REG - Borders & Southern - Final Results
19/05/2025 07:00
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RNS Number : 1145J Borders & Southern Petroleum plc 19 May 2025
19 May 2025
Borders & Southern Petroleum plc
("Borders & Southern" or "the Company")
Audited Results for the 12 month period ended 31 December 2024
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 2024. 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
· Raised a further $4.7 million (£3.7 million) before expenses
through capital raises in 2024 and early 2025
· Cash balance on 31 December 2024: $2.1 million (2023: $1.9 million)
· Administrative expense for the year: $1.2 million (2023: $1.1
million)
· Operating loss of $1.2 million (2023: $1.1 million)
For further information please visit www.bordersandsouthern.com
(http://www.bordersandsouthern.com/) or contact:
Borders & Southern Petroleum plc Tel: 020 7071 6984
Harry Baker, Chief Executive
Zeus (Nominated Adviser and Joint Broker) Tel: 0203 829 5000
Nick Searle / Simon Johnson / Antonio Bossi / Andrew de Andrade
Hannam & Partners (Joint Broker) Tel: 0207 907 8500
Neil Passmore / Leif Powis
Tavistock (Financial PR) Tel: 020 7920 3150
Simon Hudson / Nick Elwes
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.
Chairman's and CEO's review
After my first full year as Borders and Southern CEO, it is my pleasure to
address shareholders and bring everyone up to date with what has happened in
the past twelve months and what we hope to achieve in the months and years to
come.
I was lucky enough to inherit a very robust project with highly commercial
economics, a great board and a top technical team. Together we have executed
three strategic moves that leave us in what we believe is a much stronger
position going forward.
Firstly, we have further refined our phased early production offering which we
believe will better appeal to potential international partners as it
requires relatively low capex and offers accelerated payback.
Secondly, we took the key step to appoint an International Investment Bank
with worldwide networks to assist the Company in a farm-out to finance the
next phase of the development of the Darwin discovery. We believe that this
appointment, together with significant changes in industry appetite for
projects, will greatly assist us in achieving our goal of bringing in a
partner (or partners) on favourable terms. It is worth noting that the new
advisor has sufficient confidence in the strength of the investment case that
they have agreed to work on a success case basis as opposed to the more usual
retainer fees.
And thirdly, we have made the vital move to put the Company onto a firmer
financial footing. During 2024 the company also took several steps to further
reduce overhead costs, which included moving offices. The Company has always
benchmarked its overhead costs against its peers we remain in the lowest cost
quartile. These reductions further reinforce this. We also completed two
capital raises to strengthen the balance sheet (one post year end) and
concomitantly, our negotiating position for the farm-out. In total we have
raised about £3.7m (pre costs) which, together with our existing resources,
gives us well over two years runway. Cash in the bank gives us the time and
firepower to make the right deal or deals for shareholders, rather than be
forced to accept the first one.
These three initiatives have put us in a much stronger position. We are
already seeing the benefits with renewed interest from multiple parties in
the data room. It is worth pointing out that Darwin is an appraisal project.
Hundreds of millions of dollars have already been spent in the high risk
exploration phase. Whilst the appraisal and development phases require
significant capital, the exploration risk has been much reduced and will be
eliminated once we have tested a well as part of the appraisal program. We
know we have a world class project which is attracting interest from tier one
industry potential partners. We are really excited by Darwin and the
prospects nearby as well as the size and scale of the remainder of the
portfolio which can be seen in detail in our latest presentation on the
website. We look forward to reporting progress to the market in due course.
In June 2024 we welcomed Dr. Sean Guest to the board as a non-executive
director. Sean is currently the President and Chief Executive of Valeura
Energy and has a long and successful track record in the oil and gas industry.
His experience and expertise will be of great help, particularly as we go
through this farm-out and development phase.
