Desire Petroleum surges on well news

SHARES in Malvern-based Desire Petroleum plc surged almost 30% in late trading on Friday on news that tests on its exploratory well in the South Atlantic indicated the oilfield is commercially viable.

Rockhopper Exploration plc and Desire Petroleum rose on the release of flow test results on the the lower fans of Rockhopper’s Sea Lion 14/10-2 discovery well.

Rockhopper’s executive chairman Pierre Jungels said: “We believe that Sea Lion is the largest fan sandstone body in the North Falkland Basin and, given this successful flow test, that the Sea Lion discovery will be commercially viable.”

The well was flow tested for 18 hours at sustained rates in excess of 2,000 barrels per day with a maximum rate of 2,304 barrels per day.

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The flow test results are in line with Rockhopper’s pre-test expectations and were significantly limited by downhole and surface equipment.

The well produced no water, no H2S and negligible CO2.

Rockhopper now intends to plug and abandon the well as planned.

Early in the day the shares had surged on rumours about the test results. At close Rockhopper was up 87p (26%) at 420p and Desire closed up 34.25p (29%) at 153.50p.