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

Pierre Jungels commented:

"The data we have available to us is extremely encouraging and further reduces
our exploration risk in the North Falkland basin. The target sizes in licences
PL023 and PL024 provide confidence in the potential upside should any discovery
be made in the area and with the rig market easing, our work will now focus on
selecting the best targets for drilling.

Oil has already been recovered on licences PL032 and PL033 so the fact that we
can see structural closures and possible fans on our 3D seismic in this area is
highly significant and increases our confidence in the prospectivity of the
acreage.

With the rig market easing does anybody have a idea of how Desire is doing re securing a rig?

http://www.oilbarrel.com/news/article.html?body=1&key=oilbarrel_en:1185847528&feed=oilbarrel

31.07.2007
Rockhopper Encouraged By Latest Technical Work On Its Falkland Acreage While FOGL Excites With News Of Possible Farm-In
Things may, at last, be starting to heat up down in the Falkland Islands. After a year of not-much-happening (a couple of years back there were hopes wells would have been sunk by now), there are signs that the Falkland Island explorers are making slow but definite progress on putting together a drilling programme in these remote waters of the southern Atlantic.

Rockhopper Exploration, which focuses on the North Falkland Basin where it has interests in six licences, attracted a flurry of investor attention last week when it provided new resource estimates for the eleven best prospects in licences PL023 and PL024, suggesting total unrisked P50 recoverable reserves of 2.5 billion barrels. Shares in the AIM company, which is named after the local penguin colonies, jumped 5.5p to 52.5p after the release of the new numbers.

These licences lie close to the Falkland Islands and in relatively shallow water depths (less than 200 metres), reducing the minimum economic threshold for discoveries to 35 to 50 million barrels of recoverable oil. The company believes that the net present value of a single 100 million barrel recoverable oil field would be between US$750 million and US$1 billion.

The prospects, named after local place names, carry unrisked P50 recoverable estimates that range from 44 million barrels on the Concordia structure to 580 million barrels in the Keppel prospect. None of the eleven include the stratigraphic leads, which can be difficult to identify on seismic data and will require further data acquisition to mature to prospect status.

The most attractive of the eleven prospects is reckoned to be Ernest, with a P50 estimate of 130 million barrels. Ernest is a four-way closure that has been derisked by matching the 3D data with a CSEM anomaly: it carries a 40 per cent chance of success.

The company has also reviewed the 800 sq km of 3D data acquired over licences PL032 and PL033 to the north. These are ex-Shell licences that yielded live oil back in 1998 when the first and last wells were drilled in the North Falkland Basin (only six in total for an area half the size of Texas). The 3D shoot included a 30 km stretch of the previously untested eastern margin of the basin. This is significant because Rockhoppers geological model is based on the assumption that oil in the basin migrated to the basin margins, thereby explaining why the 1998 drilling campaign proved disappointing: all six of the 1998 wells focused on the centre of the basin where a regional seal is believed to have prevented the upward migration of oil.

Preliminary interpretation of the new 3D data is promising, revealing a number of structural closures and two large fan bodies. Oil has already been recovered on licences PL032 and PL033 so the fact that we can see structural closures and possible fans on our 3D seismic in this area is highly significant and increases our confidence in the prospectivity of the acreage, said chairman Pierre Jungels.

All of this, of course, remains purely speculative until tested by the drillbit. The companies exploring these waters need to either pool resources to secure rig time or bring in farm-in partners with the deep pockets to finance these kinds of wildcatting projects. There are signs that the tight rig market is easing somewhat but it is still going to be expensive to drill in these remote waters.

The partners are doing what they can to inch towards drilling, collecting data in order to de-risk their prospect inventories and taking the necessary logistical steps to have drill-ready projects. Millions of dollars have been spent on 2D, 3D and CSEM surveys. Desire Petroleum, which like Rockhopper is active in the North Falkland Basin, has been stockpiling drilling equipment and is in the process of conducting a high res 2D seismic site survey over its Ann, Dawn and Ruth prospects in order to identify any potential hazards that could affect the surface location of the wellbore.

