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

Price and moving averages

Price and moving averages has closed above its Short term moving average. Short term moving average is currently above mid-term; AND above long term moving averages. From the relationship between price and moving averages; we can see that: This stock is BULLISH in short-term; and BULLISH in mid-long term.

Bollinger Bands

Desire has closed below upper band by 4.8%. Bollinger Bands are 232.5% wider than normal. The large width of the bands suggest high volatility as compared to DES normal range. The bands have been in this wide range for 5 bars. This is a sign that the current trend might continue.

Next resistance level is at 55p which it has touched on a couple of times and fallen back from, if it passes the 55p in the near future then the next resitance is at 64p

http://www.investorschronicle.co.uk/MarketsAndSectors/Sectors/article/20090616/a5630054-5996-11de-bbc4-0015171400aa/Falklands-oil-dream-taking-flight.jsp

Falklands oil dream taking flight
Created:
16 June 2009
Written by:
Martin Li Investors Chronicle

The announcement by Rockhopper Exploration of the first Falklands hydrocarbon discovery has re-ignited interest in the South Atlantic - a little-explored frontier region that could hold more barrels of oil than the North Sea.

True, this isn't a 'new' discovery - it's a reinterpretation of a well drilled by Shell over ten years ago, and Rockhopper still faces significant challenges in commercialising this discovery. But that shouldn't distract from the fact that the four Aim-traded Falklands explorers - the others are Falkland Oil & Gas, Desire Petroleum and Borders & Southern - have made significant progress developing their projects over the past few months. First drilling now looks possible within a year, although a consortium of oil majors, including BP, might get the drillbit into action even sooner in adjacent international waters.

The Falklands area splits into two separate provinces, the North basin and South basin, each of which has very different characteristics. In the North basin, where Desire and Rockhopper are active (together with private company Arcadia), the water is relatively shallow at 100-600m, the targets are large (150-500m barrels of oil) and drilling conditions relatively benign - similar to those in the North Sea.
In the South basin, where Falkland Oil & Gas (FOGL) and Borders & Southern are active, the water is deeper at 500-1,200m, although still not ultra-deep by industry standards. The targets in the south are an order of magnitude larger than their northern counterparts (1,000-3,000m barrels of oil), but drilling conditions are more challenging - similar to those in the 'Atlantic margin' west of Shetlands.
Oil majors Shell, Amerada Hess and Lasmo drilled six wells in the North basin in 1998, of which five had oil shows and one also had gas shows. Although none of the wells confirmed a commercial discovery, they demonstrated that an active hydrocarbon system exists in the area. Furthermore, the majors confirmed the existence of the four fundamental requirements of any oil or gas discovery - source rock, trap, seal and reservoir - although these were not found together. The British Geological Survey adds further evidence to the highly oil-prone nature of the Falklands source rock, estimating that the North basin alone contains some 60bn barrels of oil. Although much of this will have seeped away over time, this still leaves sizeable reservoirs to be tapped.

The majors relinquished their licences in 1999 as the prevailing $10 (6) per barrel oil price left exploration of the Falklands uncommercial, due to the difficulty of developing any finds in such a remote location. Now, the licences are in the hands of smaller players.
No wells have yet been drilled in the South basin, although drilling to the west in the Malvinas basin and scientific drilling to the east have provided useful data on the potential of the region. Indeed, several oil and gas discoveries have been made in the Malvinas basin, although none has yet been developed. Further west, the Magellanes basin is one of the most prolific in South America, containing numerous fields in production, both onshore and offshore in Argentina and Chile.
Rockhopper's announcement was based on evaluation of three-dimensional seismic data, which allowed consultants RPS Energy to reclassify the newly-named Johnson structure as a gas discovery with mean contingent resources of 3.4 trillion cubic feet (tcf) of gas and a high estimate of 7.9tcf. 'Contingent' in this context indicates that the discovery is not yet considered commercial, hence Rockhopper's decision to delay production. There is no nearby market for gas and transporting it to the market by pipe or in liquid form requires considerable capital investment.
All four explorers have completed their reviews of seismic data and identified drill targets. FOGL has farmed out an operating interest to resources giant, BHP Billiton. Desire, meanwhile, has farmed out an interest to Arcadia, which will drill two wells, and Desire will drill an additional two wells on its own account.

FAVOURITES...

Falkland Oil & Gas controls a large acreage in the South basin, covering diverse geological structures. The farming out of a controlling interest to BHP Billiton adds credibility to the acreage, and funding, although the undrilled South basin remains high risk ahead of anyone actually sinking a drillbit.

Desire Petroleum held cash of over $40m at 31 December 2008, as well as a deal with Arcadia that should carry Desire at no cost through two wells. What's more, some 50 per cent of Desire's acreage is at least partially proven by the 1998 drilling campaign.

...AND OUTSIDERS

Rockhopper has announced the first Falklands discovery, which significantly upgrades the prospectivity of its North basin acreage, although it will need to conclude a farm-out deal and/or raise funds before it can drill a well.

