borders&southern
petroleum plc
2008
annual reports & accounts ii Borders & Southern Annual Report 2008
01 Highlights
03 Chairman’s Statement
05 Chief Executive’s Review
07 Financial Review
08 Board of Directors
09 Directors’ Report
12 Audit Committee Report
13 Remuneration Committee 
Report
14 Independent Auditors’ Report
17 Consolidated Income Statement
18 Consolidated Balance Sheet
19 Consolidated Statement of 
Changes in Equity
20 Company Balance Sheet
21 Company Statement of Changes 
in Equity
22 Consolidated Cash Flow 
Statement
23 Company Cash Flow Statement
24 Notes forming part of the 
Financial Statements
39 Corporate Directory
40 Notice of Annual General 
Meeting Borders & Southern Annual Report 2008 1
 Completed 3D seismic acquisition and processing
 Completed the interpretation of the fast track and fully 
processed data
 Integrated 3D interpretation into regional evaluation
 Compiled ranked prospect inventory
 Concluded benthic sampling programme 
 Progressing Environmental Impact Assessment
 Cash balance as at 31 December 2008 was US$19.5 million
Highlights 2 Borders & Southern Annual Report 2008 Borders & Southern Annual Report 2008 3
Activity in 2008 has seen the Company 
focus on its technical objectives. During 
this period we have completed the 
acquisition and processing of a large 3D 
survey and finalised its interpretation. 
The results of this work have yielded 
what we believe to be a very attractive 
and exciting prospect inventory.
Against a challenging economic background, 
the Company, whilst experiencing a decrease in 
value along with market trends, has performed 
well relative to its peer group of AIM listed 
Exploration & Production Companies. We also 
have a strong cash balance. 
During the period we have witnessed the oil price 
decline from $147 per barrel down to around 
$35 per barrel. Recently the oil price has showed 
signs of recovery with prices approaching $60 
per barrel again. However, it should be noted that 
our projects in the Falkland Islands are likely to 
be commercial at the $35 level.
Whilst we cannot impact the external 
environment, we can influence the technical 
evaluation by the correct choice of data 
acquisition and the areas we select in which 
to collect the data. In this regard, the Board 
of Directors considers that it has been very 
successful. Multiple, high quality, large volume 
prospects have been defined, many of which 
are supported by geophysical attributes of 
the type we had hoped for at the onset of the 
exploration programme.
With the completion of the main phase of 3D 
seismic interpretation there will be no further 
requirement for additional data acquisition 
prior to drilling a well. We are now in a position 
to define drilling locations on our prioritised 
prospects. As we have previously reported, the 
first two high-graded prospects are Darwin 
and Stebbing.
As we look forward, technical work will continue 
but our energy will be placed into bringing a 
partner into the licences to help fund the wells. 
Given the scale and quality of the prospect 
inventory we are optimistic that we can attract a 
credible partner. 
Chairman’s Statement
Borders & Southern Petroleum has a 100% interest in five deep 
water production licenses in the South Falkland Basin (80 blocks, 
nearly 20,000 sq km). The basin is untested, comprising similar 
geology to the contiguous Malvinas and Magallanes Basins to the 
west where discoveries of approximately six billion barrels of oil 
equivalent have been reported. 4 Borders & Southern Annual Report 2008 Borders & Southern Annual Report 2008 5
The technical programme undertaken in 
2008 involved the acquisition, processing 
and interpretation of 1,492 sq km of 3D 
seismic data. The 3D data has been fully 
integrated into our regional evaluation 
so that we now have a comprehensive 
understanding of the South Falkland 
Basin. As a result, not only have we been 
able to define a high quality multi-billion 
barrel (recoverable) prospect inventory, 
but also identify those play types within 
the basin that we think are most likely to 
deliver success.
