Desire Petroleum announce spudding of Liz Falklands Well

Monday, Feb 22 2010 by
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Desire Petroleum announce spudding of Falklands Well company news imageDesire Petroleum (LON:DES) announced today its Liz exploration well has spudded. Following the arrival of the semi-submersible Ocean Guardian rig arrived in the Falklands last month, the well is being drilled to an estimated target depth of 3,500 metres. The company expect the drilling to complete within 30 days, at which point a further announcement will be released.

Desire Petroleum is a UK company dedicated to exploring for oil and gas in the North Falkland Basin. It was founded in 1996 and participated in the first round of drilling in the North Falkland Basin in 1998, where it now operates 6 licences in the area. According to the company website, the North Falkland Basin has a proven working hydrocarbon system with an oil source rock, and recent studies have indicated there is also a significant gas potential in the basin.

In 2005, Desire raised £25 million raised for new 3 well drilling programme and in 2008, the company announced a farm-in agreement whereby two extra wells would be explored at no cost to Desire, including the mobilization and demobilization costs.

Desire has waited a number of years to secure a rig at competitive rates to drill in the North Falkland Basin. In October 2009, Desire Petroleum signed a rig contract with Diamond Offshore Drilling (UK) Ltd for the use of the the Ocean Guardian semisubmersible drilling rig. The terms of the contract were for a four well, minimum eighty day campaign, but Desire secured options to drill a further six wells for itself or its partners.

Desire holds a 92.5% interest in the Liz prospect, located in itsTranche C acreage, with Rockhopper Exploration having farmed in for the balance. Desire’s Liz prospect has estimated resources of between 45 million and 783 million barrels, according to a report by Senergy Ltd., which specializes in appraisal for oil explorers, released in September 2009 and commissioned by Desire. [1]

Following the Liz well, the Ocean Guardian will then be allocated to Rockhopper to drill their Sea Lion and Ernest prospects. Falkland Oil & Gas also recently announced that it has reached an agreement with Desire Petroleum plc to contract the Ocean Guardian rig to drill the first ever exploration well in the East Falklands Basin on the Toroa prospect,…

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Rockhopper Exploration plc is an oil and gas exploration and production company. The Company is engaged in the exploration and exploitation of its oil and gas acreage. The Company operates through three segments, which include the oil and gas exploration activities in the geographical regions of the Falkland Islands, and the Greater Mediterranean region, as well as its corporate activities centered in the United Kingdom. The Company holds interests in North Falkland Basin and the Greater Mediterranean region. The Company's areas of operations include Falkland Islands, which is located in the South Atlantic Ocean, over 8,000 miles from the United Kingdom and approximately 300 miles from South America. Its licenses in Falkland Islands include Sea Lion phase 1 (PL032), Sea Lion phase 2 (PL032/PL004) and Phase 3-Isobel-Elaine (PL004). The Company's interests in Mediterranean region include Guendalina, Ombrina Mare and Monte Grosso in Italy; Area 3 in Malta, and Block 9 in Croatia. more »

LSE Price
22.7p
Change
-2.8%
Mkt Cap (£m)
103.9
P/E (fwd)
n/a
Yield (fwd)
n/a




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2 Comments on this News show/hide all

Betasurfer 28th Mar '10 1 of 2
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The rumour in the Times is that the well has been a flop - bad news for Desire shareholders, it seems. Wonder how much of a hit the stock will take, if this is the case.

Desire is expected to say that the well drilled at its Liz prospect was “technically successful”, meaning it found oil, but that it is “non-commercial”, meaning that there was not enough oil to justify developing the field...A source said: “It’s not a duster [a dry well], but it’s not commercially successful.” Desire has been working on the well for the past month.

http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article7078788.ece

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Stockhound 29th Mar '10 2 of 2

confirmed, predominantly dry well... 50%+ fall... ugly.

Just goes to show what happens when everyone gets on the same side of a speculative trade.

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