Borders & Southern Petroleum Plc (LON:BOR) has told investors it is confident that it can take advantage of the upturn in oil prices, if and when it comes, to advance the group’s undeveloped discovery in the waters off the Falkland Islands.
The Darwin gas condensate discovery would cost some US$1.36bn to develop and the AIM quoted company, which at the end of June had just over £12mln in the bank, is among a number of explorers seeking industry partners to take projects forward.
If developed Darwin could yield some 56,000 barrels per day from deep waters to the south of the Falklands, at a break even cost of around US$40 per barrel.
Howard Obee, Borders & Southern chief executive, highlighted: “During this period of continued low oil prices, Borders & Southern has maintained a strategy of strict financial control and a focus on activities that will enhance the attractiveness of the Company's significant condensate discovery.
“Whilst we have not yet been able to secure a partner to help fund the appraisal drilling due to industry capital constraints, we have been able to demonstrate the commercial competitiveness of our Darwin discovery.”
He noted that during the six months ended June 30 the company completed technical projects which have allowed Darwin to be compared against other development opportunities in the oil and gas sector.
And, according to Obee, Darwin compares favourably with benchmark onshore US shale plays and many global offshore pre-sanction projects.
The pre-revenue company reported a US$1.1mln loss for the six months ended June 30, and reported it had US$12.2mln of cash.
The company also, noted, that as it holds the majority of its cash in British pounds the recent currency weakness, following the Brexit referendum, means its reported cash balance (which is in US dollars) was “lower than might have been anticipated”. For reference, it ended the 2015 calendar year with just over US$14mln.