TIDMBOR
RNS Number : 6146T
Borders & Southern Petroleum plc
31 March 2016
31 March 2016
Borders & Southern Petroleum plc
("Borders & Southern" or "the Company")
Unaudited Results for the 12 month period ended 31 December
2015
Borders & Southern (AIM: BOR), the London based independent
oil and gas exploration company with assets offshore the Falkland
Islands, announces preliminary unaudited results for the year
ending 31 December 2015.
2015 Highlights
-- Darwin recoverable resource upgrade: 360 million barrels of
condensate (best estimate P50 un-risked)
-- Farm-out process is active, but continues to be impacted by the low oil-price environment
-- Reduced administrative expenses - 2015: $1.97 million (2014: $3.0 million)
-- Cash balance at 31 December 2015: $14.0 million (2014: $16.1 million)
For further information please visit www.bordersandsouthern.com
or contact:
Borders & Southern Petroleum plc
Howard Obee, Chief Executive
Tel: 020 7661 9348
Panmure Gordon (UK) Limited
Adam James / Atholl Tweedie
Tel: 020 7886 2500
Tavistock
Simon Hudson
Tel: 020 7920 3150
Notes:
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 2,862 km of 2D
seismic, 2,517 square kilometres of 3D seismic and drilled two
exploration wells, making a gas condensate discovery with its first
well.
Chairman's Statement
Industry Setting
The industry downturn, triggered by the decline in the oil
price, has had a significant impact on the Company's fortunes.
Brent has fallen from around $110 per barrel in mid 2014, to around
$35 per barrel at the end of 2015. This sustained low oil price has
caused companies to make dramatic reductions in their expenditure,
delay major capital projects and reduce or stop taking on new
opportunities. This has made it a particularly challenging
environment for us in which to conduct a farm-out. There are as
many views on future oil price trends as there are analysts and
commentators, with little consensus at the moment. Most believe a
recovery will occur, but to what level and exactly when, there is
no agreement. Consequently, companies are trying to re-base their
operations to weather a low cost, low oil price world.
Financial Position
Borders & Southern's financial status is relatively robust
in the current environment, with a strong balance sheet and no
debt. We ended the year with a cash balance of $14.0 million,
compared to $16.1 million at the end of 2014. Like most companies
in our sector, we have reduced our expenditure. The 2015
administrative expense was $1.97 million compared to $3.04 million
in the previous year. This reduced expenditure has not impacted our
ability to progress technical work and advance our understanding of
our assets. We intend to maintain this capital discipline
throughout 2016 and beyond.
Project Status
The industry recession has delayed the timing of the next
operations phase on our Production Licences. We had hoped to have
secured partners and funding for a new exploration and appraisal
drilling programme by now, but have had to reset our expectations.
So whilst the current Production Licence period extends through to
the end of October 2017, we have applied to the Falkland Islands
Government for an extension.
From a sub-surface point of view we have continued to make good
progress. Earlier in 2015, we announced an upgrade in the combined
Darwin East and West recoverable resource estimate (Best estimate
P50: 360 million barrels of condensate) and described some of the
surrounding prospects in more detail. We continue to work the Early
Cretaceous shallow marine sandstone play fairway in detail,
re-mapping the discovery and analysing the seismic response on
near-field prospects with the aim of developing reliable predictive
models for hydrocarbon presence and phase.
Additionally, we have spent time re-assessing our basin models,
incorporating the results from recent drilling activity by other
operators. The Humpback well was located over 250 km northeast of
Darwin and its findings have no impact on the prospectivity of our
Licences. In fact, our recent regional basin analysis has
re-enforced our belief that our Licences are optimally located in
the South Falkland Basin.
Current technical work is aimed at re-assessing how a Darwin
development would fit into a low oil price world. We know that the
combination of competitive fiscal terms in the Falkland Islands and
excellent reservoir characteristics of the Early Cretaceous shallow
marine sandstone makes a development competitive on the cost curve
against other deep water developments. However, we need to assess
just how commercial a project would be in a period of sustained low
oil prices. Previously we had considered 2 to 3 appraisal wells and
10 development wells (6 producers, 4 gas re-injectors) with sub-sea
tie back to an FPSO. New reservoir engineering studies are looking
at reduced well count models. Outputs from this work will feed into
a fresh look at facilities engineering concepts and costs and, in
turn, a new economic evaluation. If we can clearly demonstrate the
commercial viability of a development in a low oil price
environment, it should assist the farm-out process.
Outlook
All our technical and commercial work to date suggests that
Darwin is a robust project, even in a low oil price environment.
The principal risk for the Company over the next 12 months is that
a sustained low oil price will cause further delay to our farm-out
and hence funding for the next phase of operations. We have
positioned the Company so that our strong balance sheet will allow
us to withstand an extended period of reduced industry activity. As
we move forward, we will continue to control costs, undertake good
science and maintain our resolve to monetise the Darwin
discovery.
Finally, Stephen Posford, 69, one of the Company's founders and
a member of the Board since the Company's inception, has announced
that he intends to retire from business activities and will step
down from the Board prior to the AGM. Stephen has played an
influential role in the development of the Company, which included
the significant gas condensate discovery in 2012. On behalf of all
the Directors I would like to thank Stephen for his contribution
and wish him a healthy, happy and long retirement.
