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

Test

http://www.cggveritas.com/popup_page.aspx?cid=1-24-139

http://www.thisisnorthscotland.co.uk/displayNode.jsp?nodeId=149212&command=displayContent&sourceNode=150624&contentPK=16636955&folderPk=85744&pNodeId=150607

FIRMS 'PANIC BUYING' FOR DRILLING RIGS
Date : 14.02.07

Oil companies are almost "panic buying" when it comes to hiring drilling rigs for the North Sea, an industry expert warned yesterday.

Bob Lyons told a major gathering of energy sector leaders in Aberdeen that the high demand for units being used for exploration and appraisal work was far outstripping supply.

Oil firms are anxious to maximise output from British waters to reverse a production decline and also cash in on high prices. But Mr Lyons revealed that the shortage of rigs was poised to get worse as three units were due to leave UK waters this year to work abroad. There are 37 rigs in action off Britain.

He was speaking at a breakfast held by the UK Offshore Operators' Association (UKOOA), where the body's latest oil and gas activity report was discussed.

Though the document highlighted many positive points, there were also worrying factors - including high costs combined with smaller fields and increased taxation, making it harder to attract investment.

Mr Lyons is a division manager with AGR Peak in Aberdeen, the biggest co-ordinator of drilling programmes in UK waters. He told the audience of more than 400 people that rig demand for 2007 and 2008 far outweighed supply.

Peak expects to be involved in drilling 19 wells offshore Britain this year, but could double this if units were available.

Nearly 60% of the world's semisubmersible rigs are already booked for 2008, and 41% are also tied up for 2009.

Mr Lyons could not see unit availability getting any better in the short term, with the situation possibly getting worse.

Asked about the possibility of using foreign rigs, he said that mobilising units from abroad could make a drilling programme in British waters prohibitively expensive. Mr Lyons also said that rigs were leaving Britain for foreign waters partly because of the money they could command there. The length of contracts available abroad were also a factor.

Demand for exploration and appraisal units in the UK has seen a major turnaround this decade - at the low point in 2002, nearly 20 rigs were lying unused in the Cromarty Firth.

But Mr Lyons added: "As the oil price picked up, more people wanted to drill wells."

The strong demand has also pushed up day rates dramatically.

Mr Lyons gave the example of one UK unit being hired out in 2003 for 26,000 a day, but now commanding 177,500 a day.

He could not foresee a major downturn in demand - at least not in the short term - which would see rigs again mothballed in the Cromarty Firth.

UKOOA economic director Mike Tholen told yesterday's meeting that Britain's offshore industry was responsible for many achievements in 2006, including satisfying 96% of oil and 92% of gas demand in the country.

There was also investment of 5.6billion in new production and 600million in exploration, while nearly 500,000 people were employed in the industry.

Exploration and appraisal are expected to remain strong this year, with up to 80 wells forecast - ahead of last year's figure of 69. However, Mr Tholen also said that production fell more rapidly than anticipated in 2006 - down to 2.95million barrels of oil equivalent per day compared with 3.2million in 2005.

New production investment is expected to slip to 4billion-4.5billion this year - the first slowdown since 2003.

Meanwhile, new development costs are expected to rise to 25 a barrel in 2007-09, compared with 15 in 2005.

http://www.mercopress.com/vernoticia.do?id=9860&formato=HTML

Falklands new port development plan moves on

FIDCs press release identifies the following topics to be considered by Royal Haskoning in the preparation of their report:

The growth of containerised shipping and need for improved container handling facilities.
Anticipated growth in the fisheries sector stimulated by the new, property-based rights fishery introduced by FIG.
Potential hydrocarbons exploration.
Continued growth in cruise ship visits.
Potential growth of an aquaculture industry.
Infrastructure development.
Future management options, including the potential for public-private partnerships.

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

BUY
CONFIRMED

http://www.falklandnews.com/public/story.cfm?get=4395&source=3

February 15, 2007
by J. Brock (FINN)

MINERAL RESOURCES COMMITTEE REPORT (15/02/07)
By J. Brock (FINN)

A meeting of the Mineral Resources Committee took place at 1330hrs on Thursday, 15 February 2007 in the Mineral Resources Department. Present were Cllrs Cockwell (Chair) and Summers as well as Mrs. Phyl Rendell (DMR) and Miss Ros Cheek (Attorney Generals Chambers). Apologies came from Cllr Clausen (Richard Cockwell stood in for her) and Chris Simpkins (Chief Executive).

Minutes of the meeting held on 01 December 2006 were confirmed and signed.

