drilling Q1 2010

Thursday, Sep 10 2009 by
2

Desire have today announced a letter of intent for a rig, to drill 4 wells, projected to arrive in the Falklands in early February 2010 : http://www.investegate.co.uk/Article.aspx?id=200909100700078144Y. 

The prospects to be drilled are : Ann, Dawn, Liz and Alpha. Deatils from their Prelims: http://www.investegate.co.uk/Article.aspx?id=200904220700119388Q

Prospect

Liz

Ann

Dawn

Jacinta

Alpha

Water Depth (metres)

350 

400

160

160

145

Target Depth (metres)

2,600 

1,750

1,400

1,000

650

Age

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Barremian 

Aptian

Jurassic?

Aptian

Cretaceous

Oil/Gas 

Oil

Oil

Gas

Oil

Gas

Potential Recoverable 

660 MMBO

202 MMBO

240 BCF

1,100 MMBO

7,800 BCF

Nice map of the acreage from Desire's home page, showing %s and other companies: http://www.desireplc.co.uk/

strategy_map.jpgstrategy_map_key.jpg


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Desire Petroleum plc (Desire) is engaged the exploration and exploitation of its licenses in the North Falkland Basin. The Company assets are located within licenses PL003, PL004 and PL005 for, which phase-II license has been granted by Falkland Islands Government. The Jayne prospect was identified from initial interpretation of the East Flank Fast-Track volume. The prospects are located within PL004c where Desire has a 75% interest. The Ninky North prospect lies immediately to the south of the 14/15-4a discovery. The prospects are located within PL004b where Desire has a 40% interest. The Ann / Orca South prospect has been part of the prospect inventory for some time and remains a prospect from interpretation of the new three dimension (3D) data. The prospects are located within PL003b where Desire will have a 57.5% interest following completion of the Denholm farm-out. more »

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  Is Desire Petroleum fundamentally strong or weak? Find out More »


5 Posts on this Thread show/hide all

tingtang 10th Sep '09 1 of 5
1

Desire holders have been a long time awaiting, now they probably won't mind throwing more money into the kitty.

I had taken my eye off the situation, with an intention to take a stake, not in Desire but in FIH who will be in a win win position but is going to cost me 20% more than buying yesterday, still worth paying around £3 for though.

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emptyend 10th Sep '09 2 of 5
2

Good news for shareholders - at last!

But .......

The Company believes that with a rig becoming active in the North Falkland Basin the Company should endeavour to drill as many wells as possible to test the full potential of this highly prospective area.  To this end Desire is investigating with its advisors the best course of action to raise additional funds prior to mobilisation to ensure the area is appraised as widely as possible.  It is Desire's intention that shareholders will have the opportunity to participate in the fund raising.

......makes one wonder how much dilution will occur along the way! I would guess that rig costs for this programme (given the massive mob times and the potential for a much larger programme than just the 4 well minimum) could be heading towards $100mn.....and the current market cap is around £180mn with the shares at about 80p.

It seems to me that they would give themselves the best chance of some success (given different play types etc) if they actually aim for a programme of  say 6 wells minimum with another 4-6 optional wells, With a large programme they could then get a lot of well control data to integrate into the seismic model - so even if it wasn't an especially successful programme in terms of potentially-commercial flow rates (eg drilling locations sub-optimal) , they would vastly improve their understanding of the basins.

It'll also be interesting to see whether other companies (eg FOGL) will ramp up their drilling plans. There seems to me some chance that all the companies involved will be competing for funding in the near future.

Anyone got a view on which of the Falklands-focused companies has the best prospects??

ee

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tingtang 10th Sep '09 3 of 5
1

I rather think that BHP will be calling the tune on FOGL and will be unlikely to make any early promises before seeing how this plays out.

Been a long time since I looked so could be wrong. My recollections are hazy but wasn't it Hardman that gathered the early seismic data on the blocks of  the FIH consortium as it was then?

Thoughts at that time was FIH territory was the better bet, the seismic throwing up some big prospects in less deep or stormy waters.

 I guess that GBP rather wish they  still had their holding in those waters but survival had to come first.

tt.

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doverbeach 16th Sep '09 4 of 5
1

Oilbarrel article http://www.oilbarrel.com/nc/news/display_news/article/north-falkland-basin-exploration-campaign-gathers-momentum-as-rockhopper-exploration-bags-a-farm-in/860.html

More than ten years after the first, and last, wells were drilled in the North Falkland Basin and the campaign to return to the islands is, at last, gaining traction. Shares in Rockhopper Exploration hit a new 52-week high last week as the company announced it had agreed farm-out terms with an unnamed energy company, a deal that should give the AIM firm the financial clout to drill at least two wells on its acreage next year.

And fellow AIM explorer Desire Petroleum also released welcome news to the market last week as it confirmed it has signed a letter of intent to hire the Ocean Guardian rig for a minimum four-well programme starting in February 2010.  As long time Falklands followers will know, the chartering of a suitable rig on reasonable terms has been one of the biggest stumbling blocks to getting these remote waters drilled up, with rig mobilisation fees alone running into the many millions of dollars (earlier this year some operators in the Falklands were talking about eye-watering mobilisation fees of between US$10 million and US$50 million).

db

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monkeynuts 19th Oct '09 5 of 5

I have posted a short article on Desire - http://www.stockopedia.com/article/view/32462/desire-petroleum-wings-of-desire. Your thoughts are welcome, preferably on the article itself or else here if not.

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