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

Preliminary Results for the Year ended 31 March 2006


Chairman's Statement

Background
Rockhopper Exploration was established in early 2004 to explore for oil in the
North Falkland Basin. We currently have a 100% working interest in and are the
Operator of 4 licences, PL023, PL024, PL032 and PL033, which between them cover
approximately 5,800 km2. In addition, we have a 7.5% working interest in
licences PL003 and PL004, which are operated by Desire Petroleum. In total, our
net acreage position of over 5,900 km2 currently makes us the largest acreage
holder in the North Falkland Basin.

We are currently in a period of relatively high oil prices and have seen a
significant growth in exploration activity across the world. Access to high
quality acreage is becoming increasingly difficult and expensive while high
quality people and equipment are in high demand and short supply. Against this
background, your board has built up an acreage position of real prospectivity
and value and has also been able to carry out a significant part of the work
programme set out at the time of our listing on the Alternative Investment
Market (AIM), with more work already timetabled for later this year.

Achievements
We completed a successful listing on AIM in August 2005 raising #15 million
before expenses to undertake work on all of our licence areas. We specified at
the time that we would conduct both 2D and 3D seismic acquisition programmes and
consider using other exploration technologies in addition to fulfilling our
commitment to drilling with Desire Petroleum.

The 2D programme has been completed on licences PL023 and PL024 and the 3D
vessel is now secured for licences PL032 and PL033. CGG, one of the world's
leading marine seismic contractors, will undertake the survey. We have also
completed two Controlled Source Electromagnetic (CSEM) surveys in order to give
ourselves greater confidence in the prospects over which they were acquired.
These are the first such surveys ever completed in the Falkland Islands. The
results of these surveys will be fully integrated with all our other technical
studies once they are available.

We are working closely with Desire in moving towards drilling on licences PL003
and PL004 but have experienced a significant tightening in the worldwide market
for drilling units.

Outlook
Once the results of the two CSEM surveys have been fully integrated into the
seismic studies, our knowledge of the southern, undrilled part of the North
Falkland Basin will be taken to a new level.

Processing the new 920km 2D seismic survey data is nearing completion. Once we
have the processed data, we will focus on interpreting and integrating it into
our existing knowledge of the area.

The next active step in our exploration will be the collection of the new 3D
seismic survey in licences PL032 and PL033. Once the data has been acquired,
processing and interpretation will carry the work programme into 2007.

The ultimate test of any exploration is, of course, drilling. To this end, not
only do we have the 7.5% interest in PL003 and PL004, but we are working on our
own 100% acreage with modern seismic techniques and CSEM in order to reduce risk
before committing to a drilling programme. It is our intention to co-operate as
fully as possible with other operators in the region in order to reduce costs
and maximise not only knowledge and experience, but also the chance of success.

We have achieved a great deal in this first year against a background of
increasingly difficult markets for services in the oil sector. We look forward
to being able to present the full results of our new 2D and CSEM programmes
later this year and the results of our significant 3D programme during 2007. At
that point, we will need to consider our funding options should we confirm the
presence of drillable targets in our acreage.

Summary
We remain positive about the prospectivity of the basin as a whole and of our
acreage specifically. We believe a number of completely untested plays remain in
the basin which give a better chance of success than the original drilling
campaign in 1998. The technical work is progressing as anticipated at the time
of the listing and the board as a whole remains strongly supportive of the
management team as we move closer to discovering the real potential of the
basin.

Dr Pierre Jungels CBE
Executive Chairman
5 June 2006

Hi all

Thanks markymar for the updates.

DES hasn't been doing very much over the past 10 days, but neither has most of the oil & gas sector. DES is still following the rising trend line, which started 08/12/05. There have been a few buy & sell signals but neither have amounted to much. The oil & gas sector is currently bellow the 200 day moving average but is unlikley to stay there. In one of the news clips it was suggested that DES may announce a rig contract at the AGM. Am I right in thinking this is on 26/06/06? DES is on another Buy If signal on Britishbulls.com, so we may see the bulls return.





Good Luck All

Eddie

Eddie

That was only a rumour as the AGM was a couple of weeks ago and nothing was announced.

(Falkland Islands)



The semi-submersible rig that ran aground on Tristan Da Cunha just might fit the bill for Desire Petroleums tranches in the North Falkland Basin.





Falklands Oil Stocks End of Day Price for the 8.06.06


Desire Petroleum down 0.75p or 2% on the day to stand at 36.5.p



Falklands Oil and Gas down 4.5p or 3.4% on the day to stand at 1.26.p



Rockhopper Exploration down 3p or 10.2% to end the day at 29.5p



Border and Southern unchanged on the day to stand at 44p



NEGOTIATIONS UNDERWAY TO FREE STRANDED OIL RIG



By Sarah Glass (Tristan Times)



A message was received at Tristan on the 22nd May from master of TG Mighty Deliverer said that due to bad weather TG Mighty Deliverer was forced to release platform PXXI at 35'48S 013'35W to avoid risk to platform and his ocean-going Tug Boat.. The platform was released at sea unmanned with no onboard fuel, thus contamination free.



