MercoPress. South Atlantic News Agency

Falklands' oil drilling prospects boosted by Desire Petroleum

A poscard from the Falklands in the near future?

Falkland Islands hydrocarbons exploration development and the potential to hire a rig for a minimum six-well drilling program advanced considerably on Monday when Desire Petroleum announced that it had accepted the terms of an offer to farm in to three of the company's eighteen exploration prospects in the North Falkland basin.

The farm-in remains subject to certain awards and approvals by the Falkland Islands Government which are being applied for. If successfully approved, the farm-in will involve the drilling of two exploration wells, including the mobilization and demobilization costs associated with the two wells, at no cost to Desire, according to a release from the company. At current rig rates, in addition to the two wells above, Desire has sufficient resources to be able to drill two wells for its own account in the North Falkland Basin. Thus, in combination with the two-well commitment entered into by BHP Billiton south of the Falkland Islands, "there is now the potential to hire a rig for a minimum six-well drilling programme, thus defraying mobilization/demobilization costs for all parties". However Desire continues its efforts to hire a suitable rig in partnership with all of the other companies involved in Falklands' exploration. In the release Desire added that given the size of its exploration inventory, the Company may seek other farm-in partners for other prospects. "This is very good news for Desire Petroleum plc and its shareholders, of whom a number are Falkland Islands residents, and, it is very good news for the Falkland Islands and the offshore exploration development of the North Falklands Basin", said Falklands Director responsible for Falkland Islands liaison and activities Lewis Clifton to MercopressEarlier in the day the Board of Desire Petroleum requested a temporary suspension of trading in the company's shares on AIM pending what was later announced as the farm in prospect. Desire Petroleum and Rockhopper Exploration have interests in the North Falkland Basin while Falkland Oil & Gas and Borders and Southern have interests to the south and east of the Falkland Islands. The current state of play for exploration around the Islands is: Falkland Oil and Gas announced a farm-out to BHP Billiton last year. Desire Petroleum announced a farm-out to an unnamed party on Monday and Rockhopper Exploration last week informed that it had completed 3D interpretation and was now expecting to embark on a farm-out and/or fundraising process ahead of drilling. Borders and Southern announced the completion of a 3D seismic survey