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

hlyeo98 you must be a little slow as that was a very old report ....Your making your self sound a proper plonker...grow up!!

Tim Heeley
Head of Oil and Gas (Equity Research)
18th August 2008

Desire has just announced the conclusion of its farm in deal which it preliminarily announced way back in Q1.

Arcadia has been confirmed as the farm in partner. Arcadia is a private company which is partly controlled by John Fredriksen, a Norwegian/Cypriot shipping magnet, which in turn controls Smedvig and Seadrill drilling contracts and rig owners respectively.


The details of the deal are:


Tranche C Ann Prospect


Arcadia will drill and test Ann Pay 85% for 35% Interest. Rockhopper will have to pay 15% to get 7.5% interest in the licence.

Desire retain 57.5% interest have no costs and retain operatorship


As a negative, we note no definite drilling plans have been announced nor any time schedules. We also note a 50% COS is very high, and a more expected figure in a frontier basin would be around 15-20%. Either way, a well has to be drilled to confirm the presence of hydrocarbons and in a sense the COS is effectively an academic exercise to internally target prospects.


However this is a very good deal for Desire, less so for Rockhopper however as they will have to pay for 15% of the well, as such, we feel Rockhopper will almost certainly have to raise further capital or farm this prospect down themselves.


Tranche I Alpha Prospect


Arcadia is to pay 100% for a 50% stake in on this prospect. The target structure lies across 100% Desire Acreage and as such unitisation means Desire holds a 30% interest. Of the new awarded blocks Arcadia holds 80% and Deisre 20%.


In addition Desire has indicated that the Alpha prospect is most likely a gas prospect and as such we feel the economics will be much more marginal than an oil prospect given the remoteness of the islands and size of discovery required to justify the expense of gas infrastructure.


In addition Desire is to drill 2 wells on its own account including inter basin Mob/Demob, whilst the current cash of 21mn maybe just about sufficient to drill the two wells we feel that with costs associated with full drilling preparation and a thought for continued operations then further capital will have to be raised.

Price Review


Still cannot attach firm values and using Estimated Monetary Value (EMV) techniques is not appropriate, principally due to small companies not having the ability to add value across their entire asset bases in a timely or cost effective manner.


Without doubt this is an excellent deal from Desires perspective, Arcadia has connections to excellent O&G resources, so much so that we are amazed that it has not demanded operatorship. Even with this excellent deal we feel Desire is still a little bit over priced and note there is no more real event driven news until we get a date for drilling, as such we change our recommendation to HOLD and change our price to 60p based on the zero cost nature of the farm out but being fully aware that cash is still to be spent on the 2 Desire wells, clearly the next piece of news has to be a drilling date, but experience has shown this could be a considerable period.


For Rockhopper this is also positive news as it means they will be involved in a well if they of course exercise the option, although it will reduce its already low cash reserves. We await further news on its own acreage, and its intention to fulfill the farm in to Desires acreage. We change our recommendation to Hold and a 50p target.


Positive development, good partner with limited E&P experience but the right connections. Critically, we await definitive news on an indented drilling schedule.


Rockhopper (RKH.L) HOLD 50p (from SELL 40p)

Desire (DES.L) HOLD 60p (from Sell 40p)

--------------------------------------------------------------------------------

Tim Heeley
Head of Oil and Gas (Equity Research)

Daniel Stewart & Company Plc
Becket House, 36 Old Jewry, London EC2R 8DD

direct dial: +44(0)20 7776 6933
mobile: +44(0)7956 525433
email: tim.heeley@danielstewart.co.uk

26th August

Rockhopper Exploration - HOLD Price: 88.75p Target price: 50p Code: RKH.L Analyst: Tim Heeley | 020 7776 6933


Operations Update
Announcement of revised basin model and interpretation of new 3D data. The company states larger basins and also gas prospects within licensed area and is also looking to secure a 6 well slot in the North Falkland basin with Arcadia and Desire.
The company, furthermore, has stated its intention to drill 2 wells on its own account, plus the additional 2 wells it will farm into for 15% for a 7.5% stake in the Desire acreage.
Of note, to drill the Desire interest wells plus 2 of its own, we estimate Rockhopper could incur costs in the region of $25m (based on 30 day wells and $350k/day rates) and as such a further fund raise is required ahead of drilling.
Without a firm drilling announcement there is no more value driving news flow for Rockhopper, or indeed Desire, and as such maintain our hold recommendation.