And both Desire and Rockhopper are conducting Environmental Impact Assessments over their licences. A successfully completed EIA also enhances the marketability of the acreage to prospective farm-in partners. The more work done to de-risk the acreage and present a drill-ready portfolio of prospects the more value the AIM players will be able to extract during farm-in negotiations.

No deals have yet been struck but last week investors got the first real signal that a major oil company may be getting reading to join the AIM explorers. Falkland Oil & Gas Limited, which is focused on the virgin waters to the south and east of the islands, confirmed it is in advanced discussions which may or may not lead to a major resources company farming in to certain of its assets.

This is big news. FOGL opened its data room well over a year ago but despite reports of interest from all the usual suspects, a deal has been slow to materialize (not least because of the vast amounts of data to digest by risk-averse oil majors). Shares in AIM-quoted FOGL shot up by 42 pence to 123 pence on news of the talks, taking its share price up 55 per cent week-on-week. The shares have since eased back to 114 pence but are still more than 30 pence higher than in early June. Investors will be keen for those advanced discussions to firm into a concrete deal that brings the prospect of drilling a very real step closer.

Interesting that DES sp hasn't moved up in line with RKH & FOGL, even though they hold a plot in the middle of RKH territory.

LONDON (Thomson Financial) - Australia-based Global Petroleum Ltd said in its quarterly report that it is currently engaged in reviewing the study on Pomboo-1 blocks L5 and L7 in offshore Kenya to determine their remaining potential. The company had earlier reported unsuccessful drilling at its Pomboo-1 well.

It also said processing of data of Falkland Oil and Gas Ltd -- in which it holds 14 pct -- has commenced. The results of two surveys will be integrated with existing work to produce a short list of the best prospects for drilling, set to start in 2008

Falkland Islands upstream sector: Consolidation likely within the next year, sources say
By Oliver Adelman in London

Published: July 31 2007 15:01 | Last updated: July 31 2007 15:01


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Consolidation among the four major players in the upstream oil and gas exploration sector in the South Atlantic off of the Falkland Islands is likely in the short-term, said industry participants.

The four main players in the region presently are Desire Petroleum, Rockhopper Exploration (GBP 40m/EUR 59.5m market cap), Borders and Southern Petroleum and Falklands Oil and Gas Limited [FOGL].

Two industry sources said that all these companies were unlikely to be able to finance exploration work far into the drilling stage without significant external funding. Sales of equity stakes in certain assets was one option; issuing new shares was another, the sources said.

However, given the amount of money needed to finance large-scale exploration leading to production, some form of consolidation among these four juniors was virtually inevitable, said the sources.

I think it will be interesting to see how the situation develops for the smaller exploration firms operating out of the Falkland Islands. Everyone in the industry wants them to succeed as they see them as the last great pioneers working the unknown, said one industry source.

FOGL announced to the London Stock Exchange earlier this week that it was in sales talks with a resources major regarding the sale of an equity stake of one of its assets in the region.

A source close to the company said that he believed this particular sale did not involve a wider sale of the company, and that he was unaware of any consolidation talks taking place at this time. However, the source did say that the economics of the situation made some kind of long-term consolidation among the four logical.

A source within Rockhopper said the company was unable to proceed to the drilling phase without additional financing, but that it had not held any consolidation talks itself. Spokespersons for Borders and Southern and Desire Petroleum both did not return telephone calls seeking comment.

One of the industry sources said the four would be in trouble if there was not some form of consolidation. They are small companies and all running out of cash, some form of consolidation is inevitable, the source said, adding this consolidation would likely start within the next six months. The individual also suggested that BHP Billiton, Royal Dutch Shell, Hydro and ConocoPhillips were all potential acquirers in the region.

A spokesperson for BHP Billiton said that the company never commented on market speculation.

