REG-Borders & Southern Interim ResultsReleased: 24/09/2009
com:20090924:RnsX5676Z
.
RNS Number : 5676Z
Borders & Southern Petroleum plc
24 September 2009
24 September 2009
Borders & Southern Petroleum Plc
("Borders & Southern", "the Company" or "the Group")
Interim Results for the Six Months to 30 June 2009
Borders & Southern Petroleum Plc (AIM: BOR) is pleased to announce its interim
results for the six months to 30 June 2009. The accounts contained within this
report represent the consolidation of Borders & Southern Petroleum Plc and its
subsidiary Borders & Southern Falkland Islands Limited.
Highlights
* Continued refinement of prospect inventory - large structures with high
potential value have been defined
* Farmout process underway
* Technical work associated with the Environmental Impact Assessment nearing
completion
* Cash balance as at 30 June 2009 was US$20.7 million
Chief Executive's Statement
Since our last report the Company has been actively seeking credible partners to
help fund the drilling campaign. This farmout process is progressing but we do
not intend to comment further until there is something substantial to report.
In parallel with our farmout activity we have continued to work both the 3D and
regional seismic data in order to fine-tune our understanding of the main play
fairways and prospects. Our prospects are large simple structural traps with
good geological analogues and which possess strong geophysical attribute
support. If they work then the volumes are likely to be significant and value
high. We believe that when viewed against other global frontier opportunities
these prospects are very competitive. And whilst we are unable to offer a time
frame for securing a partner and drilling we are very confident that these
prospects will attract a rig.
On the 30 October of this year the first exploration term of the Production
Licenses comes to a conclusion. All work programme obligations have been
fulfilled, the main one being the acquisition and interpretation of 750 sq km of
3D seismic. This was exceeded, with the acquisition of 1,492 sq km of new 3D
seismic. On the 1 November we have the option to extend the first exploration
period for a further three years. This extension period has a one well
commitment associated with it. It is our intention, with Falklands Islands
Government approval, to take up the extension and thereby assume the well
commitment. Following this three year period the Company has the option to enter
a second five year exploration phase. This also comes with a one well
commitment.
It has recently been announced that the drilling programme in the North Falkland
Basin might commence in the first quarter of 2010. The rig highlighted to
undertake this work would not be suitable for our prospects due to the greater
water depths involved. However, we welcome this good news for the Falkland
Islands Government as it raises the profile and interest in the region. From a
technical perspective, the petroleum system in the South Falkland Basin is
completely different to that in the North Falkland Basin. Therefore well results
in the North Falkland Basin will have no impact on whether we succeed or fail in
the South.
The financial statements show that the Company has a strong balance sheet with
cash or cash equivalents as at 30 June 2009 of US$20.7 million. This is slightly
higher than that reported in the December 2008 financial statements (US$19.5
million) due to foreign exchange rate changes.
For further information please visit www.bordersandsouthern.com or contact:
Howard Obee Simon Hudson
Borders & Southern Petroleum plc Tavistock Communications
Tel: 020 7661 9348 Tel: 020 7920 3150
Mob: 07966 477256
Katherine Roe Guy Wilkes
Panmure Gordon (UK) Limited Ocean Equities
Tel: 020 7459 3600 Tel: 020 77864370
CONSOLIDATED INCOME STATEMENT
For the six months ended 30 June 2009
12 months ended
6 months ended 6 months ended 31 December 2008
30 June 2009 30 June 2008 (audited)
(unaudited) (unaudited)
Continuing operations Notes $ $ $
Administrative expenses (437,211) (593,872) (1,287,544)
LOSS FROM OPERATIONS (437,211) (593,872) (1,287,544)
Finance income 4 1,848,130 764,577 986,177
Finance expense - foreign exchange loss 4 - - (4,426,533)
PROFIT/ (LOSS BEFORE TAX) 1,410,919 170,705 (4,727,900)
Income tax expense - (80,966) -
PROFIT/ (LOSS) FOR THE PERIOD 1,410,919 89,739 (4,727,900)
Profit/ (loss) per share - basic and diluted 3 0.73 cents 0.05 cents (2.43) cents
