TIDMBOR

RNS Number : 2384B

Borders & Southern Petroleum plc

30 September 2022

30 September 2022

Borders & Southern Petroleum plc

("Borders & Southern" or "the Company")

Unaudited Results for the six-month period ended 30 June 2022

Borders & Southern Petroleum plc (AIM: BOR) announces its unaudited half year financial statements for the six months to 30 June 2022. The accounts contained within this report represent the consolidation of Borders & Southern Petroleum plc and its subsidiary, Borders & Southern Falkland Islands Limited.

Highlights

   --    Operating loss for the period was $857,000 (2021: $446,000) 
   --    Cash balance on 30 June 2022 was $1.207 million (30 June 2021: $1.352) 

-- An independent facilities study has been commissioned to provide preliminary cost estimates for a phased development of Darwin East

Chief Executive's Statement

The Company incurred a loss from operations for the six-month period up to 30 June 2022 of $857,000. The increase on the previous year's equivalent reporting period is partly due to the higher administrative costs associated with advisory support for the successful Open Offer, that was completed in the first half of this year, as well as the adverse foreign exchange conditions (the majority of the Company's expenditures are currently in Sterling, but our reporting is in US dollars). As of the 30 June 2022, the Company's Cash Balance was $1.2 million, compared to $1.3 for the same point last year.

The surging oil and gas prices during the first half of the year have had a positive impact on industry sentiment, with energy security becoming an important consideration. In this context, we have experienced an increase in interest in our project and continue to talk with potential partners. As previously reported, one of our objectives for the year was to commission an independent facilities study to further evaluate our development concepts and to provide current CAPEX and OPEX estimates. We are focusing on a phased development, consistent with the industry and economic environment, whereby we could minimize initial capital expenditure and deliver fast project payback. This study is now underway.

The study is assessing a development that commences on Darwin East, with initial production of 25,000 to 30,000 barrels per day of condensate, based on two subsea production wells and one subsea gas injection well, tied back to an FPSO. Production could be increased by additional wells on Darwin East and the subsequent full development of Darwin West. All equipment required for such a subsea development would be industry standard.

The Company's Production Licences and Discovery Area have an expiry date of 31 December 2022. In line with other Operators active in the Falkland Islands, we intend to request an extension to our Licences and Discovery Area. As part of the approval process, we recognise that we will need to demonstrate the Company's financial capability during the extension period. It is therefore likely additional funds will be sought before the end of the year.

With positive industry sentiment, and a global need to bring additional resources into production to help manage the energy transition, we remain convinced that the appraisal and development of the Darwin discovery is a commercially viable proposition.

For further information, please visit www.bordersandsouthern.com or contact:

 
 Borders & Southern Petroleum plc 
  Howard Obee, Chief Executive 
  Tel: 020 7661 9348 
 Strand Hanson Limited (Nominated & Financial Adviser and Joint 
  Broker) 
  James Spinney / Ritchie Balmer / Abigail Wennington 
  Tel: 020 7409 3494 
 Auctus Advisors LLP (Joint Broker) 
  Jonathan Wright 
  Tel: 07711 627449 
 
  Tavistock (Financial PR) 
  Simon Hudson / Nick Elwes 
  Tel: 020 7920 3150 
 

Notes to Editors:

Borders & Southern Petroleum plc (AIM: BOR) is an oil & gas exploration company listed on the AIM Market of the London Stock Exchange. The Company operates and has a 100% interest in three Production Licences in the South Falkland Basin covering an area of nearly 10,000 square kilometres. The Company has acquired 2,517 square kilometres of 3D seismic and drilled two exploration wells, making a significant gas condensate discovery with its first well.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 30 June 2022

 
                                                    6 months        6 months       12 months 
                                                       ended           ended           ended 
                                                     30 June         30 June 
                                                        2022            2021     31 Dec 2021 
                                                 (unaudited)     (unaudited)       (audited) 
                                     N otes             $000            $000            $000 
 
  Administrative expenses                              (747)           (546)         (1,096) 
                                             ---------------  --------------  -------------- 
 
  LOSS FROM OPERATIONS                                 (747)           (546)         (1,096) 
 
  Finance income                       3                   -             101              74 
  Finance costs                        3               (110)             (1)             (1) 
 
