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

http://www.guardian.co.uk/world/audio/2010/feb/26/guardian-daily-podcast-falkland-islands

Guardian Daily: The search for oil off the Falkland IslandsOur expert panel looks at diplomatic tensions between Britain and Argentina over oil exploration off the Falklands, in a special edition of our daily audio show with Jon Dennis

How will the oil industry affect the Falkland Islands?

Desire chief says its boom or bust as drilling begins
FOUR days into a drilling operation that has captured the
attention of the worlds media, Desire Petroleums Operations
Director Bob Lyons conceded: This is it: were a one trick pony.
Itll either be successful or it wont. It is very simple.
As Desires share prices rose on the back of news that drilling
had begun, and fell as Argentina ramped up its efforts to disrupt
the first exploratory drilling in 12 years, the man responsible for the
operation was unfazed by the current political situation.
We just want to get on with it, he told the Penguin News in
an exclusive interview yesterday. We were fully aware of what
Argentinas stance would be so we planned it so we wouldnt require
any support from anywhere locally. Were self sufficient, we
can do it all ourselves, he said. In view of the shipping
restrictions Argentina had attempted to implement he said
all the necessary equipment would come out of the UK, so it doesnt
affect us in the slightest. Plans had not been altered
because of the shipping restrictions, and Argentinas
response was anticipated, said Mr Lyons, adding that he thought the
press had made much of the situation. Even if Argentina were
to increase the level of pressure, it would not stop the operation,
he said. Out on Desires Liz prospect 100km off West Falklands,
everything on the Ocean Guardian - manned by about 90 workers -
is progressing according to plan. Weather conditions have been
less than ideal in the early stage, but are similar in many respects
to those encountered in the North Sea, where Ocean Guardian was
last operational, said Mr Lyons. It can cope with quite a lot.
Working in 2-3 metre seas with quite a lot of wind is fairly
routine, he said. We tend to get higher winds here for longer
periods, but its not untoward. Wind speed alone can restrict
crane operations and there are different limits of rig motion for
different operations. He also spoke of the prospect
of Desire becoming a takeover target if drilling succeeds: We are
a small company and exploration drilling is a completely different
animal to a full development programme. That is a bridge we
will have to cross, hopefully when we do come to it.
He said there would be a fundamental shift in how the
company was set up and what it would need to take it to the next
phase, should the occasion arise. It always has been an option
and we may well reach a time when we want to pass the baton
on to someone else to take it to the next phase. It would be a nice
problem to have, said Mr Lyons. He discounted rumours that
the rig had been buzzed or shadowed by Argentine air force
jets while in transit. Its just gossip, said Mr Lyons who
confirmed that on February 10 an Argentine coastguard aircraft had
flown over the rig on a routine flight, but that there had not been
any other air activity.
Sharon Jaffray

http://www.timesonline.co.uk/tol/news/uk/article7043319.ece

http://www.independent.co.uk/news/world/politics/falklands-offer-to-split-oil-profits-1913021.html

Falklands offer to split oil profits

don't forget that the oil still has to be found and to be in commercially extractable quantities .... for sure the odds are significantly shorter than on wildcat or even "normal" drillings, but considerable risk remains.

the falklands residents etc must also be biting their nails, as they too have invested megabucks in infrastructure and similar on the basis of a positive outcome

Rockhopper has a gas discovery already booked...that's very good, so the chances are high that with 4 to 6 wells at least being drilled that they come up with something commercial.

T20's will likely start buying from Tuesday or Wednesday with more piling in late next week and the week after so you would suspect we should be on for an across the board recovery in prices for FI stocks as the hot money starts to slowly come back in.

RF - not disputed (not sure that gas for RKH has commercial value, but haven't followed that one), but as with a contract, nothing's in the bag until it's signed - i.e. commercially viable oil found, and extractable in good quantity

It's going to be tricky playing the ups and downs on these falkland prospects over the next year....what with this lot, and Tanzania, Iraq, the North Sea...and a few other places.....we are going to have our hands full following this lot...

first news of any discovery(or duster) should come from the news media as no doubt they have their informants primed on the Ocean Guardian.

sp continues to head quite sharply south, though looking at the order book on L2 over the last 7/10 days, i wonder if there is quite a heavy short book being built up ..... not sure that means one should buy, but there has to be at level at which risk/reward are favourable .... looking at the simple charts, 90 is a possibility

Interesting that RKH also being forced (?) down, even though it looks like buys & sells almost in parity.

no surprise there at all as it will move in sympathy with DES if not more so as its licences are even more risky

Sub 100p...now..

Bargin!!!! It will bounce!!!

getting nervous ahead of result. If positive could double in minutes

Drill for rubber now are we....... could see cynic in that......

As predicted, sp drifts as drilling continues, with no news & day traders + opportunists find other stocks to pillage. As TD approaches & anticipated RNS, the hype should push up the sp. All imo.

Question is though, Harry, when will TD be reached for Liz ? My own opinion, and that's all it is, is that they will have an ROP of about 60 feet per hour, give or take. Ok, you've gotta stop drilling to run casing, cement the casing, change out the bha, etc, etc, but I think that come mid to late next week we should be getting very close to the 2680 metres which is where Liz is located. Watch the SP closely then - it will reveal whether or not Liz is abundant....

Edit :

I just had a look on BGS website to try and find the ROP for wells in '98. Got a bit of a shock when I realised just how quick the ROP was. We could be hitting the pay dirt earlier than I anticipated. I just posted this on a d v f n too.