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

A few days have passed since my last posting and although I realise Im never going to be mr. popular, while I post bearish projections. I still believe in airing my thoughts so that people can act/react accordingly. Not too much has changed in terms of my near-term sentiment towards DES. The recovery off the 27.25p low was both quicker and shorter than anticipated, as I expected to see a bounce closer to 34p. The minor abc wave that we have just seen is labelled as follows - a from 27.25p to 34p, b from 34p to 27.5p and c up to 31.5p. Therefore, 31.5p becomes the terminus of wave (b) of one higher degree (noted with a question mark on my 30 Sep chart). This now puts us in the next (c) leg lower and should see a push towards my target in the 19.75p area. Ahead of that I have noticed that we have a higher low from October 2004 (21.75p) and 78.6% Fibonacci retracement of the 6p 69p advance at 20p. Therefore, we have further reasons for the market to stall around those levels. Ultimately, I cannot rule out losses through 19.75p as the major wave 2 comes to an end and we then begin the major wave 3 advance through 69p.
Regards to all
Lynnzal

A new ship for the Falklands

http://www.vosperthornycroft.co.uk/newsandevents/newsdetails.asp?s=&ItemID=620

Hi all

Sorry I wasn't able to update last night. Our dog went missing. We have him back now, so here we go.

Thanks for all the input. Just catching up.

Lynnzal thanks for your input. Yes I agree DES could go lower. If DES were to rally at this point, would your calculations still stand ? In other words has this been built into your calculations ? The reason I'm asking, DES finnished with a long legged doji (potential for reversal). Your post was also before the close.


As just mentioned DES has finnished on a long legged doji candle, this candle suggests a tug of war between the bulls & the bears. Combined with yesterdays candle we have what could turn out to be a morning doji star. If DES gaps up tomorrow then all three days candles will form this pattern. The doji candle alone has the potential to call the bottom of a down trend, but is better at calling the top (this is the candle at the top of the chart 11/01/05). If we get the third candle tomorrow, we should see more bullish action to follow. We are therfore looking for a gap up followed by a continuation up. Britishbulls.com is also has the formation as a potential reversal & has DES on a buy if. Lets hope for the bulls are out in force tomorrow. Could be some good news brewing.




Good Luck All

Eddie

Hi Eddie, thanks for your update and glad you got the dog back!
My calculations are pretty much based on a combination of longer-term and short-term wave analysis. Often they cluster and when projections do this it adds weight to those targets.
Therefore a recovery rally tomorrow would not immediately alter the downside risk towards the 20p area. A move above the 31.5p lower high would have implications for my wave count over the near-term and so I would have to go over and re-count the recent moves more closely. As mentioned before, I felt the bounce off the 27.25p low was rather short and swift, so I wouldn't be suprised if we saw a more significant pullback. Although, that still would not rule out further subsequent weakness through the 26.75p low.
For now I can only base my findings on what I know i.e. the price movements that have gone on before, but I will update as soon as things change.
Regards
Lynnzal

Thank you Eddie for making me look up long legged dojis. It does look bullish but then WT*DIK, I thought this company looked good at the 45p offer when the 3D showed 2.2 billion barrels at one location and all they had to do was find a rig. Thank you Lynnzal for sharing your fibonacci retracement view too, it's a touch more pessimistic in the short term but then I, and possibly some others, have clearly been too optimistic in the past. On this occasion if the long legged doji is right then you will hear it's name sung on the streets of London as a cyclist flies by.

Thank you Eddie and Lynnden and glad you got the dog back Eddie

I re-topped up to day with the last of my money as I felt we are at the bare bones of Desire with the money they have in the bank and what acreage and the prospects they have this is at a bargain of a price and cant see it fall much further.

I also think we are now in territory which makes Desire a serious take over target for any large oil company and hope this does not happen but with a market cap of only 63 million when looking at there prospects I think this is chicken feed for any large oil giant when you look at what profits they make.

