Interim Results

RNS Number : 5358T

Borders & Southern Petroleum plc

30 September 2010

 



30 September 2010

Borders & Southern Petroleum Plc

("Borders & Southern" or "the Company")

Interim Results for the six months ended

30 June 2010

Borders & Southern Petroleum Plc (AIM: BOR) is pleased to announce its interim results for the six months to 30 June 2010. 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

Within the last few months the first exploration well in the South Falkland Basin has been drilled. Unfortunately, the results from the BHP Billiton operated Toroa well were negative, although some hydrocarbon shows were reported. Whilst we do not have access to the well information we are confident that the well was not a definitive test of the basin and in particular has no impact on the chance of success of the Darwin and Stebbing prospects. Toroa, from what we understand, targeted older stratigraphy and was largely a stratigraphic trap defined on 2D seismic, high-graded by a CSEM anomaly. Our prospects are testing younger aged reservoirs and are clearly defined structural traps mapped on 3D seismic. Based on our continuing geological work, we believe our prospects are as exciting as ever and are anxious to see them tested as soon as possible.

With respect to our drilling activities, the Company has prepared of detailed project plan for the Darwin and Stebbing prospects. This includes all aspects of shallow hazard assessment, pore pressure prediction, well design and logistics. We have entered discussions with rig owners and operators with the aim of signing a rig contract or an assignment agreement. At the present time we have still not secured a rig for our work and it looks like our previously targeted window for operations (Q4 2010 - Q1 2011) has slipped. Consequently we will not be drilling in 2010, but remain optimistic that we will sign a rig for drilling in 2011. The delay has been caused by the competition for high specification rigs and the logistical challenges associated with operations in the Falkland Islands.

From a financial point of view, our balance sheet remains robust. As at 30th June 2010 the Company had a cash balance of $205 million. This gives us the strength and independence to undertake the exploration programme that we wish. We remain focused on accessing a rig and will inform investors of the likely timing of drilling as soon as we have signed a contract.

For further information please contact:

Howard Obee

Chief Executive

Borders & Southern Petroleum plc

Tel: [phone]

Katherine Roe

Panmure Gordon (UK) Limited

Tel: [phone]

Simon Hudson

Director

Tavistock Communications

Tel: [phone]

Borders & Southern Petroleum Plc

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 30 June 2010

		6 months ended 30 June 2010 (unaudited)		6 months ended 30 June 2009 (unaudited)		12 months ended 31 December 2009 (audited)
	Notes	$		$		$
Administrative expenses		(613,543)		(488,551)		(1,209,977)
loss from operations		(613,543)		(488,551)		(1,209,977)
Finance income	4	240,420		1,848,130		4,587,604
Finance expense - foreign exchange loss		(299,062)		-		(226,891)
(LOSS)/PROFIT BEFORE TAX		(672,185)		1,359,579		3,150,736
Income tax expense		-		-		-
(LOSS)/PROFIT FOR THE PERIOD AND TOTAL COMPREHENSIVE (LOSS)/INCOME FOR THE PERIOD ATTRIBUTABLE TO OWNERS OF THE PARENT		(672,185)		1,359,579		3,150,736
(Loss)/earnings per share - basic and diluted	3	(0.16) cents		0.70 cents		1.54 cents

Borders & Southern Petroleum Plc

CONSOLIDATED STATEMENT OF FINANCIAL POSITION 

At 30 June 2010

				At 30 June 2010 (unaudited) $		At 30 June 2009 (unaudited) $		At 31 December 2009 (audited) $
ASSETS NON-CURRENT ASSETS
Property, plant and equipment				21,177		13,756		19,516
Intangible assets				36,780,101		36,195,286		36,619,040
Total non-current assets				36,801,278		36,209,042		36,638,556
CURRENT ASSETS
Trade and other receivables				203,110		109,840		100,191
Cash and cash equivalents				205,395,260		20,785,178		206,321,177
TOTAL CURRENT ASSETS				205,598,370		20,895,018		206,421,368
TOTAL ASSETS				242,399,648		57,104,060		243,059,924
LIABILITIES CURRENT LIABILITIES
Trade and other payables				(133,292)		(107,631)		(244,680)
TOTAL NET ASSETS				242,266,356		56,996,429		242,815,244
CAPITAL AND RESERVES
Share capital				7,675,453		3,867,741		7,675,453
Share premium account Other reserve				238,034,095 476,583		57,906,686 260,749		238,034,095 353,286
Retained deficit				(3,903,379)		(5,022,351)		(3,231,194)
Foreign currency reserve				(16,396)		(16,396)		(16,396)
TOTAL EQUITY				242,266,356		56,996,429		242,815,244

Borders & Southern Petroleum Plc

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the six months ended 30 June 2010

	Share capital $		Share premium reserve $		Other reserves $		Foreign currency reserve $		Retained earnings $			Total $
Unaudited
Balance at 1 January 2010	7,675,453		238,034,095		353,286		(16,396)		(3,231,194)			242,815,244
Total comprehensive income for the period	-		-		-		-		(672,185)			(672,185)
Recognition of share based payments	-		-		123,297		-		-			123,297
Balance at 30 June 2010	7,675,453		238,034,095		476,583		(16,396)		(3,903,379)			242,266,356

