Borders & Southern Petroleum plc GBP2.5 million Fundraising (9986H)

TIDMBOR

RNS Number : 9986H

Borders & Southern Petroleum plc

30 November 2022

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN, IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO ANY MEMBER STATE OF THE EUROPEAN ECONOMIC AREA, THE UNITED STATES (OR TO ANY U.S. PERSON), CANADA, JAPAN, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED IN ARTICLE 7 OF THE MARKET ABUSE REGULATION EU NO. 596/2014, AS RETAINED AND APPLICABLE IN THE UK PURSUANT TO SECTION 3 OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

30 November 2022

Borders & Southern Petroleum plc

("Borders & Southern" or the "Company")

GBP2.5 million Fundraising

Borders & Southern (AIM: BOR), the London based independent oil and gas exploration company with assets offshore the Falkland Islands, is pleased to announce that it has raised GBP2.5 million, before expenses to advance studies in its 100% Darwin Gas Condensate discovery. The fundraising comprises a Firm Placing, using existing pre-emptive allotment authorities and a Conditional Placing and a Conditional Subscription, both conditional on shareholder approval to disapply pre-emption rights.

The fundraising will comprise, subject to the necessary shareholder approval being granted, the issue, in aggregate of 142,857,138 is new ordinary shares in the Company ("Ordinary Shares") at a price of 1.75 pence (the "Issue Price") per new Ordinary Share (the "Fundraising"). The Issue Price is an approximate 44 per cent. discount to the Company's closing price of 3.15 pence on 30 November 2022.

Highlights of the Fundraising:

-- The Company is committed to advancing its 100% interest in its large Gas Condensate discovery at its Darwin asset, which contains over 3.2 TCF GIP (unrisked, Best Estimate) and 462 MMbbl of Liquids designated Contingent & Prospective Resources (unrisked, Best Estimate), split across Darwin East & West, and as independently assessed under the SPE PRMS Standard

-- Scoping project economics by Management suggest that a phased development project with initial production of 26,000 bbl/d from Darwin East could deliver NPV(10) of $4/bbl to $10/bbl dependent on oil price (range $60 to $90 per barrel).

-- GBP1.85 million raised through a firm placing of 105,714,281 Ordinary Shares (the "Firm Placing Shares") at the Issue Price (the "Firm Placing")

-- GBP0.3 million raised through the conditional placing of 17,142,857 Ordinary Shares (the "Conditional Placing Shares") at the Issue Price (the "Conditional Placing")

-- GBP0.35 million raised through the conditional subscription direct with the Company by Harry Dobson, the Company's Non-Executive Chairman of 20,000,000 Ordinary Shares (the "Conditional Subscription Shares") at the Issue Price (the "Conditional Subscription")

Use of Proceeds

The proceeds of the Fundraising will be used to fund the Company's Licence fees, Discovery Area fees, technical and commercial studies, general & administrative expenses and, more generally, to advance the Company's Darwin project towards appraisal.

Howard Obee, Chief Executive Officer of Borders & Southern, commented:

"This Fundraising will allow us to advance further technical and commercial studies for a potential appraisal and development of Darwin via a conventional FPSO and phased development concept.

"This is a period of elevated world-wide energy prices and increasing global E&P activity and Darwin is a large undeveloped discovery with attractive scoping economics. We look forward to reporting on the phased development concept as our studies progress.

"We would like to thank existing shareholders and new investors for their support in the Fundraising."

General Meeting

The Company is to utilise current allotment authorities to deliver the Firm Placing. The Company requires further authorities to deliver the Conditional Placing and the Conditional Subscription and a general meeting to provide these authorities (the "General Meeting") will be held on or about 20 December 2022. A circular to convene the General Meeting will be circulated to shareholders of the Company shortly. The General Meeting will propose resolutions to shareholders to grant the board authority to allot each of the Conditional Placing Shares and the Conditional Subscription Shares are on a non-pre-emptive basis and to provide a further general authority on a non-pre-emptive basis until the annual general meeting for the Company to be held in 2023 to replace those authorities which will have been utilised by the Firm Placing. Once published, the circular will be available to download from the Company's website. It is important that shareholders lodge their votes in advance of the General Meeting through submission of their proxy votes. A further announcement will be made on publication of the Circular.

Director Participation and Related Party Transaction

Harry Dobson, the Company's Non-Executive Chairman, is the sole participant in the Conditional Subscription, details on which are outlined below:

 
 Director        Position         Conditional     Shareholding 
                                   Subscription    following Second 
                                   Shares being    Admission 
                                   subscribed 
                                   for 
                 Non-Executive 
 Harry Dobson     Chairman        20,000,000      81,372,000 
                ---------------  --------------  ------------------ 
 

Harry Dobson's existing shareholding in the Company, amounting to 10.44%, is held by Zila Corporation. Mr Dobson is expected to have a result shareholding percentage in the Company of 8.9% post-First Admission and 11.1% post-Second Admission.

The participation in the Conditional Subscription by Harry Dobson is a related party transaction for the purposes of AIM Rule 13 of the AIM Rules for Companies due to Mr Dobson being a director of the Company, and a Substantial Shareholder. The Directors of the Company independent of Mr Dobson consider, having consulted with Strand Hanson Limited, the Company's Nominated Adviser, that the terms of the Conditional Subscription are fair and reasonable in so far insofar as the Company's shareholders are concerned.