If it drops any further I will sell other shares to buy more Desire I have every confidence in the board and Peak Group to do what they have set out to do and fully believe in the findings of the BGS and the encouraging seismic and work done by FOGL .

Hi Lucky good to hear you post,we must be all posting at once tonight, as you mentioned you thought the price was good at 45p with 11 prospects found and 2.2 billion barrels of recoverable oil, then we had the news from the 3D that five other prospects were found from the 3D which was even better news and then we get news of tranch F which 2 more new prospect were found which together gave a another possible 1.5 billion barrels of recoverable oil.

Ok we await a rig but looking at the fundamentals unless its just me this is a screaming BUY

Luckyswimmer, I'll listen out for you as I walk past the BofE tomorrow.

Hi Lynnzal, Luckyswimmer & Markymar.

Ye well no good films on tonight.

Lynnzal thanks for your reply, Luckyswimmer the candle formation has potential but not guaranteed. Markymar yep cheep as chips. I supose DES is like a good film, starts off looking for oil, all hopes get dashed, then bingo finds loads of oil. Well thats the happy ending anyway. Looks like were in the middle of the film. Best get some more popcorn.

Good Luck All

Eddie

Hi Marky, yes, I'm still around, holding on by my fingertips - popcorn in the other hand, wondering how to eat the popcorn without falling off the cliff edge. Well done for buying yesterday, a brave move but they're always the best investments.

Morning Lucky,

Clogs on out the door but the lowest i ever bought at was about 7.8p years back when you were lucky if there were a few thousand bought in a day.

O have times changed

Its like been on a starting line to a race this time last time there was no starting line when bought at 7.8p but i believed in the BGS and there findings and even more now.

Are big boys shaking the tree? 20p may be good entry but I don't think it will go as low as that.

Hi all

Oh well we never got the gap up, however DES did manage a little gain today. We may have seen a gap if the 500,000 trade had been the first. This means the morning doji star didn't happen. Todays candle has bullish implictions, so we may see further advances. Lynnzals theory may prove to be correct, so we must be aware of the dark side. Todays volume was a little lower today, not what you might expect on a rally. So its onto next week. We might even have a rig by then. Wishfull thinking I know. If the share price was good at the open offer 0.4500p, then it must much better now DES has capital to drill. Britishbulls.com still have DES on a buy if.





Here is a 1 year chart with candles of 1 weeks value. This shows the high and lows of the week.




Good Luck All

Eddie

Gonna get far worse yet lads, RED OCTOBER !!!!!!!!!!!!!!!!!!!!!!!!!!!

Rem told yus.

Ko or Driftwood or just plane Dave you dont know what you are talking about e.g

Assessment for North Falklands Basin
October 7, 2005
by J. Brock (FINN)

DESIRE PETROLEUM TO CONDUCT ENVIRONMENTAL IMPACT ASSESSMENT IN NORTH FALKLAND BASIN



By J. Brock (FINN)



Desire Petroleums Chief Executive Officer, Mr. Ian Duncan (ID) is visiting the Falklands this week to make arrangements to conduct an Environmental Impact Assessment (EIA) in the Companys Tranches in the North Falkland Basin. In an exclusive interview with FINN, Mr. Duncan explained that he wasnt here for a shareholders meeting but



ID: Its on-going planning for the resumption of drilling in the North Falkland Basin. As we have announced, we are planning to drill three wells there and, as part of the process, we are preparing an Environmental Impact Assessment. This is an update of the 1998 EIA, which the companies prepared at that time.



We have appointed a company called RPS Energy, which is the leading environmental consultancy company in Europe to produce it. In the first part of the process of this visit, John Parry, who is the Environmental Manager, who will be carrying out the EIA, was here last week. And, with myself, we visited all the major stake holders, which are, Mineral Resources, Falklands Conservation, Fisheries, the Chief Executive, the Deputy Governor, Environmental Planning and the Public Works Department. We really just wanted to find out what the major stake holders concerns were so we could address them in the EIA.



