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

Byron marine are manning a stand this week at an exhibition in Southampton aimed at Offshore Survey work..NOCS Expo..

Personally would like to see 33p.

http://www.bgs.ac.uk/falklands-oil/download/news.pdf

Falkland Islands Government
Department of Mineral Resources

Newsletter April 2009

Bollinger Bands

DES.L has closed above the upper band by 0.7%. If the price is in a uptrend; then this upward trend has a good chance to continue. above the upper band by 0.7%. If price is in a uptrend band; this upward trend in price might continue. However a short term pullback inside the band is likely.Bollinger Bands are 56% narrower than normal. The narrow width of the bands suggests low volatility as compared to DES.L's normal range. The bands have been in this narrow range for 3 bars.

More volume today!!

Bollinger Bands

DES.L has closed above the upper band by 14.4%. If the price is in a uptrend; then this upward trend has a good chance to continue. above the upper band by 14.4%. If price is in a uptrend band; this upward trend in price might continue. However a short term pullback inside the band is likely.Bollinger Bands are 45.7% narrower than normal. The narrow width of the bands suggests low volatility as compared to DES.L's normal range. The bands have been in this narrow range for 10 bars.

RKH is the yellow line and is up 23% Desire in blue will follow and i think she will blow today with news of results soon and the AGM coming up soon and maybe the long awaited news of we have a rig.

Both of them are showing good volume and plenty of buys.

she has blown!!!!! 17% up

http://www.byronmarine.co.fk/index_files/Page488.htm

Offshore hydrocarbon exploration will yield for the Falkland Islands, new and exciting business opportunities. Bryon Marine is desirous of cutting its business future on that anticipated exploration activity. We would be pleased to offer you our services and work with you.

well done marky.

Bollinger Bands

DES.L has closed above the upper band by 20.2%. If the price is in a uptrend; then this upward trend has a good chance to continue. above the upper band by 20.2%. If price is in a uptrend band; this upward trend in price might continue. However a short term pullback inside the band is likely.Bollinger Bands are 0.3% narrower than normal.

Next Resistance is 43p and i think we will test this today,there is plenty of volume with good strong buys coming through....am sure we will try to get passed 43p a few times today and it will fall back but 50p next stop today!!!! i hope!!!

From Jac on iii who i respect as a poster.

Spoke to Ben Romney 10 mins ago and asked him about the recent mini price rise and whether it was significant with regards to next week and a rig etc etc.
He said we will be given a full overview with regards to the rig situation but obviously could not go into specifics now but that retail investors would have a full picture of what was happenning(whatever that means!)
I asked him talks were still ongoing and he said that they were but that we would be fully enlightened on wednesday to what the position is and what is going to happen!
Good luck everyone!

news will be a relief tomorrow afternoon for many old timers....including you dit...wherever you are.

Preliminary Results

http://moneyam.uk-wire.com/cgi-bin/articles/200904220700119388Q.html

MoneyAM
"North Falkland Basin-focused oil explorer Desire Petroleum posts a pre-tax loss of $1.8m after a "frustrating year".

Results for the year to the end of December show the loss increasing from $0.6m in 2007 with the firm having cash in hand of around $40m.

Chairman Stephen Phipps said 2008 was an excellent year of progress, building the prospect inventory and attracting a substantial new partner.

But he added: "Frustratingly, we were unable to hire a rig to drill on behalf of us and our partners in the North Falkland Basin.

"Notwithstanding the general unavailability of rigs due to the high utilisation rates and the resulting very high day rates, we were also hampered by the rig owner's demands for long term contract times (typically two to three years), and their reluctance to commit to a rig programme in the remote location that is the North Falkland Basin." "

Desire Petroleum (DES), the oil and gas company focused on the Falkland Islands, said it made a loss of 1.77 million dollars for the year to 31st December 2008 on the back of a 44.6% fall in revenues to 1.14 million dollars for the period. Shares in the company fell 0.5p to 35.25p on the news. The company which agreed a farm-in partnership with Arcadia Petroleum earlier this year said its results were impacted by problems it faced in hiring rigs for its projects in the North Falklands basin. The firm said it has 15 prospects in inventory and 40 million dollars in cash to take advantage of opportunities on the site. Desire Chairman Stephen Phipps said: The biggest challenge facing Desire over the next months is to secure a suitable rig at a suitable price from as close to the North Falkland Basin as possible. The deepening global economic recession is having a noticeable impact on the drilling rig market.Despite the oil price fall the fundamentals of Desire's projects remain unchanged and with our very attractive prospects the economics of any discovery should be exciting. Commenting on the news, Broker Seymour Pierce said: Four top prospects have been selected for drilling first and these have a combined gross reserve potential of a massive 3.3 billion barrels in oil equivalent terms. With the rig market continuing to soften we feel it is increasingly likely that a rig will be secured on acceptable terms and that is when the excitement begins. However, now is the time to buy the shares.