I would like to thank all existing and new shareholders for your support. I
very much look forward to the year ahead and providing further updates on our
progress.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2024
Continuing Operations 2024 2023
$'000 $'000
Administrative expenses (1,159) (1,141)
Loss from operations (1,159) (1,141)
Finance income 15 81
Finance expense (73) -
Loss before tax (1,217) (1,060)
Tax expense - -
Loss for the year and total comprehensive loss for the year attributable to (1,217) (1,060)
equity owners of the parent
Basic and diluted loss per share (0.16) cents (0.14) cents
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 31 December 2024
2024 2023
$'000 $'000 $'000 $'000
Assets
Non-current assets
Property, plant and equipment 10 8
Intangible assets 294,269 293,741
Total non-current assets 294,279 293,749
Current assets
Other receivables 1,090 164
Cash and cash equivalents 2,090 1,928
Total current assets 3,180 2,092
Total assets 297,459 295,841
Liabilities
Current liabilities
Trade and other payables (1,181) (156)
Total net assets 296,278 295,685
Equity attributable to the equity owners of the parent company
Share capital 12,456 11,155
Share premium 310,977 310,541
Other reserves 1,851 1,778
Retained deficit (28,990) (27,773)
Foreign currency reserve (16) (16)
Total equity 296,278 295,685
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2024
Share capital Share premium Other reserves Retained deficit Foreign currency reserve Total
$'000 $'000 $'000 $'000 $'000 $'000
Balance at 1 January 2023 10,718 310,195 1,778 (26,713) (16) 295,962
Loss and total comprehensive loss for the year - - - (1,060) - (1,060)
Shares issue 437 346 - 783
Balance at 31 December 2023 11,155 310,541 1,778 (27,773) (16) 295,685
Loss and total comprehensive loss for the year - - - (1,217) - (1,217)
Shares issue 1,301 436 73 1,810
Balance at 31 December 2024 12,456 310,977 1,851 (28,990) (16) 296,278
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 2024
2024 2023
$'000 $'000 $'000 $'000
Cash flow from operating activities
Loss before tax (1,217) (1,060)
Adjustments for: Depreciation 6 -
Share-based payment 73 -
Finance costs 73 -
Finance income (15) (81)
Cash flows used in operating activities before changes in working capital (1,080) (1,141)
(Increase)/decrease in other receivables (926) 412
Increase/(decrease) in trade and other payables 1,025 (408)
Net cash outflow from operating activities (981) (1,137)
Cash flows used in investing activities
Purchase of tangible assets (8) (8)
Purchase of intangible assets (528) (497)
Interest received 15 -
Net cash used in investing activities (521) (505)
Cash flows used in financing activities
Shares issue 1,737 783
Net cash from financing activities 1,737 783
Net increase/(decrease) in cash and cash equivalents 235 (859)
Cash and cash equivalents at the beginning of the year 1,928 2,707
Exchange (loss)/gain on cash and cash equivalents (73) 81
Cash and cash equivalents at the end of the year 2,090 1,928
Notes
1. Accounting policies
Basis of preparation
The financial information for the year ended 31 December 2024 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 2024. 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 2024 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 31 December 2024 financial statements has been prepared based on the going
concern basis, which assumes the continuity of normal business activities and
the realisation of assets and extinguishment of liabilities in the ordinary
course of business. The going concern assessment of the Parent Company has
been performed as part of the Group's going concern assessment.
At 31 December 2024, the Group had a net cash position of $2.09m (31 December
2023: $1.9m). The Group does not have any external borrowings or debts. The
Group and the Parent Company have a commitment to drill a well before the
expiry of their production and discovery area licences on 31 December 2026
(see note 19). The Group plans to fund the well developments through a
farm-out or by raising additional capital if the farm-out is not successful.
If the Group does not successfully raise the capital needed or identify a
suitable farm-out partner, the Group will seek to gain an extension to the
licences and the associated commitment to drill the well. This is in line with
previous extensions and the Directors are confident that further extensions
will be granted. Historically, the Falkland Islands Government has required
the Group to show evidence of its ability to pay the licence fees before an
extension. The Directors discussed the extension of the production and
discovery area licences with the Falkland Islands Government in April and May
2024, including the conditions and commitments attached to the licences.
As part of its plan to raise funds, the Group made a corporate presentation to
the market in the first quarter of 2025, which included its plan for drilling
the well. As a result of this, the Parent Company raised £2.2 million ($2.8
million) through a share issue. In addition to this, as at the date of
approval of the financial statements, the Group's financial advisor is
currently seeking potential farm-out partners. Discussions are ongoing but not
yet at an advanced stage.
In performing their assessment of the Group and the Parent Company's ability
to continue as going concerns, the Directors have prepared a cashflow forecast
for the period ending 30 May 2026, which indicates that in current conditions,
the Group and the Parent Company will have sufficient cash to cover its costs.
At present the cost base of the business principally consists of
administrative costs, listing costs and costs to maintain the licences in
good-standing. Therefore, no additional funding will be required, before June
2026 to meet the day-to-day operational cashflow requirements of the Group and
the Parent Company.
As noted above, the Group and the Parent Company have a commitment to drill a
well before the expiry of their production and discovery area licences on 31
December 2026. To meet this commitment, they need to secure further funding,
either through a farm-out or by raising capital if the farm-out is not
successful. However, neither option is guaranteed. If the Group does not
successfully raise the capital needed or identify a suitable farm-out partner,
the Group will seek to gain an extension to the licences and the associated
commitment to drill the well, which is also not guaranteed. This indicates
the existence of a material uncertainty which may cast significant doubt on
the Group and the Parent Company's ability to continue as going concerns and
therefore, the Group and the Parent Company may be unable to realise their
assets and discharge their liabilities in the ordinary course of business.
The Directors consider that the required funding will be forthcoming and
therefore the going concern basis of preparation is deemed appropriate. The
financial statements do not include any adjustments that would be necessary if
the Group and the Parent Company were unable to continue as going concerns.
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 $1,217,000 (2023 - loss $1,060,000) and the weighted average number
of shares in issue for the year was 753,828,155 (2023 - 730,814,456). 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 48,926,666 (2023: 2,700,000) potentially dilutive ordinary
shares being the share options.
-ends-
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