We have had some very successful meetings. The intention was for John to go back to the UK and draw up the EIA and we will submit it in late November to the Director of Mineral Resources. There is an internal time table for Mineral Resources and Phyl Rendell is to take it to Executive Council and it will be published in the Gazette for 42 days.



It was very important for Mr Duncan to stress that Desire Plc is a transparent company. And no wonder. Speculation was high about the low-key visit thus far.



ID: We encourage people to ask questions about what we are doing. We want people to be aware of our operations so the EIA will be published for 42 days and we will invite comments. And, at the end of that period we will come back with RPS and our drilling people. We will then have a public meeting and explain what it is we are about and address any issues that have arisen during the presentation and the EIA.



FINN: Is the EIA an important part of the process?



ID: A very important part. For us, environmental protection is a priority with regard to our operations. Thats why we are conducting this study and also why we are having these presentations, so if people have concerns, we point out this is a very straight forward operation. Drilling has taken place in this area before. There have been extensive base-line studies as a result of the 1998 drilling. We are very keen to involve all parties in our activities.



FINN: I understand that all of the seismic is done and that the next stage after the EIA will be drilling. Is this true or do you have more seismic work to do?



ID: In 2004, we shot the 3D seismic 840 sq km and interpreted the data. We have identified these prospects we would like to drill. Earlier this year we had a fundraising exercise when we raised 24Million and we are currently putting in place all the permits and approvals to commence drilling and we are looking for a rig.



As we have announced recently in our interim statement, the rig market has changed dramatically in the last 6 months. Last December we had a rig enquiry to the market on the availability of rigs and seven of the major drilling companies phoned and said they had suitable rigs. In the meantime, we went through the fund raising exercise. We then went again to look at the market, once we had the funds we couldnt secure the rig until we had the money.



We discovered the rig market had tightened dramatically and of course the oil price has gone up doubled. Rig rates have doubled as well and the availability of rigs has really reduced dramatically. There are several reasons for this as oil prices are encouraging companies to go drilling for exploration wells, drilling production wells, they are drilling appraisal wells. So now we are looking at a very tight market but we have been here before on these markets, when oil prices go up they also come down.



Seeing that the price of getting a rig to the North Falkland Basin had doubled, would Desire have to go back to the market place to raise more money? The short answer is no. They simply will wait until prices stabilise before identifying a rig and putting it over an exploratory prospect.



What happens in the rig market is that and we are already seeing it new rigs start to get built. We know there are 30 new rigs under construction. What really brings it to our attention is that people drill dry holes, so they may have a continuing programme drilling wells but they decided not to drill any more wells so those rigs then come on the market.



The company we are using for drilling is called Peak Well Management. They are an international company that are involved in drilling over 30 wells world-wide this year West Africa, the North Sea and they are actively looking for a rig for us at the moment. Its been very disappointing and frustrating for us that we have not been able to get a rig but we are doing everything possible to get one. We dont know when that will be.



FINN: I have heard that one of the problems in finding a suitable rig is that the technology is scarce that will drill through the rather thick source rock that is predominant in the North Falkland Basin. Is this a major factor in why you cannot get a rig down here?



ID: Six wells were drilled in the area where we are going to drill. These wells were drilled in 1998 and they were really rather straight forward wells. There were no complications. For example, they drilled a 3,000 metre well in just over 20 days. As I say, no hazards were identified and drilling is very straight forward. We dont see any problems.



The conditions where we are drilling in the North Falkland Basin are very similar to the central North Sea weather-wise, so you can drill all the year around. The water depths are very reasonable and similar to the North Sea. These are shallow wells 3,000 metres. We are not looking at deep wells and we are planning to drill three wells and we are looking at 80 to 100 days for the total programme, so this is not a long duration programme. Because the environment is very similar in terms of water depth and weather in the North sea, we can use what is called 3rd Generation semi submersibles. And there are a lot of those available in the north.