As previously reported, the step change in 
understanding from 2D to 3D seismic data 
has been dramatic and justifies the size and 
expenditure of the 3D survey. Prospect sizes 
are large (up to 150 sq km of mapped structural 
closure) and display important geophysical 
attributes that help reduce the risk. These include 
seismic amplitude conformance to structure, flat 
spot and AVO anomalies, along with gas hydrates 
located above prospects. We interpret these 
seismic attributes to indicate that the structures 
have received a hydrocarbon charge.
Individual prospect volumes in some cases 
exceed 1 billion barrels of recoverable oil. 
The previously reported Darwin and Stebbing 
prospects have P50 recoverable oil volumes of 
300 million and 710 million barrels respectively. 
Additional stacked reservoirs on the same 
structures could increase these numbers. These 
prospects represent different play types and 
have been prioritised due to the chance of 
success rather than size. 
Whilst the exploration drilling programme will 
target high-graded oil prospects, each prospect 
has also been considered as a gas case. If gas 
was the only outcome, and we consider it 
unlikely, then the prospect gas volumes would 
be sufficient to justify an LNG development. 
Individual prospect volumes can exceed (P50) 
5 trillion cubic feet of recoverable gas.
Chief Executive’s Review
 6 Borders & Southern Annual Report 2008
Chief Executive’s Review (continued)
Aside from producing a ranked prospect 
inventory we have conducted a benthic sampling 
programme, one of the key requirements for the 
Environmental Impact Assessment (EIA). The 
operations were completed efficiently and the 
analysis is currently underway. Once the EIA has 
been submitted and approved we will be ready 
to drill and should the opportunity arise will be 
able to share in a combined drilling operation 
with other operators in the area.
Whilst the Company has a strong cash balance it 
does not have sufficient funds to execute a two 
well programme. Given the economic climate 
the Board has decided the best way to finance 
our wells is to seek a partner. Within the coming 
months we will further discussions with third 
parties and will report later in the year. Given 
the strength of the prospect inventory, scale of 
opportunity and the quality of the geophysical 
attributes, the Board is confident of securing a 
competent partner.
The naming theme for our 
prospects has been chosen to 
celebrate the exploration voyage of 
HMS Beagle under the command 
of Robert FitzRoy. Each prospect is 
named after a member of the crew 
or passenger on the ship. During 
the Beagle’s circumnavigation of 
the world it carried out important 
surveying work of the South 
American coastline, including the 
Falkland Islands where it stopped 
twice in 1833 and 1834. 
Charles Darwin joined the voyage 
as a companion to Robert FitzRoy. 
Famous for his observations and 
theories as a naturalist, which led 
to the publication of his work On 
The Origin of Species, Darwin was 
also a very good geologist. He had 
been inspired by the work of Charles 
Lyell and carried Lyell’s book 
“Principles of Geology” with him on 
the voyage. This book suggested that 
modern day geological processes 
such as sediment erosion and 
deposition and volcanic eruptions 
had occurred in the past. Because of 
the incredibly slow pace of many of 
these processes, it pointed towards 
a vast timescale for the age of the 
earth, a very controversial issue at 
the time. Darwin’s own observations 
from the voyage supported this 
view.  He collected many geological 
specimens, including fossils from 
the Falkland Islands, now kept 
in the Natural History Museum 
in London.
As explorers for oil and gas we 
use many of the basic principles of 
geology described in Lyell’s book to 
help us understand the sedimentary 
basins responsible for the generation 
and entrapment of hydrocarbons. 
Today, with the advancement of 
science, we now know that the age 
of the source rocks surrounding the 
Falklands (those organic rich rocks 
responsible for the generation of 
hydrocarbons) are between 120 and 
160 million years old.
Prospect Inventory – Key Features
 Multi-billion barrel recoverable prospect potential
 Structurally robust prospects up to 150 sq km in area
 Amplitude conformance to structure
 Credible flat spot and AVO anomalies
 Gas Hydrates above prospects
 Multiple play types and large prospect inventory Borders & Southern Annual Report 2008 7
As you will have read elsewhere in this 
report, the Company completed the 3D 
seismic acquisition in the first quarter 
of the year and spent the balance of 
the year processing and interpreting 
the data. All of this was fully funded 
through the two private share 
placements during 2007. 
