* 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,"
"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)