Desire Petroleum to continue operations despite losses

MIDLAND-registered oil exploration firm Desire Petroleum has said it has sufficient cash to continue operating for a least another 12 months despite a full year loss.

In its full year results statement, the Malvern registered business said losses had decreased but remained confident its exploration of the North Falkland Basin had good potential.

The statement said the loss for the year decreased by $38,632,000 from $42,500,000 in 2011/12 to $3,868,000 in the current year. The reduced loss is mainly due to a decrease in exploration and evaluation expense.

“The company’s available cash resources at the balance sheet date are sufficient to continue in operational existence for the foreseeable future being at least 12 months from the date of this report. The cash resources are not sufficient to drill further wells, and the company has commenced a data room and farm-out process to attract further investment on the company’s licences,” it said.

Stephen Phipps, Desire chairman, added: “Desire has been active in proving up the exciting hydrocarbon potential in our acreage, firstly, in the Sea Lion area, and secondly over our other acreage which we believe has the best remaining exploration potential in the North Falkland Basin.

“On the strength of this extensive prospect inventory, the board took the decision to commence a farm-out process in order to attract further investment into our licences.  With the next drilling campaign expected to commence in late 2014, a successful farm-out would not only ensure that part of this campaign will be focused on Desire’s licences, but also provide an attractive method of funding our ongoing exploration activities.”