As a result, the Company is fortunate to have 
around US$19.5 million in cash at year end 
which was held in near term bank deposits and 
UK Treasury Stock.
Looking forward, it is clear that drilling activity 
in the Company’s licenses is the next key 
objective and the most significant potential 
capital expenditure.  We are currently actively 
seeking a partner, via a farm-out, to fund these 
costs in return for equity in the licenses. It is not 
clear, at this stage, the impact such a farm-out 
transaction would have on the Company’s cash 
position and it’s forward capital commitments. 
However, given that we go into the farm-out 
process with both a strong cash balance and 
technical case, we feel that we are well placed to 
attract a favourable outcome.
This year the Company’s functional currency 
changed to US$ reflecting the nature of the 
Company’s activities and at the same time the 
presentation currency changed to US$ to be 
more comparable with peer group companies. 
As a result, the Group is now exposed to 
foreign exchange movements on its balances 
and transactions denominated in £, whereas 
in the prior year, the Group was exposed on its 
balances and transactions in US$.
The Group made a loss for the year of $4.7m 
(2007: $0.3m). This was primarily due to a 
$4.4m (2007: nil) foreign exchange loss on £ 
denominated cash and other financial assets due 
to the devaluation of the £ against the $ during 
the second half of the year. Administrative costs 
for the year were $1.3m (2007: $1.7m) and in line 
with expectations.
Capital additions of $12.9m (2007: $19.9m) 
to the Group’s oil and gas exploration and 
evaluation assets were made during the year.
As you can see from the charts, despite the 
financial turmoil during 2008 and 2009 to date, 
the Company’s shares have performed well 
both in absolute terms and relative to our AIM 
listed peers.
Financial Review
BOR.L
3/1/2008 3/4/2008 3/7/2008 3/10/2008 3/1/2009 3/4/2009
Pence/Share
0
20
40
60
80
100
120
140
3/1/2008 3/4/2008 3/7/2008 3/10/2008 3/1/2009 3/4/2009
Indexed to 100
WTI Oil
AIM Oil & Gas Index
BOR.L
0
100
200
300
400
500 8 Borders & Southern Annual Report 2008
Number of Meetings Board
Remuneration 
Committee
Audit 
Committee
Harry Dobson 3 1 2
Howard Obee 3 – –
Peter Fleming 3 – –
Stephen Posford 3 1 2
Nigel Hurst-Brown 3 1 2
Board of Directors
David Harry Williamson Dobson 
(Non-Executive Chairman) age 61
Harry Dobson is a former investment banker and senior partner of Yorkton Securities. He currently engages in 
various merchant banking and venture capital activities in North America and Europe, and has acted as Chairman 
of a number of resource companies (including American Pacific Mining Company Inc. and Lytton Minerals Limited). 
He is currently the Chairman of Kirkland Lake Gold Inc. (a Toronto Stock Exchange and AIM quoted Company) and 
Rambler Metals and Mining plc (an AIM quoted Company). He is experienced in the organisation and funding of 
resource projects, including those located in inaccessible locations.
Howard Kevin Obee 
(Chief Executive) age 49
Howard Obee was appointed Chief Executive when the Company was incorporated in June 2004. He has a PhD in 
structural geology from Imperial College, and has spent 20 years in the oil industry, initially with BP (1985-1992), and 
subsequently with BHP Billiton (1992-2004). He trained as an exploration geologist, but has been appointed to various 
technical and commercial roles, incorporating exploration, new ventures, strategic planning, and business development. 
His most recent roles for BHP Billiton were West Africa Asset Team Leader, and Exploration Manager, London. He has 
experience of executing seismic and drilling programmes in frontier basins, including those in deep water.
Peter William Fleming 
(Finance Director) age 47
Peter Fleming has over 12 years of upstream oil and gas experience, the majority of which was gained at BHP Billiton 
both in London and Melbourne. Whilst at BHP Billiton, Peter held senior positions in exploration and business 
development, investment evaluation, acquisitions and disposals and strategic planning. Prior to joining BHP Billiton, 
he worked for Bridge Oil and Banque Indosuez. He holds Masters degrees in Business Administration and Finance.
