Borders & Sth. Regulatory News (BOR)

28 Sep 2007 11:25

Borders & Southern Petroleum plc28 September 2007 For Immediate Release 28 September 2007 Borders & Southern Petroleum Plc ("Borders & Southern" or "the Company") Unaudited interim results for the six months ended 30 June 2007 Borders & Southern Petroleum Plc (AIM: BOR) is pleased to announce its interimresults for the six months to 30 June 2007. The accounts contained within thisreport represent the consolidation of Borders & Southern Petroleum Plc and itssubsidiary Borders & Southern Falkland Islands Limited. These figures arepresented under IFRS for the first time. Operating highlights during the period • Continued the technical evaluation of the Company's Falkland Islands Production Licences with particular emphasis on the high impact leads • Planned and completed an Invitation to Tender for a 3D survey over high-graded leads • Ongoing screening and evaluation of new opportunities • Cash balance as at 30 June 2007 is £9.4 million (30 June 2006 : £9.9 million) Post Balance Date Events • Raised £15 million (pre costs) in capital raising at 30p per share • Entered into agreement with PGS for approximately 1,500km of 3D seismic • Additional capital raising: PGS subscribed for 16,656,670 new shares at 30p per share to raise US$10 million (approx. £5 million) Chief Executive, Howard Obee said: "During the first six months of the year the Company consolidated its technical evaluation of its Falklands Islands Production Licences and began to focus on the high impact leads. The Board decided that the best way to further reduce the technical risks ahead of drilling was to acquire an extensive 3D survey over the most attractive leads." He added: "The next 12 months will be an exciting time for the Company as we getgreater clarity on the value of our acreage and prepare the groundwork for the drilling phase." For further information, please call: Howard Obee, Chief Executive Christopher Caldwell Clemmie Carr / Simon HudsonBorders & Southern Petroleum plc Insinger de Beaufort Tavistock CommunicationsTel: 020 7661 9348 Tel: 020 7190 7022 Tel: 020 7920 3150 Chief Executive's Statement During the first six months of the year the Company consolidated its technicalevaluation of its Falklands Islands Production Licences and began to focus onthe high impact leads. The Board decided that the best way to further reduce thetechnical risks ahead of drilling was to acquire an extensive 3D survey over themost attractive leads. As previously reported, the Company's acreage contains numerous, very large (>50 square kilometre) structures. These were mapped using the 2D seismic dataacquired in 2005 which has an average line spacing of approximately fivekilometres. The 3D seismic grid will provide us with an order of magnitude dataenhancement and in particular provide details on structural integrity, reservoirdistribution and allow a rigorous analysis of the seismic amplitude anomaliesassociated with the structures. This will then enable us to define the optimumdrilling locations. With oil prices remaining high, the costs and availability of both seismic anddrilling services remain at a premium. However, having completed an invitationto tender comprising the industry's leading seismic contractors we weredelighted to receive tenders from the majority of the companies approached.After assessing the commercial and technical merits of all the tenders, weentered into negotiations with Petroleum Geo-Services ("PGS") regarding aSeismic Agreement. This has recently been signed and we now look forward tocommencing operations very shortly. In order to fund the acquisition of the new 3D seismic data and have sufficientfunds available to assess new projects, the Company raised £15 million (gross)through the placing of 50,000,000 new ordinary shares of 1p per share (the"Placing"). We were pleased that many of our existing institutional shareholderssupported the Placing, but also that new institutional shareholders were addedto the share register. The Placing was supported by the management team of theCompany. During our discussions with PGS they expressed an interest in investing directlyin the Company. After their reservoir evaluation team reviewed the prospectivityof our Falkland Licences, PGS elected to subscribe for 16,656,670 new ordinaryshares of 1p per share representing an investment of some US$10 million (approx£5 million) and consequently now own 8.6% of the total outstanding ordinaryshares in the Company. The subscription price was 30p per share, the same as forthe recent placing. Following the PGS subscription there are 197,344,170 ordinary shares issued inthe Company. As we look forward, the 3D survey is anticipated to commence before the end ofOctober 2007 and will last approximately four months depending on the weatherconditions. PGS will be using their vessel the Ocean Explorer, most recentlyactive in the Gulf of Mexico. In parallel with the seismic operations theCompany intends to progress its Environmental Impact Assessment, a requirementof our licence terms ahead of the drilling campaign. With respect to accessingdrilling rigs, it is the Company's intention to participate in any jointdrilling activity with the other Falkland Islands operating companies and wewill continue to work with these companies to progress this. The next 12 months will be an exciting time for the Company as we get greaterclarity on the value of our acreage