Exploration Update

Borders & Southern Petroleum plc
23 May 2006


Embargoed until 07.00, 23 May 2006


                        Borders & Southern Petroleum plc
                    ('Borders & Southern' or 'the Company')

                               Exploration Update


   •Technical evaluation indicates that Borders & Southern's Falkland Islands
    licences are located in a unique 'sweet-spot' for trap development and
    source maturity on the offshore extension of the Andean fold belt trend,
    which has been proven prolific onshore South America

   •2D seismic data acquired in 2005 has revealed previously unrecognised
    potential

   •The size and quality of the Company's lead inventory has increased
    significantly since the Company's AIM listing in May 2005

   •Numerous structural leads have been mapped that are capable of exceeding
    the minimum economic field size as defined by consultants Scott Pickford's
    independent analysis

   •Encouraging indirect indicators for hydrocarbons have been recognised

   •Cash position of £10 million at 1st April 2006


Commenting on the announcement, Howard Obee, Borders & Southern's Chief
Executive, said, 'The prospectivity of our acreage - in which we have a 100%
interest - has clearly increased as a result of this technical work. The
priority now is to further reduce risk through additional studies before taking
decisions on how best to generate value from the next phases of exploration.'


For further information, please call:
Howard Obee, Chief Executive      Simon Hudson/Richard Sunderland/Clemmie Carr
Borders & Southern Petroleum plc  Tavistock Communications
Tel: [phone]                Tel: [phone] or 07966 477256



                        Borders & Southern Petroleum plc
                    ('Borders & Southern' or 'the Company')


Exploration Update

Borders & Southern announces the completion of the first phase in the evaluation
of its Falkland Islands acreage. Whilst the technical work is ongoing, aimed at
further risk reduction, the Company is now able to report on its initial
findings of its non-exclusive 2D seismic data and independent technical studies
comprising structural modelling (undertaken by Midland Valley Exploration),
geochemistry (provided by Advanced Geochemical Systems Ltd) and seismic
amplitude analysis (supplied by ECL).

In November 2004, the Company licensed nearly 20,000 sq km of acreage in the
untested South Falkland Basin. Its objective was to define and assess the
prospectivity of a fold belt located to the south of the Falkland Islands. The
fold belt was specifically targeted due to the fact that a significant
proportion of the world's hydrocarbons are found in such settings.

Prior to Borders & Southern's work, only four regional seismic lines had been
acquired across the acreage. Based on an initial regional evaluation, the
Company predicted that the fold belt would extend eastwards throughout its
acreage and contain multiple structures suitable for trapping hydrocarbons.

The Company acquired 2,862 km of new 2D seismic in June 2005. This has now been
interpreted and the results have demonstrated that the fold belt does exist, is
best developed in the Company's acreage, and appears to be very prospective.

Mapping has defined numerous structural and stratigraphic leads. Three key plays
are recognised: Tertiary / Upper Cretaceous folds, Upper Cretaceous tilted fault
blocks, and Upper Cretaceous channel fills. At this stage, work has focused on
the structural leads, as the folds provide a good focus for migrating
hydrocarbons. Ten structural leads have been selected for detailed analysis, in
order to best describe the scale and range of plays within the acreage.

The ten leads have mapped areas of closure ranging from 11 to 138 sq km, seven
of which are over 50 sq km. These structures occur in water depths ranging from
1300 metres to 2040 metres. Many of the structures display structural closure
over vertical sections exceeding 2 km, allowing for the possibility of stacked
reservoirs.

As this is an untested basin, it is unrealistic to provide resource estimates at
this stage as there is no close well control. However, the size of the
structures would allow significant volumes of hydrocarbons to be trapped. For
instance, if 30 metres of net pay was encountered across a 50 sq km structure,
and average porosity and hydrocarbon saturations were assumed, then a resource
of some 500 million barrels could be trapped.

An independent study commissioned by the Company in April 2006, undertaken by
Scott Pickford, assessed the minimum economic field size for a deep water
development in the South Falklands. The study revealed that recoverable reserves
of approximately 100 mmbbl would be required for a commercial development (based
on a $34 per barrel oil price and well flow rates of 7,000 bopd). The
hydrocarbons would be developed using a moored Floating Production System with
offshore loading to ocean going tankers. Such schemes are common in deep water
developments.

In addition to defining the size of structures, the technical evaluation has
also revealed positive indirect indications for hydrocarbons within the
Company's acreage. These include BSR's* (which may represent gas hydrates), and
amplitude anomalies within the cores of the folds and channel fills, some of
which have strong AVO** anomalies.

Because this is an untested basin, the exploration risks remain relatively high
in comparison to proven hydrocarbon basins around the world. However, as an
example of frontier exploration acreage, the Directors believe the Company's
blocks to be very attractive. This assessment is based on the positive evidence
for a working source rock, realistic models for sand presence and the mapped
definition of numerous structural and stratigraphic traps. If this assessment is
correct, then Borders & Southern is well positioned to benefit from a potential
project of significant scale.

In the coming months, the Company will assess the best way to continue to
mitigate the technical risks along with reviewing the options for financing
future exploration whilst retaining as much value as possible for shareholders.
Partners are likely to be brought in at an appropriate stage. Future work might
include the acquisition of 3D seismic prior to drilling a well. The exact timing
of drilling will be subject to completion of further technical work,
negotiations with potential partners and rig availability.


*BSR: Bottom Simulating Reflector - a high amplitude seismic reflection that
approximately parallels the seabed and often represents the base of the gas
hydrate stability zone


**AVO: Amplitude Versus Offset - a seismic technique used to detect the presence
of hydrocarbons in a reservoir


REVIEW BY QUALIFIED PERSON, QUALITY CONTROL AND REPORTS

The results of the Company's technical evaluation have been reviewed, verified
and compiled by the Company's geological staff (which includes a qualified
person, Dr Howard Obee) for the purpose of the Guidance Note for Mining, Oil and
Gas Companies issued by the London Stock Exchange in respect of AIM companies,
which outline standards of disclosure for mineral projects.


Notes to Editors

Borders & Southern was formed as a public limited company in June 2004. At that
time, the Company submitted an application for its first project, offshore
exploration acreage (19,598 square kilometers) in the South Falkland Basin,
southeast of the Falkland Islands. The Company was subsequently granted five
production licences by the Governor of the Falkland Islands with effect from 1
November 2004.

The Company raised £9.1 million via a placing at 20p per share and was admitted
to AIM in May 2005. Borders & Southern is chaired by Harry Dobson and is run by
a management team with proven experience of acquiring, evaluating and developing
oil and gas exploration plays for major international companies.

Since Admission, the management team, led by Howard Obee, has focused on the
exploration programme on its Falklands acreage but the Company intends, in the
medium term, to capture and manage a geographically diversified portfolio of
international oil and gas exploration projects. It intends to focus on gaining
early entry into projects where it can demonstrate: basins with proven play
elements, play fairways with high impact prospects and prospects that have
follow up potential.


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            The company news service from the London Stock Exchange