Farm-in agreement

25 Feb 2008 15:00

Desire Petroleum PLC25 February 2008 Desire Petroleum PLC25 February 2008 Desire Petroleum plc ('Desire' or 'the Company') Farm-in agreement The Board of Desire Petroleum plc is pleased to announce that it has acceptedthe terms of an offer from a significant party to farm-in to three of theeighteen exploration prospects identified by Desire in the North Falkland Basinand currently carried in the Company's prospect inventory. The farm-in remains subject to certain awards and approvals by the FalklandIslands Government which are being applied for and a further announcement,including the final terms of the farm-in, will be made once the necessary awardsand approvals are in place. If successfully approved, the farm-in will involve the drilling of twoexploration wells, including the mobilization and demobilization costsassociated with the two wells, at no cost to Desire. At current rig rates, in addition to the two wells above, Desire has sufficientresources to be able to drill two wells for its own account in the NorthFalkland Basin. Thus, in combination with the two-well commitment entered intoby BHP Billiton south of the Falkland Islands, there is now the potential tohire a rig for a minimum six-well drilling programme, thus defrayingmobilization/demobilization costs for all parties. Desire continues its effortsto hire a suitable rig in partnership with all of the other companies involvedin Falklands exploration. Given the size of Desire's exploration inventory, the Company may seek otherfarm-in partners for other prospects, in addition to any wells drilled for itsown account, and further discussions, which may lead to additional farm-ins, areunder consideration. For further information please contact: Desire Petroleum plc 020 7436 0423Dr Ian Duncan, Chief Executive OfficerStephen Phipps, Non-executive Director Seymour PierceJonathan Wright 020 7107 8000 Buchanan Communications 020 7466 5000Ben WilleyBen Romney This information is provided by RNS The company news service from the London Stock Exchange