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

Summary of the GS note :

http://www.proactiveinvestors.co.uk/companies/news/22966/falklands-oil-exploration-will-be-an-important-focus-in-near-term-goldman-sachs--22966.html


Falklands oil exploration will be an important focus in near term Goldman Sachs

Friday, November 12, 2010 by Jamie Ashcroft


Goldman Sachs believe that the Falklands offer the best regional value

The Falklands will continue to be an important focus for European exploration and production (E&P) oil and gas investors in the near term, according to research by Goldman Sachs.

Goldman singled out the headline grabbing frontier play in a comprehensive note to clients, entitled: 50 E&Ps to change your portfolio.

Many investors will have been familiar with the key players since the group of companies clubbed together back in 2009 to take the Ocean Guardian drilling rig out to the remote area in the South Atlantic.


So far the North Falklands basin has been the most explored with Rockhopper Exploration (LON:RKH) and Desire Petroleum (LON:DES) drilling through most of 2010. The South Basin has been actively explored by Falkland Oil & Gas (LON:FOGL) this year, and Borders & Southern (LON:BORS) has plans to take a rig out there in Q4 2011.

There has also been a new addition to this hardy group of AIM oil explorers in recent months, with the listing of Argos Resources (LON:ARG). The company has been described by the cognoscenti as the last remaining entry into the Falklands because its assets are comparatively early stage meaning it still has some catching up to do with the rest of it peers.

Argos expects to start drilling in 2011.

Goldmans research was led by analysts Christophor Jost and Ruth Brooker.

Jost and Brooker claimed that the Falklands offer the best regional value among the various investment themes in the report.

On our estimates, the Falklands is the cheapest area, despite the good performance relative to the rest of the sector over the past 3-4 years, the analysts said.

That said, Goldmans analyst team highlighted that the 4 main explorers had been out-performing the rest of the sector even before a well was drilled in the south Atlantic.

The Falklands explorers saw c.75% relative outperformance vs the sector before drilling, Jost said.

The analyst added: The anticipation has proven justified in the north where Rockhoppers Sea Lion discovery has opened a new potential play, although the failure at Rachel highlights that risks remain.

Whilst the North Falkland basin has been the main focus of attention in recent months, Goldman emphasised that the trickier deep-water South Falkland basin may hold greater potential.

Despite FOGLs disappointment at Toroa, the southern basin offers higher potential upside than the partially de-risked northern play but with a higher geological risk,

Given a combination of high impact exploration and a proven basin in the north, we expect the Falklands to be an important focus for the European E&P investor in the near term.

We see value in all the Falklands players under our coverage ... all Falklands explorers look cheap on our estimates, the analysts wrote.

Although the re-rating potential is vast, the outcome is binary in the event of the basin being successful, the companies will re-rate, but the downside in Borders and Southern and Falkland Oil & Gas is large in the event of failure.

In reference to the North Basin the analysts add: Now that the Sea Lion discovery has flowed, the risk profile of the stock has reduced, in our view, and it is no longer such a binary call as its peers to the south,

Instead, we believe that the value is a result of the markets inefficiency in pricing in the value for the potential of a newly opened play.


Borders and Southern (LON:BOR)

The Goldman report - written before Borders and Southerns drill programme was set back until Q4 2011 - began coverage on the South basin explorer with a buy rating and a 12-month price target of 104 pence.

The analyst said that the high-risk, high-impact exploration has the potential to transform the stock. Once underway, two wells will be drilled.

In the event of the two prospects being totally de-risked, we believe that the stock could re-rate upwards to the tune of over 1,500%,

Failure, however, would result in significant downside in our view (potentially as much as 85%) unless there was sufficient encouragement for follow-on wells.


Falkland Oil & Gas (LON:FOGL)

The analysts said that the Falkland Oil & Gas story is not dead, as it initiated its coverage with a buy rating and a 12-month price target, of 200 pence, that implies 96 percent upside.

Falkland Oil & Gas was the first to break ground in the frontier play, and the unsuccessful Toroa well which failed to find any hydrocarbons - prompted farm-in partner BHP Billiton (LON:BLT) to pull out of the next exploration phase.

Goldman believes the stock is undervalued ahead of the next well.

The key catalyst will be the next well at Loligo success or failure will be the key driver of share price performance.

The analysts believe that success at Loligo would re-rate Falklands Oil & Gas.


