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

Well no change on the price again today. DES is sitting above the 200 day moving average at the moment, it's been a while since we have DES has been on top of the 200 DMA. The sells seem to have been greater than the buys over the past few days, so this has me thinking the MMs are playing a part. This also has me thinking some upward movement may be expected (news maybe). Lets hope it's sooner than later.





Good Luck All

Eddie

Looks to me like Rockhopper get the priorety for whatever reason.

Progress Report Friday 3rd February 2006
144km of seismic was acquired this week prior to the Admiral returning to Monte
Video for a scheduled refit.
The replacement boat, the Gulf Pacific, is now acquiring seismic in the North Graben
Area for Rockhopper Exploration. The Gulf Pacific will move on to the FOGL permit
and begin operations later this month.

http://gulffleet.com/images/pacific/index.htm

Repsol YPF is takeover target
BP and Eni 'mulling bids' for Spanish player

By Upstream staff


Spanish oil and gas player Repsol YPF is in the sights of both UK supermajor BP and Italian energy giant Eni for a possible takeover bid, Spain's El Mundo newspaper reported.

A bidder would be looking to take advantage of the drop in Repsol YPF's share price after it downgraded its proven oil and gas reserves by a quarter last month and the expiry from today of the Spanish government's "golden share" in the company that protected it from a hostile takeover, according to the report, quoted by Reuters.

"Both energy giants have studied in recent days the viability of presenting a bid for the Spanish-Argentine company," El Mundo said, referring to BP, Eni and Repsol YPF.

The paper provided no source, and Eni refused to comment on market speculation. Repsol YPF has a market capitalisation of around 27 billion euros ($32.6 billion).

Buying Repsol YPF would give Eni or BP leadership in the oil market in Spain and Argentina and a privileged position for operating in Latin America, the newspaper said.

A deal would also give a buyer access to the board of the Spanish energy giant that will be spawned by Gas Natural's planned 22.7 billion euro takeover of power firm Endesa, El Mundo said.

Repsol YPF has 30.8% of Gas Natural. Its stake in the merged Gas Natural-Endesa would be half that and it plans to cut the stake further to 5% to 10%, the newspaper reported. However, it would remain a core shareholder of the new group, it said.

Repsol shares fell 8% on 26 January after it reduced its proven oil and gas reserves by 25% and said the cut would hit 2006 profits. The shares have fallen slightly further since then and closed on Friday at 22.25 euros, down nearly 10% so far this year.

The Spanish government decided last November to scrap golden shares it held in formerly state-owned companies, bowing to a European Court decision in May 2003 which made the special holdings illegal.

EDITOR, ENERGY

A CRITICAL shortage of drilling rigs is threatening the reviving oil and gas hunt in the UK North Sea. Just about anything with a reasonable reputation is booked up despite rocketing charter rates.

And the market is about to tighten further with three semi-submersibles scheduled to head elsewhereone each to Brazil (for Shell), Norway (the Bredford Dolphin) and West Africa.

Bob Lyons, MD at Peak Group, told Energy that 2006 is booked solid and so, too, is much of 2007.

Moreover, oil companies are still scrambling to secure drilling slots despite charter rates now climbing past $250,000 per day for competent semi-submersibles.

And there is no sign of a let-up in sight–rates are still rising.

Indeed, the Bredford Dolphin will command $360,000 on its three-year Norway deployment with DNO and other Norwegian Continental Shelf players.

The only part of the market where there may be limited relief is jack-ups, as an additional unit is being brought into UK waters on long-term contract shortly.

Soaring oil prices, coupled with revived interest in the remaining potential of the UK Continental Shelf, are driving the boom, which is showing no sign of collapse despite the latest tax grab by Chancellor Gordon Brown, though any meaningful impact on investment is unlikely to show until next year at the earliest.

But this is a different drilling boom to anything experienced in the past because it is the now large cohort of small and medium-sized independents that are driving the demand for rigs–not the majors as was previously always the case.

And the biggest chunk of that demand is being coordinated by Aberdeen company Peak, which has come to the fore in just three years as the number-one client for the drilling companies by commanding more than a third of the UK well construction market last year.

Three years ago, Peak did two wells in the UK/NW Europe based on its full suite of well construction services. Last year, the company notched up 24 exploration and appraisal wells on behalf of its client oil companies, which was roughly 30% of the entire 2005 E&A total of 82 wells.

