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

The Following transcript from an Interview from with Stephen Phipps,of DES and also Sam Moody,of RKH, who are both currently down in the Falklands on a visit,has been sent to me just this afternoon.
Rep = Reporter.

I make appoplgy for any spelling errors in this,dictation was never a strong point of mine,however I have done my best to cover what was said.
PP.


Rep-
Oil company reps that are currently visiting the Falklands,say they are pleased with how preperations are progressing in advance of the arrival of the "Ocean Guardian" Oil rig,and said there was a number of reasons for their visit..

SP
We are here just to see how things are going,our 2 supply vessels have arrived,our supply depot is being built by Byron Marine,we came to see it all and see how things are going,obviously we have a new councill since we were last here,we've come to meet councillors,and update the Minerals dept as to where we are with our drilling campaign.

Rep
Yes, so how is all the logistical work going in anticipation of the rig arriving?

SP
Its going very well,it's been an enourmos task which has been done very well by every one here in the Falklands,the 2nd ship that came in was the the biggest ship that has come into fipass for 10 years,its going to take 7-8 days to unload,the firs ship was unloaded quickly,things are going well and its all down to the credit of the Falkland Islander's who are working so hard around the clock to do it.The work effort from the Falklands has been
fantastic,every one is working hard to get us here,and we are looking forward to finding oil.

Rep
Whats the latest with the rig,and where is that at the moment?

SP
Well I cant tell you exactly where it is,that would be..I'm not allowed to umm,but its on its way,lets put it that way,and will be here pretty much on schedule,early Feb.

Rep
Have there been any difficultys so far,I belive it did have to stop off at one point in the trip?

SP
Well I think it was a minor stop for a chain breaking or something,but things that are a normal part of dragging a rig down 8000 mile in 65 days,its just a normal part of that procedure.

Rep
I guess that security is also an issue,is that also something you have been discussing?

Sp
Yes we have been discussing it with the Rig,Diamond,but all rigs have their own security procedures,its nothing untoward about that,I mean people drill in Nigera,and all sorts of places that are difficult,I'm not suggesting that this is giong to be difficult,infact we dont forsee any problems, but we will have and do have an emergency responce plan,which is in the normal operating envoirment we would have.

Rep
There seems to be quite a lot of buzz around at the moment with this campaign,it must be quite an exciting time for Desire.?

SP
We are excited,we have been waiting 12 years to drill,we have done a lot of work in between time,a lot more work on our prospects, 3D, AVO work,
we were lucky to get a rig when the rig prices were coming down,we've not just ourselves,but other oil companys have raised a lot of money on the stock market,and were here,were excited,and looking forward to the next 6-8 months.SP.
End

The Reporter then spoke to Sam Moody of RKH.

SM
Well were planning to drill 2 wells during 2010,useing the same rig as Desire,one of those wells is in the ex-Shell block, its just a few Km from the last well Shell drilled during 98,and that well of course did recover oil,so were very excited about that one,and then were drilling another well called Earnest,which is much nearer to the Islands, about 100Km away from the Islands, in an area that has'nt been drilled before. Both Des and RKH are useing AGR to do the management of the wells,and they are doing a fantastic job down here, and were extreamaly excited about whatas about to happen. This is a defining year for the company,so in my position,clearly this is the culmination of 5 years work,so yes its extreamaly exciting.

Rep
Whats the best case scenario for this campaign for Rockhopper.?

SM
Well the best case scenario is that these 2 wells we drill would be oil discoveries,and that would be an event that would compleatly transform
the company,and of course you've got to remember as well that we are in 3 wells that DES will be drilling,so we've got 5 chances if you like to make it work.

Rep
Yes there must be good co-operation between yourselves and DES with this work?.

SM
Yes, its extreamaly important that we co-operate with each other,because were both operating remotly from where we are based,thats why we've both appointed AGR to manage the wells on our bahalf.

End of Interview.

http://www.upstreamonline.com/live/article204058.ece

Stanley basks in southern summer

The final two videos of the Hitler & Desire series have been uploaded.

I hope you've enjoyed them and good luck with your investment in Desire!

Part 1: http://www.youtube.com/watch?v=HzmWefseY8s

Part 2: http://www.youtube.com/watch?v=2AK4-1KkaU8

Part 3: http://www.youtube.com/watch?v=7i7Nsx-43Pg

Part 4: http://www.youtube.com/watch?v=3j2xVuOCUG0

A first contract covering the sub-letting of the semi-submersible rig Ocean Guardian for the upcoming exploration campaign off the 
Falkland Islands appears set to be signed by the end of next week.