Rockhopper Exploration (LON:RKH)

Goldman highlighted that the Sea Lion discovery fully supports the current share price. The analysts initiated its coverage with a Conviction Buy rating with a 12-month target set at 640 pence .

They believe that the Sea Lion discovery offers a significant opportunity.

The analysts expect exploration and appraisal drilling to be the key share price catalysts.

We believe that Sea Lion has partially de-risked the basin, meaning that Rockhopper has high visibility on a potentially transformational pipeline of lower risk drilling catalysts,

We believe that further appraisal drilling on Sea Lion could help to reduce the commercial risk on the asset and potentially increase the estimated volume of reserves.


Desire Petroleum (LON:DES)

Goldman began its coverage on Desire Petroleum with a buy rating and a 12-month price target of 197 pence.

We believe that Rockhoppers Sea Lion discovery has helped to de-risk Desires substantial acreage in the north eastern part of the North Falklands basin,

Desires acreage in this part of the basin amounts to over 1000 sq km giving it substantial running room to drill a significant number of potentially transformational wells over the next few years.

The analysts believe that successful exploration could increase Desires valuation by 6 times, however they cautioned that the downside could be close to 100 percent if no further discoveries are made in the basin.

Nevertheless the analysts state: We believe that the market tends not to be aggressive enough in valuing new basins after the initial discovery, and while we appreciate the risks involved, we are willing to give Desire value for exploration drilling out to 2013 in the area.

When GS says BUY, it's a SELL.

Go on then Hlyeo, you claim to have shorted before and got it wrong, time for a second go?

Nice interview to watch :


http://www.proactiveinvestors.co.uk/companies/stocktube/590/gill-leates-of-jm-finn-says-oil-around-the-falklands-has-the-potential-to-far-exceed-the-north-sea-.html


Gill Leates of JM Finn says oil around the Falklands has the potential to far exceed the North Sea

Wednesday, November 17, 2010


Gill Leates, manager of the JM Finn UK Smaller Companies Fund, confirms that the potential for opportunities in the waters around the Falkland Islands could be as much as 60bln barrels of oil, however it's likely to be sometime before it's proven. Gill also said that the outperformance of small caps over larger cap stocks is likely to continue as innovative companies produce good earnings growth.

http://www.proactiveinvestors.co.uk/companies/news/23114/broker-roundup-desire-petroleum-petroceltic-kenmare-resources-medusa-mining-african-aura-23114.html


........Westhouse Securities analyst David Hart has re-evaluated Desire Petroleum (LON:DES) after the mixed results of the first Rachel well in the North Falklands basin.

The Rachel prospect has certainly had its share of ups and downs over a relative short period of time, Hart said.

As a result, we have also adjusted our risk assumptions for making a discovery to reflect events as they unfold.

The analyst has upped his price target to 121 pence and reduced his rating from buy to accumulate reflecting the gap from the current price of around 107 pence.

Clearly, success with the Rachel North well will result in an upgrade to our target price, Hart added.......

Feedback says everything is going fine and to plan, therefore expect strong rumours to start coming out week commencing 29th Nov IMO.

Thanks to Granny @AFN, Survey Zone 1 of 4 coordinates now available.



.

Who is that Pro_S2009 poster on DES ?? ;)


Worth a read, 4 page write up.

http://uk.reuters.com/article/idUKTRE6AL1RH20101122?pageNumber=1

.

SP is getting a bit more excitable now.

So it should be, they should be now fast approaching zones of interest...... :)

Any day now might see a sudden whooooosh of the price upwards.

Or downwards......

I agree with Harry.

Positive vibes presently emanating.

I would look for news, either way be it good or bad, next week. At the moment though its all positive vibes.

From which part of your anatomy are these vibes emanating?

Shorts might start to panic soon..........

Try a larger size.

Pros

I'm sorry to hear, in response to a question about your anatomy, that it is your shorts that might suffer....

Word is the section above the target zones is now nearly complete and they will be drilling ahead into the target zones probably through Sunday/Monday.

Therefore, watch volumes and rumours on Monday/Tuesday because that will be the time.

Shorts building up in DES, the stock on loan is now fast approaching 5 million.



That is going to make for one really big shorts closing rally on any good news. Might see a spike over 250p.

Very quiet here despite DES putting up a lively show this Afternoon!

Just got in from making snow men Chav.....nice to see the rise