The Director of Agriculture and Mineral Resources, Mrs. Phyl Rendell, gave her report, which began with the news that Rockhopper Exploration have completed their 3D Seismic Survey and that bad weather slowed things down with the crew of the CGG Marine Vessel, Laurentian, contracted to carry out the work receiving high praise for a job well done. She also reported that FOGL had two 2 D Seismic Surveys on going but that severe weather was slowing things down. An electromagnetic survey (CSEM) will follow the 2D Seismic. OHM is contracted to do the CSEM. Tim Bushell and Colin Moore from FOGL visited mid January to give a detailed briefing to FIG on their current activities and data interpretation. Borders & Southern representatives Dr Howard Obee and Mr. Bruce Farrer visited the Falklands in January to update FIG, with Mr Farrer giving the Mineral Resources Committee a full briefing on the companys acreage. Dr. Obee briefed the committee about plans for future work. Desire Petroleum will come to the Falklands later on but are at present consulting with British Geological Survey (BGS)and the Department of Trade and Industry (DTI) about their drilling programme They are working closely with BGS and FIG in anticipation of contracting a rig to work in the North Falkland Basin.

Mrs Rendell went on to say that FGML, in accordance with their licencing agreement, have relinquished 50% of their acreage on 16 January 2007. This was brought out during the FGML AGM held in the Falklands in November 2006. A notice will appear in the Gazette. Mrs Rendell said that this will not affect the on-going exploration work. Fieldwork has progresses well throughout the summer. Dr. Phil Stone, FIGs consultant, will be in the Islands from the 28th of February. It is hoped that there will be yearly meetings of the FGML Board in the Falklands.

Cllr Summers asked if the acreage that has been relinquished had been explored. Mrs Rendell said that it was including trenching and stream bed exploration and that an electromagnetic had been conducted on it but the acreage was not that attractive.

Cllr. Summers mentioned that some of the trenches in the area were not filled in and he mentioned that the land should be left as the company found it. Mrs. Rendell said there were some difficulties in filling in the trenches but she would check it out and report back.

The draft budget for the next financial year was discussed with Mrs. Rendell saying that all of the fat had to be trimmed out of it. With reference to the 250,000.00 for consultancies, BGS would like to raise their prices but were persuaded not to at this time due to the amount of work they were doing. When things heat up then the Standing Finance Committee could be asked for more funding. Charging for acreage in the North Falkland Basin would be different than the newer acreage elsewhere. Acreage was ready to be relinquished but the rents would go up in the North Falkland Basin so income would stay the same. In the other, newer areas, income would go down once acreage was relinquished. At 300,000.00 income projected for next year, earnings are healthy.

Cllr Summers asked if the projections for income were right and Mrs. Rendell said that was an unknown because income was paid in USD and the exchange rate fluctuates. It would be open ended but would be discussed in April after the Falklands Forum in the UK.

http://www.btimes.com.my/Current_News/BT/Tuesday/Corporate/BT610441.txt/Article/

http://www.gulf-times.com/site/topics/printArticle.asp?cu_no=2&item_no=138758&version=1&template_id=48&parent_id=28

Strange for Desire to be mentioned in this story.

Global oil glut hidden by rig dearth makes drillers good bet
Publish Date: Sunday,18 March, 2007, at 08:49 AM Doha Time


Chicago/oslo: The professionals most familiar with the so-called oil shortage know there is an estimated 3tn barrels under land and sea. That is why they are making their biggest bets in drilling rigs where the scarcity is no illusion.
Oil drillers are the most attractive way to go, said Don Hodges, who holds about 160,000 shares of Transocean Inc and about 120,000 shares of GlobalSantaFe Corp among the $1.1bn managed by Dallas-based Hodges Capital Management. There is a shortage, it takes time to build one and it takes a lot of money.

Their earnings are going to go up every year for the foreseeable future.
Orders for offshore rigs have surged sixfold in the past five years, and rental rates are at the highest ever after oil prices tripled and industry profits soared. The wait for the most sophisticated rigs, which can drill in waters more than a mile deep, is a record three years, and the cost to lease one has quadrupled since 2004, climbing to more than $500,000 a day.

Its a big problem, Ashley Heppenstall, chief executive officer of Stockholm-based oil producer Lundin Petroleum AB, said in an interview. There has been a gross underinvestment in the industry for a number of years and we paid for that last year. We had delays in some of our drilling campaigns.
Lundin plans to sink wells this year in Norway, Russia and Sudan, and has permits to explore in Vietnam, Ethiopia and Congo.

ExxonMobil Corp, BP and the rest of the largest oil producers are being forced to pay more to get the rigs they need to meet the worlds ever-rising energy demand.
With crude prices above $50 for most of the past two years, investors from Boone Pickens to billionaire John Fredriksen, who controls the worlds largest oil tanker company, are betting on drilling companies to outperform producers.

