From the EXPRESS - Saturday November 24,2012

DES

FALKLANDS OIL BOOST FOR BRITISH EXPLORER

Desire is sitting on 2.54billion barrels of oil, according to the best-case estimate

PROSPECTS for the Falkland Islands oil and gas industry were boosted ­yesterday by a report showing the reserves of exploration company Desire Petroleum were bigger than previously estimated.

The findings are the latest to show that potentially commercial reserves lie below the South Atlantic.

Drilling by British companies has raised the prospect of a possible oil boom in the islands, causing anger in Argentina 30 years after its invasion was repelled.

A technical report said that the Sea Lion field in the North Falklands Basin, in which Desire has a 4 per cent stake, had an 80 per cent chance of commercial success, while that of its Liz prospect was estimated at 25 per cent.

The review by consultants Senergy Oil & Gas follows drilling by Desire and rival Rockhopper, which owns the majority of Sea Lion, as well as 3D ­seismic mapping.

Senergy’s “best case” is that Desire has 2.45billion barrels of oil and ­274billion cubic feet of gas available.

Desire chairman Stephen Phipps said that its licences had “excellent remaining exploration potential”.

Drilling by British companies has raised the prospect of a possible oil boom in the islands

The firm is now seeking a ­mainstream oil producer to come in as a partner to help fund further drilling.

The shares were unchanged at 20¼p as analysts cautioned that the study showed a higher proportion of gas at Liz than previously thought. Mike van Dulken at Accendo Markets said: “Remember that the Falklands remains politically sensitive on account of the continued Argentine versus UK claim over the disputed islands and their potentially hydrocarbon-rich waters.

“It is oil and not gas that explorers really want to find due to the difficulty in transporting gas back to the mainland and politics scuppering development of a terminal for liquefied natural gas (LNG) anywhere near.”

Broker Peel Hunt has a 70p target on the shares and said the findings increased the likelihood of Desire attracting partners, though it was unlikely the discovery would be ­developed in the short term.

Rockhopper this year forged an ­alliance with FTSE 250 group Premier Oil as they seek to begin commercial production as early as 2017, while Falkland Oil & Gas has struck deals with Noble Energy of Texas and Edison International of Europe.

Falklands-oil-boost-for-British-explorer

Was a KEEP an EYE last week .............

From the TIMES - Sunday 25th November 2012

BHR - Beacon Hill Resources continued to rally sharply as the market belatedly cottoned on that Renaissance Capital, the Russian investment bank, was not about to dump its near 34% stake. The miner of coal in Mozambique jumped another 14.3% to 4p. Sentiment towards Beacon Hill, like other coalminers, has been lent a further fillip by hungry Chinese demand for the fuel.

Good morning traders!

In the US Friday, the Dow rose 173 points at 13,010, the Nasdaq added 40 points at 2,967
and the S&P500 gained 18 points at 1,409.

In Asia today, the Nikkei was recently up 51 points at 9,418 and the Hang Seng off 70
points at 21,844.

WTI crude oil traded at $87.97 a barrel and Brent crude at $111.38.

Gold settled at $1,751 an ounce.

Happy Monday!

G.

End-of-day Market Overview