Borders & Southern has completed extensive three-dimensional seismic reviews of potentially very large fold structures, and identified prospects, but also needs to conclude a farm-out deal and/or raise funds before it can drill a well.
Current plans suggest the next round of Falklands exploration will see six wells drilled in each of the North and South basins, but rig availability remains the single biggest hurdle to exploration of the South Atlantic. With keen exploration activity offshore Brazil and Africa, and continuing in the North Sea, rig contractors able to command high rates for multi-year contracts have had little incentive to release a rig to the Falklands. A Falklands contract would most probably cover less than a year, even if explorers collaborated and shared a rig, which looks the only commercially viable option given the high costs of mobilising a rig to and from the Falklands.

Fortunately for the explorers, demand for rigs has fallen recently with the oil price. Although the oil price has risen again in recent weeks, costs have yet to follow, which creates a window of opportunity. For the first time since Rockhopper floated in 2005, managing director Sam Moody is confident of being able to secure a rig.
The modest depths of Rockhopper's North basin licences will require no more than a semi-submersible rig, which Mr Moody estimates has fallen in cost to around $280,000 per day from a high of $450,000 per day last year. Given the similarities of their North basin licences, any rig secured by Rockhopper could be shared with Desire, and vice versa.

The rig requirements of the South basin explorers are more exacting. The greater water depths will demand either a dynamically-positioned, high-specification semi-submersible rig or a drill ship, of which there are only estimated to be around 25 to 30 in the world.

Rig slots are becoming available from late 2009, particularly for rigs suitable for the less demanding North basin, which suggests drilling should be possible from 2010. The 1998 wells were drilled in the southern hemisphere winter, which suggests that drilling, at least in the North basin, is possible throughout the year.

The four Aim companies aren't the only ones interested in drilling near the Falklands. In international waters to the west of the licences they hold, a consortium led by Spanish firm Repsol - which also includes Petrobras and BP-controlled Pan American Energy - is assessing a potential drilling campaign in two blocks. Lying to the west of, and on trend with, Borders' licence area, any success that this heavyweight group enjoys, including just drilling a well, will provide a great boost to Borders' prospects.


WHAT DO WE THINK?
The four Aim explorers offer investors the chance to participate in high impact exploration of one of the world's most alluring frontier oil and gas regions. All four offer massive upside potential, although the chance of total failure is also significant. Logistics remain the principal challenge in such a remote location, although any success in either basin is likely to prove enormous. Oil and gas fields in large frontier basins tend to behave like herd animals: the explorers are likely either to find nothing or they will find a lot.

patvan on 3i seems cautiously optimistic tonight.

Kiwi.

I am quietly optimistic myself that we may get some rig news in the very near future, shouldnt be long now a good time to top up.
I see KO is using the name Truthseeker on iii and upsetting people.

http://www.sartma.com/art_6739.htmlFalklands - Mineral Resources Committee Report (16/07/09)

Offshore Drilling Environmental Impact Assessments (EIAs)

Pippa Christie has been co-ordinating the release to the public of the EIAs submitted by Desire Petroleum and Rockhopper Exploration. Comments submitted by the public on the documents have been forwarded to the companies for consideration. Rockhopper Explorations consultants from RPS and their drilling consultant gave a public presentation on their EIA when in Stanley on May 4th. The event was particularly well attended, giving the public an opportunity to meet company representatives and discuss issues.


EPO Report


The Environmental Planning Officer, Anthony Payne, will be briefed the committee about the next steps in the approval process. He began by saying that the Desire Petroleum EIA, sent to FIG in February, was forwarded to the International Environmental Management Association (IEMA) for an outside opinion with the result that in certain areas the result came back as satisfactory. In one area the outcome was unsatisfactory. The D grade for the timing of drilling, clearly a concern, only reflected information about timing of drilling that the assessors got from the report itself. Desire had been sent a copy of that independent assessment for further comment. The EIA report will be considered at August EXCO.


Rockhopper Exploration also submitted an EIA Report in March and this report was not going to be submitted for outside assessment as both weighty documents covered adjoining areas in the North Falkland Basin. It is hoped that this document as well as Desire Petroleums EIA will be submitted to August EXCO but the committee said that it wasnt necessary for Rockhopper Exploration to submit them both at the same time.

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

Falkland Islands Government
Department of Mineral Resources
Newsletter: July 2009

http://en.mercopress.com/2009/07/29/falklands-eias-to-exco-as-drilling-preparation-continues

Wednesday, July 29th 2009 - 9:18 am UTC

Falklands: EIAs to ExCo as drilling preparation continues

WORK towards a hydrocarbon drilling programme in the Falkland Islands continues to progress with the news that Environmental Impact Assessments (EIAs) are soon to be submitted by Desire Petroleum and Rockhopper Exploration to Executive Council for approval.
The preparation of an EIA is one of a number of procedures companies are required to go through before drilling wells, Pippa Christie, the administrative manager at the Department of Mineral Resources said. To produce a comprehensive EIA constitutes a major piece of work, but Desire and Rockhopper are on track with this, which is greatly to their credit.