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2009
12 months ended
6 months ended 6 months ended 31 December 2008
30 June 2009 30 June 2008 (audited)
(unaudited) (unaudited)
$ $ $
PROFIT/ (LOSS) FOR THE PERIOD 1,410,919 89,739 (4,727,900)
Foreign exchange on change in presentation/functional - 8,438 (20,115)
currency
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 1,410,919 98,177 (4,748,015)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 June 2009
At
At At 31 December 2008
30 June 2009 30 June 2008 (audited)
(unaudited) (unaudited) $
$ $
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 13,756 4,968 14,929
Intangible assets 36,195,286 35,392,347 36,040,860
Total non-current assets 36,209,042 35,397,315 36,055,789
CURRENT ASSETS
Trade and other receivables 109,840 296,571 251,788
Other financial assets - - 9,950,668
Cash and cash equivalents 20,785,178 24,969,898 9,522,035
TOTAL CURRENT ASSETS 20,895,018 25,266,469 19,724,491
TOTAL ASSETS 57,104,060 60,663,784 55,780,280
LIABILITIES
CURRENT LIABILITIES
Trade and other payables (107,631) (251,863) (194,770)
Current tax payable - (81,596) -
TOTAL NET ASSETS 56,996,429 60,330,325 55,585,510
CAPITAL AND RESERVES
Share capital 3,867,741 3,867,741 3,867,741
Share premium account 57,906,686 57,906,686 57,906,686
Other reserve 209,409 108,032 209,409
Retained earnings (4,971,011) (1,564,291) (6,381,930)
Foreign currency reserve (16,396) 12,157 (16,396)
56,996,429 60,330,325 55,585,510
TOTAL EQUITY
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2009
Share capital Share premium reserve Other reserves Foreign Retained earnings Total
currency
reserve
$ $ $ $ $ $
Unaudited
Balance at 1 January 2009 3,867,741 57,906,686 209,409 (16,396) (6,381,930) 55,585,510
Loss for the period and total comprehensive income
for the period - - - - 1,410,919 1,410,919
Balance at 30 June 2009 3,867,741 57,906,686 209,409 (16,396) (4,971,011) 56,996,429
Unaudited
Balance at 1 January 2008 3,867,741 57,906,686 108,032 3,719 (1,654,030) 60,232,148
Profit for the period - - - - 89,739 89,739
Foreign exchange on change in presentation currency - - - 8,438 - 8,438
Total comprehensive income - - - 8,438 89,739 98,177
for the period
Balance at 30 June 2008 3,867,741 57,906,686 108,032 12,157 (1,564,291) 60,330,325
Audited
Balance at 1 January 2008 3,867,741 57,906,686 108,032 3,719 (1,654,030) 60,232,148
Loss for the year - - - - (4,727,900) (4,727,900)
Foreign exchange on change in functional currency - - - (20,115) - (20,115)
Total comprehensive income - - - (20,115) (4,727,900) (4,748,015)
for the period
Recognition of share based - - 101,377 - - 101,377
payments
Balance at 31 December 2008 3,867,741 57,906,686 209,409 (16,396) (6,381,930) 55,585,510
CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 30 June 2009
6 months ended 30 June 2009 (unaudited) 6 months ended 30 June 2008 (unaudited) 12 months ended 31 December 2008 (audited)
Cash flow from operating activities $ $ $
profit/ (loss) before tax 1,410,919 170,705 (4,727,900)
Adjustments for:
Depreciation 4,073 2,781 9,850
Share-based payment - - 101,377
Finance income - interest (151,623) (625,097) (986,177)
Finance income - foreign exchange gains (1,696,507) (139,480) -
Finance expense - foreign exchange losses 4,426,533
Foreign exchange differences - - (20,116)
(433,138) (591,091) (1,196,433)
Decrease in trade and other receivables 2,943 50,242 65,880
Decrease in trade and other payables (87,139) (2,057,878) (2,114,973)
Net cash outflow from operating activities (517,334) (2,598,727) (3,245,526)
Cash flows used in investing activities
Interest received 290,624 591,686 981,913
Sale/ (purchase) of investments 9,950,668 - (9,950,668)
Exploration and evaluation expenditure (154,425) (12,236,545) (12,885,059)
Purchase of property, plant and equipment (2,897) - (17,030)
Net cash used in investing activities 10,083,970 (11,644,859) (21,870,844)
Net increase/(decrease) in cash and 9,566,636 (14,243,586) (25,116,370)
cash equivalents
Cash and cash equivalents at the beginning 9,522,035 39,064,938 39,064,938
of the period
Exchange gains/( losses) on cash and 1,696,507 148,546 (4,426,533)
cash equivalents
Cash and cash equivalents at the end 20,785,178 24,969,898 9,522,035
of the period
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the six months ended 30 June 2009
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 2008 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 2009 and 30
