MercoPress. South Atlantic News Agency

Falklands: Desire begins drilling second exploration well, Rachel 14/15-1

“Ocean Guardian” spudded the second exploratory well for Desire

Desire Petroleum (AIM:DES) the first oil and gas exploration company to contract a rig and begin the current round of drilling in the Falkland Islands announced Monday the spudding of its second exploration well, Rachel 14/15-1.

In an official statement the company which is wholly focused on the North Falkland Basin said that “the Rachel 14/15-1 exploration well was spudded at 15:45 (BST) on 27 September 2010”.

The Rachel prospect is located in Tranche D, south of Sea Lion prospect and has an estimated target depth of 2,850 metres. Drilling operations are expected to take approximately 35 days.

So far in the current round Desire discovered natural gas in two zones of its Liz well and Rockhopper Exploration struck oil at its Sea Lion Prospect, with an initial flow of 2.000 bopd, in spite of ‘technical constraints’ encountered to gauge volumes.

“In order to give ourselves time to evaluate the results of the Rachel well we are most likely to drill the Dawn/Jacinta prospect following the Rachel well. Despite the disappointing (Rockhopper) Ernest well result the Dawn/Jacinta prospect continues to excite us” said Desire in a recent half year report to shareholders.

“Since the Sea Lion discovery, Desire’s geo-science effort has concentrated on identifying similar prospects for early drilling. In addition to the already recognised Rachel, Anna and Ninky prospects an exciting new prospect named Elaine has been identified”.

Commenting on the June 30 mid year balance Desire chairman Stephen Phipps said that the confirmation of oil and gas in the NFB has clearly significantly de-risked the rest of the drilling campaign, “we now enter an exciting period of drilling activity which may see us drilling up to four wells back to back.”

Last week Desire announced Friday it had successfully placed 16,294,600 shares at 140 pence each raising £22.8 million before expenses. The funds will be predominantly used to acquire and process further 3D seismic over the Desire acreage on the east flank of NFB, in Tranches D and F.

The Board of Desire currently expects that the seismic programme will begin in December 2010.

Desire Petroleum director Ian Duncan and chairman Stephen Phipps plan to visit the Falklands at the beginning of October.