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

Chav last time they had a site survey they were drilling within 6 months of it been done.

I hope you are right since I got back in last week,but I have my doubt's.

http://www.earthtimes.org/articles/show/72626.html

Prospect of oil wealth could transform Falkland economy
Posted on : 2007-06-14 | Author : DPA
News Category : UK


London - The days when wool from its considerable sheep population was the mainstay of the economy of the Falkland Islands could soon be over as oil richess beckons for the remote islands' population, according to experts in London.

As Britain, and the Falkland Islands, commemorate the 25th anniversary of the "liberation" of the islands, oil exploration firms believe they could be on the verge of striking lucky.

Britain, which stopped economic aid to the Falklands in 1992, says the islands are now self-sufficient in all areas except defence.

Maintaining a British military presence on the Falkland Islands has cost British taxpayers more than 600 million pounds (1.19 billion dollars) since 2001, according to official figures.

With a population of only 4,000, the potential royalties could propel the Falkland Islanders to the top of the world's rich list in terms of per capita income.

Experimental drilling in 1998 tested six wells across an area half the size of Texas to the north of the islands, and brought positive results from five.

Overall both oil and gas were brought to the surface but not in commercial quantities.

Later this year, the oilmen 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.

"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.

The area where today's prospectors believe oil lies is vast - roughly equivalent to the central North Sea oil fields.

"We could be looking at 5 to 6 billion barrels of reachable oil, with a potential value of 25 billion pounds, Phipps told the BBC.

That would have the "most incredible" effect on the Falklands economy, as well as on Britain, where North Sea oil production is in decline, he said.

But Phipps stressed that the islands' potential oil wealth has yet to be fully proven.

Among Falkland Islanders, excitement is mixed with circumspection.

"I'm cautiously optimistic, in 10 years time we could well see production," Phyl Rendell, the Falkland government's director of minerals and agriculture, said recently.

"It would guarantee us economic security. Genuine Falklanders who have got kids here want a sustainable economy."

The Falkland Islands economy has been growing strongly since the conflict with Argentina in 1982, with the annual gross domestic product expanding from five million pounds before the war to more than 75 million pounds today.

The island's government has been careful not to begin planning how the money would be spent should the oil dollars flow.

"It's difficult to predict the wealth that would come from oil," said Rendell.

Oil wealth would enable the Falkland Islands to achieve one long-term goal - to cover the costs for Britain's military presence on the islands.

But getting at the Falklands' hidden crude oil remains a major challenge, the experts admit, with "interference" from Argentina a certain prospect.

Since when has Des been an oil exploration company?

Falkland Island Operations and Licences
Operations

Tullow holds a 22.5% interest in seven offshore production licences covering approximately 14,500 sq km to the south and east of the Falkland Islands in a joint venture with Falklands Oil and Gas Limited (FOGL).

2D seismic data acquired over the licences during 2005 has indicated a large and diverse prospect inventory and identified numerous leads. During the first half of 2007, an additional 5,000km of 2D seismic and a sea-bed logging survey (CSEM) are being acquired to high-grade prospects within the portfolio.

The joint venture parties successfully negotiated a two year extension to the licences as a result of which Phase I of the licence now runs until December 2007 and Phase II will run (subject to a drilling commitment) from December 2007 until December 2010.

Licences
Licence Area
Sq Km Tullow
Interest Operator Other Partners
PL 10 (A & B) 2,500 22.50% Falkland O & G
PL 11 4,860 22.50% Falkland O & G
PL 12 2,021 22.50% Falkland O & G
PL 13 (A & B) 198 22.50% Falkland O & G
PL 14 (A & B) 1,993 22.50% Falkland O & G
PL 15 (A & B) 1,402 22.50% Falkland O & G
PL 16 1,537 22.50% Falkland O & G


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Now if only DES could attract someone like Tullow.

Desire Petroleum "hold"

Tuesday, June 19, 2007 7:13:11 AM ET
Seymour Pierce

LONDON, June 19 (newratings.com) - Analysts at Seymour Pierce maintain their "hold" rating on Desire Petroleum (ticker: EYX).

In a research note published this morning, the analysts mention that the company has announced that the majority of seismic site survey data across its Ann prospect in the North Falkland Basin has been taken over by Wavefield InSeis ASA. Desire Petroleum expects the Ann prospect to have recoverable reserves of 259mmbbls based on a 30% recovery factor

Presumably the half year results will show a reduction in cash as a result of the spending on environment assessments and the 2D seismic survey, and a reduction in interest income as a result. Then there is the further slide in the US$ offset only by a rise in interest rates. It will be interesting to see if interest income will continue to cover normal costs.

The numbers will not look fantastic.

I see the SP (up 16%) is reacting to FOGL's potential farm-in announcement.

Falklands Oil in deal talks
Companies: FOGL
23/07/2007
Resource prospector Falklands Oil & Gas (FOGL) is in 'advanced discussions' about bringing a 'major resources company' into its projects.