Harry Dobson
30 March 2016
Unaudited consolidated statement of comprehensive income
for the year ended 31 December 2015
2015 2014
$000 $000
------- -------
Administrative expenses (1,968) (3,037)
------- -------
Loss from operations (1,968) (3,037)
Finance income 47 59
Finance expense (679) (910)
------- -------
Loss before tax (2,600) (3,888)
Tax expense - -
------- -------
Loss for the year and total
comprehensive loss for
the year attributable to
owners of the parent (2,600) (3,888)
======= =======
Basic and diluted loss (0.54) (0.8)
per share (see note 3) cents cents
======= =======
Unaudited consolidated statement of financial position
as at 31 December 2015
2015 2014
$000 $000 $000 $000
Assets
Non-current assets
Property, plant
and equipment 10 11
Intangible assets 289,590 286,966
---------- ----------
Total non-current
assets 289,600 289,977
Current assets
Other receivables 297 329
Cash and cash
equivalents 14,011 16,079
Total current
assets 14,308 16,408
Total assets 303,908 306,385
Liabilities
Current liabilities
Trade and other
payables (283) (250)
---------- ----------
Total net assets 303,625 306,135
========== ==========
Equity
Share capital 8,530 8,530
Share premium 308,602 308,602
Other reserves 2,370 2,280
Retained deficit (15,861) (13,261)
Foreign currency
reserve (16) (16)
Total equity 303,625 306,135
========== ==========
Unaudited consolidated statement of changes in equity
(MORE TO FOLLOW) Dow Jones Newswires
March 31, 2016 02:00 ET (06:00 GMT)
for the year ended 31 December 2015
Share Share Other Retained Foreign Total
capital Premium reserves deficit currency
reserve
$000 $000 $000 $000 $000 $000
Balance at 1
January 2014 8,530 308,602 2,035 (9,373) (16) 309,778
Loss and total
comprehensive
loss for the
year - - - (3,888) - (3,888)
Recognition of
share
based payments - - 245 - - 245
-------- ---------
Balance at
31 December 2014 8,530 308,602 2,280 (13,261) (16) 306,135
Loss and total
comprehensive
loss for the
year - - - (2,600) - (2,600)
Recognition of
share
based payments - - 90 - - 90
-------- -------- --------- -------- --------- -------
Balance at 31
December 2015 8,530 308,602 2,370 (15,861) (16) 303,625
======== ======== ========= ======== ========= =======
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.
Retained deficit Cumulative net gains and losses recognised
in the consolidated statement of
comprehensive income.
Foreign currency Differences arising on change of
reserve presentation and functional currency
to US Dollars.
Unaudited consolidated statement of cash flows
for the year ended 31 December 2015
2015 2014
$000 $000 $000 $000
Cash flow from operating
activities
Loss before tax (2,600) (3,888)
Adjustments for:
Depreciation 1 2
Share-based payment 90 245
Net finance costs 632 851
Realised foreign exchange
gains (8) 5
Cash flows from operating
activities before
changes in working
capital (1,885) (2,785)
Decrease in other
receivables 32 689
Increase/(decrease)
in trade and other
payables 33 (518)
Tax paid - (185)
Net cash outflows
from operating activities (1,820) (2,799)
Cash flows used in
investing activities
Interest received 47 59
Purchase of intangible
assets (773) (3,555)
Proceeds from disposal
of intangible assets 1,149 -
----- -------
Net cash from/(used)
in investing activities 423 (3,496)
Cash flows from financing
Net decrease in cash
and cash equivalents (1,397) (6,295)
Cash and cash equivalents
at the beginning of
the year 16,079 23,290
Exchange loss on cash
and cash equivalents (671) (916)
Cash and cash equivalents
at the end of the
year 14,011 16,079
======= =======
Accounting policies
1. Basis of preparation
The financial information set out above does not constitute the
company's statutory accounts for 2014 or 2015. Statutory accounts
for the year 31 December 2014 have been reported on by the
Independent Auditors. The Independent Auditors' Report on the
Annual Report and Financial Statements for 2014 was unqualified,
did not draw attention to any matters by way of emphasis, and did
not contain a statement under 498(2) or 498(3) of the Companies Act
2006.
The results for 2015 are unaudited. Statutory accounts for the
year ended 31 December 2015 will be finalised based on the
information presented in this announcement. The independent
Auditors' Report will be based on those statutory accounts once
they are complete.
Statutory accounts for the year ended 31 December 2014 have been
filed with the Registrar of Companies. The statutory accounts for
the year ended 31 December 2015, prepared under IFRS, will be
delivered to the Registrar in due course.
2. Going concern
The Directors believe that the company has sufficient funds,
with contingency, to meet its current commitments with excess funds
expected to be sufficient to fund ongoing operations for the
foreseeable future. Therefore, this financial information has been
prepared on a going concern basis.
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 $2.6 million (2014 -
loss $3.888 million) and the weighted average number of shares in
issue for the year was 484.1 million (2014 - 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 6.15 million (2014
- 6.15 million) potentially dilutive ordinary shares being the
share options.
4. Post Reporting Date Events
There were no post reporting date events.
-ends-
This information is provided by RNS
The company news service from the London Stock Exchange
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