Shares in Falkland Islands oil and gas explorer Desire Petroleum (LON:DES) slipped by 23% to 46p this morning after it revealed that the latest well in its programme of drilling in the North Falkland Basin had failed to encounter hydrocarbons. The 25/5-1 well on the Dawn/Jacinta prospect reached a depth of 1,313metres before wireline logging was carried out. The well will now be drilled to the planned total depth around 1,670 metres to evaluate the deeper Dawn Prospect.

Subsurface support is provided to Desire Petroleum by Senergy and the results reported today are based on the work of the Senergy operations team. Earlier in December Desire infuriated investors after claiming an oil discovery in its Rachel North well before later conceding that suspected oil movements were in fact only water. The Dawn/Jacinta prospect is independent of Rachel and is targeting sands at a number of levels and will explore the prospectivity on the southern margin of the basin immediately updip from the main oil source rock.

The wells drilled by Desire in the Rachel area are understood to have identified five fan systems of varying areal extent and reservoir properties. Good reservoir development has been recorded in a number of the fans. Some of the sands are of a similar age to the sands in the Sea Lion discovery made by Rockhopper Exploration (LON:RKH) earlier this year. All of these fans will now be remapped incorporating the data from the wells to identify areas where better quality reservoir can be expected and stratigraphic traps developed. As these fans can only be mapped on 3D seismic, final mapping will therefore need to await the new 3D data acquisition, which is expected to begin shortly.

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