Desire Petroleum (LON:DES) , the oil and gas exploration group operating in the north basin of the Falkland Islands, confirmed this morning that it had been given the go-ahead by regulators and its partner in the region to press ahead with drilling a second well on the Rachel prospect. The news comes just a week after Desire was hit with mechanical problems on its first Rachel well, which meant that it was unable to carry out the necessary tests to establish how successful the well had been. So far, the company, its investors and partners in the region know only that Desire was encouraged enough by what it saw to consider drilling another well in more or less the same place.

The first Rachel well has been plugged and abandoned and the rig is currently waiting on weather to move to the new Rachel North location. The Rachel North well will be drilled vertically with an estimated total depth of 3,050 metres. The bottom hole location will be 1.7km from the Rachel sidetrack 14/15-1Z bottom hole location. Drilling operations are expected to last around 35 days.

Desire said it was intended that this well would evaluate the sands with oil shows encountered in the Rachel sidetrack as well as a number of possible additional sands not seen in the sidetrack. The company thanked the regulatory authorities and its partner Rockhopper Exploration (LON:RKH) for their speedy approvals to move to the new Rachel North location.

Initial finding from the original Rachel well were that it had encountered around 25 metres of sand with oil shows. Data collected from both the Rachel main bore and sidetrack should 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.

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 119.75p. The value of shares in its partner Rockhopper Exploration, has soared since the end of…

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