Stephen James Douglas Posford 
(Non-Executive Director) age 62
Stephen Posford was a partner of stockbrokers W.Greenwell and Co. In 1986, he became Managing Director of 
Greenwell Montagu Gilt Edged, and in 1989 moved to Salomon Brothers to head up their proprietary trading 
department in London. He then became Salomon Brothers European CEO before retiring in 1996.
Christopher Nigel Hurst-Brown 
(Non-Executive Director) age 57
Since qualifying as a Chartered Accountant, Nigel Hurst-Brown has pursued a career in fund management. From 
1986-1990 he was Chairman of Lloyd’s Investment Managers. In 1990 he moved to Mercury Asset Management 
as a main board Director and following Mercury’s acquisition by Merrill Lynch in 1997 became a Managing Director 
of Merrill Lynch Investment Managers. Currently he is Chief Executive of Hotchkis and Wiley (UK) Limited and a 
member of the Executive Committee of its US parent Hotchkis and Wiley Capital Management LLC. Borders & Southern Annual Report 2008 9
Directors’ Report 
for the Year Ended 
31 December 2008
The directors present their report and the 
audited consolidated financial statements for 
the year ended 31 December 2008.
Domicile
The parent company of the group (which is 
also the ultimate parent), Borders & Southern 
Petroleum Plc, is a public limited company and is 
registered and domiciled in England.
Principal activity
The principal activity of the group is the 
exploration for oil and gas.  
Results and dividends
The group income statement is set out on 
page 17 and shows the result for the year.
The directors do not recommend the payment of 
a dividend.
Review of business and future developments 
A review on the operations of the group is 
contained in the Chief Executive’s Review and 
Financial Review on pages 5-7. 
Principal risks and uncertainties and financial 
risk management
Exploration risk
The exploration for and development of 
hydrocarbons is speculative and involves a 
high degree of risk. These risks include the 
uncertainty that the Group will discover 
sufficient oil or gas to exploit commercially.
Financial risk management
The company’s operations are such that it has 
a limited exposure to a variety of financial 
risks. These may, from time to time, include the 
effects of changes in price risk, liquidity risk and 
a foreign exchange risk. The company does not 
use derivative financial instruments to manage 
interest rate or currency risks and as such, no 
hedge accounting is applied.
Given the size of the company, the directors 
have not delegated the responsibility of 
monitoring financial risk management to a 
sub-committee of the board. The company’s 
management implements the policies set by the 
board of directors.
Price risk  
The company is exposed to price risk due to 
normal inflationary increases in the purchase 
price of goods and services. The company has 
no exposure to equity securities price risk, as it 
holds no listed or other equity investments.
Liquidity risk 
The company has no long term commitments and 
is able to satisfy any current liability from cash 
reserves. 
Foreign exchange risk
The company has potential exposure due 
to some of its purchases being invoiced in 
currencies other than the US dollar functional 
currency. The exposure relates mainly to items 
denominated in £. To mitigate the risk, the 
company when it becomes aware of a liability in 
a different currency, seeks to minimise the risk 
by either immediately converting the required 
funds to the relevant currency or taking out a 
forward contract. Other than forward contracts, 
the company does not use any other type of 
currency hedging.
Key performance indicators 
The Company’s key performance indicators 
(discussed in the Chief Executive’s Review 
and Finance Review on pages 5-7 are the 
management of its cash position ($19.5m at year 
end, 2007: $39.1m) and the fulfilment of the 
exploration program. 
Post balance sheet events
No events have occurred since the year end 
which require reporting or disclosing in the 
financial statements.
Charitable and political donations
There were no political or charitable 
contributions made by the company or the 
group during the period. 10 Borders & Southern Annual Report 2008
Directors’ Report (continued)
Health, safety and environment
The group has an overriding commitment to health, safety and environmental responsibility. The group works closely with host governments 
and communities in the countries in which it operates, together with its contractors and partners, to ensure internationally recognised 
standards are implemented and maintained along with compliance to local legislation.  