Without either additional rigs coming in or spare slots appearing, there are going to be a lot of disappointed people in the North Sea this year because the wells wont get drilled, Lyons told Energy.

On that basis, there will be fewer wells drilling on the UK Continental Shelf because there is less rig capacity than last year.

That said, Lyons is hopeful that Peak will, in fact, drill more E&A wells, but this is contingent on getting lucky with potentially spare well slots and negotiations to bring in two additional semi-submersibles from elsewhere, one of which is apparently fourth generation.

From our standpoint, if we can secure sufficient rig capacity, well in fact drill more than last year. If we succeed in bringing in rigs from elsewhere, that would change the picture considerably.

If one looks at overall E&A activity levels going through the year, there is something of the order of 30 firm wells, 19 probable and 40 possibles on the UKCS.

PEAK Group has identified a total of 49 UK wells to be drilled this year from companies it is in discussions with, says MD Bob Lyons.

We will not undertake all of these wells, even if there was rig capacity. However, it is indicative of volume.

Right now, there is no rig capacity on the UK Continental Shelf. There is some capacity later on in 2007, but there are already people in the market for those units and some are booking up for 2008.

We could see this coming a mile off at the start of 2005.

Lyons said Peak had held several rounds of discussions with its client group of mostly small independents in the hope that they could be persuaded to book ahead while rig rates were still modest.

But while there was the will to drill, many were constrained, perhaps by farm-in negotiations designed to spread risk or financial restrictions.

Last year, we had the opportunity to secure rigs for large parts of this year at what, in todays market, were very attractive rates around $160,000 during a first round robin. It was around $180,000 when we had another go. We had a further go at just over $200,000, another at $225,000 and, latterly, $250,000.

You only have to go back 14 months. On New Years Eve 2004, we released a semi off contract in the North Sea at $52,000 a day.

Lyons stressed the need for smaller players to work co-operatively through a well construction management specialist such as Peak as it had reached the point where, even if they had spare capacity, rig owners were no longer interested in short, two and three-well contracts.

They wanted one, two and three-year deals.

On the hunt for possible spare slots on already chartered rigs, he said: Weve spoken to a number of operators with rigs on long-term contract, trying to get into a position where we can take on any spare capacity for work at short notice. Some of these guys have rigs for longterm programmes, but speak to them and they dont actually know how those programmes will be structured.

What were now doing with a lot of the companies that were working for is getting the technical work done ... permitting, site surveys, equipment ordered and so forth ... which enables us to move at short notice and utilise any drilling slots that become available.

Its important that we focus on putting together multi-operator programmes because, otherwise, it will be very difficult for smaller E&P players with a desire to drill, say, one or two wells to secure any kind of rig.

If the number of E&A wells drilled in 2006 falls, this has serious implications for UK reserves replacement. 2005 was not a particularly good year, with about 300million barrels oil equivalent located.

Analysts Hannon & Westwood believe an annual programme of at least 50 such wells is required every year for the next few years to deliver an acceptable stream of new, albeit mostly modest, oil&gas discoveries.

Hannon & Westwood said at the end of last year that there were still about 1,200 leads to pursue in UK waters and that there was a reasonable certainty that some fairly large finds would be made, especially with 23-27billion barrels oil equivalent remaining in proven and potential reserves, versus 34billion barrels produced to date.

O.K. own up, who sold two lots of 250k

I thought they were Buys lucky and looking at the price today they must of been.

Ditto, Marky. Looks to me like they were bought at mid price.

120K buy trade just gone through.

Marky and Oily, I assumed that because the price fell yesterday the 250ks were sells but I hope you're right and they were buys at mid price.

Hmm, the 120K buy from this morning has been deleted from the trade page. How bizarre.

I see that Oily....." lad" but still shows on AD web pages and then a 120,000 at 4.29pm today,

The last few days some big buys have come through........most strange!!

Hi all

Thanks to all for the recent updates.

DES is looking good and has been since moving off the 0.2400p support level. The market may go as far as testing the green fibonacci line, however todays candle has got smaller and is within the shadow of recent traiding. This level is being tested again (0.3550p). If the support holds tomorrow DES should be on the move back up. The information I have for todays trading is total trade value 91.9K, (buy 27.1k) (sell 28.2k) (unknown 36.0k). If the unknown turns out to be a buy, we may see DES open with a gap up. The oil and gas sector is now moving up which may have a knock on effect. DES is up 27.08% since the support of 0.2400p.





