Results for six month period ended 30 June 2019
26 September 2019
Borders & Southern Petroleum plc
("Borders & Southern" or "the Company")
Unaudited Results for the six month period ended 30 June 2019
Borders & Southern Petroleum Plc (AIM: BOR) is pleased to announce its unaudited interim financial statements for the six months to 30 June 2019. 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
The Company reports an operating loss for the six-month period ending 30 June 2019 of $820,000 (compared to a loss for the corresponding period last year of $961,000). The cash balance at 30 June 2019 was $4.4 million (30 June 2018: $6.8 million), with the majority of the Company's funds continuing to be held in Sterling. The Company does not hold any debt.
With the help of our advisors we are actively pursuing a farm-in partner for our Darwin project. Industry reach has been extensive and we continue to present our robust technical and commercial proposition to new companies. The external environment remains challenging despite the relative recovery in oil price. Global conventional exploration drilling is recovering slowly but is still significantly below the level seen in 2012. However, discoveries in 2019 have increased, including a significant amount in deep water, which is helping to provide a more positive sentiment. The Board remains confident that the Company will secure funding for the next phase of drilling and further updates will be made as and when appropriate.
In order to support our farm-out activities we continue to improve our sub-surface technical case. During the past six months we have refined our channel / fan prospects and leads, enhancing our palaeogeographical reconstructions of the Lower Cretaceous. Moving forward we aim to concentrate on detailed structural and stratigraphic analysis of the Darwin reservoir. One of the key objectives of this work will be to evaluate potential additional hydrocarbon pools (some of which have seismic amplitude support) that have been identified adjacent to the Darwin East and West fault blocks. The current un-risked best estimate of 462 million barrels for total recoverable liquids (condensate and LPGs) for Darwin East and West (as previously announced) does not include these pools. The work will determine whether they could be economically exploited, thereby increasing the prospective resource and enhancing the value of the discovery.
The financial statements will shortly be on the Company's website.
Howard Obee
Chief Executive
25 September 2019
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.
For further information please visit www.bordersandsouthern.com or contact:
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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
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Tavistock (Financial PR) Simon Hudson / Barney Hayward / Nick Elwes Tel: 020 7920 3150 |
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 years 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.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2019
|
|
|
6 months ended 30 June 2019 (unaudited) |
6 months ended 30 June 2018 (unaudited) |
12 months ended 31 December 2018 (audited) |
|
|
Notes |
$000 |
$000 |
$000 |
|
|
|
|
|
|
|
Administrative expenses |
|
(820) |
(783) |
(1,802) |
|
|
|
|
|
|
|
|
|
|
|
|
loss from operations |
|
(820) |
(783) |
(1,802) |
|
|
|
|
|
|
|
Finance income |
3 |
17 |
15 |
29 |
|
Finance expense |
3 |
(17) |
(193) |
(193) |
|
|
|
|
|
|
|
|
|
|
|
|
LOSS BEFORE TAX |
|
(820) |
(961) |
(1,966) |
|
Tax expense
|
|
- |
- |
- |
LOSS FOR THE PERIOD AND TOTAL COMPREHENSIVE LOSS FOR THE PERIOD ATTRIBUTABLE TO EQUITY OWNERS OF THE PARENT |
|
(820) |
(961) |
(1,966) |
|
|
|
|
|
|
(Loss) per share - basic and diluted |
2 |
(0.2) cents |
(0.2) cents |
(0.41) cents |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 June 2019
|
|
At 30 June 2019 (unaudited) $000 |
At 30 June 2018 (unaudited) $000 |
At 31 December 2018 (audited) $000 |
|
|
|
|
|
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ASSETS
NON-CURRENT ASSETS |
|
|
|
|
Property, plant and equipment |
102 |
4 |
15 |
|
Intangible assets |
291,675 |
291,639 |
291,367 |
|
|
|
|
|
|
Total non-current assets |
291,777 |
291,643 |
291,382 |
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
Other receivables |
