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

BAS

Oh!!! I was quite enjoying that. It was like Ice Road Truckers, but in virtual reality mode rather than on the telly!

cynic me ol' fruit
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your private conversations are getting pretty dull and tiresome for the rest of us
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what a pot kettle black person you are! Read some of your own posts and wind your neck in!

but i rarely rattle on for days at at time, and if i do, then no doubt someone will call time - as i did for you

! lol
How do we put you up for Thread Moderator?

i'm sure there's a crude response to be found somewhere!

Good response and line drawn!
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no prob .... :-))

So are you still flying then avsec?..lol

Oriel brokers note

10 May 2010
Oil & Gas

Desire Petroleum
Implications of Sea Lion

Summary
Last week Rockhopper Exploration announced that it made an oil discovery with the Sea Lion exploration well. Whilst Desire does not hold an interest in Sea Lion, the well result appears to help de-risk three prospects on Desires acreage and makes the chance of success identified in the CPR appear to be much more realistic. Given Desire looks funded for 4-5 further wells which we estimate will target prospects worth 153p/sh on a risked basis (1400p/sh unrisked) we retain our BUY recommendation.

Sea Lion analogues
The most obvious Sea Lion analogue is Rachel, which we estimate is worth 56p/sh on a risked basis (assuming the 15% CoS identified in the CPR). Rachel now appears likely to be on Desires drilling programme and could be worth 373p/sh if successful. The Anna prospect also appears to be analogous to Sea Lion, but was not assessed in Desires CPR.
Ninky also appears lower risk following Sea Lion as it is also a Barremian prospect that could contain 94mmb on a P50 basis across four intervals. The CPR estimates the CoS at 27% implying a risked value of 36p/sh (146p/sh). Ninky looks lower risk as it is a structural prospect.

Other likely firm wells
We also expect wells on the Alpha and Ann prospects, where the wells are carried by Arcadia. The CPR estimates that Alpha could contain 1104mmb with a 6%, worth 33p/sh risked (or 557p/sh unrisked) net to Desire. Alpha is seen as very high risk as it is located away from the proven source, but it is supported by a very clear amplitude anomaly that switches off at the structural spill point. There are two targets at Ann
which combined could hold 96mmb with a 16% CoS, worth 15p/sh risked (or 93p/sh unrisked).

Wells in the Southern part of the basin?
The final well may target one of the prospects in the Southern part of the North Basin, although the final prospect selection is likely to be driven by the success or failure of Rockhoppers Ernest prospect which will be drilled ahead of Desires next well. It is currently unclear if an active source is present in the Southern part of the basin, although the wet gas encountered in the deeper section of Liz does give some encouragement. These prospects, Kate, Ruth and Barbara, were not assessed in the CPR, but we assume they are c150mmb with a 5% CoS, worth 13p/sh risked
(252p/sh unrisked). Depending on the results of Ernest the CoS may improve considerably.

Michael Savage writing in yesterdays FT that DES was a "strong sell" perhaps led to a little selling pressure friday/ a bad day for oilees generally ..On occassion Financial journalists are the rampers/ derampers of the worst kind ; and this is one of those occassions. - But on this occassion you have to question this very integrity of the FT for allowing such ignorant partisan advice at such a critical time in the companys corporate history when in a few months it sould be worth 500p+ ,,,,,im not saying it for sure but to classify it as a strong sell now seems inane-unless he believes to take a strike an improved position at a later date ........................As regards recent momentum l now wish rather than banking 35k id sold the neccassay percentage percenage to allow me a free ride ......

TFC, DES is probably "fair value" now are around 75p, so at the the present price.. well.....

The one to buy is RKH of course, buy the ones with oil, speculate and play on the ones still looking (FOGL / DES)

Simple really.

i was out all of yesterday, but having called in a couple of times, i had the impression that both DES and RKH stood up very well until, as far as i can tell, very late in the day, when everything seemingly collapsed in a heap

with the w/e ahead and good profits already made, a pullback in general as well as in particular was always strongly on the cards
however, i have noticed over the last few days that the sell book was consistently double the buy, which did not exactly gladden the heart

The action will switch to FOGL shortly.....in fact most people are forgetting that elsewhere in the world, things could be hotting up for a couple of big oil or gas strikes !....

hence still worth keeping your eye on the likes of AFR and TLW ..... more speculatively, GPX has been in the doldrums for a while and of course XEL should be a better bet still

Check out SQZ....on home ground and there is always a risky punt on SEY....I'm still holding and that could imitate GKP !...or crash...

SQZ i have never looked at before
still would prefer XEL for safe home territory with high chance of success in the imminent future - i.e. well before year end

not a time to start risking new money in the markets i feel

Check it out...2 very high impact wells at no cost to the company...the first one just spudded off Blackpool...yes Blackpool....the other in the north sea with Premier oil.

For me AEX more exciting and worth a punt at current undervalued price

Retracement is taking place and after today's news for RKH is looking more deeper than it should be