Rob Watts Friday, 22 January, 2010, 02:34 GMT

Desire Petroleum, which has contracted the rig for the explor ation in the North Falkland basin, said it hopes to finalise the deal with fellow explorer Rockhopper Exploration in the next few days.

Desire chief executive Ian 
Duncan refused to be tied down to an exact schedule but said he was hopeful the deal would be signed.

It will not be finalised until it is actually signed but it is a case of dotting the Is and crossing the Ts, said Duncan. He added that talks on another deal to sub-let the rig to BHP Billiton Petroleum for a well off the south-east of the 
islands are at an advanced stage, with a deal expected shortly after the Rockhopper agreement.

Duncan and Desire chairman Stephen Phipps have been in Port Stanley this week along with 
officials from Rockhopper Explor ation, including managing director Sam Moody, for a series of meetings with Falkland Island 
officials and agencies ahead of the start of the campaign, the first drilling off the islands since 1998.

Duncan said: We are excited. After 12 years of waiting we cant wait to get started.

The Ocean Guardian is 
currently south of Rio de Janeiro heading for the islands after refuelling in Brazil, and drilling is 
expected to start in mid-February. niDesire has contracted the rig to drill four wells on its own acreage, with six optional slots.

Rockhopper is expected to take two of those options while BHP Billiton, assuming a deal is signed with the Australian company, is expected to take one slot, widely assumed to be the third.

Duncan told Upstream that the first Desire well to spud will in all probability be its Liz prospect, where it holds a 92.5% interest, with Rockhopper on 7.5%.

The second well on the Ocean Guardians schedule is expected be the Rockhopper-operated Sea Lion prospect.

Despite speculation over the remaining drilling schedule, 
Duncan cautioned that Desire wanted to keep a large degree of flexibility in the campaign.

He also said Desire intends to test any potential discoveries.

Work is also picking up in Port Stanley, with thousands of tonnes of drilling equipment from the UK being unloaded from the Thor Leader and Honest Rays vessels in the past week.

Work on a yard being built by Falkland Islands company Byron McKay Port Services to store the equipment is also in full swing.

Oil bosses excited as
prospects bode well

TOP oil men visiting the Falklands
in advance of the arrival of the oil
rig Ocean Guardian have said they
are extremely excited about the
next stage of exploration in Falklands
waters.
Sam Moody, Rockhopper Explorations
Managing Director and
co-founder of the company, and
Desire Petroleums Chairman
Stephen Phipps are in the Islands
this week meeting with government
officials and observing the
ongoing arrangements being put in
place for the arrival of the semisubmersible
oil rig.
The construction of office
blocks and a laydown area near
Boxer Bridge - affectionately referred
to by the oil men as Byron
Plaza - is progressing well, said
Mr Phipps.
There has been an enormous
effort to get everything ready and
they [Byron McKay] have been
working around the clock to get
the ships unloaded.
The first of the two ships,
Thor Leader, has been unloaded
and the off loading of Honest Rays
is going well, said Mr Phipps.
A 100-tonne crane needed to
unload the vessels was shipped
into Mare Harbour just days before
the cargo arrived in Stanley.
Rockhopper Exploration is
planning to drill two wells using
Ocean Guardian: one is in the
block from which Shell recovered
oil in the previous drilling round
in 1998; the other, called Ernest,
is about 100km from the Islands
in an area that has not been drilled
before.
Both Rockhopper and Desire
are using AGR for the management
of the wells. They are doing a
fantastic job down here, said Mr
Moody, for whom the drilling is
the culmination of five years
work. He said if both wells were
discoveries it would completely
transform the company.
Rockhopper also is in on three
wells with Desire, effectively with
five chances to make a success of
the drilling round.
Desire Petroleum has contracted
the oil rig and expects to
drill four wells in the shallow waters
of the North Falklands basin.
Evaluation of its top ten prospects
has indicated prospective recoverable
resources of over three
billion barrels. While the rig is going
to be 100km offshore and there
is not going to be any great influx
of personnel into the town, the
local economy is feeling the benefit
of the drilling round in a subtle
way, not least by the construction
of the office and laydown facilities
by local labour.
As an additional example Mr
Phipps said Desire had block
booked 15 seats on each airbridge
flight and nine rooms in the
Malvina House Hotel until the end
of April.
There is a good lot of money
coming in, he added.
At an extraordinary meeting of
Executive Council on Monday oil
industry related papers were considered.
Councillor Jan Cheek said it
was recommended to the Governor
that approval for a Consent to
Drill application from Rockhopper
Exploration be forwarded to the
Secretary of State.
Further papers related to oil
spill contingency plans for Desire
Petroleum and the Falkland Islands,
the latter being an updated
plan which addresses some of the
previous shortcomings which became
apparent at the time of the
Ocean 8 spill in Berkeley Sound.