Admissions and Total Voting Rights

Application has been made for admission of the Firm Placing Shares to trading on AIM ("First Admission") and it is expected that First Admission will occur on or around 6 December 2022. The Firm Placing Shares will rank pari passu with the existing Ordinary Shares of 1 pence each in the capital of the Company ("Ordinary Shares").

Following First Admission (of the Firm Placing Shares), the total issued share capital of the Company will consist of 693,671,599 Ordinary Shares each with voting rights. The Company does not hold any Ordinary Shares in treasury. Therefore, the total number of voting rights in the Company will be 693,671,599 and this is the figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure Guidance and Transparency Rules.

Application will be made for the Conditional Placing Shares and Conditional Subscription Shares (together, the "Second Admission Shares"), to trading on AIM following the requisite resolutions being passed at the General Meeting ("Second Admission") and it is expected that Second Admission will occur on or around 21 December 2022.

For further information please visit www.bordersandsouthern.com or contact:

 
 Borders & Southern Petroleum plc 
  Howard Obee, Chief Executive 
  Tel: [phone] 
 
   Strand Hanson Limited (Nominated Adviser) 
   Ritchie Balmer / James Bellman 
   Tel: [phone] 
 
   SP Angel Corporate Finance LLP (Broker) 
   Richard Hail / Stuart Gledhill / Adam Cowl 
   Tel: [phone] 
 
   Tavistock (Investor Relations) 
   Simon Hudson / Nick Elwes 
   Tel: [phone] 
 

Notes:

Borders & Southern Petroleum plc is an oil & gas exploration company listed on the London Stock Exchange AIM (BOR). The Company operates and has a 100% interest in three Production Licences in the South Falkland Basin covering an area of nearly 10,000 square kilometres. The Company has acquired 2,517 square kilometres of 3D seismic and drilled two exploration wells, making a significant gas condensate discovery with its first well.

-ends-

Glossary

 
 bbl                     barrel 
 Best Estimate           With respect to resources categorization, 
                          the most realistic assessment 
                          of recoverable quantities if only 
                          a single result were reported. 
                          If probabilistic methods are used, 
                          there should be at least a 50% 
                          probability (P50) that the quantities 
                          actually recovered will equal 
                          or exceed the best estimate. 
                        ------------------------------------------ 
 Condensate              A mixture of hydrocarbons (mainly 
                          pentanes and heavier) that exist 
                          in the gaseous phase at original 
                          temperature and pressure of the 
                          reservoir, but when produced, 
                          are in the liquid phase at surface 
                          pressure and temperature conditions. 
                          Condensate differs from NGLs in 
                          two respects: (1) NGL is extracted 
                          and recovered in gas plants rather 

                          than lease separators or other 
                          lease facilities, and (2) NGL 
                          includes very light hydrocarbons 
                          (ethane, propane, or butanes) 
                          as well as the pentanes-plus that 
                          are the main constituents of condensate. 
                        ------------------------------------------ 
 Contingent Resources    Those quantities of petroleum 
                          estimated, as of a given date, 
                          to be potentially recoverable 
                          from known accumulations by application 
                          of development projects, but which 
                          are not currently considered to 
                          be commercially recoverable owing 
                          to one or more contingencies. 
                        ------------------------------------------ 
 GIP                     The total quantity of gas that 
                          is estimated to exist originally 
                          in naturally occurring reservoirs, 
                          as of a given date. 
                        ------------------------------------------ 
 MM                      million 
                        ------------------------------------------ 
 Liquids                 A mixture of light hydrocarbons 
                          that exist in the gaseous phase 
                          in the reservoir and 
                          are recovered as liquids in gas 
                          processing plants. NGLs differ 
                          from condensate in 
                          two principal respects: (1) NGLs 
                          are extracted and recovered in 
                          gas plants rather 
                          than lease separators or other 
                          lease facilities, and (2) NGLs 
                          include very light 
                          hydrocarbons (ethane, propane, 
                          or butanes) as well as the pentanes-plus 
                          that are 
                          the main constituents of condensates. 
                        ------------------------------------------ 
 Prospective Resources   Those quantities of petroleum 
                          estimated, as of a given date, 
                          to be potentially recoverable 
                          from undiscovered accumulations 
                          by application of future development 
                          projects. 
                        ------------------------------------------ 
 TCF                     Trillion cubic feet 
                        ------------------------------------------ 
 NPV(10)                 Net present value of estimated 
                          future net cash flows discounted 
                          at a 10% interest rate 
                        ------------------------------------------ 
 SPE                     Society of Petroleum Engineers 
                        ------------------------------------------ 
 SPE PRMS Standard       The Petroleum Resources Management 
                          System (PRMS) is a system developed 
                          for consistent and reliable definition, 
                          classification, and estimation 
                          of hydrocarbon resources. The 
                          Oil and Gas Reserves Committee 
                          has completed the revision of 
                          the Petroleum Resources Management 
                          System (PRMS) and the SPE Board 
                          approved it in June 2018. 
                        ------------------------------------------ 
 

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November 30, 2022 02:00 ET (07:00 GMT)