416 |
34 |
260 |
|
Cash and cash equivalents |
4,407 |
6,784 |
5,626 |
|
TOTAL CURRENT ASSETS |
4,823 |
6,818 |
5,886 |
|
TOTAL ASSETS |
296,600 |
298,461 |
297,268 |
|
LIABILITIES
CURRENT LIABILITIES |
|
|
|
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Trade and other payables
|
(489)
|
(527)
|
(337)
|
|
TOTAL LIABILITIES |
(489) |
(527) |
(337) |
|
|
|
|
|
|
TOTAL NET ASSETS |
296,111 |
297,934 |
296,931 |
|
|
|
|
|
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EQUITY |
|
|
|
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Share capital |
8,530 |
8,530 |
8,530 |
|
Share premium |
308,602 |
308,602 |
308,602 |
|
Other reserve |
1,775 |
1,773 |
1,775 |
|
Retained deficit |
(22,780) |
(20,955) |
(21,960) |
|
Foreign currency reserve |
(16) |
(16) |
(16) |
|
|
|
|
|
|
|
|
|
|
|
TOTAL EQUITY |
296,111 |
297,934 |
296,931 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2019
|
|
Share capital $000 |
Share premium $000 |
Other reserve $000 |
Retained deficit $000 |
Foreign currency reserve $000 |
Total $000 |
|
Unaudited |
|
|
|
|
|
|
|
Balance at 1 January 2019 |
8,530 |
308,602 |
1,775 |
(21,960) |
(16) |
296,931 |
|
Total comprehensive loss for the period |
- |
- |
- |
(820) |
- |
(820) |
|
|
|
|
|
|
|
|
|
Balance at 30 June 2019 |
8,530 |
308,602 |
1,775 |
(22,780) |
(16) |
296,111 |
|
|
|
|
|
|
|
|
|
Unaudited |
|
|
|
|
|
|
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Balance at 1 January 2018 |
8,530 |
308,602 |
1,773 |
(19,994) |
(16) |
298,895 |
|
Total comprehensive loss for the period |
- |
- |
- |
(961) |
- |
(961) |
|
|
|
|
|
|
|
|
|
Balance at 30 June 2018 |
8,530 |
308,602 |
1,773 |
(20,955) |
(16) |
297,934 |
|
Audited |
|
|
|
|
|
|
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Balance at 1 January 2018 |
8,530 |
308,602 |
1,773 |
(19,994) |
(16) |
298,895 |
|
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 |
CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 30 June 2019
|
|
|
6 months ended 30 June 2019 (unaudited) |
6 months ended 30 June 2018 (unaudited) |
12 months ended 31 December 2018 (audited) |
|
||||
|
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Cash flow from operating activities |
$000 |
$000 |
$000 |
|
||||
|
|
(loss) before tax Adjustments for: |
(820) |
(961) |
(1,966) |
|
||||
|
|
Depreciation |
97 |
7 |
1 |
|
||||
|
|
Share-based payment |
- |
- |
2 |
|
||||
|
|
Net finance (income) / costs |
- |
178 |
164 |
|
||||
|
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Realised foreign exchange gains / (losses) |
- |
(20) |
21 |
|
||||
|
|
|
(723) |
(796) |
(1,778) |
|
||||
|
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(Increase)/decrease in trade and other receivables |
(156) |
406 |
180 |
|
||||
|
|
Increase/ (decrease) in trade and other payables |
72 |
(106) |
(296) |
|
||||
|
|
Tax paid |
- |
- |
- |
|
||||
|
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Net cash outflow from operating activities |
(807) |
(496) |
(1,894) |
|
||||
|
|
|
|
|
|
|
||||
|
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Cash flows used in investing activities |
|
|
|
|
||||
|
|
|
|
|
|
|
||||
|
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Interest received |
17 |
15 |
29 |
|
||||
|
|
Purchase of intangible fixed assets |
(308) |
(814) |
(541) |
|
||||
|
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Lease interest |
(10) |
|
|
|
||||
|
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Lease repayments |
(104) |
|
|
|
||||
|
|
Proceeds from disposal of tangible fixed assets |
|
|
(5) |
|
||||
|
|
Net cash used in investing activities |
(405) |
(799) |
(517) |
|
||||
|
|
|
|
|
|
|
||||
|
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Net decrease in cash and cash equivalents |
(1,212) |
(1,295) |
(2,411) |
|
||||
|
|
Cash and cash equivalents at the beginning of the period |
5,626 |
8,251 |
8,251 |
|
||||
|
|
Exchange losses on cash and cash equivalents |
(7) |
(172) |
(214) |
|
||||
|
|
Cash and cash equivalents at the end of the period |
4,407 |
6,784 |
5,626 |
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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the six months ended 30 June 2019
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 2018 and are expected to be consistent with those policies that will be in effect at the year end.
