Interim Results

Borders & Southern Petroleum plc 28 September 2006 For Immediate Release 28 September 2006 Borders & Southern Petroleum plc Interim Results for the six months ended 30 June 2006 Borders & Southern Petroleum plc (AIM: BOR) is pleased to announce its interim results for the six months to 30 June 2006. Highlights • The first phase of the Falkland Islands technical evaluation has been completed • The Company has defined a new fold belt play within an untested basin - the heart of this play falls within Borders & Southern's acreage • The Company's lead inventory has increased significantly since the AIM listing in May 2005 • Regional and block specific technical evaluation continues, aimed at further prospect definition and risk reduction • Ongoing screening and evaluation of new opportunities • Cash Balance as at 30th June 2006 is £9.9 million (30th June 2005: £10.4 million) Chief Executive's Statement During the six month reporting period the Company made considerable progress in its technical evaluation of its Falklands Islands acreage. Our understanding of the prospectivity has increased dramatically, as has the size and quality of the Company's lead inventory. In May 2006 we made a press release to report some of these findings. The technical work continues as we aim to further reduce the risks and consider our funding options prior to entering the next exploration phase. We are delighted with the progress to date and remain optimistic that the acreage can deliver a high value play. In parallel with our Falklands work, we continue to screen and evaluate new exploration opportunities in other parts of the world. To date we have elected not to invest in any of these opportunities as they did not compare favourably with our existing acreage. We will only sign up those projects that meet the Company's strategy and stringent investment criteria. 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 The Interim Results will be sent to shareholders shortly and available on the Company's website www.bordersandsouthern.com Borders & Southern Petroleum plc SUMMARISED PROFIT AND LOSS ACCOUNT For the six months ended 30 June 2006 6 months ended 6 months ended 12 months ended 30 June 2006 30 June 2005 30 June 2005 (unaudited) (unaudited) (audited) Notes £ £ £ Administrative expenses (361,022) (174,874) (204,785) OPERATING LOSS (361,022) (174,874) (204,785) Interest receivable 179,012 59,539 63,539 LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (182,010) (115,335) (141,246) Taxation - - - LOSS RETAINED FOR THE PERIOD 3 (182,010) (115,335) (141,246) Loss per share - basic and diluted 2 (0.14p) (0.18p) (0.26p) All recognised gains and losses are included in the profit and loss account. All amounts relate to continuing activities. Borders & Southern Petroleum plc SUMMARISED BALANCE SHEET At 30 June 2006 At At 30 June 2006 30 June 2005 (unaudited) (audited) Notes £ FIXED ASSSETS Intangible assets 1,639,997 1,497,668 Tangible assets 10,173 14,965 1,650,170 1,512,633 CURRENT ASSETS Debtors 93,531 142,790 Cash at bank 9,918,712 10,416,100 10,012,243 10,558,890 CREDITORS: amounts falling due within one year (26,241) (331,546) NET CURRENT ASSETS 9,986,002 10,227,344 TOTAL ASSETS LESS CURRENT LIABILITES 11,636,172 11,739,977 Provision for liabilities and charges - (42,955) NET ASSETS 11,636,172 11,697,022 CAPITAL AND RESERVES Called up share capital 1,276,875 1,276,875 Share premium account 10,561,393 10,561,393 Profit and loss account (deficit) (202,096) (141,246) EQUITY SHAREHOLDERS' FUNDS 3 11,636,172 11,697,022 Borders & Southern Petroleum plc CASH FLOW STATEMENT For 6 months ended 30 June 2006 6 months 6 months 12 months ended ended ended 30 June 2006 30 June 2005 30 June 2005 (unaudited) (unaudited) (audited) Notes £ £ £ NET CASH OUTFLOW FROM OPERATING ACTIVITIES 4 (312,105) (96,575) (140,147) RETURN ON INVESTMENTS AND SERVICING OF FINANCE