and prepare the groundwork for the drillingphase. Howard ObeeChief Executive 27 September 2007 Borders & Southern Petroleum Plc Consolidated Income StatementFor the six months ended 30 June 2007 6 months 6 months 18 months ended ended ended 30 June 30 June 31 December 2007 2006 2006 (unaudited) (unaudited) (audited) Notes £ £ £Administrative expenses (362,015) (361,022) (1,176,389) Loss from operations (362,015) (361,022) (1,150,361) Finance income 244,857 179,012 649,365 --------- --------- ---------Loss on ordinary activities before (117,158) (182,010) (527,024)and after tax --------- --------- ---------LOSS FOR THE PERIOD 3 (117,158) (182,010) (527,024) ========= ========= ========= Earnings per share - basic and 2 (0.09p) (0.14p) (0.41p)diluted All amounts relate to continuing activities. Borders & Southern Petroleum Plc Consolidated balance sheetAt 30 June 2007 At At At 30 June 30 June 31 December 2007 2006 2006 (unaudited) (unaudited) (audited) £ £ £ ASSETS NON-CURRENT ASSETS Exploration and evaluation 1,637,066 1,639,997 1,637,066 assets Office equipment 6,057 10,173 10,144 --------- --------- ---------Total non-current assets 1,643,123 1,650,170 1,647,210 current assets Trade and other receivables 124,659 93,531 135,731 Cash and cash equivalents 9,364,105 9,918,712 9,468,174 --------- --------- ---------Total current assets 9,488,764 10,012,243 9,603,905 --------- --------- ---------TOTAL ASSETS 11,131,887 11,662,413 11,251,115 ========= ========= ========= CURRENT LIABILITIES Trade and other payables (63,734) (26,241) (65,804) --------- --------- --------- Net assets 11,068,153 11,636,172 11,185,311 --------- --------- --------- equity Share capital 1,276,875 1,276,875 1,276,875 Share premium account 10,561,393 10,561,393 10,561,393 Other reserve 15,313 - 15,313 Retained earnings (785,428) (202,096) (668,270) --------- --------- ---------TOTAL EQUITY 11,068,153 11,636,172 11,185,311 ========= ========= ========= Borders & Southern Petroleum Plc Consolidated cash flow statementFor 6 months ended 30 June 2007 6 months 6 months 12 months ended ended ended 30 June 30 June 31 December 2007 2006 2006 (unaudited) (unaudited) (audited) £ £ £ --------- --------- --------Loss before tax (117,158) (182,010) (527,024)Adjustments for:Depreciation 4,086 3,412 10,653Decrease/(increase) in receivables and prepayments (1,939) 35,886 2,203(Decrease)/in crease in trade andother payables (2,070) 9,619 (265,742)Increase in provision - - (42,955)Issue of share options - - 15,313Investment income (244,857) (179,012) (649,365) --------- --------- -------- Cash utilised by operations (361,938) (312,105) (1,456,917) ========= ========= ======== Cash flows from investing activities Interest received 257,869 179,012 654,22 Purchase of tangible fixed assets - (639) (5,832) Exploration and evaluation expenditure - (13,300) (139,398) --------- --------- --------Net cash flows from investing activities 257,869 165,073 508,991 --------- --------- --------Net decrease in cash and cash equivalents (104,069) (147,032) (947,926)Cash and cash equivalents at the beginning of the period 9,468,174 10,065,744 10,416,100 --------- --------- -------- Cash and cash equivalents at the end of the period 9,364,105 9,918,712 9,468,174 ========= ======== ======== Borders & Southern Petroleum Plc Notes to the interim statementFor 6 months ended 30 June 2007 1. Basis of preparation With effect from 1 January 2007 the Group is required to prepare itsconsolidated financial statements in accordance with International FinancialReporting Standards. (IFRS) as adopted by the European Union. The financialresults of the Group for the six months to 30 June 2007 have been prepared onthis basis, which it expects to apply in its annual audited accounts presentedat 31 December 2007. Previously the Group had reported under United Kingdom General AcceptedAccounting Principles (UK GAAP). The transition from UK GAAP to IFRS has notimpacted the Group's previous results or the comparatives in this interimreport. The principal accounting policies that the Group has adopted in this interimreport are consistent with the Group's anticipated 2007 accounting policies. The interim report is unaudited and does not constitute Statutory Accounts asdefined in Section 240 of the Companies Act 1985. The UK GAAP version of the accounts for the period ended 31December 2006 has been filed with the Registrar of Companies and the auditreport issued for those accounts was unqualified. 2. Loss per share The calculation of the basic earnings per share is based on the lossattributable to ordinary shareholders divided by the weighted average number ofshares in issue during the period. Weighted Loss for average Loss per the period number of share £ shares penceBasic and dilutedSix months ended 30 June 2007(unaudited) (117,158) 127,687,500 (0.09)Six months ended 30 June 2006 (unaudited) (182,010) 127,687,500 (0.14)12 months ended 31 December 2006 (audited) (527,024) 127,687,500 (0.41) 3. MOVEMENT IN TOTAL SHAREHOLDERS' EQUITY DURING THE PERIOD Share Share premium Other Retained capital account reserves earnings £ £ £ £Balance at 1 January 2007 1,276,875 10,561,393 15,313 (668,270)Loss attributable to - - - (117,158)shareholders ---------- ---------- -------- ---------As at 30 June 2007 1,276,875 10,561,393 15,313 (785,428) ========== ========== ======== ========= This information is provided by RNS The company news service from the London Stock Exchange