June 2008 are unreviewed and unaudited. The comparative financial information
does not constitute statutory financial statements as defined by Section 240 of
the Companies Act 1985. The comparative financial information for the year ended
31 December 2008 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 237(2)-(3) of the Companies Act 1985.
Effective 1 July 2008, 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. Concurrent
with this change in functional currency, the Group adopted the $ as its
presentation currency and consequently the financial information for the six
months ended 30 June 2008 has been re-presented in $.
In accordance with International Accounting Standards, this change in functional
currency has been accounted for prospectively by translating all items using the
$:£ exchange spot rate on that date, being $1.9902:£1. In the parent company
accounts the resulting translated amounts for non monetary items at this date
have been treated as their historic cost.
For the purposes of changing the Group's presentation currency, the comparatives
for the year ended 30 June 2008 were translated for the balance sheet using $:£
exchange spot rate on that date, being $1.9902:£1, for the income statement
using the average $:£ exchange rate during the period being $1.9748:£1, and for
the opening the balances as at 1 January 2008 using the $:£ spot rate on that
date being $1.9796:£1. Resulting exchange differences have been taken to the
Foreign currency reserve.
Changes in accounting policies
In the current financial year, the Group has adopted IAS 1, "Presentation of
Financial Statements" (Revised) and IFRS 8, "Operating Segments".
IAS 1 Presentation of Financial Statements (Revised) includes the requirement to
present a Statement of Changes in Equity as a primary statement and introduces
the possibility of either a single Statement of Comprehensive Income (combining
the Income Statement and a Statement of Comprehensive Income) or to retain the
Income Statement with a supplementary Statement of Comprehensive Income. The
second option has been adopted by the Group. As this standard is concerned with
presentation only it does not have any impact on the results or net assets of
the Group.
2. SEGMENTAL ANALYSIS
For the purpose of segmental information the operations of the group consist of
one operating segment, the exploration for hydrocarbon liquids and gas.
Geographical information
During the period the group's exploration and evaluation activities took place
outside the UK, substantially in the Falkland Islands. All of the exploration
expenditure capitalised during the period took place in the Falkland Islands.
The loss from operations of the group is analysed as follows:
6 months ended 6 months ended 12 months ended
30 June 30 June 31 December 2008
2009 2008 $
$ $
United Kingdom 437,211 588,024 1,287,544
Falkland Islands - 5,848 -
437,211 593,872 1,287,544
Non-current assets of the group are analysed as follows:
At At At
30 June 30 June 31 December
2009 2008 2008
$ $ $
United Kingdom 13,756 4,968 14,929
Falkland Islands 36,195,286 35,392,347 36,040,860
36,209,042 35,397,315 36,055,789
3. PROFIT/ (Loss) per share
The calculation of the basic earnings per share is based on the profit or loss
after tax 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.
Profit/(loss) after tax for Weighted average number of shares Profit/(loss) per share
the period cent
$
basic and diluted
Six months ended 30 June 2009 (unaudited) 1,410,919 194,344,170 0.73
Six months ended 30 June 2008 (unaudited) 89,739 194,344,170 0.05
12 months ended 31 December 2008 (audited) (4,727,900) 194,344,170 (2.43)
4. FINANCE INCOME AND EXPENSE
Finance income 6 months ended 6 months ended 12 months ended
30 June 30 June 31 December 2008
2009 2008 $
$ $
Bank interest receivable 101,963 625,097 951,024
Treasury stock interest 49,660 - 35,153
Exchange gain on cash and other financial assets 1,696,507 139,480 -
1,848,130 764,577 986,177
Finance expense 6 months ended 6 months ended 12 months ended
30 June 30 June 31 December 2008
2009 2008 $
$ $
Exchange loss on cash and other financial assets - - 4,426,533
The foreign exchange gain in the six months ended 30 June 2009 arises on the
treasury stock and cash balances held in £ due to the appreciation of the £
against the $ during the period.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SEMFMDSUSEFU
|