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(Sharecast News) - Offshore Falkland Islands-focussed oil and gas explorer Borders & Southern reported an operating loss of $1m (£0.79m) in its audited 2021 results on Tuesday, in line with the loss it recorded in 2020.
The AIM-traded firm said cash balances at year-end on 31 December totalled $0.714m, down from $2.18m year-on-year, while its administrative expenses rose to $1.1m from $1.0m.
Operationally, it said it continued its farm-out process through the period.
Since the end of the year, Borders & Southern said it extended its production licences and discovery area through to the end of 2022, and raised $1.8m before expenses through the issue of 103,858,914 new shares.
The board noted that the open offer for excess shares was "significantly" oversubscribed.
It said it was currently evaluating different development options, including an accelerated production development.
"Our technical and commercial work recently has concentrated on investigating a range of Darwin development scenarios," the company said in its announcement.
"This focus has been on reducing initial capital expenditure, delivering a fast payback on that capital, minimising the environmental footprint and, at the same time, ensuring the break-even oil price is below $40 a barrel.
"As a result we have prioritised a phased development concept starting with around 25,000 barrels of liquids production per day, and using that cash flow to increase production after a few years."
Borders & Southern said initial production could come from two wells, with a further well for gas re-injection.
It added that its initial studies concluded that such an approach would "greatly reduce" capital expenditure, and result in a payback of that capital within two years.
"Over the coming months we plan to commission an externally-led technical study to scrutinise these plans and assumptions and will be in a position to report these results when available.
"If this study supports our internal findings, we believe this will make the Darwin development project much more attractive to incoming investors and partners as it will offer an investment with lower capital commitments, robustness under most near term oil price scenarios and a quick pay back on the invested capital."
At 1029 BST, shares in Borders & Southern Petroleum were down 9.21% at 4.29p.
Reporting by Josh White at Sharecast.com.