BORDERS & SOUTHERN PETROLEUM PLC
29 September 2014
Borders & Southern Petroleum Plc
Unaudited interim financial statements for the six months ended
30 June 2014
Borders & Southern Petroleum Plc (AIM: BOR) is pleased to announce its interim financial statements for the six months to 30 June 2014. The accounts contained within this report represent the consolidation of Borders & Southern Petroleum Plc and its subsidiary Borders & Southern Falkland Islands Limited.
Highlights
· The technical evaluation of the merged 2008 and 2013 3D seismic surveys is progressing.
· Phase 2 reservoir engineering study completed with new base case estimate of wet gas in place of 2.6 tcf and the recovered condensate of 263 million barrels.
· Discussions with companies regarding the farm-out of Borders & Southern's acreage continue.
· Planning for an appraisal / exploration programme is advancing.
· Cash balance as of 30 June 2014: $21.5 million - sufficient to cover forward overhead costs and all necessary short-term technical studies
For further information please contact:
Howard Obee, Chief Executive Borders & Southern Petroleum plc | Tel: 020 7661 9348 |
Dominic Morley / Adam James Panmure Gordon (UK) Limited | Tel: 020 7886 2500 |
Simon Hudson Tavistock Communications | Tel: 020 7920 3150 |
Notes:
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 2,862 km of 2D seismic, 2,517 square kilometres of 3D seismic and drilled two exploration wells, making a gas condensate discovery with its first well.
This statement has been reviewed, verified and approved by Dr Howard Obee, (a petroleum geologist with over 25 years relevant experience, Fellow of the Geological Society and member of the American Association of Petroleum Geologists and the Petroleum Exploration Society of Great Britain), in accordance with the Guidance Note for Mining, Oil and Gas Companies issued by the London Stock Exchange in respect of AIM companies.
Chief Executive's Statement
During the first half of the year the Company received the final processed data from the 2013 3D seismic acquisition programme along with the reprocessed data of the 2008 3D seismic survey. The two surveys have been merged together to form one continuous volume covering an area of just over 2,500 square kilometres. Based on this new data and our Phase 2 reservoir engineering study, in June of this year we reported that our estimated most likely recoverable resource for Darwin (East and West combined) was 263 million barrels of condensate from a wet gas in place estimate of 2.6 tcf. It was also noted that this number could increase if the appraisal programme confirms additional reservoir intervals.
Detailed technical analysis of the Darwin East discovery continues, including the selection of potential appraisal well locations. Evaluation of nearby prospects is also underway. Initial mapping has identified numerous amplitude anomalies at the same stratigraphic interval as the Darwin reservoir. The next phase of the evaluation is to complete a detailed seismic reservoir characterisation study, using the well data to calibrate the seismic response. It is hoped that the study may allow us to differentiate between oil, gas and water charged reservoir and therefore rank the anomalies and prospects that have been identified. This work, currently in the planning stage, will continue through the fourth quarter of 2014..
Our main commercial thrust has been to bring partners into our acreage. Discussions with companies continue and our objective is to reach a conclusion so that we can participate in the 2015 Falkland Islands drilling programme that has been announced by other companies operating in the Falkland Islands. The conceptual well designs for an exploration and appraisal programme with associated logistical planning is in an advanced stage allowing us to join the consortium as soon as partnering and funding has been secured.
In the six month period to 30 June 2014, the Company reports a loss of $0.9 million (30 June 2013: $3.3 million loss). Administrative expenses for the six month period were $1.7 million (30 June 2013: $1.4 million). The cash balance remains strong at $21.5 million.
Borders & Southern Petroleum Plc
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2014
6 months ended 30 June 2014 (unaudited) | 6 months ended 30 June 2013 (unaudited) | ||
N otes | $ | $ | |
Administrative expenses | (1,664,997) | (1,388,347) | |
(1,664,997) | (1,388,347) | ||
Finance income | 3 | 731,505 | 40,254 |
Finance expense | 3 | - | (2,011,254) |
(933,492) | (3,359,347) | ||
Tax expense | - | - | |
(933,492) | (3,359,347) | ||
2 | (0.2) cents | (0.7) cents |
Borders & Southern Petroleum Plc
CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAt 30 June 2014
N otes | At 30 June 2014 (unaudited) $ | At 31 December 2013 (audited) $ | |
ASSETS NON-CURRENT ASSETS | |||
Property, plant and equipment | 11,858 | 12,801 | |
Intangible assets | 289,786,678 | 286,950,378 | |
Total non-current assets | 289,798,536 | 286,963,179 | |
CURRENT ASSETS | |||
Other receivables | 575,834 | 1,017,040 | |
Restricted use cash | 4 | 30,739 | 30,736 |
Cash and cash equivalents | 21,473,836 | 23,258,717 | |