Of Interest

Desire Petroleum Plc has announced that it has applied for 539,679 new ordinary shares in the
Company to be admitted to trading on the Alternative Investment Market. Shares should be
admitted on Friday, 10 August 2007. The press release goes on to say that following the
exercise of these options, Desire has 223,556,022 ordinary shares in issue with an equivalent
number of voting rights.

Hi all
New war ship HMS Cyde just launched to patrol the Falklands
for the next 5 years. Hopefully with the new protection in place
we will see some positive news emerge from all the oil companies
active in the area.

http://news.bbc.co.uk/1/hi/england/hampshire/6955386.stm

regards Hustler

Heard that good news on the way from the Falklands, so get in quick before the RNS.

Rumour or fact, a hot stock today. Safe punt anyhow, in my opinion, since news is only a matter of time.

There have been plenty of rumours in the past 2 years but I guess one day one of them will come true...

http://www.oilbarrel.com/news/article.html?body=1&key=oilbarrel_en:1185847528&feed=oilbarrel

31.07.2007
Rockhopper Encouraged By Latest Technical Work On Its Falkland Acreage While FOGL Excites With News Of Possible Farm-In
Things may, at last, be starting to heat up down in the Falkland Islands. After a year of not-much-happening (a couple of years back there were hopes wells would have been sunk by now), there are signs that the Falkland Island explorers are making slow but definite progress on putting together a drilling programme in these remote waters of the southern Atlantic.

Rockhopper Exploration, which focuses on the North Falkland Basin where it has interests in six licences, attracted a flurry of investor attention last week when it provided new resource estimates for the eleven best prospects in licences PL023 and PL024, suggesting total unrisked P50 recoverable reserves of 2.5 billion barrels. Shares in the AIM company, which is named after the local penguin colonies, jumped 5.5p to 52.5p after the release of the new numbers.

These licences lie close to the Falkland Islands and in relatively shallow water depths (less than 200 metres), reducing the minimum economic threshold for discoveries to 35 to 50 million barrels of recoverable oil. The company believes that the net present value of a single 100 million barrel recoverable oil field would be between US$750 million and US$1 billion.

The prospects, named after local place names, carry unrisked P50 recoverable estimates that range from 44 million barrels on the Concordia structure to 580 million barrels in the Keppel prospect. None of the eleven include the stratigraphic leads, which can be difficult to identify on seismic data and will require further data acquisition to mature to prospect status.

The most attractive of the eleven prospects is reckoned to be Ernest, with a P50 estimate of 130 million barrels. Ernest is a four-way closure that has been derisked by matching the 3D data with a CSEM anomaly: it carries a 40 per cent chance of success.

The company has also reviewed the 800 sq km of 3D data acquired over licences PL032 and PL033 to the north. These are ex-Shell licences that yielded live oil back in 1998 when the first and last wells were drilled in the North Falkland Basin (only six in total for an area half the size of Texas). The 3D shoot included a 30 km stretch of the previously untested eastern margin of the basin. This is significant because Rockhoppers geological model is based on the assumption that oil in the basin migrated to the basin margins, thereby explaining why the 1998 drilling campaign proved disappointing: all six of the 1998 wells focused on the centre of the basin where a regional seal is believed to have prevented the upward migration of oil.

Preliminary interpretation of the new 3D data is promising, revealing a number of structural closures and two large fan bodies. Oil has already been recovered on licences PL032 and PL033 so the fact that we can see structural closures and possible fans on our 3D seismic in this area is highly significant and increases our confidence in the prospectivity of the acreage, said chairman Pierre Jungels.

All of this, of course, remains purely speculative until tested by the drillbit. The companies exploring these waters need to either pool resources to secure rig time or bring in farm-in partners with the deep pockets to finance these kinds of wildcatting projects. There are signs that the tight rig market is easing somewhat but it is still going to be expensive to drill in these remote waters.

