of the three wells will prove oil or good shows. There are still more prospects for a further phase of drilling after the initial three wells if encouragement is found.

ROCKHOPPER EXPLORATION

Rockhopper have recently been awarded licences PLO 23 and 24 in the southern part of the North Falkland Basin. These are relatively shallow water (less than 200 metres), commercially attractive areas close to the Falkland Islands. Any exploration success here would be very quick to exploit. There have been no wells drilled in the southern part of the NFB, but both Desire and Rockhopper have substantial prospects and leads within those areas with DHI presence.

The Rockhopper 100 per cent licences 23 & 24 wrap around the Desire licences 6 & 7, and contain a southerly extension of the North Falkland lacustrine Basin where high potential source rocks are expected to be proved. The source rocks are likely to be older than those of the Desire licences 3 & 4. Existing 2d seismic indicates the likelihood of reservoir development.

Any success in the area is likely to increase significantly the value of the Rockhopper acreage. They have further optimised their portfolio by taking an interest in the soon-to-be-drilled Desire licences 3 and 4.

COMPETITOR ACTIVITY

Additional large acreage spreads southeast of the islands have been licensed recently by FOGL and Borders & Southern. These are all high risk frontier areas, having scant previous seismic information, no wells, deep water and a harsh climate. Any potential in this area might be ten or more years down the line from the North Falkland Basin - and with much bigger risks. 2d seismic has recently been acquired.

The main objective reservoir is one that is also present in the North Falkland Basin, but the source rocks are not expected to be the rich lacustrine shales, as a marine section is expected.

Recent share price movements suggest that investors are actively embracing the high-risk scenario of the South Falklands deep water areas. This can only have a positive knock-on effect for the North Falkland Graben which is much lower risk and with very similar geology and structure.

As the recent shake-out in AIM energy and resources stocks proceeds, the Desire and Rockhopper licence acreage will stand out as quality and relatively low risk for the area.

Hi all

Thanks markymar

DES had realativly low volume today. The candle that was formed is called a four price doji (using sharescope). (on moneyam it sugests the high was 0.3100p). The doji indicates the market has lost its sense of direction (I thought this a while ago). I would think after the hammer dated 25/05/05 it is clear the bulls intend to give support down to 0.2850p. It would also appear there less bearishness at this price. Looking at the recent candles, if the bearishness has gone, then we may have consolidation or reversal from this level. Reversal would be nice !







Have a nice weekend !

Good Luck All

Eddie