Borders & Southern Petroleum plc said it might need to raise additional funds before mid-2023 if it fails to find a farm-out partner for its oil and gas licences offshore Falkland Islands.
FINANCES
The company’s decision was included in its audited results for 12 months ended 31 December 2021, which showed its cash balance fell by nearly two thirds to $0.714 million (2020: $2.18m)
Operating loss remained flat at $1m (2020: $1m) while administrative expenses marginally rose to $1.1m (2020: $1m).
The company added that its farm-out process continued and that it was currently evaluating “different development options including an accelerated production development”.
Post-year, Borders & Southern extended its production licences and discovery area until 31 December 2022.
The decrease in the company’s cash balance resulted in the company deciding to raise post-year additional funds of $1.8m through a subscription and open offer.
GOING CONCERN
“We believe this [fundraise] provides sufficient funding for the company until early 2023 so in the absence of a farm-out agreement bringing in working capital into the company, additional funds may need to be raised before mid 2023,” wrote chairman Howard Dobson and chief executive Howard Obee in their review.
“These events or conditions indicate the existence of a material uncertainty which may cast doubt on the group and parent company’s ability to continue as a going concern and therefore that the group and company may be unable to realise their assets in the normal course of business.”
They added the company would continue to promote the development, although it was unclear what bearing energy security would have on oil and gas companies’ strategies and on Borders & Southern’s ability to attract partners to the Darwin project.
The company operates and has a 100% interest in three production licences covering nearly 10,000km2 in the South Falkland Basin.