Aim-listed oil prospector Desire Petroleum has cut interim losses from £1.7 million to £548,000 and is looking for partners to help fund further exploration drilling in the Falkland Islands, writes Ben Cobley.

Desire's hopes rest on today's high price of oil at the moment and a Shell/British Geological Survey report which has revived the previously stilled interest in the Falklands region. The report says that 60 billion barrels of oil appear to have been generated and expelled from the exceptionally rich source rock below the islands, but the problem is to find where it has gone.

Currently Desire is making presentations to interested parties. Director David Quick claims the company has had 'a quite reasonable response' so far, though there are no indications as yet of anyone wanting to sit down and sign anything.

If a partner is found, Quick says Desire will move as fast as possible, but it is 'fairly optimistic' to expect drilling to start early next year. It is more likely to begin closer to the Falklands' winter season, which apparently is not as bad as the North Sea's.

Commenting on Desire's oil and mining ventures in Portugal and Ireland, Quick expects further work to start during the next twelve months. Faulty machinery, spiralling costs and lack of gas at its Aljubarrota No. 3 rig in Portugal caused a setback earlier this year, but Desire is virtually certain the gas is down there somewhere and it will try again.

At 25p, Desire's shares have bounced up from their 2000 low on oil price strength, but remain nearly 50p off their year's high of 64.5p. Significant developments will be covered in Growth Company Investor.