The partners are doing what they can to inch towards drilling, collecting data in order to de-risk their prospect inventories and taking the necessary logistical steps to have drill-ready projects. Millions of dollars have been spent on 2D, 3D and CSEM surveys. Desire Petroleum, which like Rockhopper is active in the North Falkland Basin, has been stockpiling drilling equipment and is in the process of conducting a high res 2D seismic site survey over its Ann, Dawn and Ruth prospects in order to identify any potential hazards that could affect the surface location of the wellbore.

And both Desire and Rockhopper are conducting Environmental Impact Assessments over their licences. A successfully completed EIA also enhances the marketability of the acreage to prospective farm-in partners. The more work done to de-risk the acreage and present a drill-ready portfolio of prospects the more value the AIM players will be able to extract during farm-in negotiations.

No deals have yet been struck but last week investors got the first real signal that a major oil company may be getting reading to join the AIM explorers. Falkland Oil & Gas Limited, which is focused on the virgin waters to the south and east of the islands, confirmed it is in advanced discussions which may or may not lead to a major resources company farming in to certain of its assets.

This is big news. FOGL opened its data room well over a year ago but despite reports of interest from all the usual suspects, a deal has been slow to materialize (not least because of the vast amounts of data to digest by risk-averse oil majors). Shares in AIM-quoted FOGL shot up by 42 pence to 123 pence on news of the talks, taking its share price up 55 per cent week-on-week. The shares have since eased back to 114 pence but are still more than 30 pence higher than in early June. Investors will be keen for those advanced discussions to firm into a concrete deal that brings the prospect of drilling a very real step closer.

http://www.sartma.com/art_4483.html

The oil exploration industry in the Falklands are expecting good news about an oil rig soon, with all companies keeping cards close to their chests, in hopes to bring the first rig to the Falklands sometime in 2008. Some uncertain sources say it could be at the end of 2007. We wait and see.

Rig group required for Falklands

http://www.offshore247.com/news/article.asp?Id=8599


Rig group required for Falklands

Thursday, September 6, 2007


Drilling in the South Atlantic Falklands will still take some work from the operators holding licences there before a rig consortium can be formed to drill, an offshore service group has suggested.

With the worldwide rig market remaining tight a rig expert from AGR Petroleum Services has suggested that Falklands exploration companies with licences both in the north and south of the Falklands will have to compromise if they want to get identified prospects drilled.

One of the big barriers is the fact that rig owners are seeking a minimum 12 months contract for a drilling unit before they are prepared to commit to a region.

There is a group of Falkland Islands operators and they recognise they have to work together, said Ian Burdis, division manager of AGR Petroleum Services.

I have a feeling we are getting close, he commented, when asked about the prospects for putting a rig consortium together for Falklands drilling.

One of the challenges for the region is the differing rig requirements for the operators: Licences to the north of the islands are in shallower water which does not require a high specification unit, but the area to the south of the islands is a much harsher, deepwater environment which will demand a high specification rig.

Drilling last took place in the Falklands in 1998 with a rig-sharing consortium which drilled six wells.

I think they will have to take a deepwater rig and some commercial arrangement will have to take place between the operators, Burdis speculated.

The deepwater operators are going to have to compensate the others, but they will have to pay more than they want to, he suggested.

He said there is no deepwater rig capacity available for 2008. We have expressions of interest from 27 different companies with an aggregate of 2.5 rig years and I have an offer on a fifth generation rig for a minimum of two years, he said, detailing AGRs current negotiations with rig contractors. And those operators are in West Africa, Australia, Calgary, London, Paris and Moscow, Burdis told an industry briefing at Offshore Europe in Aberdeen.

The hard part is transforming all those expressions of interests into form commitments before someone like Exxon Mobil or Statoil takes the rig.

On the chances of forming a rig consortium for the Falklands, he continued: It is technically possible .this is worth the effort but it requires an awful lot of work on our part to pull it together.
Thursday, September 6, 2007

http://news.independent.co.uk/business/analysis_and_features/article2970876.ece

Small Talk: BHP in the frame to take Falklands stake
By Andrew Dewson
Published: 17 September 2007
Companies have been prospecting for natural resources in the vicinity of the Falkland Islands for what seems like an eternity, and so far at least the results have been about as tempting as a winter holiday at Goose Green. However, some well-informed corners of the City believe that the situation is about to change radically for at least two regional players.

