DESIRE Petroleum, the UK-listed oil and gas explorer which focuses on the South Atlantic, said yesterday its biggest challenge over the next few months was to secure a suitable rig at a suitable price from as close to the North Falkland Basin as possible.
Chairman Stephen Phipps said that, notwithstanding the general unavailability of rigs because of high utilisation rates and the resulting very high day rates, the company had been hampered by rig owners’ demands for long-term contracts: typically two to three years.
He added that rig owners were reluctant to commit to a rig programme in the remote North Falkland Basin but he said with about £27.5million in cash Desire was in a strong position to negotiate a suitable contract to drill some very large prospects.
Mr Phipps said: “Desire has seen a greater willingness of rig contractors to hold discussions with us. This is in marked contrast to the situation as recently as four months ago.”
Desire reported pre-tax losses of £1.22million yesterday for 2008 compared with a £44,800 deficit the year before. It has no revenue from production so far but had interest of £783,000 on bank deposits, against £1.41million the previous year.