The group’s exploration activities are subject to the relevant environmental protection acts. The group closely monitors its activities to ensure 
to the best of its knowledge there is no potential for the breach of such regulations. There have been no convictions in relation to breaches of 
these Acts recorded against the group during the reporting period.
Creditor payment policy
It is the group’s policy to settle the terms of payment with suppliers when agreeing the terms of the transaction, to ensure that suppliers are 
aware of these terms and to abide by them.
The amounts owed to the company and group’s trade creditors at the year end represented 5 days (2007: 39 days) as a proportion of the total 
amounts invoiced by suppliers during the year.
Financial instruments
Details of the use of financial instruments by the company and its subsidiary undertaking are contained in note 21 of the financial statements.
Directors and their interests
The beneficial and other interests of the directors and their families in the share capital at the beginning of the year or the date of their 
appointment to the board, whichever is later, and at 31 December 2008, were as follows:
At 31 
December 2008
Number
At 31 
December 2007
Number
David Harry Williamson Dobson 26,670,000 26,670,000
Stephen James Douglas Posford 26,695,000 26,670,000
Howard Kevin Obee 10,000,000 10,000,000
Christopher Nigel Hurst-Brown  1,330,000 1,330,000
Peter William Fleming  2,200,000 2,200,000
The ordinary shares in which Mr D H W Dobson is interested are held by the Zila Corporation, a company owned by the Whitmill Trust 
Company Limited, as trustee of The Lotus Trust of which he is a beneficiary.  
The group has provided the directors with qualifying third party indemnity insurance.
Share options
Number of options held at 
the beginning and end of the year 
Fair value 
of options
Exercise 
price
Vesting 
period
Howard Kevin Obee 50,000 21p 48p 3 years
Peter William Fleming 50,000 21p 48p 3 years Borders & Southern Annual Report 2008 11 
Substantial shareholders
At 26 May 2009 the following had notified the company of disclosable interests in 3% or more of the nominal value of the company’s shares 
carrying voting rights:
Number of 
ordinary shares
% of share 
capital
Landsdowne Partners Limited Partnership 27,125,000 13.96
Stephen James Douglas Posford 26,695,000 13.74
Zila Corporation 26,670,000 13.72
Allianz SE 18,460,000 9.50
Petroleum Geo-Services 16,656,670 8.57
Howard Kevin Obee 10,000,000 5.15
Credit Suisse Securities (Europe) 6,792,231 3.49
Directors’ responsibilities
The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position 
of the company, for safeguarding the assets of the company, for taking reasonable steps for the prevention and detection of fraud and other 
irregularities and for the preparation of a Directors’ Report which complies with the requirements of the Companies Act 1985.
The directors are responsible for preparing the annual report and the financial statements in accordance with the Companies Act 1985.  The 
directors are also required to prepare financial statements for the group in accordance with International Financial Reporting Standards 
as adopted by the European Union (IFRSs) and the rules of the London Stock Exchange for companies trading securities on the Alternative 
Investment Market.  The directors have chosen to prepare financial statements for the company in accordance with IFRSs.
International Accounting Standard 1 requires that financial statements present fairly for each financial year the company’s financial position, 
financial performance and cash flows.  This requires the faithful representation of the effects of transactions, other events and conditions in 
accordance with the definitions and recognition criteria for assets, liabilities, income and expenses set out in the International Accounting 
Standards Board’s ‘Framework for the preparation and presentation of financial statements’.  In virtually all circumstances, a fair presentation 
will be achieved by compliance with all applicable IFRSs.  A fair presentation also requires the  directors to:



impact of particular transactions, other events and conditions on the entity’s financial position and financial performance. 
Financial statements are published on the group’s website in accordance with legislation in the United Kingdom governing the preparation and 
dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the group’s 
website is the responsibility of the directors. The directors’ responsibility also extends to the ongoing integrity of the financial statements 
contained therein.