The word is that Falklands Oil & Gas is poised to confirm that it has agreed a "farming-in" deal with the world's largest integrated mining group, BHP Billiton. Farming-in occurs when an exploration and production company invites a partner to share in the development and funding of a prospect.

The company has already confirmed that it is deep in negotiations with several potential blue-chip partners about a farming-in arrangement, and as a result the shares have rocketed from below 75p to Friday's closing 157p over the past two months. However, a deal with as prestigious a partner as BHP should see even more punters pile into the shares.

Although best-known as a mining stock, BHP has extensive oil interests, and expects several of its prospects to come into production over the nextsix months.

Many observers have been highly sceptical about the prospects for significant and more importantly economically viable finds in the South Atlantic. Not only is the environment one of the least hospitable anywhere in the world, requiring deep sea rigs capable of working in the roughest seas, the Falklands is a long way from any major oil market. But with black gold hovering at close to all-time highs, in absolute terms at least, perhaps now majors are set to take the region more seriously.

Elsewhere in the Falklands, recent newsflow has not been so good. Falklands Gold & Minerals confirmed that its drilling programme has failed to find commercial quantities of gold at Bluff Cove. The company still has 3.5m of cash, and the rumour is that it is considering a move even further south into Antarctica, to be precise. How many geologists will be queuing up for a slice of the action is hard to tell there is no shortage of demand for qualified geologists, and most locations don't require living life in the freezer.

http://www.falklandnews.com/public/story.cfm?get=4673&source=3

LOCAL DEVELOPMENTS:



There is a positive buzz in the Falklands and the visit of Oil Company representatives is seen as a very important event for Falklands businesses. The representatives will be giving presentations at the Chamber of Commerce and there will be an opportunity to chat with them about a variety of options. It is expected that the Falklands will see an exploration rig sooner rather than later.

http://www.sartma.com/art.php?artid=4537&skip=1

Falklands Await Joint Oil Operators Meeting


By J. Brock (FINN)


A joint Oil Operators meeting will be held in the Falklands between Saturday 29 September and Saturday 6 October 2007


Participants attending are: from Desire Petroleum, Dr. Colin Phipps Chairman, Dr. Ian Duncan Chief Executive Officer, Mr. Stephen Phipps Non Executive Director, from Mr. Lewis Clifton OBE Non Executive Director, from Rockhopper Exploration, Mr. Sam Moody Managing Director, Mr. Dave Bodecott Exploration Manager, from Argos Resources, Mr. John Hogan Chief Executive, Mr. Drew Irvine Director, from Falkland Oil & Gas Ltd, Mr. Tim Bushell Chief Executive Officer, Mr. Stephen Luxton Resident Representative, from Borders & Southern Petroleum, Dr. Howard Obee Chief Executive Officer, Mr. Bruce Farrer Business Development Manager, from British Geological Survey, Dr. Phil Richards FIG Offshore Consultant, from RPS Energy, Mr. Jon Perry Environmental Manager, from FIG, Mrs. Phyl Rendell Director of Minerals & Agriculture, Cllr. Andrea Clausen plus others as appropriate


On Saturday 29 September, the oil reps will arrive via Lan and transported to Stanley. The programme begins on Sunday 30 September, when the group will participate in an organised field trip. Another organised field trip will take place on Monday. From 8.00am-5.00pm on Tuesday the oil reps will have individual Company meetings with FIG. The big event on Wednesday 3 October from 8.30am-5.00pm is a Joint Oil Operators & Government Officials Meeting. A Briefing at MPA is scheduled for Thursday 4 October between 10.30am-1.00pm. From 2.00-4.00pm Individual Company meetings with FIG as required will be held and from 5.00-6.00pm there will be a Public Meeting in Court & Council Chambers



Friday 5 October will be a very busy day with a 9.00-10.30am Operators briefing with Councillors. Then from 10.30am-12.00 there will be another briefing with Heads of FIG Departments meeting with OperatorsFrom12.00-1.30pm there will be a Q & A Session followed by lunch at Chamber of Commerce. Then from 2.00-2.50pm Dr. Ian Duncan & Mr Jon Perry to talk to Community School children Years 10 & 11, followed by 2.30-3.30pm when Dr. Phil Richards to talk to Infant/Junior School children Year 5 & 6. From 3.30-4.30pm Operators will be meeting with Falklands Conservation.