The condensed consolidated financial statements for the six months ended 30 June 2019 and 30 June 2018 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 2018 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.
Adoption of IFRS 16 'Leases'
The new IFRS standard on leases came into effect on 1 January 2019. The new standard sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for most leases under a single on-balance sheet model.
The Group adopted IFRS 16 from 1 January 2019 using the modified retrospective approach and accordingly the information presented for 2018 is not restated. It remains as previously reported under IAS 17 and related interpretations. On initial application, the Group elected to record right-of-use assets based on the corresponding lease liability. A right-of-use asset and lease obligations of $0.3m were recorded as of 1 January 2019, with no net impact on retained earnings. The Group also elected to use the recognition exemptions for lease contracts that, at the commencement date, have a lease term of 12 months or less and do not contain a purchase option ('short term leases'), and lease contracts for which the underlying asset is of low value ('low-value assets').
On adoption of IFRS 16, the Group recognised lease liabilities in relation to leases which had previously been classified as 'operating leases' under the principles of IAS 17 Leases. These liabilities were measured at the present value of the remaining lease payments.
Straight-line operating lease expense recognition in cost of sales is replaced with a depreciation charge for the right-of-use assets and an interest expense on the recognised lease liabilities (included in finance charges). In the earlier periods of the lease, the expenses associated with the lease under IFRS 16 will be higher when compared to lease expenses under IAS 17. However, EBITDA results improve as the operating expense is now replaced by interest expense and depreciation in profit or loss.
For classification within the cash flow statement, previously operating lease payments were presented as operating cash flows. These lease payments are now disclosed in financing activities with the interest portion included within in operating cash flows.
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. During the period the potential ordinary shares are anti-dilutive and therefore diluted loss per share has not been calculated. At 30 June 2019, there were 7,050,000 (30 June 2018: 7,050,000, 31 December 2018:7,050,000) potentially dilutive ordinary shares being the share options.
|
|
(Loss) after tax for the period/year $000 |
Weighted average number of shares |
(Loss) per share cent |
|
basic and diluted |
|
|
|
|
|
|
|
|
|
Six months ended 30 June 2019 (unaudited) |
(820) |
484,098.484 |
(0.2) |
|
|
|
|
|
|
|
|
|
|
|
Six months ended 30 June 2018 (unaudited) |
(961) |
484,098,484 |
(0.2) |
|
|
|
|
|
|
|
|
|
|
|
Twelve months ended 31 December 2018 (audited) |
(1,966) |
484,098,484 |
(0.41) |
|
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|
|
|
|
|
|
|
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3. FINANCE INCOME AND EXPENSE
|
Finance income |
6 months ended 30 June 2019 $000 |
6 months ended 30 June 2018 $000 |
12 months ended 31 December 2018 $000 |
|
Bank interest receivable |
17 |
15 |
29 |
|
Foreign exchange gain / (loss) |
(7) |
(193) |
- |
|
Interest on leased assets |
(10) |
|
|
|
|
- |
(178) |
29 |
-ends-
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