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

It's been spudded....good luck all...

Three weeks of relaxation before possible news of Rachel's ability to produce the goods.

Should be some cash jumping across from FOGL/BOR, into DES this fine morning imo.

Relaxation !...???....be very nervous about finding anything above 50 million barrels...

lol

required field a lot more that 50 mill i think Rachel is a 50-50 chance of hitting.

Marky, your post #4685 says 85% chance of success. I took that as gospel! ;o)

My daft short is turning into a daft closure of a short....

it can't have made much of a turn methinks

Harry thats not my post.....that was copied from iii from Synchrouk....but i respect what he has to say.

Got a few more whilst the price is right.

Chav whats with FOGL news? no rig

Appears that way Marky...guess they backed out as the price wasn't right!....I haven't heard anything locally about the Transocean rep being in Town, so guess that was incorrect.

Interesting conversation the other night with a DES guy down for the Rachel drill and his opinion on Sealion results so far.

That was Aberdeen, but I was told a whisper that they had been talking to Argos about future plans.

Chav you can always chuck me a clog over.

Transocean?

Marky,

I knew Argos sold many things, but an oil rig. You must be kidding.
But seriously I do not think they will have to wait too long for a rig. There is a world shortage of oil (found and being produced) so I feel the big producers will be looking to get in, in the not too distant future.

Yes Chav it came from FI contact...... you still looking for flow gear.......catch up!!! or it will be lime and soda in the Angel for you or i might lock u up in my mine,at the very bottom where its dark.

Geek am sure there will be no problems getting another rig there i can see if rachel comes in you may see 2 or 3 rigs there. exciting times!!!!

I would think your contact is talking out of her backside there marky!

Will bend an ear Chav and try to get a bit more meat on the bones and chuck you a clog with spikes on it, When are you backfor your lime abd soder?

Sat will be a nice day to wear shorts,polish them shades.

L2 starting to firm up we might be back in the blue soon.

FDC Flash note

Desire Petroleum plc announced that the Rachel 14/15-1 exploration well was spudded on 27 September 2010. The Rachel prospect is located in Tranche D and has an estimated target depth of 2,850m. Drilling operations are expected to take
approximately 35 days and a further announcement will be made once drilling is completed.

Comment

The Rachel prospect is a post-rift lacustrine fan play on the eastern flank of the North Falklands basin, similar to Rockhoppers Sea Lion discovery. The pre-drill unrisked
resources size is 318MMbo for the mean estimate with P90-P10 of 38-630MMbo and a chance of success of 15% as per Senergys competent person report of September
2009. Given the success of Rockhopper at Sea Lion, we would attribute a higher chance of success than 15% to Rachel. Using a 25% chance of success for Rachel, instead of 15%, increases our risked valuation for the Company from 150p to 200p.
After the disappointment at Liz, a lot of Desires fortune rest on the results of the Rachel 14/15-1 exploration well; however we believe there is upside in the stock from those levels. Ninky is a similar prospect to Rachel and Sea Lion with a pre-drill
unrisked mean estimate of 122 MMbo and could be the next prospect to be drilled depending on the results of Rachel.

Recommendation

We see some upside to the stock in the short-term and hence upgrade to a Buy with a price target of 200p.