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

http://www.cityequities.com/documents/emu.pdf

Rig Ahoy?

Desire to push the button
Desire Petroleum is committed to unlocking,
what it believes to be, the huge reservoirs of
hydrocarbons in the North Falkland Basin. So
far, it has been hampered by the lack of drilling
equipment, but the management havent
been standing still and Desire should be able
to push the button on its exploration programme
once a rig becomes available.
Demand for drilling rigs has been high, as the
oil exploration market has reacted to the rise in
the oil price, driven by geo-political uncertainty
in the Middle East and an upswing in global
economic growth. Consequently, utilisation
rates have been high, as have rents, which has
left Desire unable to progress with its three well
programme planned back in late 2004. Around
this time Desire raised 25m at 45p to fund the
drilling, but with little progress, sentiment has
moved against it. The shares have fallen sharply
from their more recent high of 71p (January 2005)
and continue to languish below the Placing price.
However, the stock seems to spike on news and
rumour suggesting there is an appetite amongst
the investment fraternity. We hope that securing a
drilling rig will prompt a similar reaction.
Desire has had to adapt its strategy. It has entered
into discussions with a number of companies
interested in an equity deal over tranches C and D.
These companies either own a drilling rig or have
long-term contracts over equipment that would
provide Desire greater visibility with regards to
rig availability. Moreover, the Board believe the
rig market will return to normal in due course,
which implies that its only a matter of time. To
further expedite the drilling programme, Desire
has selected nine drilling locations and submitted
an Environmental Impact Assessment. Peak Well
Management has been appointed to oversee well
planning, design and construction, well infrastructure
has been ordered and contracts for waste disposal,
helicopters and crew-change facilities are
being put in place. In short, Desire is ready-to-go.
It has been a frustrating story, but the speculative
interest remains. As the drilling market relaxes
and exploration work is allowed to begin, Desire
could yet fulfil Chairman Colin Phipps goal of
retiring having discovered a billion barrel oil field.

Looks like there will be some progress sooner rather than later. The story in cityequities will be getting the share more widely noticed and we could well see some additional buying interest in anticipation of the long awaited rig deal.
There has been a lot of speculation about where the price will be when the deal is announced and I have no more idea than anyone else but I am very hopeful.

Juanita is no Fast Frigate!Short, 50ish,glasses but A nice enough person.The problem is that she pastes and cuts everything including local news and does not do any original pieces,gossip or dodgy stuff and certainly dosn't stick her neck out.I received the City equites report last night but is still the same old stuff with no fresh news.
Is it sensible to pay the high costs to tow a rig to the F.I. and back for just three holes?The rest of the field are away behind DES and could not just join in quickly.A shared rig between all players could leave enough change for DES to do four holes maybe?

Coeliac is that a positive post am reading from you? I better go for a sit down in a darken room.

Chav you seem to come across that you know Finn do you come from the Falklands or have you just seen her picture to know what she looks like?

You say she does not write an original pieces so what do you call the story about Woodside then !!!!!! I would call it sticking her neck out.

What do you call the Daily Hydrocarbon News then; I would call it fresh news putting the Falklands shares in focus with the share price and any news.

It sound very much that Finn has done here home work on this and has a dam good contact and can back her claim up or she could be in trouble, you sound a bit like a Mecropress reporter who can only post what they have been told to, where Finn works for her self and is not funded by anyone.

Maybe instead of me going to sit in a dark room maybe you should.

Pip Pip

My post reflects the situation as I see it- namely there appears to be progress- though I am not holding my breath.

Anyway I have a small shedload.

No picture,in the flesh but dressed!
Daily Hyrocarbon news is no more than you get on this site so no big deal.Your claim that she could be in trouble if she is wrong,how will she be in trouble and how can she prove it?
If you want an improved news service from the F.I.'s and an insight into how the place ticks then I would recommend the Penquin News instead.
I'm not saying she's wrong but the F.I.'s being small run on gossip and news like this would be widespread by now.The silence is loud.

Chav you still never said where you live?

Penguin news ...now who owns that?

Your right she isnt wrong she is a journalist and got her facts right and how it pans out I dont know but interesting it is and am glued to her thread.

Since Finn has done her thread she has done more on the PR front than anything from the PR people for Desire have. Fact!

Finn is an inspiration and am sure more news will come from her in the days to come as her hands are not tied like some papers over there.


Pip Pip

So Chav, Jaunita is a bit of an oldish cruiser, I hope the poop decks are in good order and the yokohama fenders have not splayed to much.

What's your take on Argos Chav, now Evergreen / Pioneer seem to have flow the roost.

