Desire Petroleum attempted to offer a ray hope to investors yesterday, saying that new data on its acreage off the coast of the Falkland Islands pointed to new leads for potential oil finds.
The update came less than two months after the prospector failed to find any oil during a closely watched exploration campaign to drill six wells.
The setback left Desire with insufficient funds to drill any further, causing its shares to plunge below 20p. They had surged as high as 168p last October amid excitement among retail investors about the prospects for oil in the Falklands.
Desire's shares nevertheless bounced 6 per cent yesterday to 12.5p after the group issued an update alongside its annual meeting, saying it had received early data from a new study and that "the initial indications for new prospects are encouraging".
"We are pleased with the preliminary results from the new seismic data and feel that it highlights new prospectivity within our acreage," the chairman, Stephen Phipps, said. "We anticipate the prospect inventory will continue to grow as the fully processed seismic data are delivered and interpreted."
The final results will not be forthcoming until after the summer, but the news was welcomed by analysts, with Charlie Sharp at Matrix saying: "It's a step in the right direction but there's a long way to go."
Besides fully processing the data, Desire still needs funds to proceed with drilling. The group, which tapped investors for £23m last autumn, has about £27m held in a mixture of its own and escrow accounts. This money is enough to complete the seismic study and meet other costs, including working capital.
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