Desire Petroleum operates exclusively in the north Falkland basin and perhaps the highlight of the first half of the year was news of a farm-out agreement with Arcadia Petroleum and the granting of a new exploration license. All this is expected to help significantly in unlocking a new gas find, notably the Alpha prospect..
Under the terms of the agreement, Arcadia will drill and test the Ann prospect, paying 85 per cent of the costs in return for a 35 per cent interest in Tranche C. While under the terms of a previous agreement, Rockhopper Exploration will pay the remaining 15 per cent of the costs in return for a 7.5 per cent interest. This leaves Desire with a 57.5 per cent interest in the Ann prospect, with potential recoverable reserves of 202m barrels of oil, and no exploration or testing costs.
Meanwhile, administrative expenses rose, mainly because of reduced income from the renewal of joint venture licenses. And finance income on the group's cash pile fell in the period due to a steady fall in US interest rates.
| DESIRE PETROLEUM (DES) | ||||
|---|---|---|---|---|
| ORD PRICE: | 68p | MARKET VALUE: | £155m | |
| TOUCH: | 66-68p | 12-MONTH HIGH: | 107p | LOW: 20p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 14p* | NET CASH: | £21.5m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | nil | -0.48 | -0.28 | nil |
| 2008 | nil | -0.27 | -0.16 | nil |
| % change | - | - | - | - |
*Includes intangible assets of £7.8m, or 3p a share | ||||