Eyeball contact with semi submersible PXXI was maintained until 10 May 2006. However, after further bad weather the platform started to draw away from TG Mighty Deliverer. From the 16th May the Tug had been searching for the rig and, the skipper reported it lost on the 22nd May.


Another company S/T Ruby Deliverer assist in searching but had found nothing. The size of the Platform is as follows, Total length 104.9m, Breadth 103.63m, Draft 13m.


The Platform was found at Tristan on the 7th June on the SE side of Tristan at Tripot Gulch. The rescue rib was coxswained by Neil Swain and Conrad Glass, and crewed by Mark Swain, Duncan Lavarello and Jack Green accompanied by Head of Natural Resources James Glass and Conservation Officer Simon Glass. Tristan Officials visited the rig on the morning of Thursday, 08 June 2006. She is grounded approximately 300m from the shore. There does not appeared to be any oil leaking, only a small diesel slick, which is nothing to be concern about at the moment, its also good that the penguins have left the island as it is grounded directly of the Tripot Rock Hopper penguin rookery. Talks are underway with its owners.

Hi all

Thanks for the updates markymar.

Hi coeliac1. I am a bit confused as the dates I have via Sharescope say the annual report was due out in May and the AGM is on 26/06/06, as they say buy the rumour and sell the fact. After Markymars update, it seems there's a rig floating around.

Good Luck All

Eddie

Eddieshare,

The AGM was held on the 24th May 2006, the details of the date are in the annual report.

That rig that's floating around does not look like a drilling rig to me, more a production platform.

A picture of PXXI over in the Falklands, shame it is a platform rig!!!Thats are luck.

Hi all

Thanks for the upates Captguns, Markmar, Coeliac1

Thanks for putting me right on the AGM. Not much volume today leaving us with a four price doji. This candle is said to indicate indecision in the market. The rising trend line which started mid December is still intact. Once the sector picks up momentum I'm sure DES will also.

Here is the yearly chart with candels of one weeks value.




Good Luck All

Eddie

http://www.oilbarrel.com/home.html

13.06.2006
Desire Petroleum Gears Up For Another Tilt At Finding Oil And Gas In The North Falklands Basin
You would think it could be a case of once bitten twice shy for Desire Petroleum. But not a bit of it. The London AIM-listed junior is gearing up for another tilt at finding oil in the North Falklands Basin.

Desire was formed in 1996 to participate in the 1st Falklands Licensing Round. It floated on AIM in 1998 after raising 15 million. It was a pure exploration play; a high risk/high reward project. The Falklands was and remains the ultimate frontier oil and gas province. It is remote and no oil or gas has been found there so far.

Desires shares took off and the company participated in a six well drilling campaign in 1998 alongside Shell and Amerada Hess. Desire had interests in two wells. Five of the six wells had hydrocarbon shows. Well 14/10-1, drilled by Shell, had live oil at surface of 27 degree API. Another well 14/5, also drilled by Shell, had 32 per cent gas at surface. The drilling was not a success but it was not a complete failure either.

The wells were drilled back to back and there was no time to evaluate each well. For reasons, which in retrospect seem a little curious, the initial drilling was not followed up.

Dr Ian Duncan, Chief Executive Director of Desire Petroleum, is wary of criticising anyone after the event but he does say: You have got to remember this was at a time when the oil price had fallen to US$10 a barrel. The majors have to compete internally within the company for scarce rigs. Someone in London or Houston only has to say why are we wasting our time drilling in a marginal area in the Falklands when we could be on to a surer bet in the Gulf of Mexico.

For whatever reasons the majors pulled out but Desire has kept the faith. It has continued its commitment to the Falklands. It holds large equity in five tranches in the North Falkland Basin. This amounts to circa 4,000 sq kms equivalent to 14 North Sea Blocks. Desire holds 92.5 per cent of Tranches C and D. Rockhopper holds the other 7.5 per cent which carries with it a commitment to fund 15 per cent of three wells. Tranches F, I and L are held 100 per cent by Desire.

Dr Duncan says that what was established in the 1998 round of drilling was there is working hydrocarbon system in the North Falklands Basin, because there is a proven world-class oil source rock. The British Geological Survey has estimated over time 60 billion barrels of oil could have been expelled. The question, as always with exploration, is where is it? Where are the reservoirs and traps?

Dr Duncan says lessons were learned from the six earlier wells. He believes the source rock regional seal has prevented upward migration of hydrocarbons. High quality seismic was needed to define traps at deeper levels in the source rock.

