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

I know its not about Desire but of FOGL and its PR and about the Falklands and that is postive news.

http://www.falklandnews.com/public/story.cfm?get=3231&source=2

Section 1:



Oil News



ENCOURAGING RESULTS FROM FALKLANDS OIL AND GAS


(A Report for BBC World Service Calling the Falklands by Dee Palmer (DP) 03 May 2005



Falklands Oil and Gas Limited has released the preliminary results of the seismic surveys its carried out in its licence area IN THE South Falklands Basin. They more than justify the hopes the Company expressed when it listed on Londons Alternative investment market last October. Disclosure of the seismic results was made today (Tuesday) in Australia, where the Companys Chairman, John Armstrong (JA), is based. I (DP) phoned him up and asked him how things are looking.



JA: We havent mapped the data completely but weve had people look at the early records and I must say that they are very encouraging and they certainly exceed our expectations a lot more than we had expected at this stage of the project.



DP: So, are you able to even begin to estimate how much oil and gas there might be there?



JA: I think its probably a bit early to do that. We only listed the Company last year on the basis there were only 8 possible targets there that would warrant further investigation. And, now, weve got something over 100 possible targets.



DP: Wow. That is a big increase, isnt it?



JA: It certainly is. Our progress to date has been quite remarkable and our announcement today was intended to inform the market that we had made good progress and things are looking very good.



DP: So whats the next step, John?



JA: The next step here is more detailed mapping of the information we have already acquired. And, that will take place over the next few months. And, then we will probably engage contractors to do further work to define some prospects for drilling.



DP: Any idea how many prospects there might be for those initial test wells?



JA: We think that if we can survey the area sensibly that we should be able to produce perhaps 20 drillable prospects maybe by the middle or second half of next year. And, then we marked the end to begin drilling a programme in 2007.



DP: Right, so the summer after next in the South Atlantic?



JA: The Southern summer 06/07 or maybe somewhere into 2007 and so on.



DP: Right. Now, of course you now have onboard Patrick Byrd as your operations manager a very experienced oil man. So, hes got something to get his teeth into.



JA: I think he has. I mean, Patrick has only been with us for a few weeks and I think when he joined he thought that this was a pretty interesting project. He was out with us in Australia a couple of weeks ago looking over the data because we are going to make the transition from managing the project from Brisbane in Australia to London. And, I think Patrick was quite surprised at the attributes and the opportunities that he saw.



DP: John Armstrong is the Chairman of Falklands Oil and Gas Limited.

Chart update...
As markymar pointed out late yesterday, Thursday's evening star has prompted a pullback in the market. Whether it will reverse the recovery rally off the 31.5p low remains to be seen, but while we are above support at 35.5p there is no reason to suspect that it is anything more than consolidation ahead of further strength.
Stochastics remain firm which supports further bullish action, although we still need to fill the 40/41.5p window to trigger stronger recovery towards 48p.
Supports are at 36.5p (intraday rising trendline), 35.5p (Wednesday's low) then 33.5p. Below the latter is needed to suggest further weakness to/through the recent low, but lets hope we don't get there...
Enjoy the weekend!
Lynnzal

http://www.falklands.com/Detalle.asp?NUM=5613

Desire confirms exploratory drilling in 2006



Desire Petroleum is set to begin early 2006 exploratory drilling in the Falkland Islands northern basin with an overall investment of forty million US dollars, reports the Argentine press.



In a phone interview with Clarin, Mr. Colin Phipps, Desires president said offshore drilling in three wells has been encouraged by recent tri-dimensional surveys in the north of the Islands which indicate the zone has at least a billion barrels of crude waiting to be exploited.
Mr. Phipps added that the billion barrels represent a 25/30 years oil reserve, and if successfully exploited will generate a daily income for the Islanders of half a million US dollar, -royalties and taxes-, adding up to 182 million dollars annually, to be shared among the 2,500 inhabitants.

