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

It all looks verg good indeed Capt

Presentation looks good on Des site
Captguns.
If you can understand it
personally i dont as not trained,
but surmise if it has been put to the conventsion
experts will,hope the hype turns into a buying frenzy.
we all know it will given time.
Not many seats left on the rollercoaster, when full booked
and flying at 5.00 an hour per share, pre drill
pussy galore and all her mates will love you.
for sure for sure
regards
HUSTLER

Hi all

DES went down again today, stange volume, with only 5 buys. 2 of them at the end of the day. The bears didn't seem to sell very much either, only 21 sells. I think its a case of the bulls letting the bears bring the price back down a little, testing the how low they intend to go. The bulls seem to be picking up a few cheap stocks towards the end of the day, almost as if this is their intention. We are closer to the golden cross now. Also Lynnzal had mentioned a price of 0.3850p as a possable rally (see post 1444). Lynnzal could you please confirm if this still looks good ? DES has stopped at the rising trend line today. Lets hope we come back up off it tomorrow !







Good Luck All

Eddie

Eddie am sure that viagra is starting to work and its Friday tommorrow.

Hi Eddie, thanks for the daily commentary, can you remind me what the Grey area running right across the chart represents, why it is on your daily chart & how is used to predict future price movements, to me it looks like the last two times we breached the top of it we dropped rapidly to touch the bottom!

Thanks
Jon

Hi Eddie and thanks for your latest update. In my last posting (21 Jun - #1430) I mentioned my concern about a potential pullback. Well, we are now witnessing the unwinding of some of those longs. If I had to put a fundamental perspective on it, I would suggest that some of the previous buying was based on a potential rig announcement at Calgary and the resulting drift lower is due to lack of news. Anyway, on a technical note.I am still not unduly concerned with the slippage we have seen over the past few days.
If we look at a line chart of DES (closes only), the up-move from the 7 Jun higher low/close at 34p extended exactly 161.8% of the previous rally (from 30.5p to 36.25p), when it reached a closing high at 43.5p. This is classic Fibonacci/Elliott stuff for a third wave impulsive advance. As I mentioned before, impulsive waves come in fives (three up, with two corrective downs in between). Therefore, it looks like we are currently in the throws of a fourth wave correction (or perhaps part of an extended 3rd wave advance). Either way, for the underlying impulsive rally to remain intact, DES needs to stay above the peak of the first wave up. Therefore, the 37.25p peak (36.25p on closing basis) should act as support. Also of note is the convergence of the 20 and 60-day moving averages just over 37.5p that should also provide support.
I have stated before that a clear break above 48p (48.25p closing basis) would confirm the end of the corrective phase, as it would take the market through the base of the first wave down from the Jan 2005 peak (confirming the decline as a corrective three a,b,c lower). Once this happens, I will post some projections for where the rally will take us.
Downside risk? If we should break below 37.25p (close under 36.25p) then I will have to re-examine the decline from early March. It could mean that we re-try the recent lows and my original 26p objective sometime late July early August. However, for now in terms of timing and also the proximity of the 28.5p low to my 26p target, I am happy that we have seen the base.
Summary look for support in the 36.25p/37.25p area to underpin the market for a fresh test of the recent highs. Key topside level 48p.
If anyone would like clarification on what may appear to be a complicated piece of analysis, then please ask. If anyone knows how I can post an external chart it would be useful.

Jon B, the grey area denotes the upper and lower limits of 'Bollinger Bands'. I'll let Eddie explain - thanks Ed ;)

Regards to all Lynnzal

Hi all

Thanks for the explanation Lynnzal. All is looking well, have a hammer just at the 60 day moving average. This is roughly where Lynnzal is refering to (or should I say the low was exactly 0.3850p). The chart is slightly defferent as I have changed the 200 day moving average to 60 days. This also shows the 20 DMA just about to come through the 60 day moving average. This is called the golden cross. It is regarded as support and should trigger buying around this area. As Lynnzal says the recent rise may be due to expectation of a rig. So the market has got its eye on DES, and will give support. Just a matter of time.


Hi Jon B

As Lynnzal says the Bollingerbands is an area in which the share price would normaly move within. The upper & lower limmits. As volume increases, gets regular and there is lots of movement the bands open up more. As you can see on the bottom of the chart the bands have started to open up. But as the share price gets to the top, it is seen to be over bought. At this area we may see some selling, as the price drops again the bulls see the stock as over sold. Buying starts again.






Good Luck All

Eddie

From Oil Brat on iii for you Eddie

Folks,

Sorry for the delay but its been a little busy. $60 a barrel and all that. I decided to go to the AAPG in Calgary and have a nose around. I went to the Falklands presentation which capt kindly posted a link to. In summary of what was said, (and not said) in accompaniment to the presentation:

There where 45-50 people present for the presentation. The twenty minutes or so was dominated by the North Falklands basin, with five minutes being spent on the south.

They ended with the south but Ill start with it. Limited data from seismic and no drilling data. In short a rank wild cat territory. But the scale of the targets are huge, if one of those comes in it will be a super giant. Interesting investment but no mention of drilling in the near future, Ill have some fogl in the future but not just yet.

