RE: Hold Firm21 May 2022 15:27
The farm-out process has been extensive and far reaching. To assist the marketing, considerable effort has been put intominimising drilling costs for the next campaign, addressing both the well designs and the service company costs. Potential savings of up to 25% have been identified and this has formed the basis of our current conversations with potential partners. The project fundamentals are strong. Economic projections are attractive, the break-even oil price is low (less than $35 per barrel), sub-surface risks are low, and the environmental footprint low. As the industry enters the energy transition to a lower carbon future, we believe that Darwin (with its estimated 460 million barrels of condensate and LPGs) is a worthy development, comparing favourably to many global alternatives. Prior to the start of the next phase of operations, the Company commits to fully integrating climate change into its business plan. We will define measures, report transparently, and mitigate our own emissions as far as practicable.Outlook for the industry remains challenging, although signs of optimism are noted. Brent crude has risen during the first quarter of 2021, approaching $70 per barrel before declining to around $60 later in the quarter. Whilst this has not yet impacted company expenditure patterns, if the trend were to continue, and energy demand accelerates as the world comes out of the Covid pandemic crisis, there will be a need to bring additional resources into production. Borders & Southern aim to be part of that production increase.
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