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

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

The chart might as well be blank if you can't read it, all I say is 3/4 into March last. Look and learn but it's no matter, the chart does not know about the next RNS. Tut tut.

Hi maddoctor

I have looked up the Adam Eve formation in Thomas N Bulkowski. The criteria seems to fit the Adam Eve. This also confirms Lynnzals finidngs, that DES may go lower. The confirmation was given on 22/09/05 close below the low of 0.3375p which was also a gap down with high volume. The patterns I have looked at suggest as you say, a bounce is needed here. Yes it's a critical time. As they say it's not over 'till the fat lady sings.

Kind Regards

Eddie

eddie, glad you found it - I did not want to comment because i have seen a number of failures of this pattern.
Doc

Hi maddoctor

I'm glad you have commented, It's only fair to the other board users. I would never be offended. Your comments have been constructive.


Kind Regards

Eddie

Hi all

Provided I've done my home work correctly. DES is already at the ultimate low for the Adam Eve chart.

To work out the target price, you take the higher of the highest price Adam or Eve.

I this case its Adam at 0.4525p We then subtract the minor low which is the low between Adam & Eve. In this case the minor low is 0.3375p. The difference is 0.115p. Then divide the difference by 2. 0.115p /2 = 0.0575p. Take this away from the minor low price. 0.3375p - 0.0575p = 0.2800p. This is the target price 0.2800p The doji on Thursday appears to confirm this. The method used to calculate this is said to only work 69% of the time.

After the target price is reached the, change in a bull market is 50% and 43% in a bear market. These are average changes and can vary. The pattern is reversal or continuation.

I hope it's reversal !


Good Luck All

Eddie

eddie if you want to see another one look at the 5min candles on prty

Hi all

DES took a little step backwards today, The open looked ok but the bears managed to push down to the close. Todays candle is a spinning top, the real body of the candle is small. When we get a spinning top in either an up or down trend, it usualy indicates the prior trend is coming to an end. As I said in my last post the target price is 0.2800p, the method used to calculate this has a 69% success rate. After the cofirmation price, there is said to be a definate move up between 14 - 21 days. Lets hope all of that is correct then.

Maddoctor I had a look at the chart PRTY, it seems to have gone way past the target price. I dont see any support either. I will look if your on PRTY thread.





Good Luck All

Eddie

eddie , only just got time to look at your calculation. Top of adam is 71 ,bottom of adam is 28.5 , top of eve is 44.75. never seen your calculation before but perhaps you might want to run it again or maybe not because of the figure it will turn up. Not a clear cut pattern unless you look at the longer view and particularly the weekly candlesticks when the pattern jumps out at you.as to prty(5min) i just thought it might be of interest because it seems the pattern is taking the forecast course and in addition this pattern appears in all timescales.
doc

Maddoctor, thanks for the insight into the adam and eve pattern. Similar to double tops and bottoms although the projections are measured somewhat differently. However, as a double top/bottom is invalidated if the price closes back above/below the pattern trigger level...is this the same with adam and eve? i.e. is the pattern negated on a close above 28.5p?
Thanks in advance and regards to all.
Lynnzal.

lynzal , yes and you would then have a 2b bottom and this is the problem with this pattern - not a good one for shorting at the 2b bottom , need to be certain of the break

so for des at the mo , no confirmation either way

Hi Maddoctor & Lynnzal

I have just gone over the criteria again. There is a suggested time between the peaks, 2 -7 weeks also the peaks should be close in price, it is said some place a 3 % limit between the peak prices.

The dates I have that fit the criteria are Adam peak 0.4525p (25/05/05). Eve peak 0.4475p (15/08/05). The minor low is between Adam & Eve at 0.3375p (06/07/05), this is said to be the confirmation price. Also the valey between Adam & Eve is usualy about 10 - 20% which also fits. The volume is generaly higher on the top left in this case Adam (3.158m) Eve is (1.876m). If all of this is correct then DES is at the target price.

Good Luck All

Eddie

eddie , more information in your book obviously. Mine just refers to this pattern as one which shows the gradual loss of confidence during the eve peak construction.

Hi Maddoctor

We will have to wait and see if it is correct yet. We are on day 14 since the confirmation and target price. It is said there should be a significant change around day 14 - 21. I have gone over the material a few times., just incase I got it wrong. Time will tell as they say.

Kind Regards

Eddie