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

Pro at this present time gas is the last thing any of them want it may have a value in years to come when the whole basin opens up but at this present time its the black stuff they want to find.So i dont think if they thought it was gas they would be drilling it.

marky, they need the info for calibrating their 3D seismic, and you never know, it might be gas or oil or it might be bone dry.

However, the drill data is the important thing for the new 3D.

I think DES will rebound stongly....regardless of the Dawn result once the seismic survey results from around their border with RKH comes in....

Totally agree with you there and a good chance it will be bone dry with only a 8% chance of hitting oil but you never know whats round the corner.I guess we will know in the next 5 days or so.

Then its all to play for with RKH where the down side should be minimal as they already have a proven discovery and the upside is huge with any further discoveries on their acreage.hence my banker for 2011

RF i also think that.

Curious that Arcadia bought into the Alpha prospect, which is Gas, despite everyone thinking that any Gas found would be stranded.

If Alpha comes off its huge!!!

is there any reason why Alpha should have anything at all when Dawn, Jacinta and Ernest patently did not

i would never laugh at anyones misfortune, or be jealous of anyones success - i have had both many times, but marky is this not correct?:

75 million before this drill, approx. 55 million left as each drill is 20million

35 million allocated to Seismic Surveys

20 million left for one more drill (not yet decided where)

Next drill will be months away after RKH finishes with the OG

DES will be forced to issue discounted shares to raise capital otherwise they will be left with nothing other than their licences and Seismic data left to sell off to the highest bidder

i sincerely hope des strikes but i blame the bod for this mess at the moment

i did well trading des this year - got it wrong a few times - but going fwd it looks a bit bleak for des right now imo compared to before they started drilling he first prospect when all looked bright

i hope they strike

the gas - i just dont know - what is your opinion? i suppose it depends how much and cost to move it anywhere?

but i sure do not laugh if someone does bad because i have had that more than once - not nice at all - and i believe what goes around comes around

Dawn it still to be drilled and we should find out results after the New Year, only 6% chance that Alpha will come in but am sure Arcadia have looked at the pros and cons.

Des will not be forced,they will wait till 3D result then drill another prospect with that info at hand at some point they will have to raise money but at what price the SP will be at i dont know depends on 3D results and if they hit any oil.

someone does bad - what's wrong with adverbs?

Alpha and Jacinta couldn't both work so Jacinta's failure would suggest that Apha is still a possibility.

more good money to be invested after bad, would you invest in the last DODO?

Make your mind up gibby your post before that you said

gibby - 29 Dec 2010 11:53 - 5933 of 5963
this sould be the end of des i am afraid imo

Now your saying the will have to raise some money........i think we all know that so its not the end its just you deramping.

Desire's current cash balances are circa 75 million GBP equivalent. These funds will enable us to drill the Dawn/Jacinta well, an additional well and to cover our 3D seismic costs.

marky - lets hope they can raise the money / investment

i said could be the end - not is the end - and it could be still but we will not know for sometime either way

i hope it is not the end for des - i dont deramp just facts

you carry on you will persuade me to buy des before cob today!!

Gibby i woudnt buy any Desire shares knowing that bad news you were trying to tell the thread about a few weeks ago.

His English has improved since then though marky!

Thats because he is not running round the globe as much!

lol

some general info fyi....

http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/8184486/Falkland-Islands-oil-false-dawns-and-rollercoaster-share-rides.html

this post from ii:

'Whilst some respected posters are doing their utmost best in talking down DES whilst talking up RKH to serve their own purposes lets take a look at whats next...

(1) Jacinta came up dry. Well that is no surprise. Its a long way from any other well tie in. There is a distinct lack of details of the reservoir conidtions at this well. Did they encounter water?, If so was it fresh. Will there be any traces of oil like 14/24-1 after post analysis to verify the oil has come and gone (but in which direction?)

(2) Dawn coming up next. Dawn is a success, it will most likely be gas, if it is a failure well the trap has failed and is a prerequisite for Alpha to be charged. Hello Arcadia, time to put your hands in your pockets once the numbers have been crunched.

(3) Rig going to RKH for the next 2 wells. Thats it. Only 2, no confirmed continuation, but who knows what will happen after Q1, 2011

(4) By Q2, 2011 the seismics of the NE basin should have been fasttracked processed. DES puts out another CPR identifying more targets.

(5) Funding. Well there is enough funds for one remaining drill. This is not the last throw of the dice. The outcome of the Sealion appraisals will have a very strong influence on the price of capital rasing for DES to explore the NEFB. The capital raising will be done by either farm in or the usual share issue.

So which way for DES now? Well lets assume Dawn has failed. PI's will panic and head for the hills and then to watch the share rebound to around 45-50p whilst the rig moves to Sealion -2. Anticipation will set in for Sealion appraisal edging the share maybe to 60p. Sealion 2 - comes in well hello 70-80p, Sealion 3 comes in well hello 100p again as that is confirming the discovery area adjacent to Rachel.

Lets assume Dawn comes in with gas. Well...guess what the people who sold out at 45p won't have a chance to get back in. Ones that sold at 60p.. might be lucky.. bang back to 70p. Either way its back to 60-70p, just the time horizons for each are different.