This is not a deep water hostile environment like the west of Shetland where there are many fewer rigs than there are available that can drill areas like the North Falkland Basin.



FINN: Many people writing about this area tout horrible weather and, FINN has replied to one such article recently.



ID: I always say the weather is like that in Aberdeen and I am from Aberdeen so I might be a little bit biased. You do get a bit more sunshine that London. I just wish I had taken my shorts and tee shirts with me.



FINN: We know about the source rock in the North Falkland Basin but FOGL are showing their results in the South Falkland Basin that shows gas chimneys and flat spots. FOGL say that from satellite they see crude oil slicks. Are there any such indicators in the North Falkland Basin?



ID: Yes. We see those as well. We shot 3D seismic so we got very good control on our prospects. As I say, we have identified seven prospects, which we are ready to drill. Some of those do have flat spots and some of them do have vent gas chimneys as well. We have drilled before and we have got a very good idea what the geology is.



The reason we like the North Falkland Basin so much is the source rock which you mentioned. It is a world class source rock. Its 1,000 metres thick and everybody who looks at it have come up with estimates of large quantities. We have developed a model where we think the oil has accumulated on the margins of the Basin in these deltas, which we have identified. And, those are the features we are hoping to drill in the next drilling campaign.



FINN: The price of oil dropped to $61.32 yesterday. If the price drops significantly, at which point would a drilling programme here become unviable? That price has risen since 1998, when it hovered around $14.00 per barrel.



ID: The economics we did last year suggested that at $30.00 oil and 35Million barrels recoverable would be economic. The fiscal regime is very similar to the North Sea. We would apply very similar drilling techniques in those sort of developments offshore developments would be the sort of thing wed have in mind so we based all our economics on $25.00 - $30.00 oil. At $60.00 obviously it looks a lot more attractive.



FINN: Compared with the North Sea, how large is the area you are planning to drill?



ID: The fields we are looking at are similar potentially. They are very large fields. The first prospect we will drill, Liz, has got something like 700 to 900Million barrels of oil recoverable, which would be a very large field. So, we have a range of prospects. Liz is the largest but we have other prospects as well.



We see the 3D seismic but until we drill, we dont know whether there is oil there. We have done all we can and now we are ready to drill and we are frustrated that we cant get a rig. We are doing everything we can and will resume drilling as soon as possible.



We are here to do the planning, getting everything in place all our ducks in a row so that when we do get a rig, we are ready to drill as quickly as possible. Preparing the Environmental Impact Assessment is just part of that process.



FINN: Finally, how are you going to let people know about the EIA and your proposed drilling programme?



ID: We intend to have a public meeting at the end of January, early February and we will detail the operational plans, all the mitigation efforts we will be putting in place and having an absolute minimum environmental footprint in the area.

Markymar

can you explain why having a trip to the falklands to announce an environmental assessment is good news.

You would not understand Dave.

still pushing foreward and they cannot drill without one.

Eddie , the shape of the chart is a well known one , on the brink at the mo. A bounce is needed sharpish.

Hi maddoctor

What shape is it you see ? Lynnzal has predicted further correction. I still see support on the weekly chart which goes down to 0.2450p. I'm not saying DES can't go down further. I'm suggesting the support is still there untill the close is under that price. Most will see the low price as a good place to top up. The market tends to over react to negative news. The rig is delayed, but even if DES had the rig. The issues in markymars post, would still need to be addressed. The fact DES is getting ready to drill is good news.

Buy low sell high (thats the aim isn't it). So the cheaper you can buy the better. Once everything is in place and DES has the rig, I doubt you'll be seeing these prices. Cheap as chips.


Regards

Eddie

eddie , look in your candlebook book for adam and eve

agree with everything you say , and your analysis valuable but after serious burns trading fundamentals and promises i am now a pure technical trader. Don't wish to say any more here about the pattern as i never give advice.
best wishes Doc