31st Mar 2016 10:55
LONDON (Alliance News) - Borders & Southern Petroleum PLC said Thursday its pretax loss narrowed in 2015 as it cut its expenditure over the year, and said its financial status is "relatively robust in the current environment".
The oil and gas exploration company primarily operating in the Falkland Islands reported a pretax loss of USD2.6 million for the year ended December 31, narrower than the USD3.9 million loss reported in 2014.
This came as administrative expenses fell to USD2.0 million from USD3.0 million and finance expenses were down to USD679,000 from USD910,000.
At the end of December, the company had cash reserves totalling USD14.0 million, down from USD16.1 million a year earlier.
Borders & Southern said the oil industry downturn, triggered by the decline in crude prices, has had a "significant impact of the company's fortunes", and has delayed the timing of the next operations phase on its production licences.
Borders & Southern said it had hoped to secure partners and funding for a new exploration and appraisal drilling programme by now, but has "had to reset expectations". As such, whilst the current production licence period extends through to the end of October 2017, it has applied to the Falkland Islands government for an extension.
Borders & Southern added it was re-assessing how its Darwin development can fit into a low oil price world, and said all its technical and commercial work to date suggests the project is "robust".
"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," said Chairman Harry Dobson.
"As we move forward, we will continue to control costs, undertake good science and maintain our resolve to monetise the Darwin discovery," Dobson added.
Elsewhere, the company said one of its founders, Stephen Posford, who is currently a non-executive director at the company, will retire from his position and step down from the board prior to Borders & Southern's annual general meeting, which usually takes place in June.
Shares in Borders & Southern were down 7.4% at 1.58 pence on Thursday.
By Hannah Boland; [email protected]; @Hannaheboland
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