So given this...Now for the people bailing out has it evere occurred to you that holding may be the best method of regaining any losses? Any mistiming of the market, you lose more. The correct timing will mean you gain more but the chance to bug it up is high, its the game I suppose but you are takuing on very seasoned experienced traders who will make mince meat of you. Some people may have the time to sit around and trade this beast, but others may just have better more constructive things to do than sit and watch a computer screen buying and selling on some hope and a prayer.

DES is not finished. I repeat DES is not finished. So anyone who says that is speaking out of their ring and knows little about the exploration business. The NFB is HUGE. The oil has spread like an ink blot on a page. Its a puzzle to work it out. '

http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/8094462/Revealed-how-Desires-advisers-have-cashed-in.html

&.....

'Arcadia will drill and test a major new prospect named Alpha, paying 100% of the costs to earn

50% in Block 25/10 and part of Block 25/15. This prospect also extends into the newly awarded

Blocks 25/8, 25/9 and 25/14b where Arcadia has an 80% interest and Desire 20%. Based on the

current mapping, Desire estimates that it has an approximately 30% interest in the total Alpha

prospect.

Alpha is a large, well-defined, structural closure, covering an area of over 300 square kilometres.

It is associated with a very strong AVO anomaly which in addition to significantly de-risking the

prospect, suggests that the reservoir is gas charged.'
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By Rowena Mason, Energy Correspondent 6:28AM BST 29 Oct 2010
16 Comments
As its shareholders the vast majority small investors anxiously await news, the explorers share price has still been bobbing up and down like a nodding donkey this week. Will it be third-time lucky for Desire or will the latest drilling effort prove fruitless just like the last two? The rumour mill is working overtime with the share price doubling earlier this week on rumours the minnow has hit oil.

But while investors fret, the companys directors, advisers and consultants already appear to have profited from Falklands fever even if the presence of oil has yet to be confirmed. An analysis of company filings by The Daily Telegraph shows:

A consultancy connected to Stephen Phipps, the chairman, and his sister, Anna Neve, the company secretary, has been paid 3m for management services and rent over the years. These payments of approximately 300,000 per year continued during the years when the company was merely waiting for a rig to become free to begin drilling.

Advisers to the company have earned almost 4m from 109m worth of rights issues and placings the bulk going to its broker Seymour Pierce.

Three companies connected to directors have also been employed as consultants, receiving thousands of pounds in extra fees beyond the 28,000 remuneration to each non-executive.

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Directors have benefited from an avalanche of share options granted over the years. Two days after the first rig was hired for the Falklands, Mr Phipps sold shares worth 2m at 115.3p per share. On the same day he bought three times as many shares for 2m under options at 32.46p per share a 71pc discount to the traded price.

The dilutive effect of cash calls means that a 10pc stake in the company before the placings and open offers would now account for just 4pc of the company.

Desire is not the only Aim-listed oil and gas company to make a fortune for those connected to the company even before striking oil.

Investors in Aim-listed natural resources stocks are often hit by the dilutive effects of share placings.

For example, Falklands rival Rockhopper raised 320m through six placings and Falklands Oil & Gas 80m through five.

Like many of its peers, Desire has never made a profit or produced any revenue, typically losing 2m per year except in 2005 when it was sitting on the proceeds of a recent share placing.

Investors are not the only ones to be exposed. Desires directors have also ploughed substantial amounts of their own money back into the company, as they built up large chunks of the equity.

And theyre certainly convinced that oil is down there, whether or not in commercial quantities, with Mr Phipps remaining upbeat and encouraged even after the failure of its first well.

But passion for Falklands exploration over a decade is no guarantee of commercial success.

It is now Desires second decade of trying to find black gold in an unexplored area in the middle of the Atlantic.

Investors have been on a roller coaster typical of an Aim-listed oil and gas stock, as the companys market value has grown from 60m to 310m on the geological promise of the area.

Despite the hopes of its faithful investors, its still the case that Desire has just a one-in-10 chance of coming up with a concrete find. Lets hope theyre right.

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i like to be fair - make of this lot what you wll

Desire Petroleum shares fell 17p, or 29 per cent, to 42p after the company said it had found no hydrocarbons in its Jacinta well in the southern part of the North Falkland Basin.

Desire, which earlier this month said it had 75m ($116m) remaining to drill its final two prospects, said it would now proceed with drilling the deeper Dawn prospect at the same site.

The failure to find oil is the latest setback for Desire, whose shares have dropped 73 per cent, from 168p, since they hit a high on October 11. That was before Desire said that it had failed to make a commercial discovery at the Rachel prospect, a joint venture with fellow Falklands explorer Rockhopper.

David Farrell, an analyst at Evolution Securities, said it could soon be game over for Desire, which after drilling four dry wells might have trouble raising more funds.

This didnt come as too much of a surprise [though] it will be hard for the management to go cap-in-hand [to the market] again. Perhaps if Rockhopper has continuing success that might change ... but it looks as if it has one last roll of the dice, he said.

In September, Desire raised 22.8m in a share placement for a potential drilling programme elsewhere in the North Falkland Basin, close to where Rockhopper made its Sea Lion discovery.

That remains the only oil find in the region since four London-listed oil companies that operate there Rockhopper, Desire, Falkland Oil & Gas and Borders & Southern raised 250m from investors last year to drill for oil at the spot for the first time since 1998.

Earlier this month, Desire shares fell after it issued a statement suggesting that it had struck oil based on preliminary data, only to announce a few days later that it had turned out to be a mixture of residual oil and water.