We think drilling companies are going to stay very busy, hedge fund manager Pickens, who is sticking to his prediction that oil prices will reach $70 a barrel this year, said in an interview Qatar last month. The situation for drillers is very positive for profitability, he said.

The rise in rig costs contributed to the five-year jump in oil prices by driving up production costs, hindering the discovery of new deposits and slowing the development of existing finds. There is some 3.02tn barrels of crude oil left under the ground, according to the US Geological Survey.
The oil left underground in the US alone is enough to replace every barrel pumped from Iran for the next 20 years, according to statistics compiled by London-based BP, Europes second-biggest oil company.

A new deepwater rig that is capable of drilling in waters 7,500ft or more costs $525mn to $625mn to build, up from $300mn to $400mn during the late 1990s, according to the Dallas-based analyst.
The shares of drillers are poised to replace oil and gas producers as the industry leaders, Hodges said. The Standard & Poors 500 Oil & Gas Drilling Index, which includes Transocean, Noble Corp and Dallas-based Ensco International Inc, is little changed in the past year.

A measure grouping producers such as ExxonMobil and Chevron Corp, the Standard & Poors 500 Integrated Oil & Gas Index, jumped 22% in that time. The losers are smaller companies that sink wildcat wells in hopes of finding a gusher.
Desire Petroleum, a UK-based oil explorer with a permit to drill offshore the Falkland Islands near Argentina, has sought a rig since early 2005. The firm lost 1.68mn ($3.3mn) in its most recent six-month period.

The rigs most in demand are known as drillships and semisubmersibles, equipment used in deep waters.
The battle for rigs has intensified as oil producers boost exploration in the Gulf of Mexico, West Africa and Brazil. The number of offshore rigs in West Africa has increased to 56 from 44 a year ago, according to industry analyst ODS-Petrodata.
In Asia and Australia, the number rose to 86 from 79. It takes three years from when you order a rig until it is delivered, and we haven't seen this before, said Martin Huseby Karlsen, an analyst with DnB NOR Markets in Oslo.

Lease rates have soared to a record. Seadrill Ltd, the Norwegian driller founded by Fredriksen, in January said it rented out a rig for an unprecedented $525,000 a day. Contracts in early 2004 were signed for about $125,000 a day.
Theres a fight for resources in the entire industry, not only rigs, Norsk Hydro chief executive officer Eivind Reiten said in an interview. That;s putting pressure on costs, and may challenge the progress of some of the projects, but my company, Hydro, is fortunate in being well positioned there.
Oslo-based Hydro is Norways second-largest oil company.

The number of offshore drilling rigs on order at shipyards, a measure of demand, has jumped to 115 from 18 five years ago, according to ODS-Petrodata. With few rigs yet delivered, the number of offshore rigs operating worldwide is little changed in the past five years, at 657.
Transoceans net income last year was $1.39bn, up from $19.2mn in 2003. The stock more than tripled during that time. Nobles net income jumped to $732mn in 2006 from $166.4mn in 2003.
Shares of the Sugar Land, Texas-based company doubled.
The retreat in oil prices from the record $78.40 a barrel in July poses no threat to exploration, said Alf Thorkildsen, chief financial officer for Seadrill Management AS, the Stavanger, Norway-based operating arm of Seadrill. Were not concerned with oil prices at around $50, said Thorkildsen. If they go below $30, thats another issue.

Seadrill is looking at buying competitors to get rigs and workers now and avoid the three-year wait. The biggest acquisition in the industry last year was when Fredriksen bought Norways Smedvig for $2.4bn.
Seadrill, based in Hamilton, Bermuda, beat out Noble and became the industrys sixth-largest following the purchase. Fredriksen declined to comment for this story.
GlobalSantaFe, the worlds second-biggest offshore driller by sales, with 61 offshore rigs, would be a perfect fit for Seadrill, because of its premium drilling fleet and high- quality management team, said Alan Laws, an analyst at Merrill Lynch & Co in New York.

While oil and gas prices rise and fall, rig owners can lock in years of revenue with long-term leases. Houston-based Transocean on February 14 estimated its so-called contract backlog, or revenue expected from existing agreements, was almost $21bn for the next nine years.
Shares of rig companies are also cheaper than oil companies including ExxonMobil. Transocean trades at more than 10 times expected earnings, while Noble, the third-largest US offshore oil and gas driller, is at 8.1 times.
Irving, Texas-based ExxonMobil trades at more than 12 times expected profit. BP Capital, the Dallas hedge fund managed by Pickens, boosted stakes in oilfield services stocks including Transocean and GlobalSantaFe in the fourth quarter, according to a filing with the US Securities and Exchange Commission.
Two of the five biggest holdings in the fourth quarter at Touradji Capital Management, a hedge fund firm founded by Paul Touradji, a former commodities trader at Julian Robertsons Tiger Management, were Diamond Offshore Drilling, an oil driller controlled by the Tisch family, and Hercules Offshore. Both of the rig owners are based in Houston.

