Borders & Sth. Regulatory News (BOR)

30 September 2010

Borders & Southern Petroleum Plc

("Borders & Southern" or "the Company")

Interim Results for the six months ended

30 June 2010

Borders & Southern Petroleum Plc (AIM: BOR) is pleased to announce its interim results for the six months to 30 June 2010. The accounts contained within this report represent the consolidation of Borders & Southern Petroleum Plc and its subsidiary Borders & Southern Falkland Islands Limited.

Chief Executive's Statement

Within the last few months the first exploration well in the South Falkland Basin has been drilled. Unfortunately, the results from the BHP Billiton operated Toroa well were negative, although some hydrocarbon shows were reported. Whilst we do not have access to the well information we are confident that the well was not a definitive test of the basin and in particular has no impact on the chance of success of the Darwin and Stebbing prospects. Toroa, from what we understand, targeted older stratigraphy and was largely a stratigraphic trap defined on 2D seismic, high-graded by a CSEM anomaly. Our prospects are testing younger aged reservoirs and are clearly defined structural traps mapped on 3D seismic. Based on our continuing geological work, we believe our prospects are as exciting as ever and are anxious to see them tested as soon as possible.

With respect to our drilling activities, the Company has prepared of detailed project plan for the Darwin and Stebbing prospects. This includes all aspects of shallow hazard assessment, pore pressure prediction, well design and logistics. We have entered discussions with rig owners and operators with the aim of signing a rig contract or an assignment agreement. At the present time we have still not secured a rig for our work and it looks like our previously targeted window for operations (Q4 2010 - Q1 2011) has slipped. Consequently we will not be drilling in 2010, but remain optimistic that we will sign a rig for drilling in 2011. The delay has been caused by the competition for high specification rigs and the logistical challenges associated with operations in the Falkland Islands.

From a financial point of view, our balance sheet remains robust. As at 30th June 2010 the Company had a cash balance of $205 million. This gives us the strength and independence to undertake the exploration programme that we wish. We remain focused on accessing a rig and will inform investors of the likely timing of drilling as soon as we have signed a contract.

For further information please contact:

Howard Obee

Chief Executive

Borders & Southern Petroleum plc

Tel: 020 7661 9348

Simon Hudson

Director

Tavistock Communications

Tel: 020 7920 3150

Borders & Southern Petroleum Plc

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 30 June 2010

Borders & Southern Petroleum Plc

CONSOLIDATED STATEMENT OF FINANCIAL POSITION 

At 30 June 2010

Borders & Southern Petroleum Plc

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the six months ended 30 June 2010

Borders & Southern Petroleum Plc

CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months ended 30 June 2010

Borders & Southern Petroleum Plc

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the six months ended 30 June 2010

1. Basis of preparation

The unaudited condensed consolidated interim financial statements have been prepared using the recognition and measurement principles of International Accounting Standards, International Reporting Standards and Interpretations adopted for use in the European Union (collectively EU IFRSs). The Group has not elected to comply with IAS 34 "Interim Financial Reporting" as permitted. The principal accounting policies used in preparing the interim results are unchanged from those disclosed in the Group's Annual Report for the year ended 31 December 2009 and are expected to be consistent with those policies that will be in effect at the year end. 

In the current financial year, the Group has adopted IAS 27, 'Consolidated and separate financial statements', IAS39, 'Reclassification of financial assets',  and Improvements to IFRSs (2010) - Amendments to various standards Issued 16 April 2009. This has not had any impact on the figures stated in these interim financial statements.

The condensed financial statements for the six months ended 30 June 2010 and 30 June 2009 are unreviewed and unaudited. The comparative financial information does not constitute statutory financial statements as defined by Section 435 of the Companies Act 2006. The comparative financial information for the year ended 31 December 2009 is not the company's full statutory accounts for that period. A copy of those statutory financial statements has been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under section 498(2)-(3) of the Companies Act 2006.

Effective 1 July 2009, the Company's functional currency changed from Pounds sterling ('£') to the US dollar ('$'). This change was made as, due to the $ being the currency that mainly influences significant transactions and balances, the directors considered the $ to most faithfully represent the economic effects of the underlying transactions, events and conditions in the Company.

2. SEGMENTAL ANALYSIS

The company operates in one operating segment (exploration and gas) and in substantially one geographical market (Falkland Islands); therefore no additional segmental information is presented.

Of the Group's total non-current assets, the property, plant and equipment is based in the UK, all other non-current assets are located in the Falkland Islands.  

3. EARNINGS per share

The calculation of the basic earnings per share is based on the profit attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period. Diluted earnings per share are not stated as the dilution would relate only to share options and would not be material.

4. FINANCE INCOME AND EXPENSE