Good Luck All

Eddie

Hi all

We can use the chart above.

Unfortunatly it wasn't to be today. DES is in a good position to buy, however the rig situation may slow this a little. The hammer is said to be hammering out the bottom, all things bieng well DES should be on the move up again soon.

Good Luck All

Eddie

Desire share price is being overtaken by by an outfit that hasn't even started a 3D survey yet. With FOGL talking about 10 billion barrels spread over 25,000 km2 the price rises today to an all time high. However I doubt that the city is excited about a drilling campaign that will probably not start til 2008 so something must be happening behind the scenes. A farm-in is the obvious conclusion particularly as Shell and her fellow global titans are awash with cash. With Venezuela suddenly grumbling about British interests in the Falklands it looks like a deal is close. I hope Desire is part of it, the share price doesn't seem to think so.

Thank you Eddie for our evening chart, I look forward to the day when Fibonacci is overcome by good news.

Hi all

Thanks to all for the updates

DES looking prety strong today, the candle has bullish implications. The trades seemed a bit odd though. Never the less a nice gain. DES opend up higher than yesterdays close and finnished on the days high. If you blend the candles of the past 2 or 3 days, we have a bullish hammer. All being well we should see a continuation as DES is in a good area for more buying.





Good Luck All

Eddie

I don't think candles mean anything...we need news...good news.

Thanks for the update Eddie

All the Falkland plays seem to have a good day today

BOR up 11.5%

DES up 4.2%

FKL up 11.7%

FOGL up 13.6%

RKH up 5%

FOGL market Cap is astonishing 156.92m

Hi hlyeo98

Yes good news would boost DES or any other share for that matter. The shaddows on the candles do suggest areas of support and resistance. Long shadows on top after trading up, suggest resistance. If you look at the chart the resitance is at about 0.3600p. The support is about 0.2900p, so this is my reason for saying DES is looking good for a buy. Depending on how you trade a 7p move on stock may be worth trading for a short term trader. If DES is sitting on top of the yellow line tomorrow, chances are 0.3600p will be the target.


Kind Regards

Eddie

http://business.guardian.co.uk/story/0,,1709740,00.html

Among the small caps, rumours of a link-up with an Indian oil company saw Falklands Oil & Gas advance 20.5p to 171p

PR by FOGL working over time

A tight rig market but not overly so hopefully.

Snip from a trade mag.

Latin America
At the moment, activity in this market is humming along, although concerns about Mexico continue to surface. While initial beliefs were that Pemex was going to release rigs, this has proven not to be the case, and in fact, the company has tendered for additional rigs. The concern now appears to be over the upcoming presidential election this summer. Assuming the governments stance on offshore drilling remains the same, Pemex will bring in two or three additional jackups in 2006 and will continue to renew existing contracts when they expire. The operator has proven recently that it is willing to step up and pay the rates necessary to keep rigs in the region. In 2006, rates for new awards will eclipse $100,000 (up from rates in the $30,000s fixed in 2002/2003), rising to over $140,000 for larger units. In the other active country in this region, Trinidad, three of the five working jackups come up for renewal this year, with two likely to receive long-term extensions. Also, the Rowan Gorilla III will arrive this summer to begin a one-year plus one-year option contract with EOG Resources.

The floating rig fleet in this region is essentially tied up to mid-2008. Despite the fact that it will lose two drillships in the first-half of this year, Petrobras extended contracts for its floating rig fleet in 2005 and signed new contracts that will bring additional rigs to the area. Coupled with other operators plans for drilling in the area, no fewer than five floaters will mobilize to the area for contracts starting over the next few years. Elsewhere in the region, only one of seven semis will come up for renewal off Mexico in 2006 and that is not until October, so the market should remain balanced for the entire year

In finalizing its extensions earlier in 2005, Petrobras was able to avoid the meteoric rise in rates that occurred later in the year. The highest rate the operator fixed was $220,000 for a rig that today would likely command over $400,000 in any other market. In comparison, Shell signed two much shallower-rated units later in the year at $240,000 and $280,000, respectively