AIM-quoted FOGL, where RAB Capital has a hefty stake, has been prompted by a 52 per cent share price surge to disclose to today's well-regulated market that it is in talks which 'may or may not' lead to one of the big sector players farming in to 'certain of its assets'. Tim Bushell, chief executive, recently reported encouraging seismic survey results from the company's prospects in the South and East Falkland Basins and these seem to have kindled interest in potentially useful quarters.

Shares in FOGL, commended as a possibly advantageous 'gamble' by Growth Company Investor at 99p two years ago and at 113.5p last year, have jumped 42.5p today to 123p, valuing the company at nearly 113 million. That is more than the 99.5p and 113.5p at which Growth Company Investor highlighted their speculative possibilities in 2005 and 2006 respectively, but below their 178p peak in February last year.

Meanwhile, Falkand Island Holdings, with 16.3 per cent of FOGL, has gained 80p to 385p, still around 1 off last year's high. Global Petroleum, with a 14 per cent FOGL stake, is 1.75p up at 9.25p.

FOGL and its backers have distinct speculative appeal as long as the current talks hook a big fish.

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


BUY
CONFIRMED

Pierre Jungels commented:

"The data we have available to us is extremely encouraging and further reduces
our exploration risk in the North Falkland basin. The target sizes in licences
PL023 and PL024 provide confidence in the potential upside should any discovery
be made in the area and with the rig market easing, our work will now focus on
selecting the best targets for drilling.

Oil has already been recovered on licences PL032 and PL033 so the fact that we
can see structural closures and possible fans on our 3D seismic in this area is
highly significant and increases our confidence in the prospectivity of the
acreage.

With the rig market easing does anybody have a idea of how Desire is doing re securing a rig?

http://www.oilbarrel.com/news/article.html?body=1&key=oilbarrel_en:1185847528&feed=oilbarrel

31.07.2007
Rockhopper Encouraged By Latest Technical Work On Its Falkland Acreage While FOGL Excites With News Of Possible Farm-In
Things may, at last, be starting to heat up down in the Falkland Islands. After a year of not-much-happening (a couple of years back there were hopes wells would have been sunk by now), there are signs that the Falkland Island explorers are making slow but definite progress on putting together a drilling programme in these remote waters of the southern Atlantic.

Rockhopper Exploration, which focuses on the North Falkland Basin where it has interests in six licences, attracted a flurry of investor attention last week when it provided new resource estimates for the eleven best prospects in licences PL023 and PL024, suggesting total unrisked P50 recoverable reserves of 2.5 billion barrels. Shares in the AIM company, which is named after the local penguin colonies, jumped 5.5p to 52.5p after the release of the new numbers.

These licences lie close to the Falkland Islands and in relatively shallow water depths (less than 200 metres), reducing the minimum economic threshold for discoveries to 35 to 50 million barrels of recoverable oil. The company believes that the net present value of a single 100 million barrel recoverable oil field would be between US$750 million and US$1 billion.

The prospects, named after local place names, carry unrisked P50 recoverable estimates that range from 44 million barrels on the Concordia structure to 580 million barrels in the Keppel prospect. None of the eleven include the stratigraphic leads, which can be difficult to identify on seismic data and will require further data acquisition to mature to prospect status.

The most attractive of the eleven prospects is reckoned to be Ernest, with a P50 estimate of 130 million barrels. Ernest is a four-way closure that has been derisked by matching the 3D data with a CSEM anomaly: it carries a 40 per cent chance of success.

The company has also reviewed the 800 sq km of 3D data acquired over licences PL032 and PL033 to the north. These are ex-Shell licences that yielded live oil back in 1998 when the first and last wells were drilled in the North Falkland Basin (only six in total for an area half the size of Texas). The 3D shoot included a 30 km stretch of the previously untested eastern margin of the basin. This is significant because Rockhoppers geological model is based on the assumption that oil in the basin migrated to the basin margins, thereby explaining why the 1998 drilling campaign proved disappointing: all six of the 1998 wells focused on the centre of the basin where a regional seal is believed to have prevented the upward migration of oil.

Preliminary interpretation of the new 3D data is promising, revealing a number of structural closures and two large fan bodies. Oil has already been recovered on licences PL032 and PL033 so the fact that we can see structural closures and possible fans on our 3D seismic in this area is highly significant and increases our confidence in the prospectivity of the acreage, said chairman Pierre Jungels.

All of this, of course, remains purely speculative until tested by the drillbit. The companies exploring these waters need to either pool resources to secure rig time or bring in farm-in partners with the deep pockets to finance these kinds of wildcatting projects. There are signs that the tight rig market is easing somewhat but it is still going to be expensive to drill in these remote waters.

