MercoPress. South Atlantic News Agency

Falklands’ Desire ‘exited’ about prospects plans to drill four more wells

Desire Petroleum chairman Stephen Phipps

Falkland Islands Desire Petroleum (AIM-DES) is upbeat about the prospects for finding major reserves of oil offshore the Islands despite mixed results so far and revealed plans to further drill four wells in the North Falkland basin.

“The current North Falkland Basin (NFB) drilling campaign has started very positively: gas has been discovered by Desire in two zones in the Liz well and a potentially significant oil field has been discovered by Rockhopper Exploration on the Sea Lion Prospect”, said Desire Petroleum in a release to shareholders commenting on half year results to June 30.

Currently the Desire contracted oil rig Ocean Guardian is with Rockhopper doing the flow test on the Sea Lion discovery and following this “the rig will revert to Desire to drill our Rachel prospect; this is likely to be in late September or early October”.

“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 Ernest well result the Dawn/Jacinta prospect continues to excite us” said Desire.

“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”.

“In the Competent Persons Report (CPR) prepared by Senergy (GB) Ltd and published by Desire late last year, using a reservoir thickness range of 30 to 85 metres, Senergy (GB) Ltd calculated a gross unrisked mean recoverable potential of 318 million barrels of oil. As a result of further work Desire now believe that the sand thickness in Rachel may exceed this range in a series of stacked sands, with a consequent increase in the recoverable potential. In addition the Rachel prospect has been significantly de-risked as a result of the Sea Lion discovery” points out Desire.

“Unfortunately, the full nature of these fan plays can only be identified on 3D data and currently Desire has 3D seismic coverage over only half the relevant acreage. Therefore, Desire intends to investigate the possibility of acquiring further 3D seismic, possibly in conjunction with other NFB operators to mitigate the costs”.

Desire Petroleum made a loss of 6.4 million USD in the half year, of which 5.9 million were exchange losses. They arose primarily on Sterling cash balances held to meet exploration costs, and follows a weakening of the pound against the US dollar between the previous year-end and the date of this report, according to the company.

“This drilling campaign in the North Falkland Basin (NFB) has started very positively. Our first well Liz discovered gas in two zones and on the Sea Lion prospect drilled by Rockhopper Exploration a potentially significant oil field has been discovered. The confirmation of oil in the NFB has clearly significantly de-risked the rest of the drilling campaign. With the Ocean Guardian rig due to return to Desire within the month, we now enter an exciting period of drilling activity which may see us drilling up to four wells back to back” said Desire chairman Stephen Phipps.