  LOSS BEFORE TAX                                      (857)           (446)         (1,023) 
                                                           -               -               - 
    Tax expense 
  LOSS FOR THE PERIOD AND TOTAL 
   COMPREHENSIVE LOSS FOR THE 
   PERIOD ATTRIBUTABLE TO EQUITY 
   OWNERS OF THE PARENT                                (857)           (446)         (1,023) 
                                             ===============  ==============  ============== 
 
  Loss per share - basic and           2              (0.02)          (0.09)    (0.21) cents 
   diluted                                             cents           cents 
 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

At 30 June 2022

 
                                               At              At              At 
                                          30 June         30 June     31 December 
                                             2022            2021            2021 
                                      (unaudited)     (unaudited)       (audited) 
                                             $000            $000            $000 
  ASSETS 
 
   NON-CURRENT ASSETS 
  Property, plant and equipment                 9              88              22 
  Intangible assets                       293,064         292,494         292,746 
                                  ---------------  --------------  -------------- 
  Total non-current assets                293,073         292,582         292,768 
 
    CURRENT ASSETS 
  Other receivables                           383             361             183 
  Cash and cash equivalents                 1,207           1,352             714 
                                  ---------------  --------------  -------------- 
 
    TOTAL CURRENT ASSETS                    1,590           1,713             897 
 
    TOTAL ASSETS                          294,663         294,295         293,665 
                                  ===============  ==============  ============== 
 
  LIABILITIES 
   CURRENT LIABILITIES 
  Trade and other payables                  (287)           (180)           (126) 
                                  ---------------  --------------  -------------- 
  TOTAL LIABILITIES                         (287)           (180)           (126) 
 
  TOTAL NET ASSETS                        294,376         294,115         293,539 
                                  ===============  ==============  ============== 
 
  EQUITY 
  Share capital                             9,833           8,530           8,530 
  Share premium                           308,993         308,602         308,602 
   Other reserve                            1,778           1,777           1,778 
  Retained deficit                       (26,212)        (24,778)        (25,355) 
  Foreign currency reserve                   (16)            (16)            (16) 
 
 
    TOTAL EQUITY                          294,376         294,115         293,539 
                                  ===============  ==============  ============== 
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the six months ended 30 June 2022

 
                                                                            Foreign 
                                            Share                Retained   currency   Total 
                            Share capital   premium   Other      Deficit    reserve 
                                                      reserve 
                                 $000        $000      $000        $000       $000      $000 
Unaudited 
Balance at 1 January 2022           8,530   308,602     1,778    (25,355)       (16)  293,539 
Total comprehensive loss 
 for the period                         -         -         -       (857)          -    (857) 
Share placement                     1,303       391         -           -          -    1,693 
Balance at 30 June 2022             9,832   308,993     1,778    (26,212)       (16)  294,376 
                            =============  ========  ========  ==========  =========  ======= 
 
 
Unaudited 
Balance at 1 January 2021   8,530  308,602  1,777  (24,332)  (16)  294,561 
Total comprehensive loss 
 for the period                 -        -      -     (446)     -    (446) 
Balance at 30 June 2021     8,530  308,602  1,777  (24,778)  (16)  294,115 
                            =====  =======  =====  ========  ====  ======= 
 
 
Audited 
Balance at 1 January 2021    8,530  308,602  1,777  (24,332)  (16)  294,561 
Total comprehensive loss 
 for the year                    -        -      -   (1,023)     -  (1,023) 
Recognition of share-based 
 payments                        -        -      1         -     -        1 
Balance at 31 December 
 2021                        8,530  308,602  1,778  (25,355)  (16)  293,539 
                             =====  =======  =====  ========  ====  ======= 
 

CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months ended 30 June 2022

 
                                                                                         12 months 
                                                      6 months 
                                                         ended             6 months          ended 
                                                       30 June                         31 December 
                                                          2022                ended           2021 
                                                                            30 June 
                                                   (unaudited)     2021 (unaudited)      (audited) 
 Cash flow from operating activities                         $                    $              $ 
 (Loss) before tax 
  Adjustments for:                                       (857)                (446)        (1,023) 
 Depreciation                                               13                   63            129 
 Share-based payment                                         -                    -              1 
 Net finance (income) / costs                              110                (100)           (73) 
 Realised foreign exchange gains                             -                    -              - 
                                                         (734)                (483)          (966) 
 Cash flows used in operating activities 
 (Increase)/decrease in trade and 
  other receivables                                      (200)                (136)             42 
 Increase/(decrease) in trade and 
  other payables                                           161                    5             10 
 Net cash outflow from operating activities              (773)                (614)          (914) 
  Cash flows used in investing activities 
  Interest received                                          -                    -              - 
  Purchase of intangible fixed assets                    (318)                (253)          (505) 
  Net cash used in investing activities                  (318)                (253)          (505) 
 
