dozen years ago, after a brief flurry of drilling, all went quiet in the waters around the Southern Hemisphere’s Falkland Islands.

Now, a substantial drilling campaign is under way offshore the remote islands, predominately led by two U.K. independents, Desire Petroleum Plc and Rockhopper Exploration Plc. “2010 will be a big year for Desire and Rockhopper,” say David Hart and Peter Bassett, analysts with U.K. investment firm Westhouse Securities Ltd. “We expect a steady diet of drilling news.”

The islands are U.K. territories, and are surrounded by a 200-square-mile economic zone encompassing four sedimentary basins. The North Falkland Basin is geologically distinct from the three southern basins, which are interconnected: the eastern Falkland Plateau Basin, southern South Falkland Basin and western Malvinas Basin.

Beginning in February 2010, up to 10 wells will be drilled. “The first prospects are in the North Basin, but we also expect a well to be drilled in the southern basins,” says Hart. The southern prospects are in deeper water and are held by BHP Billiton Plc and Falkland Oil & Gas Ltd. Arcadia Petroleum Ltd. and Borders & Southern Petroleum Plc also hold interests offshore. The latter three firms all headquarter in the U.K.

Desire has contracted Diamond Offshore’s Ocean Guardian third-generation semisubmersible for the program. The rig can drill in 1,500 feet of water to depths of 25,000 feet. The first four wells in the planned program are firm commitments, and the remaining six are optional.

“Depending on how drilling results come in, the program could run a full year,” says Hart. Each well will take approximately a month to drill.

The North Basin, a north-south trending rift graben that covers some 4,800 square miles, enjoyed its only previous activity in 1998. Explorers Shell, Amerada Hess, Lundin Petroleum and Lasmo drilled a total of six wells within a relatively small portion of the central graben.

Five wells probed sediments above 10,000 feet and encountered shows in post-rift Cretaceous sands. The reservoirs were undercharged and lay above the main source interval, which consists of more than 3,000 feet of lacustrine rocks. Only the lower part of the source section was in the oil window, and the upper part was immature.

One test, Shell’s 14/5-1, went deeper, to 14,800 feet, and found tight, charged reservoirs. It was a gas discovery, estimated to contain 3.4 trillion cubic feet of contingent resources. That size was too small to allow for commercial development, and low commodity prices discouraged further activity. The area went dormant.

Today’s prospectors are targeting several types of play, and they have integrated extensive 2-D and 3-D seismic data, amplitude-versus-offset analysis and controlled-source electromagnetic mapping into their toolkits. The target sizes range from 120 million to more than 1.5 billion barrels of oil. The prospects are traps below the immature source rock, which is now thought to be a basinwide seal.

The first well will be drilled on Ann, a structure mapped by seismic on a license held 57.5% by Desire, 35% by Arcadia and 7.5% by Rockhopper. It could potentially contain 150 million barrels of oil. The second will be on Sea Lion, a feature with 230 million barrels of potential. It is on license PL032, held 100% by Rockhopper.

“It looks increasingly likely that BHP Billiton and Falkland Oil & Gas will take the third slot in the drilling program, and test their Toroa prospect in the eastern Falkland Basin,” says Hart. Water depths on this feature are close to 2,000 feet, so the rig will have to be modified slightly.

There has been no drilling yet in the southern basins in Falkland waters, so the test will be a major wildcat.

“This well is very significant and risky,” says Bassett. “It is effectively a one-exploration-well program.” A discovery well would validate remaining prospects in the area; an unsuccessful test would mean that follow-up drilling might not occur until September 2010 at the earliest.

“Clearly, 2010 is a big year for the Falklands,” says Hart. “It’s an area that’s been kept alive by technical study and data gathering. The missing component has been more drilling, and there’s a lot of excitement about this program.”