drilling Q1 2010

10th Sep '09 by doverbeach

5 comments 2702 reads

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	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/

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About the Author

Doverbeach

Premium Member

5 comments

tingtang

10th Sep '09

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.

emptyend

10th Sep '09

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??

tingtang

10th Sep '09

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.

doverbeach

16th Sep '09

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).

monkeynuts

19th Oct '09

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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drilling Q1 2010

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Doverbeach

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