Once the details of a contracted drilling rig are known, both companies will be required to submit an addendum to their EIAs to demonstrate that they have taken account of any particular environmental issues that might arise as a result of the type of rig to be utilised.

Despite the credit crunch, the world rig market remains tight with many rigs tied up on long contracts and the day rates for rigs holding their high, pre-global economic downturn prices.

However, Mrs Christie said it was hoped that gaps in rig work programmes would arise, and Falklands operating companies would be able to take advantage of these.

She added: Once a rig has been identified, then, in addition to submitting an addendum to the EIA, a company must embark on a process of receiving approval to drill, which, briefly, will require them to submit a satisfactory well design proposal, and to demonstrate that the health and safety standards of the rig and their operating health and safety protocols are up to the levels required by the Falkland Islands Government. Source: Penguin News

http://en.mercopress.com/2009/08/03/sir-nicholas-re-elected-chairman-of-ukfalklands-all-party-parliamentary-gro

Sir Nicholas re-elected chairman of UK/Falklands All Party Parliamentary Group

The Falkland Islands strategic role as a gateway to valuable mineral reserves and associated wealth increases each year. An anticipated hydrocarbon exploration program will begin later this year with a high chance of success in the Northern Basin.

Business Financial Newswire
"Desire Petroleum's environmental impact statement for licences PL 006 and PL 007 in the North Falkland Basin has been approved by the Falkland Islands Governor.

This approval is subject to the further approval by the Mineral Resources Committee of an operational dddendum, to be submitted once the rig details are known. "

http://en.mercopress.com/2009/08/25/foreign-office-impressed-with-falklands-oil-security-measures

Director of Minerals and Agriculture Mrs Phyl Rendel said Mr Fred Rokkita appeared, impressed with the facilities and emergency plans that are in place for such a small country.

Falkland Islands Government Legislative Assembly (Legassy) Member Mike Summers confirmed that Mr Rokkita met with Members in order to discuss the physical security of rigs and vessels as well as operational security in terms of logistics.

He said they talked through how the last drilling round went and what had been learnt.

The Hon Mike Summers said Legassy Members were able to assure Mr Rokkita that all of the issues he had been tasked with examining were being looked at already by the Falkland Islands Government: All of the people he met were able to satisfy him that everything was well in hand.

Latest news relating to North Falklands basin is that the Environmental Impact Assessment for Desire Petroleum Licences PL 006 and PL 007 presented to the Falkland Islands Government Executive

Council last week was accepted yesterday.

Desire announced: This approval is subject to the further approval by the Mineral Resources Committee of an Operational Addendum, to be submitted once the rig details are known.

Desire Petroleum operates 6 licences in the North Falklands Basin. Rockhopper Exploration plc has farmed into two of those tranches and Arcadia Petroleum Limited into three.

By Lisa Johnston - SeAledPR - Stanley

Desire Petroleum plc
("Desire" or "the Company")

EIA Update

Desire Petroleum plc (AIM: DES) the exploration company focusing on the North Falkland Basin, is pleased to announce that the Governor of the Falkland Islands, acting on the advice of the Executive Council, has approved the Environmental Impact Statement for Licences PL 006 and PL 007. This approval is subject to the further approval by the Mineral Resources Committee of an Operational Addendum, to be submitted once the rig details are known.

IN WHICH MILLENIUM ARE WE GOING TO SECURE A RIG?????????????????

It's a mirage!!

Is everyone still sleeping? WE HAVE GOT A RIG!!!!!!!!!!!!!!!!!!!

Desire agrees drilling rig deal for Falkland campaign
Business Financial Newswire
Desire Petroleum has exchanged a letter of intent with Diamond Offshore Drilling for the drilling unit the Ocean Guardian to undertake a four well minimum drilling campaign in the North Falkland Basin.

The Ocean Guardian is currently in the North Sea and following a programme of shipyard work will mobilise in November.

Projected arrival in Falkland waters is early February 2010.

Desire has options to drill a further four wells for itself and or its partners.

Well done, Marky. It's been worth the wait but a hell of a long and winding road.

Looks like we will be playing the south atlantic stocks next year....still probably 6 months before drilling commences....

Cheers Oily,its the news i have waited for for a long time and have held for over 11 years waiting for us to resume drilling in the NFB.

That is crazy holding for as long as that when the funds could have been invested elsewhere...you can always buy them back again..., anyway looks like that next summer should be interesting...

required field i was sure back then there was commercial oil would be found in the NFB and time will tell but over them years i have topped up from my orignal stake to hold a significant amount of shares.Last time they went drilling the share price rose to nearly 5 a share and it will do it again as time gets closer and greed takes over.

More holes will be drilled and maybe other partners will come in to the picture now,RKH i expect news from them it all systems go.