Clarin recalls that since the 1982 war Islanders became immensely rich with the sale of fisheries licences but the diminishing squid catches have forced the Falklands government to look for other options such hydrocarbons offshore but also gold and diamonds on shore.

In 1998, four oil companies, including Desire, drilled six wells in the northern basin with signs of oil but not commercially viable. At the time according to Mr. Phipps 100 million US dollars were invested, of which Desire participated with 30 million, but further plans were cancelled when the international price of oil dropped to 10 US dollars per barrel. All drilling took place in the 150/200 miles South Atlantic area adjacent to the Falklands.

With price of oil averaging 50 US dollars per barrel companies are returning to the Islands and Desire is confident, based on the data from the northern basin, of the existence of huge deposits of hydrocarbons.

Desire will be the first company to begin exploratory drilling in the margins of the basin, in this new stage, since other companies also present, such as Falkland Islands Oil & Gas Limited and Borders and Southern, have plans for 2007 and 2008.

Clarin finally reports that Desire Petroleum is currently involved in the search for an oil rig, probably from Brazil. The operation, involving a serious environmental risk, will need 100 men working offshore and another fifteen in Stanley (Puerto Argentino).

http://www.falklandnews.com/public/story.cfm?get=3237&source=3

WELL WORTH A READ AND VERY INTRESTING


Caught in the Net with Rendell and Luxton
May 8, 2005
by Sian Ferguson

CAUGHT IN THE NET WITH RENDELL AND LUXTON



A Report for FIBS by Sian Ferguson (SF) 06 May 2005



Sians guests today are Director of Minerals and Agriculture, Phyl Rendell (PR) and Cllr. Stephen Luxton (SL), who holds the Minerals Portfolio. She asked if anyone could explain who the licence holders are for offshore oil exploring at the moment.



PR: Well weve got quite a number of licence holders at the moment. The ones that are best known probably are Desire Petroleum, who have got licences in the North Falkland Basin and FOGL or Falklands Oil and Gas Limited, with open door licences in the south. In addition to that we have a company called Boarders and Southern Petroleum, who were licensed last year. Their area in the south is being surveyed right now by the GSI Admiral the vessel that people will have seen coming in and out of Stanley. Further to that, weve got Argos resources, who still have a licence in the North Falkland Basin and we have Talisman Energy with a licence in the North Falkland Basin.



SF: How much of the basin that can be licensed has actually been licensed to these companies?



PR: Thats rather difficult to estimate.



SL: Its a relatively small area. Its a proportion of the actual 150 200 mile zone. But in terms of the areas of interest, I think they are the main areas of interest are now licensed. The North Falkland Basin the several licence holders in that. I think they are covering most of the juicy bits. But there is a lot of unlicensed acreage. Some of it may be of interest in the future depending on what is found by the existing license holders but other areas arent actually sedimentary basins. They wont have any oil or gas potential.



PR: And, I forgot to mention Rockhopper Exploration having licences in the North Falkland Basin that were awarded last year. And, theres a few areas just further north of the areas that are licensed that are interesting as Stephen says, quite juice bits. That perhaps companies will be interested in later on after we get more data on the region.



SF: Whats the difference between the North Falkland Basin and the south one?



PR: Way back in 1996/97, we tried licensing both areas to spread the effort. But the companies chose to all explore in the north because the water depths are much shallower under 500 metres and, generally speaking the geology looked more straight forward than the south. And, met-ocean conditions, too are more straight forward in the north. Its quite a challenge in the south with the currents and the much deeper water depth. So the effort has been focused on the north until more recently and now we are pleased to have companies looking at the south, which is completely unexplored and no wells have been drilled down there.



SF: At the moment, do you have interests from any other companies who may be wishing to explore in the south?



PR: Theres interest from companies now because oil prices are so high so theres a number of companies enquiring. And we are handling the enquiries as and when they approach us.



SF: The open door policy that Government is now exercising has this changed the interest you are getting from companies or not?



