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

Annual General Meeting of the Company to be held at the offices of Buchanan Communications Limited, 45 Moorfields,
London EC2Y 9AE on 8 June 2010 at 10.30 a.m.

Technical Review

3. Future Drilling
Substantial new information has been obtained from the Liz well which
will have a bearing on the remainder of the drilling campaign.

(a) Reservoir Liz encountered new sandstones which if better
developed elsewhere in the basin could be major targets.

(b) The oil and gas petroleum systems have been confirmed with
the possibility of an additional wet gas system.

(c) Liz encountered a number of different pressure regimes
indicating good seals in the basin enhancing hydrocarbon trapping
possibilities.

(d) The geological model for the basin has been confirmed.

Given the excellent news on RKH you can see the shorters on DES desperate to close positions now :)

LOL

Now where is Hlyeo!!! happy days!!!

Would be lovely to see RKH past 100p later today :)

Make them shorts burn as they struggle to close their positions.

Just closed for +10.5 - not bad for 17 minutes work :-)

DES does not have an interest in RKH's sea lion oil discovery so why the rise in the sp?

Shorts closing.............panic by shorters.

It proves the Northern basin has oil.......whoooo hoooo!!!!!!
now the party starts and am off to the pub watch out for new partners coming on board and shell have cocked up again.

Halifax,

I think it is just down to the rockhopper well 'proving that there is oil in them thar hills'.
Never been in Des (In RKH, FOGL and FKL) but this discovery has indicated that the possiblity of Des and all F1 oilies have of finding oil is enhanced.
So as a RKH holder I am obviously well (no pun intended) please, but to the Des holders, you should take encouragement. To those who still hold, I wish you the best of luck.

I sold a load of DES in the spike and buying more RKH on the dips now.

This could be a big find.

19% porosity and 53M of net oil pay.

PP if that is the case why does RKH say in their RNS there is an option to abandon the well?

I think because it's only a test well, not a production well.

Halifax,

As I understand it ,until the discovery if 'fully accessed' the mention of the possibility of 'plugging' is made in order to cover themselves.

A bit like the bottom line on investments. 'Your investment may go down as well as up etc'.

Not an oil expert by a long shot, so waiting for clarification re the 19% porosity/53M of NET oil play etc. Sounds brilliant but is it.

Anyone out there able to clarify.

or does it mean having established the presence of oil RKH is anxious to minimise rig costs and move on to ernest?

Could be. As now they have struck oil, they will await full analysis that will show if they need to drill deeper straight down or of at a tangent. So yes, I suppose it could mean they could move the rig to the next site, whilst awaiting such data. Again hope someone can fill the gaps in for us.

All the wells will be P&A. That is the plan for DES/RKH/FOGL.

This eliminates the need to return in a short time period to continue, so the plan was that whether they hit oil or not all wells will be P&A.

If they do not P&A they are obligated to return with a rig in 6 to 9 months to do further work, so by P&A'g all wells, even discoveries, they negate the need to return in a very short time frame.

This allows them time to head home, churn the data, make decisions and then return as per their own schedule.

The exciting thing here is the mention of "suspending" the well. That is not the P&A as was planned.

This might mean its a very big find.

Update from Westhouse

"Malcolm Graham-Wood, director of broking at Westhouse Securities, comments: "What looks like an excellent result from Rockhopper and with 100%, if the well is on target for the mean recoverable number of barrels of 220 million then the unrisked value per share is 308p. We need further data and info from the company but we have said that they have the biggest potential upside (354p) of the two drilling this programme."

Proselenes,

Thanks for that. A lot clearer now.

in at 44.............out at 54 .....a bit premature i know........but have a feeling buying will tail off and finish day at 50p level..........good luck et al.........................edit >......and back in at 58p ....

RKH update from Oriel.




"Rockhopper Exploration (RKH, under rveiew, 77p) - Sea Lion oil discovery, initial thoughts

Rockhopper has announced that initial indications are that the Sea Lion well in the North Falklands is an oil discovery

The well encountered a 150m gross sand and shale interval with 53m of net pay in multiple pay zones. The thickest zone had net pay of 25m

Average porosity is c19%, but there was no indication of permeabilities at this stage. This remains the key uncertainty given the quality of reservoirs encountered to date in the North Falklands, including the Barremian interval being targeted in this prospect, has been variable

Additional logging information is being collected before a decision is made whether to abandon the well or suspend it for further testing at a later date.

The net pay encountered appears to be larger than that used to estimate the P50 pre-drill resources of 170mmb for the prospect. Our analysis of the seismic time section in the CPR suggests the targeted reservoir interval had pay potential of c20-30m to derive the pre-drill volumes, although this has not been confirmed by the company

Based on a notional US$8.5/boe valuation (may prove to be conservative in a US$90/bbl environment), a 170mmb discovery would be worth c600p/sh

Although early days this is clearly an encouraging result and the positive share price reaction is not overdone. The result also has positive implications for further prospectivity on both Rockhopper's and Desire's acreage in the North Falklands, particularly the Barremian fan plays on the eastern basin margin (Rockhoppers' analogue prospects include Fox at c144mmb and Stephens at c106mmb)

Our recommendation is under review pending a further update on the well, especially any data regarding reservoir quality"