TIDMBOR
RNS Number : 2571B
Borders & Southern Petroleum plc
01 June 2023
1 June 2023
Borders & Southern Petroleum plc
("Borders & Southern" or "the Company")
Audited Results for the 12 month period ended 31 December
2022
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 ended 31
December 2022. 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 and posted to Shareholders along with the notice of the AGM
shortly.
Summary
-- Raised a total of $4 million (GBP3.2 million) before expenses through two capital raises
-- Cash balance on 31 December 2022: $2.7 million (2021: $0.71 million)
-- Administrative expense for the year: $1.2 million (2021: $1.1 million)
-- Operating loss of $1.3 million (2021: $1.0 million)
-- Extended Production Licences and Discovery Area through to 31 December 2024
-- Independent study confirms lower cost Darwin development is
economically and technically robust
-- Post year-end events:
- raised further $0.78 million (GBP0.65 million) (before
expenses) through the issue of 37,142,857 new Ordinary shares
- the total number of Ordinary shares in issue is now 730,814,456
For further information please visit www.bordersandsouthern.com
or contact:
Borders & Southern Petroleum plc
Howard Obee, Chief Executive
Tel: 020 7661 9348
Strand Hanson Limited (Nominated Adviser)
Ritchie Balmer / James Bellman
Tel: 020 7409 3494
SP Angel Corporate Finance LLP (Broker)
Richard Hail / Adam Cowl
Tel: 020 3470 0470
Tavistock (Financial PR)
Simon Hudson / Nick Elwes
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 (as amended) as it forms part of the
domestic law of the United Kingdom by virtue of the European Union
(Withdrawal) Act 2018 (as amended). 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.
Chairman's and CEO's review
During the reporting period, the Company successfully completed
two fund raisings, renewed its Production Licences and Discovery
Area in the Falkland Islands, and commissioned an independent
engineering study which validated a phased development concept for
the Group's Darwin gas condensate discovery.
At the end of the first quarter 2022 the Company raised $600,000
through a Subscription Agreement and a further $1,200,000 through
an oversubscribed Open Offer. The latter was approved by
shareholders at a General Meeting in April. A total of 103,858,914
new Ordinary shares were issued. In the last quarter of 2022, the
Company raised GBP2,500,000 through a firm and conditional Placing
and Subscription Agreement, issuing 142,857,138 new Ordinary
shares. The conditional placing and subscription agreement was
approved by shareholders at a General Meeting in January 2023.
These funds will meet the Company's overheads until end 2024. The
total number of Ordinary shares now in issue is 730,814,456.
As a result of the successful fund raisings, the Company
finished the year with a cash balance of $2.7 million (31 December
2021: $0.714 million) and continues to be debt-free. The Company
reports an operating loss for 2022 of $1.35 million (2021: $1.0
million). Administrative expense for the year was $1.2 million
(2021: $1.1 million). There were no major capital expenditures
during the year. We continue to keep a strong control on costs but
anticipate a small increase in expenditure during 2023 due to wider
inflationary pressures. Significant salary reductions were
implemented in 2019 and have been kept at the same level ever
since.
In January 2022, the Company applied for, and was awarded, an
extension to its Falkland Islands Production Licences and Discovery
Area. In line with other operators in the region, the extension
went out to 31 December 2022. A further extension request was
submitted in December and a two-year extension was granted. The
revised expiry date for the Production Licences and Discovery Area
is 31 December 2024. The Company is grateful to the Falkland
Islands Government for these awards.
As reported earlier in the year, our recent technical and
commercial work has focused on defining and validating new
development concepts for the Company's large gas condensate
discovery, Darwin. The overall aim was to reduce project risk to
help attract capital. The viability of a three well (two producers,
one gas injector), conventional deep water FPSO development concept
was confirmed by an independent engineering study. This study
provided up-to-date capital and operating expenditure estimates
which have been incorporated into the Company's economic models.
Based on a $60/barrel oil price and initial production of 26,000
bpd, project payback could be achieved within two years and project
expansion could occur from free cash flow.
The positive conclusions from this work are currently being
shared with potential industry collaborators. This includes some of
the companies that have previously engaged with us, along with
those who are considering the project for the first time. This
phase of farm-out activity will continue over the coming months. It
is supported by a relatively favourable industry environment.
Global oil and gas prices have remained resilient throughout the
reporting period and there are no obvious indications of a
significant weaking in the immediate future. Whilst competition for
capital for greenfield oil developments is strong, we believe that
Darwin's appraisal and phased development represents an attractive
proposition and with its relatively small environmental footprint
can play a role in the delicate balance between energy security and
the transition to renewable energy sources.
