Interim Results

Desire Petroleum plc

("Desire" or "the Company")

Interim Results

Desire Petroleum plc (AIM:DES) the exploration company focusing on the North Falkland Basin, today announces its Interim Results for the six months ended 30 June 2010.

Highlights:

·; Gas discovery in two zones in the Liz well

·; Potentially significant oil field discovered by Rockhopper Exploration on the Sea Lion Prospect has de-risked oil exploration in North Falklands Basin

·; Ocean Guardian rig to return to Desire

o Likely to drill up to 4 wells back to back

o Rachel prospect next to be drilled late September / early October

·; Loss for the period $6.4m (2009: $265,000)

Commenting on the results, Stephen Phipps, Chairman of Desire, said:

"This drilling campaign in the North Falkland Basin (NFB) has started very positively. Our first well Liz discovered gas in two zones and on the Sea Lion prospect drilled by Rockhopper Exploration, a potentially significant oil field has been discovered. The confirmation of oil in the NFB has clearly significantly de-risked the rest of the drilling campaign. With the Ocean Guardian rig due to return to Desire within the month, we now enter an exciting period of drilling activity which may see us drilling up to four wells back to back."

For further information please contact:

Chairman's Statement

Dear Shareholder,

The current North Falkland Basin (NFB) drilling campaign has started very positively. Gas has been discovered by Desire in two zones in the Liz well and a potentially significant oil field has been discovered by Rockhopper Exploration on the Sea Lion Prospect. The third well drilled to date, the Ernest well by Rockhopper, was plugged and abandoned as a dry hole. Currently the Ocean Guardian drilling rig is with Rockhopper for the flow test on the Sea Lion discovery and following this the rig will revert to Desire to drill our Rachel prospect. This is likely to be in late September or early October.

With the Sea Lion oil discovery and the Liz gas discovery the NFB has entered a new phase of exploration. However exploration is still in its infancy and a great deal has still to be learned about this area. The Sea Lion discovery is particularly significant as this has demonstrated that oil has been trapped in potentially significant quantities in a good quality reservoir. The oil at Sea Lion is trapped in a fan sandstone and we believe that this is one of a number of such fan sandstones on the eastern flank of the NFB. Oil fields rarely occur singly and we would expect a number of further oil discoveries in this play type on the east flank fan play fairway. We believe that over 50% of this play type is on Desire acreage.

Accordingly, since the Sea Lion discovery, Desire's geoscience effort has concentrated on identifying similar prospects for early drilling. In addition to the already recognised Rachel, Anna and Ninky prospects an exciting new prospect named Elaine has been identified.

As noted above the next prospect to be drilled by Desire will be Rachel. In the Competent Persons Report (CPR) prepared by Senergy (GB) Ltd and published by Desire late last year, using a reservoir thickness range of 30 to 85 metres, Senergy (GB) Ltd calculated a gross unrisked mean recoverable potential of 318 million barrels of oil. As a result of further work Desire now believe that the sand thickness in Rachel may exceed this range in a series of stacked sands, with a consequent increase in the recoverable potential. In addition the Rachel prospect has been significantly de-risked as a result of the Sea Lion discovery.

Geoscience work is ongoing to evaluate which of the other prospects in this play type on the eastern flank are best for drilling in the current campaign. Unfortunately, the full nature of these fan plays can only be identified on 3D data and currently Desire has 3D seismic coverage over only half the relevant acreage. Therefore, Desire intends to investigate the possibility of acquiring further 3D seismic, possibly in conjunction with other NFB operators to mitigate the costs.

As previously indicated, the Sea Lion oil discovery in the east of the NFB has meant that further evaluation of the Liz gas discovery has been given a lower priority. The Liz dry gas discovery and the gas condensate discovery are in reservoirs of uncertain lithology and quality and studies are continuing to get a better understanding of what we are dealing with. In addition, the trapping mechanism for both discoveries is uncertain, both are stratigraphic traps, and much work is required to identify these traps and associated volumes. As a result Desire believes that further appraisal of the area is unlikely until a later stage in the development of the NFB.

