Borders & Southern Petroleum

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Borders & Southern Petroleum PLC
BORLOGO.png
TypePublic limited company
IndustryOil and Gas Producers
Trades asLSE:BOR
Websitewww.bordersandsouthern.com
BOR stock chart

Borders & Southern Petroleum is an oil and gas exploration company incorporated in the United Kingdom in 2004, which aims to explore highly prospective and commercially viable hydrocarbon deposits in previously untapped and unidentified frontier and emerging basins. [1]

The company was granted five exploration licences in the Falkland Islands in 2004, and subsequently established an operating subsidiary, Borders & Southern Falkland Islands Limited, to conduct the exploration activities. [2] [3]

Contents

News

Operations

Borders & Southern holds 100% equity interest in the five production licences composed of 80 blocks and covering an area of 19,598 km2, in the South Falkland Basin, 150 kilometres south east of the Falkland Islands. [4] [5] [6]

The exploration licences granted Borders & Southern exclusive rights to survey, drill, and facilitate production of hydrocarbon at a 9% royalty on production and 26% corporation tax on profits. [5]

Exploration Objective

Borders & Southern hopes to replicate the successes of other oil and gas exploration companies, which hold acreages in the north, east, and west of the company’s own licence. 2D seismic data of about 2,862 kilometres and 3D seismic data covering 1,492 km2 were acquired to understand the geology of the area. The company wants to prove the continuity of the hydrocarbon potential from the east to the west, where numerous large simple structures such as thrust cored anticlines and tilted fault blocks are found. [5]

Darwin Prospect

Borders & Southern’s first of the two-well exploration programme was spudded on 31st January 2012, designed to test the Darwin East prospect, a fault/dip closed structure with a lower cretaceous sandstone reservoir target. The company estimated about 300 million barrels P50 recoverable resource for the amplitude anomaly and about 760 million barrels P50 recoverable resource for the entire structure. [7] [6]

Exploration well 61-17-1 is located approximately 140 kilometres south of the Falkland Islands. The well reached a depth of 4,876 metres and encountered gas condensate. The main reservoir interval was about 84.5 metres thick, with 67.8 metres of net pay at an average porosity of 22%. [8]

However, Borders & Southern did not issue a resource estimate of the discovery stating only that “it is likely to contain significant volumes”. Fluid samples from the reservoir were brought back to the UK for analysis and the company expects to announce the results during the third quarter of 2012. [9]

The well was plugged and abandoned and the rig transferred to the second well targeting the Stebbing prospect. [9]

Stebbing Prospect

On 11th May 2012, Borders & Southern commenced the spudding of the second exploration well 61/25-1 designed to test the Stebbing prospect, a thrust cored anticline covering an area of about 85 km2. The well, which is about 170 kilometres from the Falkland Islands, is referred by the company as a “wildcat exploration well” targeting tertiary and upper cretaceous sandstone reservoirs over a 49-day period. [10]

Directors

Non-Executive Chairman

Aside from being the Non-Executive Chairman, Mr. Dobson is the Chairman of the company’s Remuneration Committee and a member of the Audit Committee. Outside of Borders & Southern, he is the current Chairman of Kirkland Lake Gold, Inc. and Rambler Metals & Mining plc. He had held the same position with a number of resource companies in the past, including American Pacific Mining Company, Inc. and Lytton Minerals Limited. [11]
Mr. Dobson is also engaged in merchant banking and venture capital activities in North America and Europe. He was a former investment banker and senior partner at Yorkton Securities. [11]

Chief Executive Officer

Mr. Obee has been Chief Executive of Borders & Southern since its incorporation in 2004. He started his career with BP in 1985 and left to join BHP Billiton in 1992. He is a trained geologist, with a PhD degree in Structural Geology from Imperial College. He held both technical and commercial roles in the past involving exploration, strategic planning, and business development. He has experience in executing seismic and drilling programmes in frontier basins. [11]

Finance Director

Mr. Fleming holds a Master’s Degree in Business Administration and Finance. Prior to joining Borders & Southern, he held senior positions in exploration and business development, investment evaluation, acquisitions and disposals, and strategic planning back at BHP Billiton, where he spent the majority of his 15 years of experience in the upstream oil and gas industry. [11]

Non-Executive Directors

Mr. Posford is a member of Borders & Southern’s Remuneration and Audit Committees. He was Managing Director of Greenwell Montagu Gilt Edged in 1986 and became Head of Proprietary Trading Department of Salomon Brothers in 1989, becoming the European Chief Executive of the company until he retired in 1996. [11]
Mr. Hurst-Brown is the chairman of Borders & Southern’s Audit Committee and also a member of the Remuneration Committee. He is the Chief Executive of Hotchkis and Wiley (UK) Limited and sits on the Executive Committee of its parent company Hotchkis and Wiley Capital Management LLC. He is a qualified Chartered Accountant and made a career in Fund Management. He was Chairman of Lloyd’s Investment Managers from 1986 to 1990 and moved to Mercury Asset Management as a member of the Board. He became Managing Director at Merrill Lynch Investment Managers in 1997, following the acquisition of Mercury Asset Management by Merrill Lynch. [11]

Share Price

Borders & Southern joined the Alternative Investment Market on 24th May 2005 and raised £10 million during the initial public offering. Before the global financial crisis, its shares were trading above 100 pence until it collapsed to about 15 pence a share. Share prices then slowly went up and traded between 40 and 50 pence in the next three years, with occasional flare ups. [12]

On 18th April 2012, Borders & Southern share price jumped more than 55%, breaking the 100-pence after four years, after rumours of imminent results of its first exploration well. Share price steadily increased, reaching 131 pence by Friday, 20th April 2012, before slipping back to below the 100-pence mark after the company announced the Darwin well encountered gas condensate, rather than oil or natural gas. The company’s stocks were valued at 66.90 pence a share as of 18th May 2012. [12] [13]

References

  1. Company Overview
  2. Operations Overview
  3. Falkland Islands Acreage and Licence Overview
  4. Operations Overview
  5. 5.0 5.1 5.2 Falkland Islands Overview
  6. 6.0 6.1 Technical Summary
  7. Darwin Well Spud
  8. Borders & Southern Slips Back on Condensate Discovery - ADVFN Published News - 23rd April 2012
  9. 9.0 9.1 Darwin East Well Results - 23 April 2012
  10. Stebbing Prospect
  11. 11.0 11.1 11.2 11.3 11.4 11.5 Board of Directors
  12. 12.0 12.1 Borders & Southern Share Price Analysis - London Stock Exchange
  13. Borders & Southern Slips Back on Condensate Discovery - ADVFN Published News - 23rd April 2012
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