* Liz well plugged and abandoned on poor quality discovery
* Shares in Desire fall 6 percent (Adds detail, analyst comment, share price)
LONDON, April 6 British oil explorer Desire Petroleum DES.L said it had plugged and abandoned the first well to be drilled as part of a controversial oil exploration programme by UK companies in the Falkland Islands.
Oil exploration in the islands off the coast of South America has sparked protests from Argentina, which claims the British territory [ID:nN22219606].
Desire said on Tuesday it had completed final logging at its first well, the Liz well 14/19-1 in the North Falkland Basin, and while it found gas, it said it was abandoning the well, confirming an update it gave in late March which said that the gas present was in poor quality reservoirs [ID:nLDE62S04Q].
Mirabaud Securities analyst Richard Savage said the result of the first well to be drilled in the Falkland Islands for a decade was "disappointing".
"I think commercialising gas in the Falklands region is going to be very difficult unless you find very large volumes," said Savage.
"The key fact is that they've plugged and abandoned this well so they're not saying this is a gas discovery which we're going to come back to, they're saying look we've got some encouraging signs lets move on with the programme."
Shares in Desire fell 6 percent to 47.3 pence at 1414 GMT.
Rockhopper Exploration (RKH.L), another Falklands oil explorer which has a 7.5 percent working interest in the Liz well, gained 16.6 percent to 52.8 pence at 1415 GMT, as the expectation shifts to the two wells it is now due to drill with the 'Ocean Guardian' rig.
(Reporting by Sarah Young; editing by Rhys Jones)
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