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

In an interview with Mr Phipps dated 21st july they had finished interpretation on the Tuesday the 20th and the data will interpret.
Then if you read the Artical below he says should take 6 weeks to interpret, well we are in week 6 now, give or take a few days.



SEISMIC data collected in the Falklands is undergoing a fast track processing route and should be ready for interpretation at the end of the month.
Penguin News yesterday contacted Dr Colin Phipps, Chairman of Desire Petroleum plc, to ask if he could confirm rumours that oil giant Shell had shown interest in returning to the Falklands to carry out exploratory drilling.
Dr Phipps said he could say nothing about, ...who might or might not be coming in. This is something that would have to be put out to the Stock Exchange.
However he said all the 3D seismic data recently collected in the Falklands has been loaded for fast track processing, ...and it all should be ready for interpretation at the end of this month or the beginning of next month.
He said the data will take approximately six weeks to interpret, ...then well know what our principle objectives are and we will be able to sit down and hopefully organise a deal for exploratory drilling in tranches C and D.

I think you must have put a jinx on it now down 2.0(6%)............Seriously I think they are have amazing potential and from what we know there should be significant news between now and Christmas.Its one thing identifying a good opportunity , the other is then having the patience for that potential to become a reality

Willfagg, good choice again, do I know you ha ha! As Markymar states above, news should be out either this week or next although it will ultimately be driven by the farm in partners. I still see the odds of DES being succesful as greater than most, technology has improved dramatically and if there is oil down there in quantities then the boys can bring it up, is the south atlantic more inhospitable than the north sea, probably but if there is black gold then it doesn't matter a jot. These are a gamble but a better bet than at the bookies!

Shell hit free flowing oil and was capped it was $10 a barrel they left for other things going on because it would cost back then $ 14 to pull it out.

Times have changed and so has the price of oil for good and gas.
I have not spoken about gas but look at the UK now next year we will inport gas and look at the likes of South Americia.

Times have changed and so have the prospects of Desire.

Markymar, some interesting notes in the weekend press. Apparently we will be struggling to provide enough gas to fuel the gas burning power stations next year and British Gas are going to build a liquification plant on the coast of Brazil, i guess that could be geographically significant. The upward pressure on oil as a resource will continue as the world economy grows, oil is not going to go down in price until production increases or growth slows right down or turns negative, neither of these will happens until at least the medium term at best! The economics behind a find for desire at current prices is impelling, they should have no problem fidning a farm in partner whatever the cost!

Economics by definition is the study of scarcity, that is the definition! I have a ph.d in economics and oil is just a comodity with a fixed (inelastic) supply and long term increasing demand, the price will go up and so will Des' share price if the reserves are significant!

Fingers crossed ehall, there could not be a better time than now.

Gnarlysurfer will soon be on iii markymar, nice to see some support for the SP today, should give a further lifty for tomorrow.

Hope to see you there . Not long now either way i have made the right choice and i wont regret a minute, I have learnt so much with this share about myself and been through so many lows and have not sold.

Interim Results for the six months ended 30 June 2004

Chairman's Statement

Following the completion of the acquisition of the 804 sq.kms. of
three-dimensional (3-D) seismic data over Tranches C and D in the North Falkland
Basin on 1st April 2004, it has been a particularly busy time for the Company.
As stated in the 2003 Annual Report, the final processing of the 3-D data will
not be completed until September but, in order to begin detailed geological
interpretation of the data prior to September, it was decided to implement a
fast-track, processing programme which would produce processed data in near
final form. This fast-track processing was completed in July and detailed
interpretation, which is being carried out by Hydrosearch Associates Limited,
has begun. This interpretive work will still be subject to any modifications
which the final processing may require but data quality appears to be such that
few, if any, major modifications are anticipated. The fast-track interpretation
will, therefore, provide the Company with an early basis for continuing
discussions with potential farm-in partners.

It has already been established that the North Falkland Basin contains one of
the World's richest oil-source rocks and that substantial quantities of oil have
been generated and expelled from it. The principal objective of the geological
interpretation is, therefore, to identify potential oil accumulations which, in
turn, involves the identification of suitable structures (both tectonic and
sedimentary) and reservoirs in which economically producible reserves of oil may
have accumulated. At current oil prices, reserves as low as thirty million
barrels of recoverable oil would be commercial and the main tasks are to map the
structures and/or sand bodies most likely to be prospective. Structural mapping
is already underway and it is intended to apply various forms of attribute
analysis to aid in the identification of reservoir sands. At the same time, work
will be undertaken to identify direct hydrocarbon indicators (DHI's) which may
enhance drilling confidence levels.

Interpretation of all of these factors is still at an early stage but a number
of significant features are already emerging. The 3-D seismic data quality is
very much better than the existing 2-D data and it is now clear that there are
many more structural leads than previously recognised. It follows that, if there
is good reservoir development, there are likely to be many more drilling targets
than those defined by the 2-D seismic. Accordingly, interpretive work is being
directed at defining the largest prospects first.

Attribute analysis designed to identify sand bodies has not yet begun but
initial, geological interpretations indicate that the new geological model
developed by the Company appears to be a valid one.

Given the amount of oil generated in the North Falkland Basin, it is not
surprising that several DHI's are discernable. In particular, gas chimneys and
amplitude anomalies are present. In themselves, these do not always indicate oil
accumulations (much less commercial accumulations) but, taken together with the
geological and attribute analysis data, they are a welcome indication of
potential oil-bearing prospects.

