http://www.bordersandsouthern.com/home/

http://www.falklands-oil.com/

http://www.fogl.com/

http://www.bgs.ac.uk/falklands-oil/images/legislation/A3Map.jpg

Exploration for oil and gas

Borders & Southern is a UK-based, London Stock Exchange (AIM) listed company, engaged in the exploration for hydrocarbons. The company is focused on frontier or emerging basins where there is potential to identify and commercialise high value prospects.

The company’s first project is located to the south of the Falkland Islands where it holds a 100% interest and operatorship in five Production Licences covering an area of nearly 20,000 sq km. The acreage is completely untested. The company is currently planning its first drilling campaign.

http://www.bordersandsouthern.com/investor_relations/news/RNS/

8 April 2013

Borders & Southern Petroleum Plc

Preliminary Unaudited Results for the 12 months ended

31 December 2012
Borders & Southern Petroleum Plc ("Borders & Southern" or "the Company") (AIM:BOR) announces preliminary unaudited results for the year to 31 December 2012.


Highlights



· Safely executed a two well drilling programme in the Falkland Islands

· Reported a gas condensate discovery with the Company's first exploration well - current estimated most likely recoverable resource: 200 million barrels

· Completed post-well sub-surface, engineering and commercial evaluations

· Reduced risk profile of the prospect inventory

· Entered second exploration phase of the licences

· Post year-end activities - completed 3D seismic acquisition and commenced farm-out process

· Cash balance as at 31 December 2012: $56 million



Harry Dobson, Borders & Southern's Non-Executive Chairman, commented:

"Last year Borders & Southern enjoyed its first taste of exploration success. In April 2012 the Company announced a gas condensate discovery with its first exploration well. Subsequent post-well technical studies have endorsed our initial opinion that Darwin has the potential to develop into a significant field. Furthermore, the discovery well (61/17-1) has opened up a new hydrocarbon basin, proved the Early Cretaceous play fairway and significantly reduced the risk profile of the Company's prospect inventory.



Building on this success, the Company has defined an ambitious work programme for the next two years. This includes further technical evaluation, 3D seismic acquisition and processing, reprocessing of existing 3D seismic, securing a partner and a rig contract, well planning and finally the drilling of both appraisal and exploration wells. At the conclusion of this programme, the Company hopes to have established a core area comprising an appraised discovery that can be taken forward for project sanction and prospects that could add further significant value."

http://oilbarrel.com/news/borders-southern-completes-3d-seismic-as-it-continues-to-digest-the-results-of-its-darwin-discoveryApril 15, 2013

Borders & Southern Completes 3D Seismic As It Continues To Digest The Results Of Its Darwin Discovery



You wouldn't know it from the share price but 2012 was a breakout year for AIM-quoted Borders & Southern Petroleum. The company, which has three licences in the South Falkland Basin that stretch for nearly 10,000 sq km, made a gas-condensate strike with its first wildcat in these untested waters, Darwin, which carries a most likely recoverable resource of 200 million barrels.


This was a key event, not only for the company but also for the islands, opening up a new hydrocarbon basin and proving the early Cretaceous play fairway. The company points out that the discovery has “profound implications” for its nearby prospects, helping to de-risk its portfolio. Yet the shares are knocking along at around 20 pence per share, a fraction of the 52-week high of 139 pence just ahead of the discovery announcement in April 2012.

In part this is a reflection of the realities of working in these remote and challenging waters. The shares suffered as investors digested the gassy nature of the well – oil is the much hoped for but still elusive target in these southern waters. Then Borders' second well, on the Stebbing prospect, came back empty while the much-anticipated two well programme by fellow explorer Falklands Oil & Gas, which has the dominant acreage position in these waters to the south and east of the islands, also disappointed, again pointing to a gassy basin and poor quality reservoirs.

This hit sentiment as this kind of challenging location needs reservoirs of scale and quality to justify investment. But it is still very early days and last year's drilling programmes have delivered a wealth of information to help operators refine their models and derisk prospect inventories.

