TIDMBOR
RNS Number : 2921N
Borders & Southern Petroleum plc
31 May 2022
31 May 2022
Borders & Southern Petroleum plc
("Borders & Southern" or "the Company")
Audited Results for the 12 month period ended 31 December
2021
Borders & Southern (AIM: BOR), the London based independent
oil and gas exploration company with assets offshore the Falkland
Islands, announces its audited results for the year ended 31
December 2021. Full copies of the Company's Annual Report and
Accounts, including the Company Overview, Chairman's Statement,
Remuneration Committee Report, Directors' Report, Auditor's Report
and full Financial Statements, will be available on the Company's
website and posted to Shareholders along with the notice of the AGM
shortly.
Summary
-- Cash balance on 31 December 2021: $0.714 million (2020: $2.18 million)
-- Administrative expense for the year: $1.1 million (2020: $1.0 million)
-- Operating loss of $1.0 million (2020: $1.0 million)
-- Farm-out process continues
-- Post year-end events:
- extended Production Licences and Discovery Area through to 31 December 2022
- raised $1.8 million (before expenses) through the issue of 103,858,914 new Ordinary shares
- the total number of Ordinary shares in issue is now 587,957,318
- the Open Offer for excess shares was significantly over-subscribed
- currently evaluating different development options including
an accelerated production development
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 & Joint
Broker)
Ritchie Balmer / James Bellman
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
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014 (as amended) as it forms part of the
domestic law of the United Kingdom by virtue of the European Union
(Withdrawal) Act 2018 (as amended). Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
Notes to Editors:
Borders & Southern Petroleum plc is an oil & gas
exploration company listed on the London Stock Exchange AIM (BOR).
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.
Competent Person Disclosure:
The technical aspects of this announcement have been reviewed,
verified and approved by Dr Howard Obee in accordance with the
Guidance Note for Mining, Oil and Gas Companies, issued by the
London Stock Exchange in respect of AIM companies. Dr Obee is a
petroleum geologist with more than 30 year's relevant experience.
He is a Fellow of the Geological Society and member of the American
Association of Petroleum Geologists and the Petroleum Exploration
Society of Great Britain.
Chairman's and CEO's review
The Company reports an operating loss for 2021 of $1.0 million
(compared to $1.0 million in 2020). Administrative expense for the
year was $1.1 million (compared to $1.0 million in 2020) The cash
balance at year end was $0.714 million (2020: $2.18 million). The
Company continues to be debt-free. Due to the declining cash
balance the Company decided in late 2021 to raise additional funds.
This was completed in April this year through a $600,000
Subscription for 34,702,000 new Ordinary Shares and an Open Offer
for $1.2 million through the issue of 69,156,914 new Ordinary
Shares. The response to the Open Offer was extremely positive and
resulted in a significant over-subscription and we are grateful for
the support from existing shareholders. The funding was approved by
shareholder resolutions at a General Meeting in April 2022.
The funding coincided with a significant upturn in oil price.
Brent crude started to strengthen from the beginning of the 2022
but spiked significantly higher (towards $130 per barrel) during
March as a response to the tragic events in Eastern Europe. It is
always difficult to predict future oil price movements, but there
are clearly new considerations now in play for the energy
transition, such as energy security. It is uncertain what impact
this will have on oil & gas company strategies and from our
perspective, what bearing it will have on our ability to attract
partners to the Darwin project, but we will continue, with the help
of our advisors, to promote the strong merits of a development.
Our technical and commercial work recently has concentrated on
investigating a range of Darwin development scenarios. This focus
has been on reducing initial capital expenditure, delivering a fast
payback on that capital, minimising the environmental footprint
and, at the same time, ensuring the break-even oil price is below
$40 a barrel.
As a result we have prioritised a phased development concept
starting with around 25,000bpd of liquids production and using that
cash flow to increase production after a few years. Initial
production could come from 2 wells with a further well for gas
re-injection. Our initial studies have concluded that this approach
greatly reduces capital expenditure and results in a payback of
that capital within two years.
Over the coming months we plan to commission an externally led
technical study to scrutinise these plans and assumptions and will
be in a position to report these results when available. If this
study supports our internal findings, we believe this will make the
Darwin development project much more attractive to incoming
investors and partners as it will offer an investment with lower
capital commitments, robustness under most near term oil price
scenarios and a quick pay back on the invested capital.
