Desire's losses reduce sharply

published 17 September 2012

North Falkland Basin exploration company Desire Petroleum has seen interim losses reduce sharply following the completion of drilling and seismic activities.

The group, which has an estimated 4% share of Rockhopper Exploration's Sea Lion discovery - the only worthwhile project in the Falklands area discovered so far - saw its operating loss for the first half of 2012 contract to $1.51m from $39.39m the year before. Last year's figures have been restated to reflect a change in accounting policy regarding exploration costs.

Loss before tax narrowed to $1.54m from $39.32m the year before, as exploration and evaluation expenses tumbled to $0.72m from $39.65m.

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Despite making a loss, the tax man still grabbed $0.45m this year, pushing the post-tax loss up to $1.99m. The tax charge represent estimated provisions for the settlement of corporation tax liabilities arising in respect of investment revenues in prior years.

Loss per share was 0.58 cents versus 11.49 cents in the first half of 2011.

The group's cash resources at the end of June amounted to $12.7m.

"Recent developments have highlighted the exciting potential of the North Falkland Basin and it is Desire's intention to seek a high quality farm-in partner to help us capitalise on this potential, with our share in recent discoveries, material positions in well defined prospects and the exploration potential across our remaining acreage," said Stephen Phipps, Chairman of Desire.

A competent person's report covering the full prospect inventory derived from the total merged three-dimensional seismic data has accumulated will be available in the fourth quarter of 2012, with the company expecting this will continue to enhance its prospect inventory.