Technical evaluation of the Darwin gas condensate discovery is progressing well, with the initial estimate of recoverable liquids in the range of 130 to 250 million barrels – and the company suggests this might be conservative. It also boldly claims that, if confirmed by appraisal drilling, this find could be both technically and commercially viable using existing technology. Some will feel this is unlikely and that more resources will need to be proved before greenlighting development given that costs of operating in the southern Atlantic (importantly last year's wells did demonstrate it is possible to work safely year-round in these harsh weather conditions and, given the animosity of Argentina, successfully manage the complicated logistics of a stretched supply chain).

The London-based company, which ended last year with cash of US$56 million, has now entered the second exploration phase on its licences. This commits it to drill one exploration well and relinquish 50 per cent of its acreage – some of the relinquished acreage included structurally very complex geology and very deep waters in an area the company expects to have limited reservoir development. It has just completed a 3D survey shoot over its acreage and has started the hunt for farm-in partners to help fund future drilling; it hopes to mobilise a rig in late 2014 or early 2015.

This means there will be something of a lull before the drillbit turns again. The next milestone will be the results of the 1,025 sq km 3D seismic survey – a fast-track product will be ready for interpretation in three months but the full dataset will take nine months – and landing a partner with the financial muscle and technical competence to take this project to the next stage.

As FOGL as shown on its blocks, heavyweights are prepared to take on these risks with it successfully bringing in Edison and Noble Energy as partners – with Noble making it clear that it is oil is hoping to find in these waters. 2012 was a big year for these companies but it is the events of the next 12-18 months, as 3D seismic is calibrated with well data, and new partners brought in, that could really pave the groundwork for future exploration success in the Falklands.

Chief Executive's Statement



During the first half of the year the Company received the final processed data from the 2013 3D seismic acquisition programme along with the reprocessed data of the 2008 3D seismic survey. The two surveys have been merged together to form one continuous volume covering an area of just over 2,500 square kilometres. Based on this new data and our Phase 2 reservoir engineering study, in June of this year we reported that our estimated most likely recoverable resource for Darwin (East and West combined) was 263 million barrels of condensate from a wet gas in place estimate of 2.6 tcf. It was also noted that this number could increase if the appraisal programme confirms additional reservoir intervals.



Detailed technical analysis of the Darwin East discovery continues, including the selection of potential appraisal well locations. Evaluation of nearby prospects is also underway. Initial mapping has identified numerous amplitude anomalies at the same stratigraphic interval as the Darwin reservoir. The next phase of the evaluation is to complete a detailed seismic reservoir characterisation study, using the well data to calibrate the seismic response. It is hoped that the study may allow us to differentiate between oil, gas and water charged reservoir and therefore rank the anomalies and prospects that have been identified. This work, currently in the planning stage, will continue through the fourth quarter of 2014..



Our main commercial thrust has been to bring partners into our acreage. Discussions with companies continue and our objective is to reach a conclusion so that we can participate in the 2015 Falkland Islands drilling programme that has been announced by other companies operating in the Falkland Islands. The conceptual well designs for an exploration and appraisal programme with associated logistical planning is in an advanced stage allowing us to join the consortium as soon as partnering and funding has been secured.



In the six month period to 30 June 2014, the Company reports a loss of $0.9 million (30 June 2013: $3.3 million loss). Administrative expenses for the six month period were $1.7 million (30 June 2013: $1.4 million). The cash balance remains strong at $21.5 million.

Chairman's Statement
Industry Setting
The industry downturn, triggered by the decline in the oil price, has had a significant impact on the Company's fortunes. Brent has fallen from around $110 per barrel in mid 2014, to around $35 per barrel at the end of 2015. This sustained low oil price has caused companies to make dramatic reductions in their expenditure, delay major capital projects and reduce or stop taking on new opportunities. This has made it a particularly challenging environment for us in which to conduct a farm-out. There are as many views on future oil price trends as there are analysts and commentators, with little consensus at the moment. Most believe a recovery will occur, but to what level and exactly when, there is no agreement. Consequently, companies are trying to re-base their operations to weather a low cost, low oil price world.

