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Gold/Mining/Energy : Lundin Oil (LOILY, LOILB Sweden)

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To: Oily1 who wrote (792)	10/23/1998 7:54:00 AM
From: Tomas	Read Replies (1) of 2742

The Falklands: "The conditions for a significant oil find clearly exist" Slump may hit Isles oil hunt by Jeremy Cresswell Press & Journal, Aberdeen, October 23 DESIRE Petroleum says the four wells completed off the Falkland Islands to date indicated the conditions for a significant oil find clearly existed. But disappointments showed there was still much to learn about the geology of the region and that "it may be some time before success is achieved". Desire warned yesterday that the Falklands hunt could be hampered by the latest oil price crisis forcing a round of corporate belt tightening. "Perhaps the most serious impediment to rapid progress is the worldwide slowdown in exploration drilling ," said company chairman Colin Phipps. "Exploration budgets have been cut back sharply and this is likely to have an effect on continued exploration in the North Falklands Basin, while low oil prices prevail." Mr Phipps said Desire was looking at its options on this score, including whether it could drill by itself or with other groupings of oil companies. The company has a cash pile of $11million available, according to its 1998 first half year results statement posted yesterday. "Whether or not this can be done will depend on a fall in drilling costs, which frequently occurs in times of low exploration activity," said Mr Phipps. Amerada Hess is now drilling the fifth well in the current programme for the semi-submersible Borgny Dolphin. And Shell is expected to start the sixth in about two weeks. The company was sufficiently encouraged by the results of an earlier well -- Falklands well number three -- to have another try. Significant gas shows were achieved, with at least one source claiming that, had it been in the North Sea, Shell might have had a commercial find on its hands. However, this has never been confirmed. But the very fact that the company is back so soon has to be viewed as encouraging. pressandjournal.co.uk

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