MercoPress. South Atlantic News Agency

Desire will drill four exploratory wells in North Falkland basin next February

The map shows the area where “Ocean Guardian” will be drilling

Oil company Desire Petroleum announced Friday the formal signing of a rig contract with Diamond Offshore Drilling Ltd. from the UK which means the company is ready to begin its exploratory drilling campaign in the North Falkland basin this summer.

According to the terms of the contract, in a minimum eighty day campaign, at least four wells are to be drilled by the rig Ocean Guardian.

Desire has secured options to drill a further six wells for itself or its partners. Following a program of scheduled shipyard work the rig will mobilise from North Sea waters in late November 2009 and the first well is expected to spud in the North Falkland basin in early February 2010.

“We are delighted to be able to announce the formal rig contract with Diamond Offshore Drilling. We intend to maximize our chances of success with our firm four-well program with additional wells being likely, subject to further agreements with partners and additional funding” said Stephen Phipps, chairman of Desire.

Desire has retained the services of AGR Petroleum Services for the provision of well construction technical work and operations management.

“All associated service contracting is underway as is the necessary addendum to the Company’s EIAs to include the relevant details of the Ocean Guardian”.

Desire said it has waited a number of years to secure a rig at competitive rates to drill in the North Falkland Basin.

“The Company believes that it should take this opportunity to have the flexibility to drill more wells and/or potentially test successful wells” and it is the intention of Desire to raise additional funds to enable the operations.

Under the contract terms the Ocean Guardian could earn maximum total revenue of 19.6 million US dollars. Mobilisation and demobilization fees are estimated to be 16 million dollars.