MercoPress. South Atlantic News Agency

Desire signs ‘letter of intent’ for Falklands drilling campaign

Phyl Rendell: “excellent news for the Falklands”

Desire Petroleum plc the exploration company focusing on the North Falkland Basin, has announced that it has exchanged a letter of intent with Diamond Offshore Drilling (UK) Ltd for the drilling unit the Ocean Guardian to undertake a four well minimum drilling campaign in the North Falkland Basin.

The Ocean Guardian is currently in the North Sea and following a programme of shipyard work will mobilise in November 2009. Projected arrival in Falkland waters is early February 2010. Desire has options to drill a further four wells for itself and or its partners.

In a press release from the Desire it is stated: “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.”

Commenting on the development, Stephen Phipps, Chairman of Desire said:

“The Board of Desire is delighted to be able to report today's news on securing a rig to drill our prospect inventory in the Falkland Islands. Subject to the anticipated timing, we will be commencing activity in early 2010, where we intend to explore as many play types as possible, thus maximising our chances of success.”

Director of the Falkland Islands Government Oil and Minerals Department, Phyl Rendell said, “The announcement that Desire Petroleum has signed a letter of intent with a rig company with the aim of drilling wells starting in early 2010 is excellent news for the Falklands. The wells to be drilled will take exploration in the northern basin a step further forward in finding out if there are commercial quantities of oil and gas there. This planned exploration programme will not require any new infrastructure and the Mineral Resources Department is looking forward to assisting Desire Petroleum with their drilling campaign.”

Lisa Watson – SeAledPR - Stanley