North Falklands: They set the scene with the 98 campaign and lessons learnt. I now understand what they mean by they only targeted one type of play. The primary failure was purported to be no attempt to find the basin margin sands. A little harsh I think they had a bunch of targets and they went for it, fair enough. The presenter also mentioned the last Shell well and stated that live oil was recovered from the shakers. I have drilled many wildcats and Ive seen big finds, and Ive only ever seen oil on the shakers once. If there is enough oil / pore pressure to over come the hydrostatic head and get oil to surface in sufficient quantities to be noticed, I would like some one to explain how this is an under charged reservoir. The key implication I got was that the Shell well was TDd early, certainly earlier than it should have been, because the bottom fell out of the oil price. While that may have saved a few million in 98 that could be a Cairn x 10, but time will tell.

Specifically the top of the oil window is at 2800m, and the source rock is 1200 to 1500m thick, the top 400m of source rock is expected to be above the window and there for immature, (it may also provide a good seal). They have worked on the thermal history of the basin and determined that the wells drilled in 98 where on the margins of the required thermal events. The most exciting well, ie the Shell well was the most southerly, all the additional seismic and the next targets will be /are further south and targeting the hottest part of the basin. (This is good)

With direct reference to the Seismic interpretation, (which I know very little about). They have clearly identified feeder channels into the basin East and West. These are the entry points to basin for sediment and from this the classic sedimentalogical patterns can be worked out. This is important, but the size of the feeders is huge, which is also good.

On the West we have the Beth Fan. This will be the second or third target, quote. It shares the same feeder with Liz fan, both targets over lay and they can be hit with one well. Additionally the speaker made a specific comment that he would not comment about the potential size of the reservoir, you can determine that for yourself, pointing at the screen. He also made a comment about the fact it is a big amplitude anomaly. Ie he was being professional with in the context of the AAPG but it was a have a look at the size of that one comment. Each of these fans are predicted to be 2-3 Kms across and 200 300m thick.

On the East of the structure / basin there are the Rachel and Helen fans which can be hit with one well. These seem to be the most attractive targets mentioned. He said he would resist the temptation to imply that the whole sequence is a massive deltaic wedge, ie he did imply that the sequence was a massive deltaic wedge. These two are right over the hotspot on the oil source window.

What was not mentioned was the third target. With the cross section on the screen he failed to mention anything at all about Phyllis, (I think it was Phyllis). It stands out as a huge target dwarfing all the others. This may be an artifact of this being a 2D representation of a 3D object but wow it looks big.

Now I should say I had hoped that the rig would be announced while at the AAPG but I was wrong ho hum, Ill take that on the chin. However he did say that they hoped to have the results of the drilling by the AAPG in Houston, which is April 06.

Ill post some other stuff from talking to people in the bar when I get chance.

OB

Thanks Marky for the Oil Brat post,
info looks good if you can understand the tech lingo.
Main concern is the rig as quoted not a mention
at Calgary. But still hoping to give drilling results
in april 06 in Houston, major opportunity to pump up
the anti missed will be read as they can't find one
at the right price or timing, the market has already taken
this as negative note the dip last week the longer it
takes to announce the more down pressure the sp will have
to stand. If they anounce a delay the price will suffer more
we desperatly need news otherwise we will have to wait a
lot longer, we believe it's there but how long before we find
it we need the rig and soon.
regards
HUSTLER

I think they are waiting to get Rockhopper's fundraising, (due next month), out of the way before making an announcement about a rig.

Falklands oil explorer aims to list on market

IAIN DEY
CITY EDITOR


ROCKHOPPER Exploration, an oil firm planning to drill in the Falkland Islands, is seeking admission to the Alternative Investment Market next month after securing five heavyweight board appointments.

The company, which is led by former Enterprise Oil chief executive Pierre Jungels, is looking to raise 30m in a flotation that will value the business at 70m.

To help sell the issue, Jungels has recruited a handful of oil industry veterans and non-executive directors, including Chris Walton, the former finance director at easyJet.

The move comes in spite of the continued problems at Regal Petroleum which have sent shockwaves through the oil and gas exploration sector.

Jungels, who joined Rockhopper as executive chairman in January, said: "The North Falkland basin is hotting up. The interest is growing, wells are being drilled. It's at about the same stage the North Sea was at pre-1970."

He added: "We will be floating the company in July. We want to raise 30m and we are starting with a valuation of 40m before the new money.

"We've already done some pre-marketing to get the views of some large investors. They think that Regal and everything else is behind us now and companies with good management and good assets will get away without a problem.

"We've brought in strong financial expertise and strong industry expertise. We are fully compliant with all the regulations so that everyone can see we are 100% above board."

Rockhopper has been awarded a number of licences in the North Falkland basin, some of which were previously drilled by Shell in the 1990s. It has also farmed into a further prospect with Desire Petroleum.

Jungels said an independent consultancy commissioned to do research into Rockhopper's prospects estimated that they could hold 500 million barrels of risked reserves.