Unaudited
Balance at 1 January 2009	3,867,741		57,906,686	209,409			(16,396)			(6,381,930)			55,585,510
Total comprehensive income for the period	-		-	-			-			1,359,579			1,359,579
Recognition of share based payments	-		-	51,340			-			-			51,340
Balance at 30 June 2009	3,867,741		57,906,686	260,749			(16,396)			(5,022,351)			56,996,429

Audited
Balance at 1 January 2009	3,867,741		57,906,686			209,409	(16,396)			(6,381,930)			55,585,510
Total comprehensive income for the year	-		-			-	-			3,150,736			3,150,736
Issue of share capital	3,807,712		180,127,409			-	-			-			183,935,121
Recognition of share based payments	-		-			143,877	-			-			143,877
Balance at 31 December 2009	7,675,453		238,034,095			353,286	(16,396)			(3,231,194)			242,815,244

Borders & Southern Petroleum Plc

CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months ended 30 June 2010

			6 months ended 30 June 2010 (unaudited)		6 months ended 30 June 2009 (unaudited)		12 months ended 31 December 2009  (audited)
	Cash flow from operating activities		$		$		$
	(loss)/Profit before tax Adjustments for:		(672,185)		1,359,579		3,150,736
	Depreciation		1,863		4,073		9,206
	Share-based payment		123,297		51,340		143,877
	Finance income		(240,420)		(1,848,130)		(4,587,604)
	Finance expense		299,062		-		226,891
			(488,383)		(433,138)		(1,056,894)
	Decrease/( increase) in trade and other receivables		(13,830)		2,943		12,841
	Decrease in trade and other payables		(111,388)		(87,139)		49,910
	Net cash outflow from operating activities		(613,601)		(517,334)		(994,143)

Cash flows used in investing activities
Interest received		151,330		290,624		359,490
Redemption of other financial assets		-		9,950,668		9,950,668
Exploration and evaluation expenditure		(161,061)		(154,425)		(578,180)
Purchase of property, plant and equipment		(3,524)		(2,897)		(13,793)
Net cash used in investing activities		(13,255)		10,083,970		9,718,185
Cash flows from financing activities
Exchange gain on forward contract		-		-		4,366,870
Proceeds from issue of shares and share options (net of issue costs)		-		-		183,935,121
		-		-		188,301,991
Net increase/(decrease) in cash and cash equivalents		(626,856)		9,566,636		197,026,033
Cash and cash equivalents at the beginning of the period		206,321,178		9,522,035		9,522,035
Exchange ( losses)/gains on cash and cash equivalents		(299,062)		1,696,507		(226,891)

Cash and cash equivalents at the end of the period		205,395,260		20,785,178		206,321,177

Borders & Southern Petroleum Plc

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the six months ended 30 June 2010

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 results are unchanged from those disclosed in the Group's Annual Report for the year ended 31 December 2009 and are expected to be consistent with those policies that will be in effect at the year end. 

In the current financial year, the Group has adopted IAS 27, 'Consolidated and separate financial statements', IAS39, 'Reclassification of financial assets',  and Improvements to IFRSs (2010) - Amendments to various standards Issued 16 April 2009.  This has not had any impact on the figures stated in these interim financial statements.

The condensed financial statements for the six months ended 30 June 2010 and 30 June 2009 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 2009 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.

Effective 1 July 2009, the Company's functional currency changed from Pounds sterling ('£') to the US dollar ('$'). This change was made as, due to the $ being the currency that mainly influences significant transactions and balances, the directors considered the $ to most faithfully represent the economic effects of the underlying transactions, events and conditions in the Company.

2.            SEGMENTAL ANALYSIS

The company operates in one operating segment (exploration and gas) and in substantially one geographical market (Falkland Islands); therefore no additional segmental information is presented.

Of the Group's total non-current assets, the property, plant and equipment is based in the UK, all other non-current assets are located in the Falkland Islands.    

3.             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 dilution would relate only to share options and would not be material.

		(Loss)/Profit  after tax for the period $		Weighted average number of shares		(Loss)/profit per share cent
	basic and diluted
	Six months ended 30 June 2010 (unaudited)	(672,185)		428,578,404		(0.16)
	Six months ended 30 June 2009 (unaudited)	1,359,579		194,344,170		0.70
	12 months ended 31 December 2009 (audited)	3,150,736		204,611,972		1.54

4.             FINANCE INCOME AND EXPENSE

	Finance income	6 months ended 30 June 2010 $		6 months ended 30 June 2009 $		12 months ended 31 December 2009 $
	Bank interest receivable	240,420		101,963		171,075
	Treasury stock interest	-		49,660		49,659
	Foreign exchange gain	-		1,696,507		4,366,870
		240,420		1,848,130		4,587,604

	Finance expense	6 months ended 30 June 2010 $		6 months ended 30 June 2009 $		12 months ended 31 December 2009 $
	Exchange loss on cash and other financial assets	299,062		-		226,891

 

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