After a very busy week, the Oil Company reps will depart the Islands via the weekly Lan Flight.

Britain said to lay claim to south Atlantic seabed


LONDON (AFP) Britain is seeking to legally annex stretches of the south Atlantic seabed in a bid to tap gas, mineral and oil wealth, in a move that could raise tension with Argentina, a newspaper reported Saturday.

It plans to file with the United Nations authorities a claim to tens of thousands of square miles of the Atlantic Ocean floor around the Falklands, Ascension Island and Rockall, The Guardian said.

In a bloody war 25 years ago, British forces expelled Argentine invasion forces from the Falkland Islands, which is 8,000 miles (13,000 kilometres) from Britain. Argentina claims the Falklands, or Malvinas, as their own.

The British government is trying to speed up the application process with the UN Commission on the Limits of the Continental Shelf (UNCLCS) ahead of an international deadline in May 2009, the newspaper said.

In a novel legal approach, any state can use detailed geological and geophysical surveys to demarcate a new "continental shelf outer limit" that can extend up to the 350 miles from its shoreline, The Guardian said.

The British government has collected data for most of what it is submitting, it added.

Chris Carleton, head of the law of the sea division at the UK Hydrographic Office, said preliminary talks on Rockall are due to be held next week in Reykjavik, the capital of Iceland, according to the newspaper.

The Falklands claim has the greatest potential for diplomatic tension, Carleton said.

Britain has been granted licences for exploratory drilling around the islands within the normal 200-mile exploration limit and any new claim to UNCLCS would extend territorial rights further into the Atlantic.

"It would be beyond the 200-mile limit but less than 350 miles," said Carleton, who is involved in preparing the submission.

"It effectively joins up the area around South Georgia to the Falklands. It's a claim but how it's handled has not been decided yet. The Argentinians will say it's not ours to claim. It's all a bit tricky," he was quoted as saying.

http://www.oilport.net/news/article.asp?Id=8783

Rig share offered

Friday, September 28, 2007



Falkland Islands exploration company boss Howard Obee has clearly stated that his company is willing to work with other firms operating there to develop a joint drilling campaign.

Obee, chief executive of Borders and Southern Petroleum, which just recently hired PGS for a 1,500 sq. km 3D seismic survey campaign over its licences to the south of the Falklands, says his company is preparing an environmental impact statement in preparation for drilling, and indicated his willingness to share a rig.

With respect to accessing drilling rigs, it is the companys intention to participate in any joint drilling activity with the other Falkland Island operating companies and we will continue to work with these companies to progress this, Obee said.

Rockhopper Exploration and Desire Petroleum are currently working their own prospects for possible drilling off the Falkland Islands.

Obee went on to state: The next 12 months will be an exciting time for the company as we get greater clarity on the value of our acreage and prepare the groundwork for the drilling phase.

Previously, Borders and Southern has indicated that it has identified a number of high-graded leads on its acreage, some of which encompass areas of more than 50 sq. km (20 sq. miles).

Borders and Southern expects PGS to start its 3D South Falklands survey next month.

Today the company reported its interim results for the first half of the year, and disclosed a 362,015 loss on operations for the six months to June, similar to the 361,22 loss reported for the first half last year. Losses on ordinary activity after tax were 117,158, for the first half of 2007, down from 182,010 last year. Friday, September 28, 2007

http://www.tradingmarkets.com/.site/news/Stock%20News/662251/