The partners are doing what they can to inch towards drilling, collecting data in order to de-risk their prospect inventories and taking the necessary logistical steps to have drill-ready projects. Millions of dollars have been spent on 2D, 3D and CSEM surveys. Desire Petroleum, which like Rockhopper is active in the North Falkland Basin, has been stockpiling drilling equipment and is in the process of conducting a high res 2D seismic site survey over its Ann, Dawn and Ruth prospects in order to identify any potential hazards that could affect the surface location of the wellbore.

And both Desire and Rockhopper are conducting Environmental Impact Assessments over their licences. A successfully completed EIA also enhances the marketability of the acreage to prospective farm-in partners. The more work done to de-risk the acreage and present a drill-ready portfolio of prospects the more value the AIM players will be able to extract during farm-in negotiations.

No deals have yet been struck but last week investors got the first real signal that a major oil company may be getting reading to join the AIM explorers. Falkland Oil & Gas Limited, which is focused on the virgin waters to the south and east of the islands, confirmed it is in advanced discussions which may or may not lead to a major resources company farming in to certain of its assets.

This is big news. FOGL opened its data room well over a year ago but despite reports of interest from all the usual suspects, a deal has been slow to materialize (not least because of the vast amounts of data to digest by risk-averse oil majors). Shares in AIM-quoted FOGL shot up by 42 pence to 123 pence on news of the talks, taking its share price up 55 per cent week-on-week. The shares have since eased back to 114 pence but are still more than 30 pence higher than in early June. Investors will be keen for those advanced discussions to firm into a concrete deal that brings the prospect of drilling a very real step closer.

Interesting that DES sp hasn't moved up in line with RKH & FOGL, even though they hold a plot in the middle of RKH territory.

LONDON (Thomson Financial) - Australia-based Global Petroleum Ltd said in its quarterly report that it is currently engaged in reviewing the study on Pomboo-1 blocks L5 and L7 in offshore Kenya to determine their remaining potential. The company had earlier reported unsuccessful drilling at its Pomboo-1 well.

It also said processing of data of Falkland Oil and Gas Ltd -- in which it holds 14 pct -- has commenced. The results of two surveys will be integrated with existing work to produce a short list of the best prospects for drilling, set to start in 2008

Falkland Islands upstream sector: Consolidation likely within the next year, sources say
By Oliver Adelman in London

Published: July 31 2007 15:01 | Last updated: July 31 2007 15:01


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Consolidation among the four major players in the upstream oil and gas exploration sector in the South Atlantic off of the Falkland Islands is likely in the short-term, said industry participants.

The four main players in the region presently are Desire Petroleum, Rockhopper Exploration (GBP 40m/EUR 59.5m market cap), Borders and Southern Petroleum and Falklands Oil and Gas Limited [FOGL].

Two industry sources said that all these companies were unlikely to be able to finance exploration work far into the drilling stage without significant external funding. Sales of equity stakes in certain assets was one option; issuing new shares was another, the sources said.

However, given the amount of money needed to finance large-scale exploration leading to production, some form of consolidation among these four juniors was virtually inevitable, said the sources.

I think it will be interesting to see how the situation develops for the smaller exploration firms operating out of the Falkland Islands. Everyone in the industry wants them to succeed as they see them as the last great pioneers working the unknown, said one industry source.

FOGL announced to the London Stock Exchange earlier this week that it was in sales talks with a resources major regarding the sale of an equity stake of one of its assets in the region.

A source close to the company said that he believed this particular sale did not involve a wider sale of the company, and that he was unaware of any consolidation talks taking place at this time. However, the source did say that the economics of the situation made some kind of long-term consolidation among the four logical.

A source within Rockhopper said the company was unable to proceed to the drilling phase without additional financing, but that it had not held any consolidation talks itself. Spokespersons for Borders and Southern and Desire Petroleum both did not return telephone calls seeking comment.

One of the industry sources said the four would be in trouble if there was not some form of consolidation. They are small companies and all running out of cash, some form of consolidation is inevitable, the source said, adding this consolidation would likely start within the next six months. The individual also suggested that BHP Billiton, Royal Dutch Shell, Hydro and ConocoPhillips were all potential acquirers in the region.

A spokesperson for BHP Billiton said that the company never commented on market speculation.

Of Interest

Desire Petroleum Plc has announced that it has applied for 539,679 new ordinary shares in the
Company to be admitted to trading on the Alternative Investment Market. Shares should be
admitted on Friday, 10 August 2007. The press release goes on to say that following the
exercise of these options, Desire has 223,556,022 ordinary shares in issue with an equivalent
number of voting rights.

Hi all
New war ship HMS Cyde just launched to patrol the Falklands
for the next 5 years. Hopefully with the new protection in place
we will see some positive news emerge from all the oil companies
active in the area.

http://news.bbc.co.uk/1/hi/england/hampshire/6955386.stm

regards Hustler

Heard that good news on the way from the Falklands, so get in quick before the RNS.