In January we applied for, and were granted, an extension to our
Production Licences and Discovery Area. The revised expiry date is
31 December 2022. This is the maximum extension currently available
and did not come with additional work obligations.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2021
2021 2020
--------------------------------------------------
$'000 $'000
-------------------------------------------------- -------- --------
Administrative expenses (1,096) (1,046)
-------------------------------------------------- -------- --------
Loss from operations (1,096) (1,046)
Finance income 74 55
Finance expense (1) (11)
-------------------------------------------------- -------- --------
Loss before tax (1,023) (1,002)
Tax expense - -
-------------------------------------------------- -------- --------
Loss for the year and total comprehensive
loss for the year attributable to equity owners
of the parent (1,023) (1,002)
-------------------------------------------------- -------- --------
Basic and diluted loss per share (see note (0.21) (0.21)
4) cents cents
-------------------------------------------------- -------- --------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 31 December 2021
2021 2020
------------------------------- ----------------- -----------------
$'000 $'000 $'000 $'000
------------------------------- ------ --------- ------ ---------
Assets
Non-current assets
Property, plant and equipment 22 151
Intangible assets 292,746 292,241
------------------------------- ------ --------- ------ ---------
Total non-current assets 292,768 292,392
------------------------------- ------ --------- ------ ---------
Current assets
Other receivables 183 225
Cash and cash equivalents 714 2,184
------------------------------- ------ --------- ------ ---------
Total current assets 897 2,409
------------------------------- ------ --------- ------ ---------
Total assets 293,665 294,801
------------------------------- ------ --------- ------ ---------
Liabilities
Current liabilities
Trade and other payables (126) (240)
------------------------------- ------ --------- ------ ---------
Total net assets 293,539 294,561
------------------------------- ------ --------- ------ ---------
Equity attributable to
the equity owners of the
parent company
Share capital 8,530 8,530
Share premium 308,602 308,602
Other reserves 1,778 1,777
Retained deficit (25,355) (24,332)
Foreign currency reserve (16) (16)
------------------------------- ------ --------- ------ ---------
Total equity 293,539 294,561
------------------------------- ------ --------- ------ ---------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2021
Foreign
Share Share Other Retained currency
capital premium reserves deficit reserve Total
$'000 $'000 $'000 $'000 $'000 $'000
------------------------------ --------- --------- ---------- --------- ---------- --------
Balance at 1 January
2020 8,530 308,602 1,777 (23,330) (16) 295,563
Loss and total comprehensive
loss for the year - - - (1,002) - (1,002)
Balance at 31 December
2020 8,530 308,602 1,777 (24,332) (16) 294,561
Loss and 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
------------------------------ --------- --------- ---------- --------- ---------- --------
The following describes the nature and purpose of each reserve
within owners' equity:
Reserve Description and purpose
Share capital This represents the nominal value of shares
issued.
Share premium Amount subscribed for share capital in excess
of nominal value.
Other reserves Fair value of options issued less transfers
to retained deficit on expiry.
Retained deficit Cumulative net gains and losses recognised
in the Consolidated Statement of Comprehensive
Income.
Foreign currency reserves Differences arising on the translation of
foreign operation to US dollars.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2021
2021 2020
----------------
$'000 $'000 $'000 $'000
--------------------------------------- ------ -------- ------ --------
Cash flow from operating activities
Loss before tax (1,023) (1,002)
Adjustments for: Depreciation 129 95
Share-based payment 1 -
Finance costs 1 11
Finance income (74) (54)
Unrealised foreign currency movements - 2
--------------------------------------- ------ -------- ------ --------
Cash flows used in operating
activities before changes in
working capital (966) (948)
Decrease in other receivables 42 8
Increase/(decrease) in trade
and other payables 10 (61)
--------------------------------------- ------ -------- ------ --------
Net cash outflow from operating
activities (914) (1,000)
Cash flows used in investing
activities
Interest received - 2
Purchase of intangible assets (505) (476)
------ ------
Net cash used in investing activities (505) (474)
--------------------------------------- ------ -------- ------ --------
Cash flows used in financing
activities
Lease interest (1) (11)
Lease payments (124) (62)
------ ------
Net cash used in financing activities (125) (73)
-------- --------
Net decrease in cash and cash
equivalents (1,544) (1,547)
--------------------------------------- ------ -------- ------ --------
Cash and cash equivalents at
the beginning of the year 2,184 3,682
Exchange gain on cash and cash
equivalents 74 49
--------------------------------------- ------ -------- ------ --------
Cash and cash equivalents at
the end of the year 714 2,184
--------------------------------------- ------ -------- ------ --------
Notes
1. Accounting policies
Basis of preparation
The financial information for the year ended 31 December 2021
set out in this announcement does not constitute the Company's
statutory accounts. These financial statements included in the
announcement have been extracted from the Group annual financial
statements for the year ended 31 December 2021. The financial
statements have been prepared in accordance with the recognition
and measurement criteria of International Financial Reporting
Standards adopted for use in the European Union. However, this
announcement does not itself contain sufficient information to
comply with IFRS.
The auditor has issued its opinion on the Group's financial
statements for the year ended 31 December 2021 which is unmodified
and is available for inspection at the Company's registered address
and will be posted to the Group's website.
2. Going concern
The consolidated financial statements have been prepared on a
going concern basis which assumes the continuity of normal business
activity and the realisation of assets and settlement of
liabilities in the normal course of business.
Subsequent to balance date, the Company raised US$1.8 million
(GBP1.35 million) before expenses through a subscription and open
offer to existing shareholders. We believe this provides sufficient
funding for the company until early 2023 so in the absence of a
farm-out agreement bringing in working capital into the Company,
additional funds may need to be raised before mid 2023. These
events or conditions indicate the existence of a material
uncertainty which may cast doubt on the Group and Parent Company's
ability to continue as a going concern and therefore that the Group
and Company may be unable to realise their assets in the normal
course of business.
3. Basic and dilutive loss per share
The calculation of the basic and dilutive loss per share is
based on the loss attributable to ordinary shareholders divided by
the weighted average number of shares in issue during the year. The
loss for the financial year for the Group was $ 1,023,000 (2020 -
loss $1,002,000) and the weighted average number of shares in issue
for the year was 484,098,484 (2020 - 484,098,484). During the year
the potential ordinary shares are anti-dilutive and therefore
diluted loss per share has not been calculated. At the Statement of
Financial Position date, there were 6,200,000 (2020: 6,100,000)
potentially dilutive ordinary shares being the share options.
4. Subsequent date events
In January 2022, the Company was advised that its licences in
The Falkland Islands had been renewed until end 2022 in line with
current practices.
In March 2022 the Company announced that it had raised $600,000
through a share placement and it planned an open offer to existing
shareholders to raise up to a further $1,200,000. The open offer
was oversubscribed so the applications were scaled back to raise
the full $1.8 million before expenses. Both capital raises were
approved at the general meeting in April.
-ends-
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