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 goes with being curmudgeonly

wow....you should be on with Frank Muir.,.

you mean because he's long dead?

My Word!, that takes me back a bit!!

.

lol we must be the same age - the thickness of yongstesr asounds me not worldy wise at all take care

From Mike on iii

Phoned Desire this morning after phoning a couple of weeks ago and being told all the BoD were travelling and that someone would call me back - no one did. Also tried emailing before that but no reply. When I phoned today I got the Hello, Phipps and Co and expected a fob off but when I asked to speak to a Desire director there was a short awkward pause and a yes? I asked who I was speaking to and Stephen Phipps introduced himself. Throughout our conversation he seemed relaxed, at ease and quite happy to talk with me. He gave me the impression of confidence and enthusiasm.


I asked about Acadia:-

Were they still farmed in and why hadnt we heard anything from them? I explained that to me their involvement was a good third party endorsement of Desires prospects and that their silence was disconcerting.

It was explained that as they were a private company they do not need to inform the market of their plans were but that they were still involved. I asked that if this should change would Desire need to inform the market? He said yes. I asked that should Arcadia pull out had some kind of penalty clause been written into the farm in contract? He said no but Arcadia was listed as a joint licensee with Desire on the new acreage containing the Alpha prospect and as such had certain obligations to meet (by 2012?) with F.I.G. He didnt mention what the obligations were.


Funding:-


I said that the last RNS stated that Desire had 75m left for drilling and obtaining seismic and that I understood that 20m was for the seismic? I said that this seemed a lot as compared to the last 3D seismic taken back in 2004? And could some of the 20m go into the drilling fund should it be required?

He replied that the 2004 seismic was for a smaller area and at the time of contract seismic companies were in a bit of a slump and therefore DES got a very good deal. He said that since then seismic survey costs had bounced back up. He also said that the new seismic was for a larger area and the latest kit was being used. He said that there may be a bit of contingency in the 20m but that was prudent. I said that the remaining 55m sounded much more than was needed for just two wells. He said it wasnt just for the rig but also for the supply ships and onshore back-up. He said that $12m (8m) had to be set aside in an escrow FIG bank account as part of the licence terms. This was to cover costs should DES go bust etc. SP quoted example of the North Sea Co (Oilex?) and the financial mess it caused when it went bust!


Rachel oil to water RNS:-

I said there was a lot of anger directed at the BoD on BBs over this but stated that I personally thought Senergy were to blame. He defended Senergy and reaffirmed that they did everything to accepted industry standards. I personally feel this was just plain bad luck. I queried the logic of drilling effectively three wells at Rachel. He said once they had found something interesting in the sidetrack it made sense to investigate it further with another well. With Master Shamus recent posts in mind I asked what the percentage of oil to water was? He said he didnt know and that the samples are still in the Falkands awaiting shipping to the UK for further analysis. I tried again and prompted was it 10%, 20% , 30%? He said again he didnt know. I asked if this info would be made public before the Dawn/Jacinta well. He replied that it isnt easy getting things to and from the Falklands ie one flight a week I asked when the logs would be made public? He said he didnt know if they would!


Jacinta/Dawn

I asked if it would be better to let RKH have the rig now, have a rest and give time for DES/Senergy to pick through the info before using our remaining drills. He agreed but said RKH werent ready to take the rig yet so DES had no other option. I asked if this was because the EIA wasnt ready ? He said, no , he didnt mean that. They needed to complete their geological well plan first. He explained that this was a report to state what types of geology they would likely be drilling through rock types etc.??? He definitely described it as the geological well plan though. This would go some way to explain DESs vagueness on drill after Jacinta. Its not in their hands. I got the impression that rig still isnt guaranteed to go to RKH after Jacinta IMO.


Further funding concerns:-

I said I was worried about DESs prospects when it came to seeking further funding. He seemed totally un-phased by this. Ie that it wouldnt be a problem. I said I was worried by excessive dilution. He said yes, there would be that but there were different options. He used a farm in as an example and said that after the 3D seismic was interpreted it would create more options ie many more targets. It seems to be a "given" that more reservoirs are there. I distinctly got the impression that he doesnt have sleepless nights worrying over funding. He said that Desire was founded 14 years ago, implying that it would go on for more. I asked if it would be possible for RKH to drill an appraisal well on the boundary of Sea Lion to DESs acreage. He said no because there was no 3D there yet and it would be pointless to do so. Identifying suitable sands to drill would need to wait for the new seismic.


I think thats everything we covered?


I thanked him for his time and wished him (and us) good luck.


He certainly didn't sound like a man on the "back foot"!




Mike.

the guy wasn't going to be wringing his hands and crying, "we're doomed, we're doomed" was he .... he knew his conversation was coming straight to a BB

Marky
Thanks for the post. Whilst I agree with Cynic that he knew it would be a broadcast message I do think it gives some insight into their strategy - for what it is worth!

I thought the extra drilling was too speculative but if their hands were tied regarding the rig it makes a little more sense or have I missed something obvious?

don't worry who owns Ocean Guardian they are coining it!

des nojump
playing prw iby mo woth stich 50p tops atm
before i sold after told too ii told to me run des in my opinion and the city = hidtory
earn now time is short

and nesrly forgot rrr = gold

imo

?

? lol
if you skip des switch to rrr and others like mtv gold to be made or one of the best fi companies like rkh
des as far as i am concerned gone
that rns as people who know wold say = cash making release for those that know
gl

gibby sounds totally rat-arsed, but i cannot disagree that DES looks to be for the knackers yard

on it's way back up to 129p so i can get out!!!

on it's way back up to 129p so i can get out!!!

you have a very long way to go to 129 and imo, you should forget the emotional attachment and bite the bullet (take the hit) and put the residual funds somewhere better

you know what mitzy would say....and rf did......buy buy buy....