Last checked at 1 Apr 2019 07:00
1 April 2019
Borders & Southern Petroleum plc
("Borders & Southern" or "the Company")
Audited Results for the 12 month period ended 31 December 2018
Borders & Southern (AIM: BOR), the London based independent oil and gas exploration company with assets offshore the Falkland Islands, announces its audited results for the year ending 31 December 2018. Full copies of the Company's Annual Report and Accounts, including the Company Overview, Chairman's Statement, Remuneration Committee Report, Directors' Report, Auditor's Report and full Financial Statements, will be available on the Company's website later today and posted to Shareholders in April.
2018 Highlights
· Farm-out process is actively on-going.
· Administrative expenses for 2018: $1.8 million (2017 - $1.7 million).
· Cash balance at 31 December 2018: $5.6 million (2017 - $8.2 million); no debt.
For further information please visit www.bordersandsouthern.com or contact:
Borders & Southern Petroleum plc Howard Obee, Chief Executive Tel: 020 7661 9348
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Strand Hanson Limited (Nominated & Financial Adviser) James Spinney / Ritchie Balmer / Georgia Langoulant Tel: 020 7409 3494
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Mirabaud Securities Limited (Broker) Peter Krens Tel: 020 7878 3362
Tavistock (Financial PR) Simon Hudson / Barney Hayward Tel: 020 7920 3150 |
The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
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.
Competent Person Disclosure:
The technical aspects of this announcement have been reviewed, verified and approved by Dr Howard Obee in accordance with the Guidance Note for Mining, Oil and Gas Companies, issued by the London Stock Exchange in respect of AIM companies. Dr Obee is a petroleum geologist with more than 30 year's relevant experience. He is a Fellow of the Geological Society and member of the American Association of Petroleum Geologists and the Petroleum Exploration Society of Great Britain.
Chief Executive's Statement
The year ending 31 December 2018 was a relatively frustrating period for the Company. We started the year on an upbeat note, reporting on an independent evaluation of our 100 per cent owned Darwin gas condensate discovery that highlighted a substantial increase in the estimation of recoverable liquids (a best estimate gross contingent and prospective resource of over 450 million barrels of liquids condensate and LPG). However, our main objective of the year was to secure partners to help fund the next phase of operations in the Falkland Islands.
We worked hard to achieve this, but unfortunately the farm-out process is taking longer than we had hoped, for reasons largely outside our control, such as the wider oil & gas industry's reduced capital expenditure on offshore projects and on alternative geographical focus areas.
To advise and assist us in the farm-out process, we have retained a leading independent investment bank which specialises in oil and gas asset transactions. The bank has reached out across the industry more widely than we have previously attempted and the response to date has been good. Data-rooms and technical sessions have been initiated, and these continue. Feedback about the sub-surface geology is always positive, so we are optimistic that we can secure the partners that we need. The farm-out will continue to be our main focus over the coming months.
The Company is in a stable financial position. The year-end cash balance was $5.6 million, and we remain debt-free. The loss from operations was $1.96 million. This was a slight increase from last year and reflects adverse movements in the sterling/dollar exchange rate. Administrative expense was $1.8 million, a small increase on last year, due to marginally higher consultant fees during the period.
In parallel with our commercial activities, we continue to fine tune the technical case, both in sub-surface evaluation and our planning for the next appraisal drilling campaign. Our current plans include the drilling of a vertical well on Darwin West followed by a deviated sidetrack. Key objectives for the drilling programme will be to confirm resource estimates and reservoir deliverability, confirm the gas-water contact and test for a potential oil rim. Positive results from this programme would allow us to start focusing on development using a conventional FPSO based scheme. The intention would be to strip out the liquids from the wet gas and re-inject the dry gas back in to the reservoir. Reservoir modelling indicates that six production wells could deliver peak production of over 90,000 barrels of condensate and LPG per day.
The discovery of Darwin has provided a solid foundation for the Company. An attractive portfolio of additional prospects will provide growth options. However, the Board of Directors recognises that our current prime objective must be to appraise, develop and monetise the discovery as quickly as possible, and to achieve that, we need to continue to focus on securing a partner and therefore development funding. We will continue to investigate all options to accelerate the achievement of that objective.