Analysts at Arden Partners, which is joint broker to the float along with Ambrian Partners, have said the company could be worth 80m. Desire, which has a similar portfolio of assets, is currently worth around 85m.

Aside from Jungels, the company is to be run by Rockhopper's co-founder Sam Moody, a former fund manager with AXA Equity & Law Investment Management and St Paul's Investment Management.

The recent appointments to the Rockhopper board are Keith Williams, the former exploration director at Kerr McGee's UK arm, who becomes exploration director; Peter Dixon-Clarke, formerly with Lloyds insurer Amlin, who becomes finance director; plus Dave Bodecott, Chris Walton and John Crowle.
http://business.scotsman.com/utilities.cfm?id=702812005

PEOPLE: Talent mined for new company

By Elaine Moore

Rockhopper Exploration Limited, a new UK-based oil and gas company, has announced a raft of board appointments in preparation for its flotation on Aim next month.

They include Chris Walton, former finance director of EasyJet, the budget airline, as a non-executive director, with chairmanship of the audit committee.

Other appointments are: Sam Moody, the co-founder, who becomes managing director; Keith Williams, exploration director; Peter Dixon-Clarke, finance director; Dave Bodecott, consultant to the board; and John Crowle, non-executive director and chair of the remuneration committee.

Pierre Jungels, who became executive chairman in January, said: "We want to show the market that Rockhopper is a serious company with a serious board with very strong corporate governance standards."

The flotation would help raise funds to proceed with an expanded exploration programme. This month, the company was awarded two licences formerly held by Shell in the North Falkland Basin, bringing its licences in the area to four.

Mr Jungels said: "It's a hugely prospective area. It has all the aspects of the North Sea in 1965." He believes reservoirs will be below the area explored by Shell. Rockhopper was founded in early 2004 with a focus on exploring for oil and gas in the Falklands.

The Office of Fair Trading has named Simon Priddis and Ali Nikpay senior directors in the competition enforcement division.

Mr Priddis, currently director of mergers, will oversee the organisation and prioritisation of cases.

Mr Nikpay, formerly of Clifford Chance, the law firm, moves from director of competition policy co-ordination to his new role as senior director of case scrutiny and policy and will lead the case review process.

The appointments are part of an ongoing project to make the OFT more effective. It was recently ranked joint second best competition regulator in Europe by a survey conducted in the Global Competition Review.

Elaine Moore

Hi all

Thanks to all for the updates.

Not such a good day again. Not much volume again with very few buys. I'm sure the announcment of a rig will change all that. DES is sitting just above the 60 day moving average with the 20 DMA about to go up through 60 DMA. This could be where we see some support. The market seems indecisive at the moment, so we'll just have see if the golden cross has any impact on the share price. We all know things are getting closer, so I dont think we will see much more retracement.






Good Luck All

Eddie

Nice posts marky and eddie.

oily 1 you may well be right with your rig announcement timing.

in any event,things look to be heating up with this rockhopper float.

regards and good luck all

Hi all,

I would have thought that a Rig Announcement would be before Rockhopper float as there has been speculation that Desire can not get a rig which this kind of news can not help Rockhopper raise the money they want too.

Just my personal thoughts but it would make sense to announce a rig and then the city know there going to drill and you can imagine the institution fighting for Rockhopper shares.

Who knows but we know Rockhopper and Desire are thick as thieves and am sure this has all be planned out well before Joe public or the city get to know and Phipps will start to play his aces.

Regards

Marky

Hi Marky.
So why didn't we sing from the roof top
at Calgary.
Because the rig is not in place - begining to
get the jitters.
regards
HUSTLER

Hi, Marky, Rockhopper now have a very serious board of fairly big hitters with alot of experience in their relevant fields. I'm sorry to say, but i think they put DES to shame in that regard.
I think the 30M for the Rockhopper float has already been agreed in principal with the intitutions involved.

If we were waiting for the Rockhopper float to be concluded before announcing a rig, then surely all those instutions involved would be insider trading and earning a fast mark up to their 30m.

Marky....mail

Interesting to see david bodecott www.bodecott.com now on the rockhopper board.No wonder he runs the southern basins down so much then!

It's true-the rockhopper board does seem to have a few big beasts,but don't forget they want in on our acreages so as far as I'm concerned that's good news.

But des also has a decent team,and don't forget peak well management-bit hitters in their field.

LOoking forward with interest to the next few months-if no rig is firthcoming for early 2006 then i will be buying more des on the inevitable dip in price.

But drill we will-and I fancy our chances.

REgards all.

Hi all

Just a small move up today, volume not great. The day started well with DES opening slighly up on yesterdays close. DES continued to move up then the bears had a go at pushing DES back down. Although not the bigest move up it may mark the bottom of this correction. The 20 day moving average is now on top of the 60 DMA. This has now given DES its golden cross. I did expect a bigger move up, but this may come tomorrow. Todays candle has suggested the market intends to move up, however the bears are still lurking. If DES closes above todays close, we can take this as confirmation.






Good Luck All

Eddie