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		</div><p><a href="http://londonglossy.com/wp-content/uploads/2010/12/desires-shares-slump-nearly-50.jpg"><img class="alignnone size-full" title="Falkland Islands-focused oil firm Desire Petroleum saw its shares slump by nearly 50%" src="http://londonglossy.com/wp-content/uploads/2010/12/min-desires-shares-slump-nearly-50.jpg" alt="Falkland Islands-focused oil firm Desire Petroleum saw its shares slump by nearly 50%"/></a></p>
<p>Falkland Islands-focused oil firm Desire Petroleum saw its shares slump by nearly 50% after it admitted a suspected oil find turned out to be water.</p>
<p>Investors piled into the Herefordshire-based firm on Thursday, sending shares up 30%, after it said its Rachel North well appeared to have struck oil in the North Falklands basin.</p>
<p>But in a statement released on Monday the AIM-listed company said the sand samples have revealed fluid in the well was just water.</p>
<p>Desire added a deeper target is still thought to be oil bearing but of a poorer quality, and it would proceed with collecting final data before plugging and abandoning the well.</p>
<p>Stephen Phipps, Desire chairman, said it was &#8220;extremely disappointing&#8221; the samples had &#8220;dashed all the earlier promise of this being Desire&#8217;s first oil discovery in the North Falkland Basin&#8221;.</p>
<p>Mr Phipps said despite the setback, the company believes the eastern flank of the North Falklands basin is still a prospective area for future discoveries.</p>
<p>Desire was pinning hopes on Rachel North being the second discovery in the region this year behind explorer Rockhopper&#8217;s Sea Lion discovery, which holds an estimated 242 million barrels in recoverable reserves.</p>
<p>Desire&#8217;s two unsuccessful wells in the region have cost it around £20 million each so far but it has £75 million for two more drilling efforts. It plans to move on to the Dawn/Jacinta prospect on the southern edge of the basin.</p>
<p>Shares closed 49% or 65.8p down at 66p.</p>
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