PR: It did change when we introduced it in 2000. It means that companies can come to us and say they would like to make an offer on an interesting area. And, they will do this amount of work for it. The other system that we worked when Desire Petroleum and Talisman and Argos got their licenses was competitive licensing, where the Government identified areas up for licenses and asked what the company would offer us. So now, weve given the industry the opportunity to be in the driving seat for the time being.



SF: Its all about making it easier for your oil companies to get involved and to get interested here. At the moment, because we dont have any working oil fields, we still are a frontier area, therefore, its still high risk, so its down to us to make it easy for companies to get involved as and when somebody actually makes a commercial find. I should say, if somebody makes a commercial find, obviously, our licensing terms are liable to change because then it will be far more interesting, actually. If there is a known working oil system here, then we may change the licensing systems so that there is more in it for the Falklands so that we can get more of the potential wealth, if you like, for the Falkland Islands Government.



PR: Following on from Stephen, its important for people to realise. Where we are at the moment is probably about the equivalent of the North Sea in the 1960s. We are at a very early stage. And, even the companies making quite a lot of statements at the moment about what they think the potential might be, its still very early days and weve got to get the wells drilled and actually have a commercial discovery before we can bank on anything.



SF: Have you seen the results of any of the surveys and do they look encouraging to you?



PR: Certainly the more mature area for the Falklands in the North Falkland Basin the Desire Acreage their data looks very interesting and as you know the result of that is that they plan to drill some wells up there. Thats great. They are really committed and moving forward. But the Falkland Islands Government has yet to see the data from the south that FOGL have acquired. Its still being processed. And, once its completed its processing, our consultants, British Geological Survey, will get a set of that and they will do diligence on that data and advise us as to what their opinion is of it.



SF: When you award licenses to companies, is it at the sole discretion of the Falkland Islands Government or does the UK and Foreign and Commonwealth Office have some input?



SL: The FCO does have some input and ultimately the licenses have to be approved by the Secretary of State. But basically if something comes to us, which is not acceptable to us, then we have the veto over it. First of all, a license will go to the Mineral Resources Committee and then Executive Council and, if Executive Council approves this, it will then be referred to the Secretary of State for the FCOs consent. But we effectively have the say over any applications but if we approve something it has to go on to the FCO as well.



SF: How long are these licenses actually granted to these companies?



PR: They vary. The competitive licensing terms are quite different to open door terms and there are stages through which we have to go. They have a first exploration phase and then they have to drop some acreage and then they can have another exploration phase. They vary depending on the amount of work that the company is prepared to do. If they are prepared to commit and drill wells in the first stage, we can make that 5 years in length but if not, and they are acquiring seismic only, it will be three. Its complicated and we have that listed out for people to read on our website.



SF: if oil was found in commercial quantities down in the Islands, what sort of measures environmentally will be taken to ensure that there werent any spills or damage to the environment?



PR: Theres Health & Safety and Environmental measures already in place at exploration stage. (inaudible sounds like nevorlan) at a discovery and production stage. So, I think the Falkland Islands Government takes that very seriously. And, indeed, with increasing activity, and interest now, we will be reviewing that legislation and probably strengthening it. It was 5 or 6 years since it was drafted and approved. Oil companies have their own operating procedures and, of course, the last thing they want is to have a spill. But that doesnt mean that the Government should be complacent. We have legislation in place, companies have to have oil spill contingency plans as well as national plans. In the case of drilling, companies have to produce an environmental impact assessment that has to be approved before they can proceed.



SL: I think its important to stress that there is a degree of nervousness here about potential environmental impacts but I think its important to stress that these days, to be honest, that the days of cowboy oil companies horrible spills in other parts of the world I think those days have gone because, to be honest, no investors these days put their money into somebody who doesnt have a good environmental track record. Its something theyve got to be 110% on in the environmental front before anybody will look at funding them from the stock market. So, I dont think there are any concerns on that front about any of the licensees. Theyve got very strong environmental programmes.



