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

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

Cheers Eddie from my point of view these share are a bargin at this price and can see little drop from this price.

With 26 million in bank gives a value of 13p a share and then think what they maybe sitting on.....time will tell

Have a good weekend all

Markymar

Hi all

Just thought I would post this chart with the Fibonacci retracements. The hammer is right on the grey horizontal line (0.2850p). As you can see once a level is broken the market looks to move to the next level. We don't want the support to be broken at this level. This retracment is at 100%. If the bears have finnished then we can look forward to a bull run.





Good Luck All

Eddie

Eddie-I have been reading about Fibonacci retracements tonight and am aware that 62% is a well known retracement.

A 62% retracement from recent highs would give a price of about 26p before resumption of upward movement,so it will be really interesting to see if this actually happens.I see that a poster on iii has predicted 26p as a level to look out for as well.

But tell me,what is this idea of a 100%retracement?Surely a 100% reteracement would put the price at 0p?

Any enlightenining comments would be very welcome.

Regards and good luck.

Hi Aur, price retracements are (usually) measured from extreme highs to extreme lows (or visa versa). Therefore, 100% retracement of the rally to 69.75p would be back to the all time low at 6p. Note that 62% retracement of the 6p - 69.75p rally was at 30.5p, which is a level that we have not closed below since correcting back from 69.75p.

Hi guys. I`m back.V.hot in Spain at moment,in the 90`s everyday last week! Wish DES was in the 90`s!
Great to read quality posts from the usual suspects,Eddie,Marky and liked Lynnzal`s recent reads.You guys keep me going in DES.Thanks.
Interesting to see 8% mark-up today with only just over 500k traded ! Something brewing ?
Regards All
Berlingo

Me again.Read about Regal Pet while i was away.Just a thought but did they do a 3d Seismic survey on the area.Understand the Well was as dry as a bone??

Hi all

Welcome back berlingo

Hi aur

The chart I have posted has pre set lines, but as lynnzal says this is normaly taken from the price low. The charts on moneyam don't allow me to choose the price low, so I have had to use the pre set range. This appears to choose the price low of the last move, which started at 0.2800p & the high of 0.7100p. The pre set value is 100, which I have taken to be 100% of that range.

Well a good rise today from DES with little volume. DES has a falling resistance line which is at about 0.3500p, which also has a falling window at about the same price area. It will be good for DES to clear this price, otherwise we may see consolidation for a while.





Good Luck All

Eddie

Thanks for the update Eddie. Keep up the good work.

Hi all

Thanks lynnzal.

I'll not bother with a chart as there is one on the board still.

Another up day for DES, only a small rise though. The candle we have today is a hanging man. (Not the traditional hanging man though, as this usualy appears in an up trend). The candle may still have bearish implications. This is because the bears managed to push the price down during the days trading. We will have to see tomorrows trading to confirm if the candle is bearish. If DES closes bellow 0.3300p the candle will be considered bearish. If todays late rally continues, we should see a higher close. The support is still at the hammer date 25/05/05 (0.2850p). To break the falling resistance line (about 0.3500p) is what is needed to take DES on a bull run.


Good Luck All

Eddie

Eddie-thanks for fibonacci info

regards


fwiw,i read with interest today that regal petroleum managed to attain a valuation of about 600m when it managed to convince institutions and private investors that its field in greece held 1bn barrels with 200 million barrels recoverable.

of course we now know that they have spectacularly over promised and underdelivered,but,nevertheless,I find those numbers quite interesting.

I wonder what drama could unfold next year in the falklands,if desire can actually deliver-could des be worth 2bn one day?

Aur i read a bit in the Sun yesterday and Regal had a high of 5 so you can imagine what Desire share price will go to when they do go to drill.

Even before the drill bit goes in to the multi targets i expect at least 2 a share......a ramp maybe i dont think on my part hence have bucket load.

There is not a share on the AIM with as much upside towards the end of this year.

Agree all the way marky.
The Regal thing however will have a dampening effect on
the sector in general for a while, but as we know
Des is now a waiting game we know it is going to
be next year befor we drill. News of a rig contract
and firming of drill date is the next news we can expect,
when this arrives hope in the not to distant future
the buying frenzy should begin. 2.00 before drilling
why not, will be very volitile as drilling starts who
knows the final sp we all hope a lot higher than 2.00
in the meantime should treat this as a buying opportunity
in the 28 - 40p range it won't last for long.
All the best to everyone on board

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