Auditors
All of the current directors have taken all the steps that they ought to have taken to make themselves aware of any information needed by the 
company’s auditors for the purposes of their audit and to establish that the auditors are aware of that information. The directors are not aware 
of any relevant audit information of which the auditors are unaware.
BDO Stoy Hayward LLP have expressed their willingness to continue in office and a resolution to reappoint them will be proposed at the 
Annual General Meeting.
By order of the board
.........................................
William John Walton Slack
Company Secretary
28 May 2008 12 Borders & Southern Annual Report 2008
Audit Committee Report
The Board has established an Audit Committee comprising Mr Hurst-Brown (Chairman), Mr Dobson and Mr Posford, all independent, non-
executive directors. 
The Audit Committee meets at least biannually and is responsible for:
-  Reviewing the integrity of the financial statements and related disclosures, based on adequate books, records and internal controls and 



- The compliance with legal and regulatory requirements. Borders & Southern Annual Report 2008 13 
The  Board has established a Remuneration Committee comprising Mr Dobson (Chairman), Mr Hurst-Brown and Mr Posford, all independent 
non-executive Directors. 
The Remuneration Committee meets at least annually and is responsible for:
-  Reviewing the performance of the CEO and other executive directors and senior management of the company and determines their 


-  Making recommendations to the board with respect to equity-based incentive plans and to act as a preparatory body for the board of 
directors in the management of any company award and option plans.
Directors’ remuneration and service contracts
On 18 May 2005, all of the company’s directors entered into a service agreement with the company. 
The remuneration of the directors for the year ended 31 December 2008 was as follows:
Basic salary
Share based 
payment Total 2008 Total 2007
$$ $ $
David Harry Williamson Dobson – – – –
Stephen James Douglas Posford – – – –
Howard Kevin Obee 170,223 6,082 176,305 181,335
Christopher Nigel Hurst-Brown – – – –
Peter William Fleming 45,135 6,083 51,218 53,170
Pensions
The group does not operate a pension scheme for its directors or employees.
Remuneration Committee Report 14 Borders & Southern Annual Report 2008
Independent Auditors’ Report
Independent auditors’ report to the shareholders of Borders and Southern Petroleum Plc
We have audited the group and parent company financial statements (the “financial statements”) of Borders and Southern Petroleum plc for 
the year ended 31 December 2008 which comprise the Consolidated Income Statement, the Consolidated and Company Balance Sheets, the 
Consolidated and Company Cash Flow Statements, the Consolidated and Company Statements of Changes in Equity and the related Notes.  
These financial statements have been prepared under the accounting policies set out therein.
Respective responsibilities of directors and auditors
The directors’ responsibilities for preparing the Annual Report and financial statements in accordance with applicable law and International 
Financial Reporting Standards (IFRSs) as adopted by the European Union are set out in the statement of directors’ responsibilities.  
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International 
Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the financial statements give a true and fair view and have been properly prepared in accordance 
with the Companies Act 1985 and whether the information given in the directors’ report is consistent with those financial statements.  We also 
report to you if, in our opinion, the company has not kept proper accounting records, if we have not received all the information and explanations 
we require for our audit, or if information specified by law regarding directors’ remuneration and other transactions is not disclosed.
We read other information contained in the Annual Report, and consider whether it is consistent with the audited financial statements.  This 
other information comprises the Highlights, Chairman’s Statement, the Chief Executive’s Review, the Financial Review, the Board of Directors, 
the Directors’ Report, the Audit Committee Report and the Remuneration Committee Report. We consider the implications for our report 
if we become aware of any apparent misstatements or material inconsistencies with the financial statements.  Our responsibilities do not 
extend to any other information.