Desire still hunts for rig

http://www.investorschronicle.co.uk/Companies/ByEvent/Results/default/article/20090428/e4caafa2-3011-11de-b6eb-00144f2af8e8/Desire-still-hunts-for-rig.jsp

Created: 28 April 2009 Written by: Martin Li

Having identified four top exploration prospects in the South Falklands Basin, Desire Petroleum chairman Stephen Phipps is disappointed that the company still hasn't been able to secure a drilling rig.

The biggest challenge remains persuading a rig owner to float a platform down to the Falklands at a commercially viable rate, as the remoteness of the Falklands makes it time-consuming and, therefore, expensive to get a platform there. Mr Phipps believes Africa to be the best source and is in discussions with several owners - he remains optimistic as rig demand and rates are falling, while sharing a platform with a fellow Falklands explorer would spread the 'mob/demob' costs. In fact, the sales of interests to Arcadia Petroleum and fellow Falklands explorer Rockhopper Exploration will allow Desire to drill two wells at no cost, while existing cash should be enough to cover the costs of the other two initial wells.

Mr Phipps doesn't think the technical challenges of drilling in the South Falklands are insurmountable, either - water depths are 200 to 400m, against a maximum drill depth of 2,600m, and the climate isn't extreme. However, it might be a different matter if Desire were to make a discovery. A gas find would require pipelines or liquefaction, and could be a major technical challenge, although after several frustrating years this would, at least, be a good problem to have.

From Morani who lives in the Falklands

The following is a personal account of the Desire Petroleum meeting in the Chamber of Commerce FI, Tuesday 5th May. Same caveat applies as before regards unintentional inaccuracies for which I apologise. It was a smaller meeting. Other than locals, including LC, there were a few other oil boffins but no Councillors. Mr Stephen Phipps, and the Chief Executive, Dr Ian Duncan who are attending a week of Falkland Offshore Operators meetings, did the presentation. Really Ian did the presentation with just a few words from Stephen here and there.
The presentation overall, clarified where Desire has got to and what the prospects are (which should help further discussion to this BB). They have farmed out 3 of their 15 prospects to Arcadia. A major gas presence has also been identified as well as oil. They have 4 top prospect sites which are known as Ann, Liz, Dawn and Alpha. Desire currently have $40M in cash but any profit and loss depends entirely on the exchange rate. Their licences are in hand until 2012/13 and they have also bought and own the casing and well heads for 4 wells which they have back in UK. There are about 11,000 Desire shareholders of which approx 200 are in the Falklands. The north Falklands basin is known as a rift basin and rifts are known to be very prolific elsewhere. The 1998 drilling identified a very good type of source rock. They feel they need to drill a minimum of 4 wells to have a decent shot at it and they kept saying there was also significant potential for gas too. They don't expect to have to drill more than 450 m depth and that is quite shallow compared to other places. They would expect to take about 12 days to drill the Alpha well which has the largest gas potential and is in the south. They have Tranches C & D in the north Falklands basin. I then missed a bit but 80% of something (either one of the prospective drillings or the drillings overall) would go to Arcadia and 20% to Desire. Dawn is expected to be the other gas well and that is 100% Desire. 30% of Alpha would go to Desire and 70% to Arcadia. Drilling at 2 of these wells would be at no cost to Desire at all. In 1998, Ann showed good oil prospects as 14/9-1 then. Liz could be expected to yield 600M barrels and I have got that one down as 92.5% and Ann as 57.5% but I am not sure why now-,must have missed another bit, apologies. Think they are hoping for a total of something like 3B barrels.
The big problem is still getting a rig and they are not as readily available as one might expect. They would cost $400,000 per day and as we are so remote, a lot of the cost would be taken up in getting it here and away again - mob and demob as they call it. To get one from the north sea would take 75 days one way, 18 days from Brazil and 35 days from South Africa. That seems the most likely at the moment as they have talked endlessly to Brazil but get no nearer to any agreement. We need the oil prices to stay down to make the availability of a rig more likely and more negotiable although they are starting to get offers. They did say they want to get on with drilling as soon as possible before they become old men (and us too) but until they can get an affordable rig, we all seem to be in limbo!
Q What would happen if the licences expire in 2012/13 and there has been no drilling by then?
A - Be nice to Phyl Rendell.
Q Is there a possibility of them changing their priorities if they hit something exciting when drilling starts?
A There will be flexibility if it is needed. Stephen Phipps said if they strike something exciting, they would hope to move on quickly.
Q What of the Argentine claim to the seabed?
A It was not unexpected and the Foreign Office will probably(!) counter claim but it all may take up to 10 years.
Q Do the oil prices reflect the rig prices?
A Keep hoping for low prices as it does reflect.
Q Minimum cost of a rig.
A $420,000 per day but with costs more like $700,000 per day.
Stephen Phipps said rig companies are starting to phone and negotiate. He added that the market will always go down eventually.
Q Would it be better for Desire to find oil or better for it to be found by someone else?
A Desire is not waiting for farm in partners and not expecting anyone else to turn up. They will go ahead as soon as possible.
Q What do you mean by not expecting anyone else to turn up.
A - Not expecting BP or anyone else to appear. Will go ahead alone as soon as possible. They can drill 4 wells on their own.
Stephen Phipps commented on having to wait for 12 years now and just wanting to get on with it before we all get any older. Hope that helps.

http://www.sartma.com/art_6479.html

A shareholders meeting on behalf of Desire Petroleum was held at the Chamber of Commerce on Tuesday, 05 May 2009. Stephen Phipps welcomed shareholders to the meeting and Ian Duncan presented the 2008 report.



