Farm-in agreement (25th 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 accepted the terms of an offer from a significant party to farm-in to three of the eighteen exploration prospects identified by Desire in the North Falkland Basin and currently carried in the Company’s prospect inventory.   

The farm-in remains subject to certain awards and approvals by the Falkland Islands Government which are being applied for and a further announcement, including the final terms of the farm-in, will be made once the necessary awards and approvals are in place.   

If successfully approved, the farm-in will involve the drilling of two exploration wells, including the mobilization and demobilization costs associated with the two wells, at no cost to Desire.   

At current rig rates, in addition to the two wells above, Desire has sufficient resources to be able to drill two wells for its own account in the North Falkland Basin.  Thus, in combination with the two-well commitment entered into by BHP Billiton south of the Falkland Islands, there is now the potential to hire a rig for a minimum six-well drilling programme, thus defraying mobilization/demobilization costs for all parties.  Desire continues its efforts to hire a suitable rig in partnership with all of the other companies involved in Falklands exploration. 

Given the size of Desire’s exploration inventory, the Company may seek other farm-in partners for other prospects, in addition to any wells drilled for its own account, and further discussions, which may lead to additional farm-ins, are under consideration.  

For further information please contact: 

Desire Petroleum plc                                                                             020 7436 0423                                    Dr Ian Duncan, Chief Executive Officer                                                                                                               Stephen Phipps, Non-executive Director

Seymour Pierce                                                                                    020 7107 8000                              Jonathan Wright                                      

Buchanan Communications                                                                   020 7466 5000                                      Ben Willey                                                                                                                                                      Ben Romney