The rig is on schedule for Vitoria on Monday morning. (Brazil time) The Maersk Traveller will then dock and load the required bunkers for the remainder of the tow to F.I. The stop over should only take around 24/36hrs.

Due in FI and will spud mid feb

http://www.dailyexpress.co.uk/posts/view/153759/Port-Stanley-s-oil-reserves-set-to-be-new-Aberdeen

PORT STANLEY'S OIL RESERVES SET TO BE NEW ABERDEEN

If they do find oil in quantity : there will be quite a few jobs created around Port Stanley.

Markymar,

Don't often post here but always look in as I am invested in FKL.
Would just like to say thanks re all your input (and other contributors of course).

Regards Greek.

http://sartma.com/art_7323.html

Falklands : FALKLANDS ARE GO FOR OIL EXPLORATION
Submitted by Falkland Islands News Network (Juanita Brock) 24.01.2010 (Current Article)
Desire Chairman, Stephen Phipps has confirmed that the exploration rig, Ocean Guardian, is progressing well and scheduled to arrive in Falklands waters early in February, weather and sea conditions depending.


FALKLANDS ARE GO FOR OIL EXPLORATION

By J. Brock (FINN)

Desire Chairman, Stephen Phipps has confirmed that the exploration rig, Ocean Guardian, is progressing well and scheduled to arrive in Falklands waters early in February, weather and sea conditions depending.

During an interview with FINN he also confirmed that the integrated pipe and lay-down facility at Coastel Road being constructed by Byron McKay is nearing completion with plans to base a majority of the shore support personnel from that area.


As reported last month on FINN there will be a financial benefit for the economy for entities involved in the pipe and lay-down facility, the movement of oil related cargo from FIPASS, People renting accommodation for shore based workers, Hotels accommodating workers and transport services. Twelve Rooms at the Malvina House Hotel, 15 seats on the airbridge as well as the increased port activity is a significant contribution to the Falklands economy said Mr Phipps.


Mr Phipps went on to say that once exploratory drilling is complete then these revenue streams will be dried up until there is another round of exploratory drilling possibly by FOGL, BHP Billiton and Borders & Southern.


Ocean Guardian is a semi-submersible rig suitable for exploring in shallower waters. This means that after Desire Petroleum finish their prospects in tranches C, D, and F, and Rockhopper Exploration end their drilling campaign in former Shell tranches, then BHP Billitons shallower prospects of Endeavour, Loligo and Nimrod could be drilled.

According to Mr Phipps there will be little information coming from the site. There will be an announcement when drilling commences and another when target depth is reached and how long it took to drill that depth. After a while the results of the drill will be announced.

Besides Desires Chairman, the CEO, Mr Ian Duncan, Finance Director Mr Eddie Wisniewski and PR Consultant Mr Ben Romney from Buchanan are visiting Also in the Falklands this week is Mr Sam Moody of Rockhopper Exploration. Rockhopper have discovered natural gas in one of their prospects.



When asked about what hydrocarbons products were being explored Mr Phipps said that the main thought process is oil because thats whats believed to be there. He shied away from commenting about natural gas


When the exploration process is over and if hydrocarbons have been found, the exploration well will be tested. If no hydrocarbons have been found, exploratory wells will be plugged and abandoned. If we can, we would like to stay, but that depends on rig availability, said Mr Phipps.



In a tight rig market this could only be a wish, rather than a firm way forward. However, many exploratory rigs in other parts of the world have been kept for exploitation purposes in the past. This adds to a tight rig market, so if a rig can be secured for Falklands waters all the better.


At the end of the day after all the exploration is finished there will be slack hydrocarbons based revenue streams. To investors, I say, hang in there. The next few months could be interesting indeed.

http://online.wsj.com/article/SB10001424052748703699204575016672711190144.html?mod=googlenews_wsj

Back to the Falklands
Rising oil prices lure prospectors to area once deemed too expensive

By CAROLINE HENSHAW
LONDONTwelve years after the last prospectors left the Falkland Islands, British oil-exploration companies are returning, lured by rising oil prices and advances in deep-water drilling technology.

But exploration and production around the remote wind-swept islandsbest known as the location of a brief, bloody war 28 years agohave been handicapped by a harsh climate and dicey politics.

Analysts say that as much as 60 billion barrels of high-grade oil could be found in the 200-square-mile economic zone surrounding the islands. If estimates prove correct, this could make the Falklands one of the world's largest oil reserves, comparable with the North Sea, which so far has produced about 40 billion barrels.

