Drilling Update

Desire Petroleum plc

("Desire" or "the Company")

Drilling Update

Desire Petroleum plc (AIM:DES), the oil and gas company wholly focussed on the North Falkland Basin, wishes to provide a further update on the 14/15-1Z sidetrack well on the Rachel prospect.

Clean out of the sidetrack has not proved possible due to mechanical failure of the wellbore and it will therefore not be possible to obtain any wireline logging data from this well. However, the data acquired during drilling operations (from logging while drilling tools and geological data from cuttings) indicates that around 25 metres of sand with oil shows was encountered. However, in the absence of wireline logging data it is not possible to fully assess the significance of these results and, in particular, reservoir properties and the hydrocarbon saturations associated with these sands cannot be confirmed.

The current well will be plugged and abandoned prior to moving the drilling rig to a new location on the Rachel prospect.

The data collected from both the Rachel main bore and sidetrack will allow the selection of an optimum location to drill a vertical well to further evaluate the potential of the Rachel prospect and undertake a comprehensive logging programme. Undertaking the logging programme in a vertical well should avoid the geomechanical problems encountered in the sidetrack which were shown to be a consequence of drilling a deviated wellbore in an area where very little regional stress data is currently available.

This proposed move to another location on the Rachel prospect is subject to obtaining all necessary regulatory and partner approvals in a short time frame. In the event these approvals are not rapidly forthcoming, the rig will instead move to drill the Dawn/Jacinta prospect and return to Rachel later in the drilling programme.

Commenting on the well, Stephen Phipps, Chairman of Desire, said "It is disappointing that we have been unable to collect all the data that would have enabled us to fully evaluate the Rachel sidetrack well. However the data that we have been able to gather has given us sufficient encouragement to drill another well on the Rachel prospect. Following the Sea Lion oil discovery by Rockhopper Exploration, this is the second well to indicate the presence of hydrocarbons in what is now termed the east flank play fairway and gives us encouragement that further oil fields will be discovered in this area."

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This announcement has been reviewed by Dr Ian Duncan, Chief Executive Officer of Desire, for the purposes of the current Guidance Note for Mining, Oil and Gas Companies issued by the London Stock Exchange in June 2009. Dr Duncan is a Fellow of the Geological Society, Chartered Geologist, and a member of the American Association of Petroleum Geologists with over 35 years experience in petroleum exploration and management.