Desire plunges 27% as Jacinta disappoints

By Adrian Lowery
Updated: 11:26 EDT, 29 December 2010

Shares in Desire Petroleum plummeted another 27% today after the oil explorer revealed yet more bad news from its controversial Falklands drilling campaign.

Desire stock fell 16.25p to 44p after it said it had failed to find any hydrocarbons from its latest well at Jacinta prospect.

This is the latest blow to Desire's dwindling hopes for a major find at the North Falkland basin. The oil minnow had pinned its hopes on Jacinta after a disastrous disappointment earlier this month at its Rachel North well.

Shares in the small-cap company then plunged 45% when it had to withdraw an earlier claim that it had made a major disovery off the south Atlantic islands.

Desire plugged and abandoned Rachel North to move on and drill at Jacinta. The well will now be drilled to the planned total depth of around 1,670 metres to evaluate the deeper Dawn Prospect.

Desire has been exploring the Falklands since 1998 and has so far failed to find any significant reserves of oil or gas. The drilling has been criticised by Argentina, which claims sovereignty over the South Atlantic islands it calls the Malvinas.

The Herefordshire-based firm said earlier this month it plans to drill another well in the future although it has yet to reveal details.

Earlier this year, rival oil firm Rockhopper discovered an estimated 242 million barrels in recoverable reserves at its Sea Lion well in the Falklands.

Desire and Rockhopper are conducting a joint seismic survey of the basin near the Sea Lion well, which they expect to complete by the end of April and they hope will identify new prospects.