Financial Position
Borders & Southern's financial status is relatively robust in the current environment, with a strong balance sheet and no debt. We ended the year with a cash balance of $14.0 million, compared to $16.1 million at the end of 2014. Like most companies in our sector, we have reduced our expenditure. The 2015 administrative expense was $1.97 million compared to $3.04 million in the previous year. This reduced expenditure has not impacted our ability to progress technical work and advance our understanding of our assets. We intend to maintain this capital discipline throughout 2016 and beyond.

Project Status
The industry recession has delayed the timing of the next operations phase on our Production Licences. We had hoped to have secured partners and funding for a new exploration and appraisal drilling programme by now, but have had to reset our expectations. So whilst the current Production Licence period extends through to the end of October 2017, we have applied to the Falkland Islands Government for an extension.

From a sub-surface point of view we have continued to make good progress. Earlier in 2015, we announced an upgrade in the combined Darwin East and West recoverable resource estimate (Best estimate P50: 360 million barrels of condensate) and described some of the surrounding prospects in more detail. We continue to work the Early Cretaceous shallow marine sandstone play fairway in detail, re-mapping the discovery and analysing the seismic response on near-field prospects with the aim of developing reliable predictive models for hydrocarbon presence and phase.

Additionally, we have spent time re-assessing our basin models, incorporating the results from recent drilling activity by other operators. The Humpback well was located over 250 km northeast of Darwin and its findings have no impact on the prospectivity of our Licences. In fact, our recent regional basin analysis has re-enforced our belief that our Licences are optimally located in the South Falkland Basin.

Current technical work is aimed at re-assessing how a Darwin development would fit into a low oil price world. We know that the combination of competitive fiscal terms in the Falkland Islands and excellent reservoir characteristics of the Early Cretaceous shallow marine sandstone makes a development competitive on the cost curve against other deep water developments. However, we need to assess just how commercial a project would be in a period of sustained low oil prices. Previously we had considered 2 to 3 appraisal wells and 10 development wells (6 producers, 4 gas re-injectors) with sub-sea tie back to an FPSO. New reservoir engineering studies are looking at reduced well count models. Outputs from this work will feed into a fresh look at facilities engineering concepts and costs and, in turn, a new economic evaluation. If we can clearly demonstrate the commercial viability of a development in a low oil price environment, it should assist the farm-out process.

Outlook
All our technical and commercial work to date suggests that Darwin is a robust project, even in a low oil price environment. The principal risk for the Company over the next 12 months is that a sustained low oil price will cause further delay to our farm-out and hence funding for the next phase of operations. We have positioned the Company so that our strong balance sheet will allow us to withstand an extended period of reduced industry activity. As we move forward, we will continue to control costs, undertake good science and maintain our resolve to monetise the Darwin discovery.

Finally, Stephen Posford, 69, one of the Company's founders and a member of the Board since the Company's inception, has announced that he intends to retire from business activities and will step down from the Board prior to the AGM. Stephen has played an influential role in the development of the Company, which included the significant gas condensate discovery in 2012. On behalf of all the Directors I would like to thank Stephen for his contribution and wish him a healthy, happy and long retirement.

Harry Dobson

Darwin Independent Evaluation
Borders & Southern (AIM: BOR), the London based independent oil and gas exploration company with assets offshore the Falkland Islands, announces the results of an independent evaluation of the Darwin East discovery and the adjacent Darwin West untested fault block.

Highlights
· Substantial increase in estimated resource. Un-risked Best Estimate total recoverable liquids (condensate and LPG) for Darwin East and West is 462 MMbbl.

· The geological chance of success of finding hydrocarbons in a well located on Darwin West is assessed to be 0.81.

Borders & Southern asked Gaffney, Cline & Associates (GCA) to perform an independent evaluation of the Darwin East gas condensate discovery along with the adjacent, technically similar fault block, Darwin West. GCA was given access to the Company's extensive 3D seismic and well data, including technical studies, interpretations and dynamic models of the reservoir.