Accordingly, in 2004 Desire raised 4 million to shoot 800 sq km of 3D seismic which was needed to identify the traps at the deeper levels. Well maybe there is oil and gas at these deeper levels or maybe there is not. When Shell had the surface oil and gas shows in its two wells, they were the deepest wells drilled in the 1998 campaign.

But Desire is prepared to put its money where its mouth is. In 2005 the company raised 25 million. Interpretation of the seismic has identified ten prospects on Tranches C and D. The water is shallow, so although it is expensive to drill, at some 7 million a time, it is not as expensive as say deepwater West Africa. The partners are planning three wells as soon as a rig becomes available. Dr Duncan says: A third generation semi-submersible would do. But it is not easy - the rig market is extremely tight.

Dr Duncan admits this company is not for widows and orphans. Look, we are not trying to build careers here. It is, as I say, a maximum bang for a buck. If the company finds oil and gas investors will do very well. The company reckons it is looking at 2 billion barrels potentially recoverable. But it could come with nothing. So perhaps the way to look at it is that provided you do not bet the shops, its better than worrying about the mortgage. Only the drillbit will tell.

http://www.guardian.co.uk/oil/story/0,,1796251,00.html

Oil price likely to fall, says Browne

http://www.falkland-malvinas.com/Detalle.asp?NUM=8145

Falklands:/Malvinas: C24 calls for negotiated settlement



The United Nations Special Committee on decolonization -C24- reiterated Thursday in a draft resolution that a peaceful and negotiated settlement was the way to end the special and particular colonial situation in the question of the Falklands/Malvinas islands regarding the dispute over sovereignty between Argentina and the United Kingdom.

http://www.desireplc.co.uk/presentations.php

Presentations

OILBARREL PRESENTATION
9th June 2006

Download Powerpoint Presentation (21 slides, 2715k)

http://www.freemarketnews.com/Analysis/106/5329/2006-06-16.asp?wid=106&nid=5329

ADDENDUM: THE OIL THAT GREASES THE SQUEAKY WHEEL OF PEAK OIL

Friday, June 16, 2006

Looks like Norske Hydro is on the presentation agenda.

http://www.offshore.no/nyheter/sak.asp?Id=14004

http://www.dn.no/forsiden/energi/article806241.ece


http://n24.no/boers-og-finans/article1358684.ece

Captguns, thank you for those links. The investor Robert Keith is a director of FAST which seems to be a successful Norwegian software company. One of his fellow directors is Thomas J.Fussell who is also a director of..... Gaelic Resources. Looks like the Norwegian link has been there a long time.

Repsol picking up pace in Argentina

By Upstream staff


Spanish explorer Repsol YPF is accelerating its investment plans in Argentina in order to make better use of its existing reserves there.

The company said that it would invest $6 billion in Argentina over a three-year period starting in 2007. $4.6 billion will go towards exploration and production.


It added that it would strengthen its strategic alliances with companies that specialise in exploring mature regions as it tries to find more crude in its existing wells, reported Reuters.


New reserves will be generated through greater exploration activity and additional development derived from the application of operational improvements and new technologies in mature areas, the company said.


The company's prior investment plan called for $7 billion in investments from 2005 to 2009, of which some $2.7 billion is expected to be spent by the end of 2006.

http://www.britishbulls.com/StockPage.asp?CompanyTicker=DES&MarketTicker=RESOURCES&Typ=S

BUY Confirmed

spot on marky. Hope you aren't paying for that advice

Snip from the RKH RNS.

Looks positve for tranches I + L, and if it all comes together a drillable target. Early days but rig sharing comes to mind.
(The BIG if just got a bit smaller)


Rockhopper contracted Offshore Hydrocarbon Mapping plc in January 2006 to
conduct two CSEM surveys over its acreage in the North Falkland Basin during
January and February 2006. The surveys covered prospect J1 and lead K. Those
areas were also the subject of a new 2D seismic survey, also acquired during
January and February 2006.


Both targets (J1 and K) are located in relatively shallow water of less than
200m in licences PL023 and PL024, an undrilled part of the North Falkland Basin
near the Islands representing an independent play type from those plays and
targets in the more northern part of the basin. The targets are both relatively
shallow and this, combined with the shallow water depth, would make any wells
drilled relatively quick and inexpensive should a rig be drilling in the area.

CSEM Preliminary Results

The preliminary results of both surveys have indicated the presence of discreet
resistors in the area of the targets which, when combined with the existing
seismic data, could prove to be a positive indicator of hydrocarbons.

The Directors remain cautious until the next step is complete, which will be to
fully integrate the CSEM results with the new seismic data, which is in the
final stages of data processing. Once this is complete, the Company should have
a more definitive view of the extent of any potential reservoirs. That process
could take several months.

Should the integration confirm the robust physical nature of J1 and support the
interpretation of the resistor as a possible hydrocarbon accumulation, that
target could be moved to the status of a fully drillable prospect without the
need to acquire any additional seismic, subject to all necessary regulatory
consents.