Markymar,I have been there and know the lay of the land also went out on the Borgney Dolphin for a look when it was drilling first time.Where do you live,Dunston or Jesmond?
Penquin News is owned and run by the Media Trust along with FIRS the local radio station and is the only newspaper in the FI,s since the demise of Teaberry Express which your favourite lady owned and edited.The Teaberry Express was all copy and paste and was poorly presented so not much interest.
As for PR from DES,if there is no fresh news then what can they say.Bullshit?Everything they put out has to be 100% fact or they are in the mire with AIM.

Captguns,while the Yokohama fenders are probably abit perished they might stand up to a careful tie up providing the swell is'nt to big!
The Argos front seems very quite ever since the first round of drilling and they have just carried on with the fishing effort.Maybe waiting to see what comes of the current flurry instead of committing funds.None of the three Argos owners have any experience in oil unlike DES who are soley in the oil game.

Morning Chav,

Newcastle area but out in the sticks in Hadrian wall Country a lot more desirable than Jesmond so I always get a good view from the crow nest to what is going on and I get to know which way the wind is blowing.

Am I right in thinking Argos are committed to do more seismic work in the very near future or they might loose there acreage, so Chav do you still sail in to the Falklands these days.

Markymar,certainly a nice piece of the country along the military road although a bit drafty for a Roman skirt!
I'm not up on Argos commitments to keep their licence however most of the players have struggled to keep exactly to the timetable.Rig availability being one cause!
I will be back there before to long so can pass your regards on to Miss Juanita if you like!

Chav,

Nothing wrong with a bit Roman skirt but you dont see that in Jesmond, you seem to know my neck of the woods.

I think rig availability may not be an issue soon if am reading the wind correct as been blowing for some time and keeps getting stronger and I could see a sudden gust

Times are interesting at the moment but I do like to feel the wind and its blowing stronger.

Roman wall ,many a battle fought and many won I stand on top now looking down and the view looks good like pigeon needs to sleep I have a mail box .

Pip Pip

Old news for Chav.

A progress report would be good, the clock is running for them.

http://www.sartma.com/artd_1697_06_2005_13.html

Hi all

Thanks to all for the updates.

Unfortunaty DES moved down again today. The 10, 20, 50 & 200 day moving averages are all now moving up again. These are good indicators of the general direction which DES is moving. The long and medium trends are up. DES is up 56.84% since the start of the medium term trend which started 08/12/05. The trend is slow moving at the moment, but fresh news of a rig/deal would speed things without a doubt. The move which took DES up to the highs, took 47 days. Which was 0.2650p to 0.7100p. I think its a matter if when rather than if. The Sell If was confirmed on Britishbulls.com today.




Good Luck All

Eddie

http://www.publications.parliament.uk/pa/cm200506/cmhansrd/cm060705/text/60705w1472.htm#column_1157WFalkland Islands



Mr. Hoyle: To ask the Secretary of State for Foreign and Commonwealth Affairs whether the British Government will play a role in supporting the secure development of oil and gas exploration facilities in the Falkland Islands waters. [79700]



Mr. Hoon: The Government will play a role in supporting the secure development of oil and gas exploration facilities in the Falkland Islands territorial sea and continental shelf. The Government are responsible for the external security and defence of the Falkland Islands. The provision of routine security and policing of oilrigs is a matter for the Falkland Islands Government and the oil exploration companies.

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

11.07.2006
Rockhopper Exploration Gets Some Encouraging Preliminary Results from Its Controlled Source Electromagnetic (CSEM) Survey On Its Falkland Acreage
Rockhopper Exploration together with Desire Petroleum, Falklands Oil and Gas (FOGL) and Borders and Southern feel that explorers in 1998 were premature in turning their backs on one of the last major untapped oil and gas provinces in the world: namely the Falkland Islands.

Like Desire, which was involved in the 1998 campaign, Rockhopper feels the Falklands are worth another crack. Although it is a long haul between acquiring acreage and drilling for oil, Rockhopper, which is having its first shot at finding oil in this remotest of regions, has received good news about one of the steps on the way in that the preliminary results from a Controlled Source Electromagnetic Survey (CSEM) have proved encouraging.

Unlike Falklands Oil and Gas (FOGL), which is probing in virgin territory in the South Falklands Basin, Rockhopper has set up in the North Falklands Basin, which proved such a disappointment and put a dampener on further exploration for eight years.

