Desire Petroleum report the conclusions of a recently completed Competent Person's Report (CPR) on part of the Company's extensive exploration acreage in the North Falkland Basin. Desire is also pleased to give an update on the Ocean Guardian drilling rig.

The CPR covers only 40% of the Company's northern licences Tranches C, D and F and is focussed on the areas of the fast-tracked fully processed 3D data covering the northern part of Tranche D (PL004) and the Ann prospect sub-area within Tranche C (PL003).

The CPR was prepared by Senergy (GB) Limited, a major independent consultancy specialising in reservoir engineering, geology, geophysics and petroleum economics.

Senergy evaluated Desire's leading prospects in the northern part of PL004, namely the Sea Lion Extension, Casper West, Casper East, Shona West, Shona East, Beverley, Jayne and Catriona, as well as the Ann/Orca South prospect in the Ann sub-area.

The evaluation recognises the results of the recently completed 14/10-8 well drilled by Rockhopper Exploration PLC ("Rockhopper") to the north of the eastern part of PL004, and takes account of Desire's revised equity interests in PL004 (Area 1 and Area 2) following the farm-out to Rockhopper announced on 12 October 2011.

A fully interpreted update of Desire's complete prospect inventory, including the Liz gas/condensate discovery and incorporating the full extent of the 3D seismic survey over Desire's acreage, will be prepared in the first half of 2012.

The key conclusions of the CPR are as follows (all volumes are unrisked prospective resources):

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