In general, the 3-D seismic has certainly enhanced the prospectivity of the
North Falkland Basin. It is still expected that final interpretation of the
combined 3-D and 2-D data will be ready later in the year. However, even prior
to a final report being available, discussions are continuing with potential
farm-in partners and it is still hoped that drilling could restart at some time
during 2005. Much will depend upon the final size and quality of the prospects
generated and on rig availability, but, failing any major setbacks, the
prospects for a resumption of drilling look much better than for some time.

The Company remains sufficiently well-funded to complete the farm-out process,
the result of which will determine what additional funding, if any, may be
required.

Yours sincerely

Dr Colin Phipps


Comment: Not sure why the big price drop, sometimes investors expect fireworks to light up the sky and suddnely provide the exact results that they ask for. The results indicate that drilling will start in 2005 which is as early as can be expected and discussions with farm in partners are ongoing so the short termers who are now probably selling at a loss are again shooting themselves in the foot but I guess that is their choice. As the statement is braodly positive on drilling next year, I think that the outlook is positive rather than negative for the company.

ehall

Hope you're right. A 14% drop did make me splutter over my cornflakes. Hope Dr Phipps isn't just trying to keep us on board and that all will come good albeit next year. I get a bit twitchey when I get the feeling I'm been blinded by science. I've invested heavely in oils recently, so something positive from any of them would be nice.

I think that something altogether different could be happeining, given the scale of the selling I would have expected a bigger drop but there hasn't really been one, I wonder why?

I think it was good news and this bit i liked, more oil than expected?

Interpretation of all of these factors is still at an early stage but a number
of significant features are already emerging. The 3-D seismic data quality is
very much better than the existing 2-D data and it is now clear that there are
many more structural leads than previously recognised. It follows that, if there
is good reservoir development, there are likely to be many more drilling targets
than those defined by the 2-D seismic. Accordingly, interpretive work is being
directed at defining the largest prospects first.

And this bit says there is oil there.

It has already been established that the North Falkland Basin contains one of
the World's richest oil-source rocks and that substantial quantities of oil have
been generated and expelled from it.

Its all there in black and white more fool the sellers .

Why such a big drop today 16%+. Ouch it's starting to hurt.Down too much now will stay in.

markymar,

I think they need to confirm they have found oil that is commercially extractable, there is a big difference from simply finding oil, and being able to extract it commercially, economically, and at a profit.

I have to admit I sold early yesterday, I was hoping we were further down the line, and figured I can invest elsewhere and be back here later, perhaps when DES has found a base.

Looking at today's price action, it does look as though I made the right call for a change.

I suspected there would be a few T traders in there, and that may well be causing such a dramatic fall.

Hopefully it will hold and start to build again soon, good luck to all.

The SP seems to have found a base moving up after the early sells which would be expected after yesterday anyway. I agree with Markymar, there is nothing bad in this news so why all of the sells. All holders were looking for a rig drilling next year and this appears to be the case, a good time to buy possibly because if the SP goes much lower then predators will surely appear. any potential farm in partner would be looking at a bid at this prices rather than giving a royalty to DES!

Andy from interims:

It has already been established that the North Falkland Basin contains one of
the World's richest oil-source rocks and that substantial quantities of oil have
been generated and expelled from it.

Read between the lines and its there in black and white, Anna has some on her desk and i keep saying this that shell when drilled was free flowing and had to be capped. When they cap a well they come back later for it.

This maybe the last chance you have to buy at this price ever, there was nothing bad in the interims at all i thought it was all good news but this time Phipps is in charge and it will be done right not like last time.

Phipps knows what he's on about his record in buisness speaks for its self and a little time is needed by us to let things cool down a little wave told me every thing is ok in the camp, am hopeing to get some more news.

I will be topping up again when i know what is left in bank in the next couple of days.

A little more time is needed for that news thats all.

Totally agree yr comments markymar, suffering some short term burnt paws but having been in on this for the last 6 years and topped in Jan and May big time plus a few interim top ups I'm holding. Think its been way over sold and prospects from the statement look to me very positive. price drop seems to be due to short termers cutting and running and time value. Getting a feeling that we have a good couple of months before conclusive news but not discounting that there may be a further rights issue as part of a farmout agreement. Yacht and ferrari on hold for couple of months yet!

Working on my pricing model at mo and hope to get some px targets together in next couple of days. Mainly post on iii so they will be posted there first.

Would be interested to hear views on this weeks moves from the likes of the Capt, Oil Brat and meic.

Had a dabble in sefton and chaco (sort of high risk hedge) plus keeping a bit of cash in reserve to pump into FOGL when they list, I see FKL had a drop which is probably means that float price for FOGL may be lowered but just a guess.

Off topic - with gas px rising its worth keeping an eye on Dana and Tullow me thinks!!

Catchya & happy hunting
JPDM FM

P.S. Got roasted by the girlfriend re the spivs party posting, didn't realise she would read my posts!!!!

mrkymar / FM,

well the market didn't like the results either!

Down 11% today, and my sale is looking to be well timed, although I appreciate that may change.

I haven't invested the money yet, so I'll watch tomorrow before deciding, but I still think DES may have further to fall before forming a base.

I hope to be back, because I want them to suceed.

the 100,000 @9.25am 28p....and 50,000 @ 8.33 am 28p could be buys?????