TOTAL CURRENT ASSETS | 22,080,409 | 24,306,493 | |
TOTAL ASSETS | 311,878,945 | 311,269,672 | |
LIABILITIES CURRENT LIABILITIES | |||
Trade and other payables Current tax liability | (2,817,231) - | (1,306,889) (185,327) | |
TOTAL LIABILITIES | (2,817,231) | (1,492,216) | |
TOTAL NET ASSETS | 309,061,714 | 309,777,456 | |
EQUITY | |||
Share capital | 8,530,461 | 8,530,461 | |
Share premium account Other reserve | 308,602,131 2,252,418 | 308,602,131 2,034,668 | |
Retained deficit | (10,306,900) | (9,373,408) | |
Foreign currency reserve | (16,396) | (16,396) | |
TOTAL EQUITY | 309,061,714 | 309,777,456 | |
Borders & Southern Petroleum Plc
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2014
Share capital $ |
Share $ | Other reserve $ | Retained Deficit $ | Foreign currency reserve $ | Total $ | |
Unaudited | ||||||
Balance at 1 January 2014 | 8,530,461 | 308,602,131 | 2,034,668 | (9,373,408) | (16,396) | 309,777,456 |
Total comprehensive loss for the period | - | - | - | (933,492) | - | (933,492) |
Recognition of share based payments | - | - | 217,750 | - | - | 217,750 |
Balance at 30 June 2014 | 8,530,461 | 308,602,131 | 2,252,418 | (10,306,900) | (16,396) | 309,061,714 |
Unaudited | ||||||
Balance at 1 January 2013 | 8,530,461 | 308,602,131 | 1,607,559 | (6,417,882) | (16,396) | 312,305,873 |
Total comprehensive income for the period | - | - | - | (3,359,347) | - | (3,359,347) |
Recognition of share based payments | - | - | 189,810 | - | - | 189,810 |
Balance at 30 June 2013 | 8,530,461 | 308,602,131 | 1,797,369 | (9,777,229) | (16,396) | 309,136,336 |
Audited | ||||||
Balance at 1 January 2013 | 8,530,461 | 308,602,131 | 1,607,559 | (6,417,882) | (16,396) | 312,305,873 |
Total comprehensive loss for the year | - | - | - | (2,955,526) | - | (2,955,526) |
Recognition of share based payments | - | - | 427,109 | - | - | 427,109 |
Balance at 31 December 2013 | 8,530,461 | 308,602,131 | 2,034,668 | (9,373,408) | (16,396) | 309,777,456 |
Borders & Southern Petroleum Plc
CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 30 June 2014
6 months ended 30 June 2014 (unaudited) | 6 months ended 30 June 2013 (unaudited) | |
Cash flow from operating activities | $ | $ |
Profit/(loss) before tax Adjustments for: | (933,492) | (3,359,347) |
Depreciation | 943 | 4,495 |
Share-based payment | 217,750 | 189,810 |
Finance income | (731,505) | 1,946.380 |
Finance expense | (13,089) | 24,620 |
(1,459,393) | (1,194,042) | |
Decrease in trade and other receivables | 441,206 | 456,259 |
Increase/ (decrease) in trade and other payables | 957,125 | (1,960,478) |
Tax paid | (185,327) | - |
Net cash inflow / (outflow) from operating activities | (246,389) | (2,698,261) |
Cash flows used in investing activities | ||
Interest received | 33,613 | 40,254 |
Interest paid | - | - |
Purchase of intangible fixed assets | (2,283,083) | (27,277,906) |
Purchase of property, plant and equipment | - | |
Net cash used in investing activities | (2,249,470) | (27,237,652) |
(2,495,859) | (29,935,913) | |
Cash flows from financing activities | ||
Proceeds from issue of shares | - | - |
Net increase/(decrease) in cash and cash equivalents | (2,495,859) | (29,935,913) |
Cash, cash equivalents and restricted use cash at the beginning of the period | 23,289,453 | 56,435,057 |
Exchange gains/ (losses) on cash and cash equivalents | 710,981 | (2,011,254) |
Cash , cash equivalents and restricted use cash at the end of the period | 21,504,575 | 24,487,890 |
Borders & Southern Petroleum Plc
NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the six months ended 30 June 2014
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 financial statements are unchanged from those disclosed in the Group's Annual Report for the year ended 31 December 2011 and are expected to be consistent with those policies that will be in effect at the year end.
The condensed financial statements for the six months ended 30 June 2014 and 30 June 2013 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 2013 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.
2. 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 group was loss making so there is no significant difference between basic and diluted earning per share.
Profit/(loss) after tax for the period $ | Weighted average number of shares | Earnings/ (Loss) per share cent | |
basic and diluted | |||
Six months ended 30 June 2014 (unaudited) | (933,492) | 484,098,484 | (0.2) |
Six months ended 30 June 2013 (unaudited) | (3,359,347) | 484,098,484 | (0.7) |
3. FINANCE INCOME AND EXPENSE
Finance income | 6 months ended 30 June 2014 $ | 6 months ended 30 June 2013 $ |
Bank interest receivable | 33,613 | 40,254 |
Foreign exchange gain | 697,892 | - |
731,505 | 40,254 |
Finance expense | 6 months ended 30 June 2014 $ | 6 months ended 30 June 2013 $ |
Exchange loss on cash and other financial assets | - | 2,011,254 |
4. RESTRICTED USE CASH
The Company has placed funds with a bank as security for a letter of credit issued in favour of a company providing it services. As payment for these services is made, these funds will be released to the Company
-ends-
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