Desire still hopeful despite Falklands disappointment

20th Apr 2010 07:58

Oil and gas explorer Desire Petroleum, which faced disappointment last month as early drilling results in its campaign around the Falkland Islands failed to meet expectations, said it remains upbeat about the area's potential and will start drilling again later this year.The firm, which has been at the centre of diplomatic tension between Britain and Argentina over drilling rights in the region, posted a pre-tax loss of $3.77m in the year to December 31, compared with $1.77m the previous year, as it accelerated its activities.Desire, which recently towed the Ocean Guardian rig from the North Sea to the South Atlantic to start drilling, saw its shares crash last month after it confirmed a disappointing result from its first drilling in the waters around the Falkland Islands. Desire said that drilling at the Liz 14/19-1 well in the North Falkland Basin, found oil in thin intervals but that reservoir quality is poor.However, analysis on the well continues, with results likely to be presented to shareholders in the next couple of months, chairman Stephen Phipps said in today's statement.Desire has several more prospects it intends to explore. To reduce costs, it has subcontracted the Ocean Guardian to fellow oil group Rockhopper Exploration and the mining giant BHP Billiton who are to start their own drilling campaigns, and will recommence its own activities in the third quarter of this year, it said.