PR: Not trying to defend the actual oil industry, but most spills occur when hydrocarbons are being transported from place to place, as we saw only recently with ships and vessels. We will be looking at double hulled tankers for transportation of oil from oilfields etc. but thats very much down the line. And, any company that were thinking of going into production will have to produce a development plan for the Falkland Islands Government, which would become a public document for public discussion and debate before they could proceed to development.



SF: So, would any companies be planning on transporting the oil via tanker from the oilrig or will the oil be coming to the Falklands for the holding stage?



PR: The production scenario in the event that there were a commercial discovery and in the event that there was a company willing enough to put in the billions of dollars required to make it commercial, the scenario is that we would have floating production vessels offshore, rather like west of Shetland, that would produce the hydrocarbons and it would all be produced and processed offshore and tankers would come alongside to the loading point where the floating production vessel was and load the hydrocarbons and take that directly away to the refinery, wherever that might be. It may be Huston or wherever. The scenario that the companies have painted to us to date is that they dont expect hydrocarbons to come ashore at all to the Falklands. The Falklands would be really the base for getting men in and out of the area and there would be some loading and requirements from the port facility but we dont envisage pipelines and storage tanks and certainly never refineries in the Falkland Islands.



SL: I think thats absolutely right. For people who dont know what they are, the floating production and storage vessels are basically an oilrig mounted on top of a tanker. You wouldnt actually be looking at an oilrig that would be attached to the sea floor. Thats what people would normally expect. Basically this is a big tanker thats anchored over the well-head with a rig on it that will extract the oil, hold it on the vessel and then transfer it to other tankers that will come and go and take it to the market. Thats the sort of technology that we are looking at. There just wouldnt be a justification for bringing oil onshore in the Falklands because it would just be double handling. You would bring it here, offload it from a tanker and then put it back on a tanker and take it away again. Its far more efficient to take it straight to the markets.



SF: And, if this did happen, how would the Falkland Islands Government prosper from the discovery of oil?



PR: The Falkland Islands Government will prosper now from exploration, probably through tax paid by companies operating offshore. Just having seismic ships operating here is good for the economy. The more activity that occurs, the more money will flow through the economy and flow into the private sector and move around, which is great. But the Falkland Islands Government probably wont make large amounts of money until such time as royalties are being paid by oil companies that are in production. And, that is quite a long way off. Certainly, corporation tax paid by companies that are operating is even further off because of the fact that they can offset the many billions of dollars they are expending on getting to that stage against their profits. So, its quite a long way before the Falkland Islands Government would see large sums of money coming in to the treasury. But certainly activity in the area is good for the economy generally.



SL: It provides a lot of opportunities for local companies for support services and things as well. And, that there was quite a lot of money flowing through the economy by that means last time in the 1998 drilling round. And, the same thing would happen again in the drilling round that may occur in the early part of next year. It may happen a couple of years down the line if FOGL do some drilling. Obviously, if there is a discovery, there will be a lot of opportunities for local companies in the logistics of handling people and equipment and drilling mud all sorts of things that they need for the industry. There will be a lot of opportunities onshore for all sorts of local businesses.



SF: How much do you think the services of Stanley would have to change to cope with that?



SL: Its really a question of scale. I guess whatever happens next year will probably be on a similar scale to what happened in 1998. So, there will be a few people coming in and going out. And, people will see the ships coming and going. I dont think there are any major changes planned at FIPASS or anything like that. We will be on the same sort of scale as last time. And, I would guess in a couple of years, if FOGL get things together and do some drilling, it will probably be much the same thing again. In terms of what will change if there is actually a discovery and we are actually producing oil, really depends on how much and at what speed things develop. There could be quite a lot of infrastructure on shore just for handling drill pipes and supplies for the rig and things like that people coming and going, so there may need to be more accommodation a camp somewhere for transiting oil workers that sort of thing but I dont think theres going to be a complete change in Stanley or anything like that.