From the outset Desire has designed its drilling campaign with flexibility in mind. Hence our ability to move Rachel and other eastern flank prospects to the head of our drilling plans post the Sea Lion discovery. However, beginning with the Rachel well Desire is likely to drill up to four wells for our own account back to back. The number of wells to be drilled could be changed should Desire decide to sidetrack or test one or more of the wells. In addition a further two wells may be drilled by our partner, Arcadia Petroleum Ltd, when their plans for this drilling programme have been finalised. In order to give ourselves time to evaluate the results of the Rachel well we are most likely to drill the Dawn/Jacinta prospect following the Rachel well. Despite the disappointing Ernest well result the Dawn/Jacinta prospect continues to excite us and we believe that there may be significant hydrocarbons in the southern licences. Dawn is a possible Jurassic horst block structure which Senergy (GB) Ltd in the CPR calculate has a net unrisked mean recoverable potential of 124 million barrels. Jacinta is an Aptian stratigraphic prospect overlying the Dawn target which Senergy (GB) Ltd assess to have a net unrisked mean recoverable potential of 797 million barrels. These prospects may have been sourced from the main basin to the north which would not have been possible for Ernest which instead relied on a local source.

The loss for the six months ended 30 June 2010 was $6,398,000, of which exchange losses were $ 5,954,000, compared with a loss for the corresponding period of $265,000. Administrative expenses of $525,000 were lower than the previous half-year, largely due to increased recharges to joint venture licences resulting from drilling activity. The non-cash charge for share-based payment at $29,000 continues to decline as the economic cost of share-based compensation plans is largely expensed. The exchange loss for the period of $5,954,000 arises primarily on Sterling cash balances held to meet exploration costs, and follows a weakening of the pound against the dollar between the previous year-end and the date of this report. These sterling balances are a combination of those held directly by Desire and those in escrow accounts.

Investment revenues of $110,000 are higher than the corresponding period, with the

benefit of increased cash balances offset by interest rates remaining at historically low

levels.

Updated details of our prospects can be found on the Desire website: www.desireplc.co.uk.

Yours sincerely

Stephen L. Phipps

Chairman

Consolidated Income Statement

Consolidated Balance Sheet

Consolidated Statement of Changes in Equity

Consolidated Cash Flow Statement

Non cash transaction

In addition to the $11,616,000 shown as purchase of tangible and intangible assets, $23,476,000 of oil expenditure costs were settled via monies previously placed into escrow.

Consolidated Cash Flow Statement

Notes to the Interim Financial Statements for the six months ended 30 June 2010

1 Basis of preparation and accounting policies

The results for the six months to 30 June 2010 have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and International Accounting Standards Board.

The financial information does not constitute statutory accounts as defined by section 435 of the Companies Act 2006. Full accounts of the Company for the year ended 31 December 2009, on which the Auditors gave an unqualified report, have been delivered to the Registrar of Companies.

2 Segmental information

The Group considers itself to have a single purpose, the exploration and exploitation of its licenses in the North Falkland Basin, and therefore concludes that it has only one business segment and only one geographic segment.

3 Loss per share

The calculation of basic earnings per share is based upon the loss for the period and the weighted average number of shares in issue during the period.

When the Group reports a loss for the period then, in accordance with International Accounting Standard 33, the share options are not considered dilutive

4 Tax

Current tax comprises a provision for tax on the interest receivable less any allowable expenses, and any adjustment for over or under provision in prior periods.

5 Copies of report

Copies of this interim statement can be viewed on the Company's website and will be available to the public at the Registered Office, Mathon Court, Mathon, Malvern, Worcestershire WR13 5NZ. 

Independent Review Report to Desire Petroleum Plc

Introduction

We have reviewed the accompanying balance sheet of Desire Petroleum Plc as of 30 June 2010 and the related statements of income, changes in equity and cash flows for the six month period then ended, and a summary of significant accounting policies and other explanatory notes. Management is responsible for the preparation and fair presentation

of this interim financial information in accordance with International Financial Reporting Standards. Our responsibility is to express a conclusion on this

interim financial information based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements

2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity." A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the

accompanying interim financial information does not give a true and fair view of the financial position of the entity as at 30 June 2010, and of its financial performance and its cash flows for the six month period then ended in accordance with International Financial Reporting Standards as applicable in the United Kingdom.

UHY Hacker Young Manchester LLP

Chartered Accountants

Manchester

September 2010