Borders & Southern Shares Rally on Gas Condensate Analysis Results

PUBLISHED: 24 Aug 2012 @ 03:00 | Comments (0) | More info about Kenneth G. Mondero

Borders & Southern plc (LSE:BOR) surprised the market this afternoon by releasing the results of the fluid sample taken from the Darwin well it drilled back in January this year.

Shares closed 56.1% higher than yesterday to 32 pence, three hours after the Falkland Islands-focussed oil and gas explorer said the recoverable volume of gas condensate it discovered last 23^rd April could be in the range of about 130 to 250 million barrels, with a mean of 190 million barrels.

Back then, B&S suffered a 37.59% drop in share price, from 131 pence – an all-time high – to 81.75 pence, after stating it found gas condensate “in significant volume”, much to the disappointment of the market, which anticipated oil and gas pay at that time.

The heavy trading of B&S stocks after the announcement today seemed to connote the market has forgiven the explorer of the disappointing result of the Stebbing well as well accepted the gas condensate discovery as better than no gas found at all.

Shares were on its 44-month low of 15.25 pence on 16^th July 2012, when the Stebbing well was plugged and abandoned after initial assessment indicated the hydrocarbon found was not significant enough to be commercial, although gas shows were strong.

Darwin and Stebbing are the prospects of the two-well exploration campaign of B&S in its 100% operated licence 150 kilometres south of the Falkland Islands.

What now?

“Following these positive laboratory results, the Board will approve a work programme that includes appraisal drilling of the Darwin discovery,” B&S said in a statement.

“Additional wells are necessary to confirm the initial resource estimates and establish a commercial development,” it added.

A new drilling programme is being discussed with a focus on augmenting the newly discovered resource with the possibility of bringing in new partners to the development, but may have to wait until after 2014.

Company Spotlight

Borders & Southern plc is a UK-incorporated oil and gas exploration company holding five licences in the Falkland Islands in line with its strategy of exploring high prospective and commercially viable hydrocarbon deposits in previously untapped and unidentified frontier basins.

Established in 2004, B&S joined the Alternative Investment Market of the London Stock Exchange in 2005.

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