TIDMBOR
RNS Number : 3621V
Borders & Southern Petroleum plc
14 April 2021
14 April 2021
Borders & Southern Petroleum plc
("Borders & Southern" or "the Company")
Audited Results for the 12 month period ended 31 December
2020
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 2020. 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 tomorrow on the
Company's website and posted to Shareholders in May.
Summary
-- Cash Balance on 31 December 2020: $2.18 million (2019: $3.68 million).
-- Administrative expense for the year: $1.0 million (2019: $1.45 million).
-- Operating loss of $1.01 million (2019: $1.37 million)
-- The farm-out process has been extensive and far-reaching -
the Company continues to investigate all possible options for
funding the next drilling programme.
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)
James Spinney / Ritchie Balmer / Georgia Langoulant
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
Borders & Southern's strategic objective is to monetise its
Darwin discovery for the benefit of all its stakeholders. To
achieve this and to initiate the next step, the Company's principal
focus has been to acquire partners and funding for Darwin's
appraisal programme. However, in the past few years, industry and
capital market fundamentals have not helped our progress. 2020
continued in the same vein. But despite the challenge, the Board
believes that the quality of the Darwin project merits the
continuation of its strategy and the Board's commitment remains
undiminished.
The loss from operations in 2020 was $1,046,000 (compared to
$1,370,000 in 2019). The Company has always maintained strong
financial control and a low overhead. However, further cost savings
have been made during the past year, including a reduction in
salaries by 50%. Administrative expense for the year was $1.0
million, compared to $1.47 million in 2019. The cash balance at
year-end was $2.18 million (2019: $3.68 million). The Company
remains debt-free. With a decreasing cash balance, and in the event
that market conditions prevent us from sourcing partner funding, it
may be necessary to raise additional capital in the coming
year.
The farm-out process has been extensive and far reaching. To
assist the marketing, considerable effort has been put into
minimising drilling costs for the next campaign, addressing both
the well designs and the service company costs. Potential savings
of up to 25% have been identified and this has formed the basis of
our current conversations with potential partners.
The project fundamentals are strong. Economic projections are
attractive, the break-even oil price is low (less than $35 per
barrel), sub-surface risks are low, and the environmental footprint
low. As the industry enters the energy transition to a lower carbon
future, we believe that Darwin (with its estimated 460 million
barrels of condensate and LPGs) is a worthy development, comparing
favourably to many global alternatives. Prior to the start of the
next phase of operations, the Company commits to fully integrating
climate change into its business plan. We will define measures,
report transparently, and mitigate our own emissions as far as
practicable.
Outlook for the industry remains challenging, although signs of
optimism are noted. Brent crude has risen during the first quarter
of 2021, approaching $70 per barrel before declining to around $60
later in the quarter. Whilst this has not yet impacted company
expenditure patterns, if the trend were to continue, and energy
demand accelerates as the world comes out of the Covid pandemic
crisis, there will be a need to bring additional resources into
production. Borders & Southern aim to be part of that
production increase.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2020
2020 2019
--------------------------------------------------
$000 $000
-------------------------------------------------- -------- -------------
Administrative expenses (1,046) (1,447)
-------------------------------------------------- -------- -------------
Loss from operations (1,046) (1,447)
Finance income 55 88
Finance expense (11) (11)
Loss before tax (1,002) (1,370)
Tax expense - -
-------- -------------
Loss for the year and total comprehensive
loss for the year attributable to equity owners
of the parent (1,002) (1,370)
-------------------------------------------------- -------- -------------
Basic and diluted loss per share (see note (0.21)
3) cents (0.28) cents
-------------------------------------------------- -------- -------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 31 December 2020
2020 2019
------------------------------- ----------------- ------------------
$000 $000 $000 $000
------------------------------- ------ --------- ------ ----------
Assets
Non-current assets
Property, plant and equipment 151 118