There were great hopes for the drilling in 1998. Six wells were drilled back-to-back with Desire having interests in two wells. As Rockhopper and others like to point out, these wells were far from a complete disaster. The North Falklands Basin stretches 250 km from north to south and the wells drilled there all looked the same kind of play concept. Of the six only one failed to find any indication of oil and gas and was never logged. The most exciting well was Shells test of the Fitzroy structure with well 14/10 which recovered live oil to the surface of 27 degree API. Another well, 14/5, also drilled by Shell, had 32 per cent gas at the surface.

For one reason and another, the wells were never tested. Because they were drilled back-to-back there was not time for proper evaluation. The wells were drilled by the majors Shell and Amerada and these have to compete internally for scarce rigs. Why drill in expensive out of the way places when you are on to a better bet with assets in, say, the Gulf of Mexico? Matters were not helped, of course, when in 1998 the oil price had fallen to US$10 a barrel. This made it barely economic to drill for oil anywhere never mind such a high cost/high risk area.

The situation is different now. With oil at US$70 a barrel the economics have been transformed. Explorers believe the source rock regional seal where the wells were drilled prevented upward migration of hydrocarbons. High quality seismic was needed to define traps at deeper levels in the source rock.

Rockhopper, which joined Londons AIM in August 2005, owns 100 per cent of four offshore licences, covering 5,800 sq km of the North Falkland Basin. These are PL023, 024, 032 and 033.

Rockhopper believes the 1998 explorers did indeed target the wrong play type. Recently the company signed up leading seismic contractor CGG Marine to shoot a 3D seismic survey over two of its licences PL032 and PL033. The 685 sq km survey is due to get underway in December and is designed to provide further data on a number of promising leads.

Before the 3D seismic, however, there are other steps which can be taken, notably 2D seismic. Rockhopper has taken on a new tool in the search for hydrocarbons: the Controlled Source Electromagnetic (CSEM) survey. The surveys were conducted on prospect J1 and lead K in block PL023 and PL024.

The CSEM survey works through transmitting an electromagnetic field into the earth, which is modified by the presence of subsurface resistive layers. These changes in the field are measured and the resulting data is processed to provide information on the resistive structure of the subsurface. Because hydrocarbon accumulations are generally very resistive, this method could indicate the presence of oil and gas. The survey has shown there are resistive bodies co-incident with the prospects that had been identified by traditional seismic. The group still has much work to do to incorporate these results with recently acquired 2D seismic.

However, broker Kepler Teather & Greenwood Merrion, for one, believes the survey is very good news for Rockhopper. It says, although far from conclusive, it shows that any reservoir present in the targets could be charged with hydrocarbons and hence will remove significant risks in these prospects. Prior to conducting the CSEM, Scott Pickford (the independent petroleum consultant) had put the chance of success at prospect J1 of being 1 in 5 (although KT&GM believed this could well have been optimistic. This CSEM could lower the risks significantly and make the chance of success as high as 1 in 3. In the competent persons report at the IPO, the J1 prospect was deemed to have potential oil in place of 328 million barrels. On a 30 per cent recovery it would give recoverable reserves of approximately 100 million barrels.

But of course you do not know until you drill. Rockhopper also holds 7.5 per cent of Desire Petroleums licences PL003 and PL004, These blocks contain some interesting prospects and Desire plans a three well drilling programme here as soon as it can. The timing is problematic due to the shortage of rigs. Given these delays Rockhopper last year decided not to exercise an option to increase its equity in the Desire licences to 15 per cent. It stressed the decision was no reflection on its view of the prospectivity of the acreage, pointing out that it farmed in to the permits to gain early exposure to drilling, an option which no longer seems to be on the table.

The shortage of rigs and costs are a major problem for companies operating in the Falklands. Whats more the remote location will ensure a hefty mobilisation and demobilisation fee (during the last drilling campaign it took 74 days to tow a rig to the islands). It may be that the problems will have eased by the time Rockhopper comes to drill and there is always the possibility of farming out to help costs. Meanwhile the CSEM result is a positive boost on the way to drilling.

http://www.rockhopperexploration.co.uk/press/rockhopper_060711.pdf

CSEM update RKH

Hi all

DES moved down a little today giving back some of the recent gains. The moving averages are still moving up and DES is trading well above them. Britishbulls.com have DES on a Buy If tag, so all being well we may be in for some more upward movement. The bulls seem to be buying at the lower level still, but there is still some resistance which is represented by the shaddow on top of yesterdays candle. The 3 line break and Kagi charts still have DES on a buy and the candles suggesting a Buy If. DES is currently up 66.67% since 08/12/05.





Good Luck All

Eddie

http://www.economist.com/world/la/displaystory.cfm?story_id=7176722