Our report has been prepared pursuant to the requirements of the Companies Act 1985 and for no other purpose.  No person is entitled to rely 
on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of the Companies Act 1985 or 
has been expressly authorised to do so by our prior written consent.  Save as above, we do not accept responsibility for this report to any other 
person or for any other purpose and we hereby expressly disclaim any and all such liability.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board.  An 
audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements.  It also includes an 
assessment of the significant estimates and judgments made by the directors in the preparation of the financial statements, and of whether 
the accounting policies are appropriate to the group’s and company’s circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide 
us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused 
by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the 
financial statements. Borders & Southern Annual Report 2008 15 
Opinion
In our opinion:





.........................................
BDO Stoy Hayward LLP
Chartered Accountants & Registered Auditors
London 
Date:................................ 16 Borders & Southern Annual Report 2008
Financial Statements Borders & Southern Annual Report 2008 17
Consolidated Income Statement
for the year ended 31 December 2008
Note
2008
$
2007
$
Continuing operations
Administrative expenses (1,287,544) (1,715,392)
Loss from operations 2 (1,287,544) (1,715,392)
Finance income 8 986,177 1,379,691
Finance expense – foreign exchange losses 8 (4,426,533) –
Loss before tax (4,727,900) (335,701)
Income tax expense 9 – –
Loss for the year (4,727,900) (335,701)
Loss per share - basic and diluted (see note 3) (2.43) cents (0.23) cents
The notes on pages 24 to 38 form an integral part of these financial statements. 18 Borders & Southern Annual Report 2008
Consolidated Balance Sheet
for the year ended 31 December 2008
2008 2007
Note $$ $$
Assets
Non-current assets
Property, plant and equipment 10 14,929 7,749
Intangible assets 11 36,040,860 23,155,802
Total non-current assets 36,055,789 23,163,551
Current assets
Trade and other receivables 13 251,788 313,400
Other financial assets 14 9,950,668 –
Cash and cash equivalents 9,522,035 39,064,938
Total current assets 19,724,491 39,378,338
Total assets 55,780,280 62,541,889
Liabilities
Current liabilities
Trade and other payables 15 (194,770) (2,309,741)
Total net assets 55,585,510 60,232,148
Capital and reserves 
Share capital 16 3,867,741 3,867,741
Share premium reserve 57,906,686 57,906,686
Other reserves 209,409 108,032
Retained earnings (6,381,930) (1,654,030)
Foreign currency reserve (16,396) 3,719
Total equity 55,585,510 60,232,148
The financial statements were approved by the board of directors and authorised for issue on 28 May 2009.
HOWARD KEVIN OBEE PETER WILLIAM FLEMING
Director Director
The notes on pages 24 to 38 form an integral part of these financial statements. Borders & Southern Annual Report 2008 19 
Consolidated Statement of Changes in Equity
for the year ended 31 December 2008
Share 
capital
$
Share 
premium 
reserve
$
Other 
reserves
$
Foreign 
currency 
reserve
$
Retained 
earnings
$
Total
$
Balance at 1 January 2007 brought forward 2,541,173 21,018,756 30,209 – (1,318,330) 22,271,808
Loss for the year and total recognised income 
and expense for the year
–– – –(335,700)(335,700)
Issue of share capital 1,326,568 36,887,930 – – – 38,214,498
Recognition of share based payments – – 77,823 – – 77,823
Foreign exchange on change in presentation 
currency
– – – 3,719 – 3,719
Balance at 31 December 2007 3,867,741 57,906,686 108,032 3,719 (1,654,030) 60,232,148
Loss for the year and total recognised income 
and expense for the year
– – – – (4,727,900) (4,727,900)
Recognition of share based payments – – 101,377 – – 101,377
Foreign exchange on change in functional 
currency
– – – (20,115) – (20,115)
Balance at 31 December 2008 3,867,741 57,906,686 209,409 (16,396) (6,381,930) 55,585,510
The following describes the nature and purpose of each reserve within owners’ equity:
Reserve    Description and purpose
Share capital   This represents the nominal value of shares issued.
Share premium reserve  Amount subscribed for share capital in excess of nominal value.
Other reserves   Fair value of options issued.