Intangible assets 292,241 291,765
------------------------------- ------ --------- ------ ----------
Total non-current assets 292,392 291,883
------------------------------- ------ --------- ------ ----------
Current assets
Other receivables 225 233
Cash and cash equivalents 2,184 3,682
------------------------------- ------ --------- ------ ----------
Total current assets 2,409 3,915
------------------------------- ------ --------- ------ ----------
Total assets 294,801 295,798
------------------------------- ------ --------- ------ ----------
Liabilities
Current liabilities
Trade and other payables (240) (235)
------------------------------- ------ --------- ------ ----------
Total net assets 294,561 295,563
------------------------------- ------ --------- ------ ----------
Equity attributable to
the equity owners of the
parent company
Share capital 8,530 8,530
Share premium 308,602 308,602
Other reserves 1,777 1,777
Retained deficit (24,332) (23,330)
Foreign currency reserve (16) (16)
------------------------------- ------ --------- ------ ----------
Total equity 294,561 295,563
------------------------------- ------ --------- ------ ----------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2020
Foreign
Share Share Other Retained currency
capital premium reserves deficit reserve Total
$000 $000 $000 $000 $000 $000
------------------------------ --------- --------- ---------- --------- ---------- --------
Balance at 1 January 2019 8,530 308,602 1,775 (21,960) (16) 296,931
Loss and total comprehensive
loss for the year - - - (1,370) - (1,370)
Recognition of share-based
payments - - 2 - - 2
------------------------------ --------- --------- ---------- --------- ---------- --------
Balance at 31 December
2019 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
------------------------------ --------- --------- ---------- --------- ---------- --------
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 Differences arising on the translation of
reserves foreign operation to US dollars.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2020
2020 2019
----------------
$000 $000 $000 $000
--------------------------------------- ------ -------- ------ --------
Cash flow from operating activities
Loss before tax (1,002) (1,370)
Adjustments for: Depreciation 95 92
Share-based payment - 2
Finance costs 11 11
Finance income (54) (88)
Unrealised foreign currency movements 2 27
--------------------------------------- ------ -------- ------ --------
Cash flows used in operating
activities before changes in
working capital (948) (1,326)
Decrease in other receivables 8 29
Increase/(Decrease) in trade
and other payables (61) (176)
--------------------------------------- ------ -------- ------ --------
Net cash outflow from operating
activities (1,000) (1,473)
Cash flows used in investing
activities
Interest received 2 27
Purchase of tangible fixed assets - (11)
Purchase of intangible assets (476) (398)
------ ------
Net cash used in investing activities (474) (382)
--------------------------------------- ------ -------- ------ --------
Cash flows from financing
Cash flows from financing activities
Lease interest (11) (11)
Lease payments (62) (112)
------ ------
(73) (123)
-------- --------
Net decrease in cash and cash
equivalents (1,547) (1,978)
--------------------------------------- ------ -------- ------ --------
Cash and cash equivalents at
the beginning of the year 3,682 5,626
Exchange gain on cash and cash
equivalents 49 34
--------------------------------------- ------ -------- ------ --------
Cash and cash equivalents at
the end of the year 2,184 3,682
--------------------------------------- ------ -------- ------ --------
Notes
1. Accounting policies
Basis of preparation
The financial information for the year ended 31 December 2020
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 2020. 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 2020 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.
The Group's board of directors have reviewed the Group's cash
forecasts for a period of no less than twelve months from the date
of approval of the financial statements, the period to 31 March
2022. Based on these forecasts, in the absence of a farm-out, the
directors have identified that further funding may be required to
cover administrative costs and licence fees beyond December
2021.
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 $1.002 million (2019-
loss $1.370 million) and the weighted average number of shares in
issue for the year was 484.1 million (2019 - 484.1 million). 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 6.1 million (2019
- 6.1 million) potentially dilutive ordinary shares being the share
options.
4. Subsequent date events
There were no subsequent date events requiring disclosure
-ends-
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