Mr Duncan said that Desires licence would run out in 2013but if hydrocarbons were discovered it could last longer. Desire plans to drill 4 exploratory wells but will only pay towards two of them. Desire have already purchased well heads and other necessary equipment but have $40 Million to spend on exploration. Arcadia will pay for 100% of the Ann prospect and 85% of the Liz prospect as well as 100% of the Alpha prospect. Desire will pay for 100% of the Dawn respect and 15% of the Liz prospect.



Prospects to be drilled will be through or close to mature, world-class source rock.



It is hoped that a semi-submersible rig can be found to do exploratory drilling. Ian Duncan has pointed out that the longer a rig has to travel, the more expensive it will be. However, getting one from Brazil is not likely due to prioritising and tightness of the market. Perhaps one can be found in South Africa.



Mr Duncan went on to say that challenges include remoteness, willingness of contractors and support.



Stephen Phipps concluded that the Falklands are a major oil province but that we should hope for low oil prices so that the rig market wont tighten up again. He concluded that while the Companies are down here drilling, they might as well stay as it was not cost-effective and would take a lot of time should only one exploratory well be drilled and abandoned.

Marymar,

Many thanks for your 'very' informative post. I hold in FKL, so have an interest in all those companies connected to the Falkland exploration area. Although moving very slowly (like watching paint dry), all these companies appear to be moving forward. My bet is that when one of these companies get a rig on site (especially if drill results come quickly and positively) this will assist the other companies. If oil is found in sufficient quantities, this will draw other rigs to the area. If no oil or/and insignificant quantities are found, this could mean a cheaper deal for the others as the rig would already be on site (as Mr Phipps stated)..
All it needs is that one important result. As soon as a rig is secured, the sp of most, even those who have not secured, will start moving upward.
If/once oil does starts to flow well who knows.
Once again thanks for your post.

Regards Greek.

http://en.mercopress.com/2009/05/08/oil-companies-delegation-visits-falklands-in-anticipation-of-drilling

Friday, May 8th 2009 - 6:20 pm UTC

Oil companies delegation visits Falklands in anticipation of drilling


Representatives of oil companies intending to drill in North and South basins around the Falkland Islands say they are, as confident as they can be in an exploration setting, that they will be successful in their endeavour to recover oil in commercial quantities.


Sam Moody of Rockhopper Exploration; Stephen Phipps of Desire Petroleum and John Hogan Argos Resources in Stanley



Eleven representatives from Desire Petroleum, Argos Resources, Rockhopper Exploration, BHP Billiton and Borders and Southern Petroleum spent between five and seven days in the Falklands this week.

Asked if they were anticipating any particular problems, Dr John Hogan, Chief Executive Argos Resources, said, Drilling here is easy for us we can benefit from the history and drilling is fast.

A 3.000 m dry hole can be drilled in about 20 days. Drilling rates are high, there are no unusual near-bottom currents, no known gas hazards and rock is not dense.

The companies are also not expecting problems from the harsh South Atlantic weather as drilling has been shown to be almost unaffected by weather and currents.

The delegation was complimentary about Falklands officialdom, Mr Stephen Phipps of Desire Petroleum said, Everyone has been very co-operative, there is a can do attitude here.

The companies are actively seeking a drilling rig and intend to share it between them a semi submersible was used during the last drilling round and it is likely that a similar rig will be used in the North Falkland basin.

With oil prices currently coming down the companies see this as helpful in terms of reducing the cost of rigs.

The oil companies representatives spent their time in the Falklands talking to Government officials, H E the Governor of the Falklands and members of the Islands business community. They also attended a public meeting on the subject of the Environmental Impact Assessment.

Mr Sam Moody, Managing Director Rockhopper Exploration, commented, We had a very positive reaction at the public meeting. Everyone seemed very pleased with the amount of in depth planning we have undertaken.

The last drilling round was in 1998. Five of the six wells drilled had oil and/or gas shows: one recovered live oil to surface and another encountered significant gas.

According to the Falkland Islands Government Department of Mineral Resources, Post-mortem analyses suggest that only one play type was drilled. It was on the worst possible migration route, above a regional seal. There is a proven, world-class source rock, plus other petroleum systems. There are numerous untested play concepts, targets and reservoir levels. Exploration in the basin is in its infancy.