Interest received 179,012 59,539 63,539 CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT Purchase of tangible fixed assets (639) (9,140) (18,685) Exploration and evaluation expenditure (13,300) (1,283,899) (1,326,875) (13,939) (1,293,039) (1,345,560) CASH OUTFLOW BEFORE USE OF LIQUID RESOURCES AND FINANCING (147,032) (13,30,075) (1,422,168) MANAGEMENT OF LIQUID RESOURCES Movement in deposits on demand 25,037 (9,650,000) (10,000,000) FINANCING Share capital issued, net of issue costs - 11,205,768 11,838,268 (DECREASE)/INCREASE IN CASH 5 (121,995) 225,693 416,100 Borders & Southern Petroleum plc NOTES TO THE INTERIM STATEMENT For 6 months ended 30 June 2006 1. Basis of preparation The interim financial statements have been prepared in accordance with the applicable accounting standards and under the historical cost convention. The principal accounting policies of the company have remained unchanged from those set out in Borders & Southern Petroleum plc's 2005 annual report and financial statements. 2. Loss per share The calculation of the basic earnings per share is based on the loss attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period. Loss for Weighted average Loss per share number of shares the period pence £ BASIC AND DILUTED Six months ended 30 June 2006 (182,010) 127,687,500 (0.14) Six months ended 30 June 2005 (115,335) 63,250,000 (0.18) 12 months ended 30 June 2005 (141,246) 55,413,437 (0.26) 3. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS 6 months ended 6 months ended 12 months ended 30 June 2006 30 June 2005 30 June 2005 (unaudited) (unaudited) (audited) £ £ £ Opening shareholders' funds 11,818,182 606,589 - Loss for the period (182,010) (115,335) (141,246) New share capital issued - 12,010,000 12,642,500 Share issue costs - (804,232) (804,232) Net (reduction)/addition to shareholders' funds (182,010) 11,090,433 11,697,022 Closing shareholders' funds 11,636,172 11,697,022 11,697,022 Borders & Southern Petroleum plc NOTES TO THE INTERIM STATEMENT (continued) For 6 months ended 30 June 2006 4. NET CASH OUTFLOW FROM OPERATING ACTIVITIES 6 months ended 6 months ended 12 months ended 30 June 2006 30 June 2005 30 June 2005 (unaudited) (unaudited) (audited) £ £ £ Operating loss (361,022) (174,874) (204,785) Depreciation 3,413 2,493 3,720 Decrease/(increase) in debtors 35,886 (127,902) (142,790) Increase in creditors 9,618 203,708 203,708 Net cash outflow from operating activities (312,105) (96,575) (140,147) 5. RECONCILING OF NET CASH FLOW TO MOVEMENT IN NET FUNDS 6 months ended 6 months ended 12 months ended 30 June 2006 30 June 2005 30 June 2005 (unaudited) (unaudited) (audited) £ £ £ Increase in cash (121,995) 225,693 416,100 (Decrease)/Increase in short term deposits (25,037) 9,650,000 10,000,00 Movements in net funds in the period (147,032) 9,875,693 10,416,100 Net funds as at 31 December 2005 10,065,744 540,407 - Net funds as at 30 June 2006 9,918,712 10,416,100 10,416,100 6. The interim report is unaudited and does not constitute Statutory Accounts as defined in Section 240 of the Companies Act 1985. A copy of the Company's 2005 Statutory Accounts has been filed with the Registrar of Companies. The audit report issued for the year ended 30 June 2005 was unqualified. 7. The financial information for the period 1 January 2006 to 30 June 2006 is unaudited. In the opinion of the directors the financial information for this period present fairly the financial position, results of operations and cash flows for the period in conformity with UK Generally Accepted Accounting Principles consistently applied. The interim report for the six months ended 30 June 2006 was approved by the Directors on 20 September 2006. 8. The directors do not recommend the payment of a dividend This information is provided by RNS The company news service from the London Stock Exchange

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