SF: We talked about offshore oil, moving on to the onshore minerals, I understand that theres activity at Goose Green at the moment.



PR: Thats correct. Falklands Gold and Minerals Limited have set up a base at Goose Green that people are well aware of because its very central for their areas that they are drilling at the moment. And, Derek Reives, the manager for that project is here in Stanley and supervising the activities out there. And, its all going very well, considering the time scale. Theyve had a lot of equipment brought in from overseas a couple of drilling rigs from Canada and a lab and so on to do testing on the cores they are getting out at the moment. Its all going to plan, in spite of moving into the winter. I think they hope to keep drilling throughout the winter.



SL: I think, really, I just would like to take the opportunity to reassure people that may be still a bit nervous that once the oil bandwagon gets underway that there will be no stopping it. I think the important thing is that the Falkland Islands Government will be in control of what happens. At the end of the day, we issue the licences and we make the laws. So, if we dont want something to happen, if we dont want a refinery onshore, if somebody decides they want to do that, then it will be up to us to say yes or no. I think we are confident that the oil industry is a fairly big enterprise but that doesnt mean to say that the Falkland Islands Government will get pushed around. I think the working relationship thus far has been extremely good and I dont think people should worry that the thing will get out of control and that there will be refineries from one end of East Falkland to the other ten years down the line. It just isnt going to happen. Its up to us what we want and where we want it.

If you think this share is going anywhere that is worth going then you must be mad. All it does is go downwards -fast!!!
Dream on suckers!
We're out of here.

We will see in early 2006...just be patient.

Hello everybody. will anyone be attending the AGM for desire Petroleum. I have recived my Invite last Thursday 5th May. The meeting is at:
THE REFORM CLUB
104 PALL MALL
LONDON
SW1Y 5EW. at 5.30 P.M Tuesday 24th May 2005

Therefoe this will initially will be an ideal opportunity to ask, any indepth questions. When a rig is due to be booked. Amonst the present hype and rummors. Also If they have plans for drilling to commence in December 2005 or early January 2006 !. Is any one else attending, if so comments and feed back are appreachiated. Bye for now shadow....

BHunt, where did you come, how can you get out of here, you've never even arrived. You sound like a shorter who's hoping to shake a few weak holders. Just to let you know that most people on this board know the action doesn't start until drilling in 6 months time and so are happy to sit tight until at least then. If you are shorting then I hope you've done your homework and know that an RNS announcing the succesful contract for a rig is just around the corner and might have a rather dramatic effect on the price. One company run by a key player in the oil industry is so impressed with Desires 3D seismic they are happy to put up 30% of the drilling costs for just 15% of the oil. You (singular) may be out of here, we are very pleased to stay.

Hi all

Had a great time in Disney Land Paris. Good to be back though!

Thanks to lynnzal for updating the charts & all the other posters for keeping us informed.

DES is at 2nd place in the oil & gas sector, this is based on the % rise over last 250 days trading. Markymar could you put the sector list up that shows this please. The open 0.3675p, high 0.3675p, low 0.3575p, close 0.3600p, combined volume 819.0 K. At the of me going away there was a hammer formed. this was near the fibonacci retracement of about 0.3000p, the hammer & fibonacci retracements have so far given support. The falling window is still remains as resistance at 0.4150p. The support & resistance (as lynnzal has suggested) may become an area of consolidation. The buys vs sells (buys 525,908. sells 239,125.) 500,000 were broker to broker. The news of a rig being secured would be great news. DES is still looking good even after all the corrections.

(Most of the charts are showing corrections) Not just DES !





Good Luck All

Eddie

Cheers Eddie
Good to have you back
Regards
Berlingo

Having trouble putting the oil sector up so will try direct link and hope it works.It works for me but i will have the cookie on my computer so let me know.

Did you have good weather Eddie?

http://www.digitallook.com/cgi-bin/digital/security.cgi?csi=50064&action=performance&username=1033187&ac=

Welcome back Eddie, thanks for the update.