 
  Cash flows from financing activities 
  Lease interest                                             -                  (1)            (1) 
  Lease payments                                         (110)                 (65)          (124) 
  Share placement                                        1,693                    -              - 
 
  Net cash used in financing activities                  1,583                 (66)          (125) 
 
    Net increase/(decrease) in cash and 
    cash equivalents                                       492                (933)        (1,544) 
 
  Cash, cash equivalents and restricted 
   use cash at the beginning of the 
   period                                                  714                2,184          2,184 
  Exchange gains on cash and cash equivalents                1                  101             74 
                                                --------------  -------------------  ------------- 
  Cash, cash equivalents and restricted 
   use cash at the end of the period                     1,207                1,352            714 
 
 

NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the six months ended 30 June 2022

1. Basis of preparation

The unaudited condensed consolidated interim financial statements have been prepared using the recognition and measurement principles of International Accounting Standards, International Reporting Standards and Interpretations as applied in accordance with the provisions of the Companies Act 2006. The Group has not elected to comply with IAS 34 "Interim Financial Reporting" as permitted. The principal accounting policies used in preparing the interim financial statements are unchanged from those disclosed in the Group's Annual Report for the year ended 31 December 2021 and are expected to be consistent with those policies that will be in effect at the year end.

The condensed financial statements for the six months ended 30 June 2022 and 30 June 2021 are unreviewed and unaudited. The comparative financial information does not constitute statutory financial statements as defined by Section 435 of the Companies Act 2006. The comparative financial information for the year ended 31 December 2021 is not the company's full statutory accounts for that period. A copy of those statutory financial statements has been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified and did include references to any matters to which the auditors drew attention by way of emphasis relating to going concern without qualifying their report and did not contain a statement under section 498(2)-(3) of the Companies Act 2006.

For the six-month reporting period up until 30 June 2022, Borders & Southern had a loss from operations of $857,000 (a loss for the same period in 2021 was $446,000). Administrative expenses were $747,000 (2021: $546,000). The cash balance at the 30 June 2022 was $1.20 million compared with a balance of $1.35 million at 30 June 2021. The Company has no debt.

2. LoSS per share

The calculation of the basic loss per share is based on the loss attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period. Diluted loss per share is not stated as the result would be ant-dilutive given the loss in the period.

 
                                     Loss after 
                                        tax for          Weighted         Loss 
                                     the period    average number    per share 
                                           $000         of shares      (cents) 
 Basic and diluted 
 
 Six months ended 30 June 2022 
  (unaudited)                             (857)       553,337,760       (0.02) 
 
 Six months ended 30 June 2021 
  (unaudited)                             (446)       484,098,484       (0.09) 
 
 Twelve months ended 31 December 
  2021 (audited)                        (1,023)       484,098,484       (0.21) 
 
 

3. FINANCE INCOME AND COSTS

 
                                6 months   6 months      12 months 
                                                             ended 
                                   ended      ended    31 December 
                                 30 June    30 June           2021 
                                    2022       2021           $000 
                                    $000       $000 
 Finance Income 
  Bank interest receivable             -          -              - 
 Foreign exchange gain                 -        101             74 
                                       -        101             74 
 
   Finance costs 
   Foreign exchange loss           (110)          -              - 
   Interest on leased assets           -        (1)            (1) 
                               ---------  ---------  ------------- 
                                   (110)        (1)            (1) 
                               =========  =========  ============= 
 

4. Going Concern

The Company regularly assesses its liquidity and available funds to ensure that it has sufficient funds available to cover costs for at least the following 12 months. This remained the case at 30 June 2022 however, as noted above, the Company intends to secure additional funds by the end of 2022 in order to continue operations as normal.

-ends-

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September 30, 2022 02:00 ET (06:00 GMT)

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