Next month, Desire Petroleum PLC and Rockhopper Exploration PLC will begin exploring a region of the North Basin, 22 miles from the islands, where they have shared and separate prospects.

They are drilling in the same area where a consortium of large oil companies, including Royal Dutch Shell PLC, led the first wave of drilling in 1998. Only six wells were drilled in an area half the size of Texas. Although oil was found, prices around $10 a barrel made the prospects commercially unviable and further development was abandoned.

But improved technology and higher prices are prompting oil companies to return, and the appetite for investment risk in London is growing. The four companies that are leading the campaign, all listed on the Alternative Investment Market, raised a total 327 million ($527 million) in share placements in a single month. Desire's shares have nearly doubled during the past three months.

"Exploration and risk are back in vogue," says Howard Obee, chief executive of Borders & Southern Petroleum PLC, which has prospects to the south. Borders & Southern raised 113 million in rights placements, more than its market capitalization.

Geologists believe the uncharted waters of the south could hold the largest finds.

Tim Bushell, chief executive of Falklands Oil & Gas Ltd., holds four prospects in the south in partnership with BHP Billiton. He compares the geology with that found near off Argentina's coast, where six billion barrels have been found. Other plays show characteristics similar to exploration hot spots in West Africa and Brazil, he says.

If a company finds oil, it could be viable as long as oil fetches $25 a barrel, less than a third of current market prices, Mr. Bushell says. Crude oil closed Friday at $74.54 on the New York Mercantile Exchange.

The Falklands government only takes a 26% share of oil earnings in addition to a 9% royalty on each barrel of oil sold, making it one of the most favorable areas in the world for exploration.

Still, the hurdles to exploration are vast. The South Basin reaches depths approaching 10,000 feet. Temperatures in the basin, one of the southernmost prospects in the world, average a low around 36 degrees Fahrenheit in winter, and the average rainfall can be as high as 2.4 inches a day. While this environment is similar to the established oil fields of the North Sea, the costs of operating a rig run to around $1 million a day, meaning losses are high if drilling stops during storms.

Political tensions surrounding drilling are also high. After the 1982 Falklands War, the islands remained a U.K. overseas territory. But Argentina has done its best to isolate the Falklands and pressured neighboring countries, such as Chile, to do the same.

Tensions in the region have been growing in recent weeks, after Argentina's Congress passed a law on Dec. 9 identifying the Falklands, as well as part of the Antarctic shelf, as belonging to Argentina. Britain says it "firmly rejects" the claim, but Argentina continues to agitate in diplomatic forums to have its sovereignty recognized.

The political complications make it difficult to know who would be willing to purchase or operate any finds in the Falklands, says Malcolm Graham-Wood, an analyst with Westhouse Securities. None of the majors with operations in Argentina, including Spain's Repsol YPF SA, the U.K.'s BP PLC and Brazil's Petroleo Brasileiro SA, which are drilling in the nearby Cuenca Malvinas, have ventured into the islands.

"If this was a huge success in somewhere like Uganda, you would have all the usual suspects lined up to take over," Mr. Graham-Wood says. "You can rule out quite a lot of potential bidders just because of the dispute with Argentina."

But despite the politics, the Falklands will remain the next frontier in oil exploration. "Geology doesn't stop at political borders," says Mr. Obee, of Borders & Southern. "There are complications. But if it were that easy, everyone would be in exploration."

OG UPDATE

The OG is anchoring 23 miles off Vitoria this morning. The Maersk Traveller will head for the dock to load the required fuel and water for the final leg. ETA over "Liz" is expected to be the 13th Feb

There has been a significant drop in the Falklands Oil shares today...What has happened???

Significant drop in most shares over the last few days, profit taking, oil down to $74 p/b, Falkland oil exploration companies thought to be overvalued & possibly slight nervousness concerning Argentine interest.

Agree with Harrycat. There have been multiple news items re the Argentinians getting out of their tree again.

If the Argies sink the rig on the way to the Falklands : I will go down there myself to sort them out !.

It would be better for the Argies to capture the crews on the rig and enslave them to dig for oil.

More likely that would like to participate in the drilling and setting up maintenance facilities along with refineries on the mainland.

One minor detail; I thought Argentina was broke? (I seem to remember they had the biggest ever Sovereign wealth fund default). In which case they are not likely to upfront the enormous costs of drilling in a joint venture.
Either, best to let someone else do the hard, expensive work & then occupy the sites, claiming sovereignty, or think very hard as to how the U.K are going to export the oil, if found. South America is the easiest land mass through which to route this crude.
Rf, you might be needed yet to go & defend our honour!!! Suggest you brush up on your language & military skills, pdq!!! ;o)

that would likely lead to yet another mfu