Falkland Islands oil and gas explorer Desire Petroleum (LON:DES) is set to plug and abandon its recently drilled Rachel well after mechanical problems with the well bore meant it was unable to conclude how successful it had been. Desire said early indications suggested the well had encountered around 25 metres of sand with oil shows and that it was planning to drill another well on the prospect.

The company reported yesterday that technical problems in completing the detailed wireline logging analysis of the well meant engineers were going to clear out the sidetrack hole, however this proved to be unsuccessful. Desire said that while it was encouraged by the results of logging while drilling tools and geological data from cuttings, without wireline logging data it was not possible to fully assess the significance of these results. In particular, it said the reservoir properties and the hydrocarbon saturations associated with the sands would not be confirmed.

Desire noted that data collected from both the Rachel main bore and sidetrack would allow the selection of an optimum location to drill a vertical well to further evaluate the potential of the Rachel prospect and undertake a comprehensive logging programme. Undertaking the logging programme in a vertical well should avoid the geomechanical problems encountered in the sidetrack which were shown to be a consequence of drilling a deviated wellbore in an area where very little regional stress data is currently available.

This proposed move to another location on the Rachel prospect is subject to obtaining all necessary regulatory and partner approvals in a short time frame. In the event these approvals are not rapidly forthcoming, the rig will instead move to drill the Dawn/Jacinta prospect and return to Rachel later in the drilling programme.

Desire is one of a handful of exploration companies currently drilling for oil in the Falklands using the Ocean Guardian rig. In anticipation of the latest well, shares in the AIM listed company jumped from 95p at the start of September to a high of 168p in early October. They closed yesterday at 92p. The value of shares in its partner in the region, Rockhopper Exploration (LON:RKH) , has soared since the end of May when it became the first of…

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