Were bullish on offshore drillers, said Maxime Carmignac, who counts Noble, GlobalSantaFe and Transocean among the $13bn in assets she helps oversee at Carmignac Gestion in Paris. Offshore drillers are cheap, undervalued and less volatile than producers and the commodities themselves, oil and gas. They are sitting on a huge amount of cash flow and may benefit from merger and acquisition activity.

Expectations are so high the risks from falling short are mounting. Baker Hughes on February 15 said profit rose less than predicted in the fourth quarter and will trail behind estimates in the current quarter on slowing sales growth in North America. The Houston companys shares that day sank 9.4%, their biggest drop since 2001. Bloomberg

http://www.economist.com/world/la/displaystory.cfm?story_id=8972511

Argentina and the Falklands

Their island story
Apr 4th 2007 | BUENOS AIRES
From The Economist print edition

Looks like you are on your own on this one marky.
I can see no reason why anyone should spend their hard earned readies here. It's a cash and hope job.

Coeliac

You either believe there is oil there in vast amounts or you dont, if you read the latest research note from Cornhill then am quiet happy sitting here waiting for a rig to become available and drilling to commence.

Rigs are slowly freeing up and its only a matter of time and time I have its just a bit frustrating all this waiting.

http://news.bbc.co.uk/1/hi/business/6571431.stm

Snips long article

If you believe the oil men, the inhabitants of the Falkland Islands could soon become among the richest people in the world.

In the year in which the islands commemorate the 25th anniversary of Argentina's invasion, a handful of exploration firms believe they are on the verge of striking it big.

Later this year, they hope to begin drilling in the South Atlantic ocean bed surrounding the Falklands to prove once and for all that the region is rich in oil reserves.

Striking oil would no doubt transform the small and remote British territory, which currently relies on fishing and sheep rearing for most of its income.

If successful, the island's population of about 2,800 would be propelled into the major league of oil producing nations.

"It could make the Falkland Islanders the richest people in the world per head of capita, much more so than in places like Dubai," says Colin Phipps, chairman of oil exploration firm Desire Petroleum.

But while the islanders are taking a keen interest, they've heard it all before.
........

"We could be looking at 5 to 6 billion barrels of reachable oil, with a potential value of $50bn (25bn)," says Desire Petroleum's Mr Phipps.

"That would have the most incredible effect on the Falklands economy. It would also have a huge effect on UK Plc, especially with North Sea oil declining."

A respected oil industry expert and former UK politician, Mr Phipps stresses that the islands potential oil wealth has yet to be seen.

But he is keen to get on with the job.

"Desire is the closest to drilling. If we could get a rig we would drill tomorrow."

......

Phil Richards, of the British Geological Survey, estimates that there is a one in five chance of finding commercially viable oil in the basin north of the Falklands, falling to a one in 10 chance in the south.

From the "UPS" thread .............Analysis selection for DES

DES price 26.50p

About 5 times the usual last Friday with large trades at the end of day

Bouncing from long retracement on what seems a double bottom and Indicators on the rise from oversold

Expectations of a deal for a rig soon in the South Atlactic Falkland Basin, is allways on the investors minds after a long wait

Seismic work completed in the basin were is believed to hold in excess of 2 billion barrels of oil in place it holds 5 tranches in the area

http://business.timesonline.co.uk/tol/business/markets/article1695921.ece

Rockhopper Exploration was ahead 1p to 43p and Desire Petroleum gained 1p at 28p amid fresh talk about that Woodside Petroleum, of Australia, could invest in a deal to explore their prospects in the Falkland Islands.

HA HA!!!

Taken from finals today

Consortia and farm-out agreements

In addition to holding licences on its own account, the Group is a member of
consortia. As explained below, the Group's proportionate share of the consortia
costs are included in intangible fixed assets. During the year, the Group
continued a farm-out agreement with a third party in respect of certain
licences. The Groups proportionate share of the costs is included in intangible
fixed assets

Rockhoppers cann't fly and cann't run very quick.

great input off you Chav

DES are never going to drill before the rest are ready in the area.To do so would be bad economics as the cost of getting a rig to the F.I.,s and back is prohibitive and would reduce considerably the amount of money available per holes drilled.Sharing the rig cost with the rest would mean that DES could afford to drill an extra hole maybe or not have to drill one less.This would still be true if DES,RKH + another jointly funded the DES trances.I would rather they waited and utilized the available funds to best advantage.

Des are experts at waiting Chav, so no problem there.

Unlike BLR etc DES have the possibility of a very large pot of gold at the end of the rainbow rather than a piece of lead!!