As we move forward, we will continue to run the business with
commercial discipline and with the application of good science. Our
focus is on the monetisation of Darwin for the benefit of all our
stakeholders.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2022
2022 2021
--------------------------------------------------
$'000 $'000
-------------------------------------------------- -------- --------
Administrative expenses (1,229) (1,096)
-------------------------------------------------- -------- --------
Loss from operations (1,229) (1,096)
Finance income - 74
Finance expense (172) (1)
-------------------------------------------------- -------- --------
Loss before tax 42 -
Tax expense - -
-------------------------------------------------- -------- --------
Loss for the year and total comprehensive
loss for the year attributable to equity owners
of the parent (1,359) (1,023)
-------------------------------------------------- -------- --------
Basic and diluted loss per share (see note (0.26) (0.21)
3) cents cents
-------------------------------------------------- -------- --------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 31 December 2022
2022 2021
------------------------------- ----------------- -----------------
$'000 $'000 $'000 $'000
------------------------------- ------ --------- ------ ---------
Assets
Non-current assets
Property, plant and equipment - 22
Intangible assets 293,244 292,746
------------------------------- ------ --------- ------ ---------
Total non-current assets 293,244 292,768
------------------------------- ------ --------- ------ ---------
Current assets
Other receivables 576 183
Cash and cash equivalents 2,707 714
------------------------------- ------ --------- ------ ---------
Total current assets 3,283 897
------------------------------- ------ --------- ------ ---------
Total assets 296,527 293,665
------------------------------- ------ --------- ------ ---------
Liabilities
Current liabilities
Trade and other payables (565) (126)
------------------------------- ------ --------- ------ ---------
Total net assets 295,962 293,539
------------------------------- ------ --------- ------ ---------
Equity attributable to
the equity owners of the
parent company
Share capital 10,718 8,530
Share premium 310,195 308,602
Other reserves 1,778 1,778
Retained deficit (26,713) (25,355)
Foreign currency reserve (16) (16)
------------------------------- ------ --------- ------ ---------
Total equity 295,962 293,539
------------------------------- ------ --------- ------ ---------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2022
Foreign
Share Share Other Retained currency
capital premium reserves deficit reserve Total
$'000 $'000 $'000 $'000 $'000 $'000
------------------------------ --------- --------- ---------- --------- ---------- --------
Balance at 1 January
2021 8,530 308,602 1,778 (24,332) (16) 294,562
Loss and total comprehensive
loss for the year - - - (1,023) - (1,023)
Recognition of share-based
payments - - - 1 - 1
Balance at 31 December
2021 8,530 308,602 1,778 (25,354) (16) 293,540
Loss and total comprehensive
loss for the year - - - (1,359) - (1,359)
Shares issue 2,188 1,593 - 3,781
Balance at 31 December
2022 10,718 310,195 1,778 (26,713) (16) 295,962
------------------------------ --------- --------- ---------- --------- ---------- --------
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.
------------------------------------------------
Share premium Amount subscribed for share capital in excess
of nominal value.
------------------------------------------------
Other reserves Fair value of options issued less transfers
to retained deficit on expiry.
------------------------------------------------
Retained deficit Cumulative net gains and losses recognised
in the Consolidated Statement of Comprehensive
Income.
------------------------------------------------
Foreign currency reserves Differences arising on the translation of
foreign operation to US dollars
------------------------------------------------
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2022
2022 2021
----------------
$'000 $'000 $'000 $'000
--------------------------------------- ------ -------- ----------- --------
Cash flow from operating activities
Loss before tax (1,359) (1,023)
Adjustments for: Depreciation 22 129
Share-based payment - 1
Finance costs 172 1
Finance income - (74)
Cash flows used in operating
activities before changes in
working capital (1,165) (966)
(Decrease)/increase in other
receivables (393) 42
Increase/(decrease) in trade
and other payables 452 10
--------------------------------------- ------ -------- ----------- --------
Net cash outflow from operating
activities (1,106) (914)
Cash flows used in investing
activities
Purchase of intangible assets (498) (505)
------ -----------
Net cash used in investing activities (498) (505)
--------------------------------------- ------ -------- ----------- --------
Cash flows used in financing
activities
Lease interest - (1)
Lease payments (13) (124)
Shares issue 3,781 -
------ -----------
Net cash from/(used in) financing
activities 3,768 (125)
-------- --------
Net increase/(decrease) in cash
and cash equivalents 2,164 (1,544)
--------------------------------------- ------ -------- ----------- --------
Cash and cash equivalents at
the beginning of the year 714 2,184
Exchange (loss)/gain on cash
and cash equivalents (172) 74
--------------------------------------- ------ -------- ----------- --------
Cash and cash equivalents at
the end of the year 2,707 714
--------------------------------------- ------ -------- ----------- --------
Notes
1. Accounting policies
Basis of preparation
The financial information for the year ended 31 December 2022
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 2022. 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 2022 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 consolidated financial statements have been prepared on a
going concern basis which assumes the continuity of normal business
activity and the realisation of assets and settlement of
liabilities in the normal course of business.
At 31 December 2022, the Group had a net cash position of
$2.706m (31 December 2021: $0.714m). Subsequent to balance date, as
part of the December 2022 capital raise, an additional 37,142,857
shares were issued in January 2023 to raise GBP650,000
($780,000).
The Group's board of directors have reviewed the Group's
forecasts for a period of no less than twelve months from the date
of approval of these financial statements, the period to May 2024.
Based on the future cashflow forecasts the Directors consider this
recent funding provides the Group and Parent Company with
sufficient funding until May 2024,
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 $ 1,023,000 (2020 -
loss $1,002,000) and the weighted average number of shares in issue
for the year was 484,098,484 (2020 - 484,098,484). 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 6,200,000 (2020: 6,100,000)
potentially dilutive ordinary shares being the share options.
4. Subsequent events
Subsequent to the balance sheet date, as part of the December
2022 capital raise, an additional 37,142,857 shares were issued in
January 2023 to raise GBP650,000 ($780,000).
-ends-
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