Profit returns to black at Desire Petroleum

PROFIT at Malvern-based oil exploration plc Desire Petroleum has returned to the black.

In its interim results for the six months ended June 30, 2011, it posted a pre-tax profit of £210,595, a dramatic switch from the £3.9m loss it posted last year.

The company, which focuses on oil exploration in the North Falkland Basin, said today this was due in large part to gains via foreign exchanges.

Operating profit also moved out of the red from £4.1m loss in the H1 2010 to £167,000.

Investment revenues of £43,000 are lower than in the corresponding period last year of £69,600 due to lower average cash balances held.

• Latest Desire Petroleum share price and historic data – click here

The group’s intangible assets at the period end stood at £110.6m and total cash balances, inclusive of amounts held as restricted cash, have reduced from £63.6m at the start of the period, to £21.7m.

Chairman Stephen Phipps said: “The information Desire has gained in the period from both our own wells, other wells drilled in the area, combined with the recently acquired 3D seismic data on our acreage, reaffirms our belief in the prospectivity of our acreage in the North Falklands Basin.

“We are therefore continuing to review all available financing options with an intention to rejoin the current drilling campaign when possible.

“Whilst Desire has sufficient funds for our share of rig and equipment demobilisation plus general working capital needs, our cash balance is insufficient to drill further wells.  With this in mind your board is continually reviewing all available financing options.”