STANLEY, Falkland Islands, June 8 (UPI) -- Despite ongoing Argentine protests, the Falklands oil exploration program received a new boost Tuesday as one of the prospecting companies, Rockhopper Exploration, announced it raised $70 million to fund more offshore drilling.
Rockhopper Exploration raised the additional cash from the stock market after reports its Sea Lion well in the North Falkland Basin had yielded much more oil than expected.
Falklands oil exploration has been blighted by early disappointing results and a continuing verbal assault on Britain and the Falklands from Argentina. Buenos Aires calls the oil prospecting illegal as it reasserts Argentine sovereignty claims on the islands it calls Las Malvinas.
Argentina and Britain went to war over the islands in 1982 after an Argentine invasion led by a military junta that ruled the country. Argentina retreated after a 74-day conflict that killed 907 people but did not give up its claim on the territory.
Argentina revived its claims with a bitter war of words when oil prospecting resumed in 2009 after a long hiatus, spurred on by high oil prices and new scientific data that placed the oil deposits at levels potentially matching those in Saudi Arabia.
Early reports after the drilling in February disappointed prospectors and investors and cost the drilling company, Desire, huge losses in equity value. More optimistic reports have restored investor confidence but also intensified Argentine opposition to the oil exploration campaign.
Rockhopper said it would drill a second exploratory well at the Ernest prospect in the North Falkland Basin.
Desire Petroleum plc, meanwhile, said it was encouraged by the Rockhopper discovery as well as its own drilling at the Liz prospect that yielded gas and gas condensates.
"Both of these wells have yielded much new information leading to a much greater understanding of the hydrocarbon potential of the North Falkland Basin," the company said.
"A great deal of work is now under way analyzing all these new data to identify the prime targets for drilling later in the campaign. These wells represent a milestone in the North Falkland Basin exploration proving that hydrocarbons (oil and gas) have been generated and trapped," said the company.
The company said it intended to drill the Rachel prospect as its next well later in the year.
The Liz well, which was drilled on the western flank of the basin, discovered gas in two zones. Desire said analysis of the samples has confirmed the lower zone as dry gas (high methane and low liquid content) and the upper zone as gas condensate with a condensate/gas ratio of 95 barrels/MMscf and condensate of 49.5 API.
Work is under way on mapping the size of these accumulations and obtaining a better understanding of the reservoir quality, Desire said.