I've been sitting here going over my DES charts and have to confess that lack of upside progress is concerning/frustrating me. As this market is currently lacking press releases, we are more under the influence of technical (chart) issues. So I feel that I should re-iterate my posting from 28 Apr (#1147).

"If this market does continue to drift lower, I see longer-term downside risk to 30.5p (fibonacci retracement) and then I have a projected target at 26.5p."

The latter is an elliott wave projection and also ties in with the 'head & shoulders' objective 28p on closing basis and 26p on daily range basis. (Note my original posting had the reversal objective incorrectly stated at 20.5p).

Technically, I don't see DES getting anywhere below 26p and will be looking to add to my holding if we break below 30p. If this scenario plays true, then 26p should be the termination of a 'killer' C wave (elliott) and would then provide the base for a wave three rally. Note wave three rallies tend to be the biggest in any impulsive move. Above 48p confirms the corrective phase is over.

I hope this doesn't cast too much of a cloud, but I felt I should share my current thoughts....
Lynnzal

It is DESpressing and very unDESIREable but investors must remember that whatever the current share price oil does not disappear overnight and this share will go massive if the first wells hit the black stuff.

Hi guys. Its a waiting game from here on.Let the MM`s play their tricks.Signs of stop losses being triggered.Wait for a massive buy to trigger uptrend!
Kind regards
Berlingo
ps Eddie , look what happens when you come back,DES drops??? What you got to say for yourself? Actually nice to have you back !

Hi all

Hi markymar the weather was good just a few short showers.

Oily don't get depressed, most stocks are having corrections.

Lynnzal I'm not familiar with the elliott killer C wave, could we have some more on this please ?

Todays trading was pretty dismal for DES, but the same support & resistances apply. The rising window that took DES to its most recent highs started at 0.2800p date 08/11/04. The bottom of a rising window is said to be the most significant for support. Lets hope this is the case. We also have the recent hammer & fibonacci suggesting support at about 0.3000p. The open 0.3600p, high 0.3600p, low 0.3275p, close 0.3225p, combined volume 631.0 K.



Indices are all down, DES could be in for a rough ride tomorrow.


Good Luck All

Eddie

Cheers Eddie,

Glad you had a good time maybe USA this time next year me thinks.

Some good posts so keep up the hard work all.

Markymar

Hi Eddie, with regard to the 'killer' C wave...

Basically I am talking about an Elliott Wave, C wave correction (the killer bit is a phrase I picked up somewhere - I don't think it's a phrase I coined myself).
Anyway, very basically RN Elliott considered that markets moved impulsively in 5 waves and correctively in 3 waves. They are labelled 1,2,3,4,5 and a,b,c. C wave corrections are 'often' the most destructive (hence 'killer') because they tend to force out most participants due to the severity of the correction.

I started looking closely at DES back in February and had counted 5 waves up from the May 2004 'orthodox' low (6.5p). I had hoped that this Jan's top at 69.75p was not the termination and that we were going to see an extended 5th wave higher. But it doesn't seem to have worked out like that. I have labelled the 'a' wave termination at the 47.75p low (10 Feb), 'b'wave recovery top at 62p (14 Feb) - although the orthodox top for 'b' may actually be at 58.5p (9 Mar). Projecting wave 'c' gave 40p as equality, (ie. wave a = wave c in terms of size). As this level was breached we now must assume that wave c will extend 1.618 times that of 'a' to give an objective at 26.5p. That level also ties in with the head and shoulders target.
Note - if measured from orthodox 'b' at 58.5p, then 'c' could terminate at 23p.

If you or anyone wants any further clarification, then I will gladly accommodate.

Lastly, let me point out that this is currently a 'CORRECTIVE' phase and once it has all played out, we can sit back and enjoy all that comes from the next impulsive move. In terms of strength, it will be 'at least' as large in magnitude as the rally to 69.75p!
Regards
Lynnzal