Howard Obee
29 March 2019
Consolidated Statement of Comprehensive Income
For the Year Ended 31 December 2018
Note | 2018 $000 | 2017 $000 | |
Administrative expenses | (1,802) | (1,734) | |
Loss from operations | 2 | (1,802) | (1,734) |
Finance income | 29 | 542 | |
Finance expense | (193) | - | |
Loss before tax | (1,966) | (1,192) | |
Tax expense | - | - | |
Loss for the year and total comprehensive loss for the year attributable to owners of the parent | (1,966) | (1,192) | |
Basic and diluted loss per share (see note 3) | (0.41) cents | (0.25) cents |
Consolidated Statement of Financial Position
At 31 December 2018
2018 | 2017 | |||
$000 | $000 | $000 | $000 | |
Assets | ||||
Non-current assets | ||||
Property, plant and equipment | 15 | 11 | ||
Intangible assets | 291,367 | 290,826 | ||
Total non-current assets | 291,382 | 290,837 | ||
Current assets | ||||
Other receivables | 260 | 440 | ||
Cash and cash equivalents | 5,626 | 8,251 | ||
Total current assets | 5,886 | 8,691 | ||
Total assets | 297,268 | 299,528 | ||
Liabilities | ||||
Current liabilities | ||||
Trade and other payables | (337) | (633) | ||
Total net assets | 296,931 | 298,895 | ||
Equity | ||||
Share capital | 8,530 | 8,530 | ||
Share premium | 308,602 | 308,602 | ||
Other reserves | 1,775 | 1,773 | ||
Retained deficit | (21,960) | (19,994) | ||
Foreign currency reserve | (16) | (16) | ||
Total equity | 296,931 | 298,895 | ||
Consolidated Statement of Changes in Equity
For the Year Ended 31 December 2018
Share capital $000 | Share premium $000 | Other reserves $000 | Retained deficit $000 | Foreign Currency reserve $000 | Total $000 | |
Balance at 1 January 2017 | 8,530 | 308,602 | 2,418 | (19,465) | (16) | 300,069 |
Loss and total comprehensive loss for the year | - | - | - | (1,192) | - | (1,192) |
Expiry of share options | - | - | (663) | 663 | - | - |
Recognition of share-based payments | - | - | 18 | - | - | 18 |
Balance at 31 December 2017 | 8,530 | 308,602 | 1,773 | (19,994) | (16) | 298,895 |
Loss and total comprehensive loss for the year | - | - | - | (1,966) | - | (1,966) |
Recognition of share-based payments | - | - | 2 | - | - | 2 |
Balance at 31 December 2018 | 8,530 | 308,602 | 1,775 | (21,960) | (16) | 296,931 |
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.
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Share premium | Amount subscribed for share capital in excess of nominal value.
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Other reserves | Fair value of options issued.
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Retained deficit | Cumulative net gains and losses recognised in the Consolidated Statement of Comprehensive Income.
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Foreign currency reserves | Differences arising on change of presentation and functional currency to US dollars. |
Consolidated Statement of Cash Flows
for the Year Ended 31 December 2018
2018 | 2017 | |||
$000 | $000 | $000 | $000 | |
Cash flow from operating activities | ||||
Loss before tax | (1,966) | (1,192) | ||
Adjustments for: | ||||
Depreciation | 1 | 1 | ||
Share-based payment | 2 | 18 | ||
Net finance costs | 164 | - | ||
Net finance income | - | (542) | ||
Realised foreign exchange gains/(losses) | 21 | (17) | ||
Cash flows used in operating activities before changes in working capital | (1,778) | (1,732) | ||
Decrease in other receivables | 180 | 728 | ||
Increase in trade and other payables | (296) | (503) | ||
Net cash outflow from operating activities | (1,894) | (1,507) | ||
Cash flows used in investing activities | ||||
Interest received | 29 | 11 | ||
Purchase of intangible assets | (541) | (445) | ||
Purchase of tangible fixed assets | (5) | - | ||
Net cash used in investing activities | (517) | (434) | ||
Cash flows from financing | ||||
Cash flows from financing activities | - | - | ||
Net decrease in cash and cash equivalents | (2,411) | (1,941) | ||
Cash and cash equivalents at the beginning of the year | 8,251 | 9,645 | ||
Exchange (loss)/gain on cash and cash equivalents | (214) | 547 | ||
Cash and cash equivalents at the end of the year | 5,626 | 8,251 | ||
Notes
1. Accounting policies
Basis of preparation
The financial information for the year ended 31 December 2018 set out in this announcement does not constitute the Company's statutory accounts. These financial statements included in the announcement have been extracted from the Group annual financial statements for the year ended 31 December 2018. The financial statements have been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards adopted for use in the European Union. However, this announcement does not itself contain sufficient information to comply with IFRS.
The auditor has issued its opinion on the Group's financial statements for the year ended 31 December 2018 which is unmodified and is available for inspection at the Company's registered address and will be posted to the Group's website.
2. Going concern
The Directors are of the opinion that the Group has adequate financial resources to enable it to undertake its planned programme of exploration and appraisal activities for 2019.
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 $1.966 million (2017 - loss $1.192 million) and the weighted average number of shares in issue for the year was 484.1 million (2017 - 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 7.05 million (2016 - 7.05 million) potentially dilutive ordinary shares being the share options.
4. Subsequent Date Events
There were no subsequent date events requiring disclosure
-ends-