Don't believe any of this then. SP crashing.

u plonker!!!open yr eyes and tell me what stock market is not crashing.grow up!!

ignore him marky.......he does this with most shares......apart from rift, rbs etc which he bought recently.......123p for rbs and it went to 90p by end of day!! no, not month or year but in a day.

AGREE markymar what stock market is not crashing!! And yes He Is a total one ; ))

Seems like you have a fan club hlyeo98. It's not just me then.

Once upon a time in a place overrun with monkeys, a man appeared and announced to the villagers that he would buy monkeys for $10 each. The villagers, seeing that there were many monkeys around, went out to the forest, and started catching them.

The man bought thousands at $10 and as supply started to diminish, they became harder to catch, so the villagers stopped their effort.

The man then announced that he would now pay $20 for each one. This renewed the efforts of the villagers and they started catching monkeys again. But soon the supply diminished even further and they were ever harder to catch, so people started going back to their farms and forgot about monkey catching.

The man increased his price to $25 each and the supply of monkeys became so sparse that it was an effort to even see a monkey, much less catch one.

The man now announced that he would buy monkeys for $50! However, since he had to go to the city on some business, his assistant would now buy on his behalf.

While the man was away the assistant told the villagers. 'Look at all these monkeys in the big cage that the man has bought. I will sell them to you at $35 each and when the man returns from the city, you can sell them to him for $50 each.'

The villagers rounded up all their savings and bought all the monkeys.

They never saw the man nor his assistant again and once again there were monkeys everywhere.

Now you have a better understanding of how the stock market works.

When I started reading about monkeys markymar I thought we were going to get a tale about hlyeo98.

: )) me to

lol......hilarious queen......chin up smiler me old chap.......keep up your posts as they are usualy informative

It's sometime good being realistic. Sorry if I offend you guys but I certainly see this falling in the long term.

Time will tell.

In the long term??? Why?
Short to medium term I agree, but a couple of years down the line when they are up & running all of these explorers should be either producing or out of business due to uncommercial reserves.

Out of business - that's is even worse.

oil prices are falling and likely to continue to fall - where is the incentive to go to the back of nowhere?

Depends on commercial quantities of oil (and whether the Argentines kick off again maybe!).

The 10 year chart shows if one has bought recently, one may not see his investment capital back for many, many years.

maddoctor oil is going to stay at round about this price so dont fool yourself.

Opec to cut supply if oil stays below $90

By Upstream staff


Opec may need to consider cutting oil output if the price of crude remains below $90, Iraqi Oil Minister Hussain al-Shahristani said today.


"It has been a source of concern since the price has fallen since June and July," he said on the sidelines of an energy conference in the Turkish coastal city Antalya to Reuters.

"We are now looking at the market and if there are any future declines below $90 we will need to consider taking action," the minister said.

Oil fell by more than $4 to a 10-month low today as expectations mounted the international financial crisis would have a major impact on demand for fuel, but later pared some of its losses.

Fellow Opec members Libya and Iran have also expressed concerns this week about the impact of the worsening global crisis on the oil market.

Opec decided at a meeting in Vienna in September to comply strictly with its formal output target, a move officials said would result in the group trimming supply by about 500,000 barrels per day.

Opecs next scheduled conference is on 17 December in Algeria.

http://www.upstreamonline.com/live/article164466.ece

HARRYCAT

Argentina cant even drill what they have on the own land as they have no money the country is nearly bankrupt,you walk down a street in Argentian and you get mugged,,,They lost once and they dont have the money or the balls to do anything but make threats so its a no no there.

the price of oil is set in Chicago !!!!

not by the t*ssers in Opec

I'm all in favor of keeping dangerous weapons out of the hands of children.

Let's start with hlyeo98 keyboard.

I've seen people like you before hlyeo - but I had to pay an admission...