REG - Borders & Southern - Operations Update / New Investor Presentation

Borders and Southern PetroleumAnnouncement

17/01/2023 07:01

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RNS Number : 8882M  Borders & Southern Petroleum plc  17 January 2023

17 January 2023

 

Borders & Southern Petroleum plc

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

 

Operations Update

New Investor Presentation

 

Borders & Southern Petroleum plc (AIM: BOR), the London based independent
oil and gas exploration company with assets offshore the Falkland Islands, is
pleased to provide an update on its activities in the Falkland Islands.

 

The Company has designed a phased development concept for its large gas
condensate discovery (Darwin), located to the south of the Falkland Islands
and had it validated in a new independent engineering study by an
international engineering consultancy. The objectives were threefold: to
generate a production profile that would require relatively low initial
capital expenditure; to deliver accelerated payback; and to allow expansion of
the production profile from free cash flow. We believe this has been achieved,
and in this regard, an updated investor presentation will be uploaded to the
Company's website giving further details of this development concept. The
material points are highlighted below.

 

The preliminary development would focus on Darwin East. Assuming appraisal
well flow rates meet reservoir modelling expectations, then initial production
of 26,000 bpd could be achieved from two production wells and one gas injector
well. The recently commissioned independent facilities engineering report
validated the development concept, confirming that a conventional FPSO
development concept could be utilised, typical of global deep water petroleum
field developments. The proposed subsea components and topsides processing
technologies would all be standard industry technology. The report also
provided up to date cost estimates, per the below.

 

Assuming the FPSO is leased, the capital requirement, excluding contingency,
for the drilling, subsea, and project costs is estimated to be approximately
$640 million. Based on Management's scoping study economic modelling, payback
could be achieved within two years of first production (assuming $60/bbl oil
price). This changes to one year with a $90/bbl oil price. The project
economics are positively impacted by the high-quality reservoir with
favourable fluid properties that does not require a large number of
development wells, the application of a conventional FPSO development and the
attractive fiscal terms set by the Falkland Islands Government.

 

Following the initial exploitation phase, project expansion could occur from
free cash flow by drilling further production wells on Darwin East and the
full development of Darwin West. Several options have been identified that
could, subject to certain assumptions, elevate production towards 70,000 bpd.

 

The Company believes that this new phased development concept with accelerated
payback, presents an attractive opportunity for industry collaborators and
will help attract the necessary funding to advance this exciting project.

 

For further information, please visit www.bordersandsouthern.com
(http://www.bordersandsouthern.com/)  or contact:

 

 Borders & Southern Petroleum plc

 Howard Obee, Chief Executive

 Tel: 020 7661 9348

 Strand Hanson Limited (Nominated Adviser)

 Ritchie Balmer / James Bellman

 Tel: 020 7409 3494

 SP Angel Corporate Finance LLP (Broker)

 Richard Hail / Adam Cowl

 Tel: 020 3470 0470

 Tavistock (Financial PR)

 Simon Hudson / Nick Elwes

 Tel: 020 7920 3150

 

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.

 

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