Presentation currency reserve Differences arising on change of presentation and functional currency to $.
Retained earnings   Cumulative net gains and losses recognised in the consolidated income statement.
The notes on pages 24 to 38 form an integral part of these financial statements. 20 Borders & Southern Annual Report 2008
Company Balance Sheet
for the year ended 31 December 2008
2008 2007
Note $$ $$
Assets
Non-current assets
Property, plant and equipment 10 14,929 7,749
Investments 12 2 2
14,931 7,751
Current assets
Trade and other receivables 13 36,388,685 23,549,349
Other financial assets 14 9,950,668 –
Cash and cash equivalents 9,522,035 39,064,938
55,861,388 62,614,287
Total assets 55,876,319 62,622,038
Liabilities
Current liabilities
Trade and other payables 15 (187,583) (2,298,257)
Total net assets 55,688,736 60,323,781
Capital and reserves 
Called up share capital 16 3,867,741 3,867,741
Share premium reserve 57,906,686 57,906,686
Other reserves 209,409 108,032
Retained earnings (6,276,415) (1,562,643)
Foreign currency reserve (18,685) 3,965
Total equity 55,688,736 60,323,781
The financial statements were approved by the board of directors and authorised for issue on 28 May 2009.
HOWARD KEVIN OBEE PETER WILLIAM FLEMING
Director Director
The notes on pages 24 to 38 form an integral part of these financial statements. Borders & Southern Annual Report 2008 21 
Company Statement of Changes in Equity
for the year ended 31 December 2008
Share 
capital
$
Share 
premium 
reserve
$
Other 
reserves
$
Foreign 
currency 
reserve
$
Retained 
earnings
$
Total
$
Balance at 1 January 2007 brought forward 2,541,173 21,018,756 30,209 – (1,266,983) 22,323,155
Loss for the year and total recognised income 
and expense for the year
–– – –(295,660)(295,660)
Issue of share capital 1,326,568 36,887,930 – – – 38,214,498
Recognition of share based payments – – 77,823 – – 77,823
Foreign exchange on change in presentation 
currency
– – – 3,965 – 3,965
Balance at 31 December 2007 3,867,741 57,906,686 108,032 3,965 (1,562,643) 60,323,781
Loss for the year and total recognised income 
and expense for the year
– – – – (4,713,772) (4,713,772)
Recognition of share based payments – – 101,377 – – 101,377
Foreign exchange on change in functional 
currency
–– –(22,650) –(22,650)
Balance at 31 December 2008 3,867,741 57,906,686 209,409 (18,685) (6,276,415) 55,688,736
The following describes the nature and purpose of each reserve within owners’ equity:
Reserve    Description and purpose
Share capital   This represents the nominal value of shares issued.
Share premium reserve  Amount subscribed for share capital in excess of nominal value.
Other reserves   Fair value of options issued.
Foreign currency reserve  Differences arising on change of presentation and functional currency to $.
Retained earnings   Cumulative net gains and losses recognised in the income statement.
The notes on pages 24 to 38 form an integral part of these financial statements. 22 Borders & Southern Annual Report 2008
Consolidated Cash Flow Statement
for the year ended 31 December 2008
2008 2007
$$ $$
Cash flow from operating activities
Loss before tax (4,727,901) (335,700)
Adjustments for:
Depreciation 9,850 16,074
Exploration and evaluation expenditure transferred 
to income statement 
– 5,054
Share-based payment 101,377 77,823
Finance income (986,177) (1,379,691)
Finance expense 4,426,533 –
Foreign exchange differences (20,116) –
Cash flows from operating activities before changes 
in working capital
(1,196,434) (1,616,440)
Decrease/(increase) in trade and other receivables 65,881 (7,576)
(Decrease)/increase in trade and other payables (2,114,973) 2,178,754
Net cash (outflow)/inflow from operating activities (3,245,526) 554,738
Cash flows used in investing activities
Interest received 981,912 1,343,856
Purchase of other financial assets (9,950,668) –
Purchase of intangible assets (12,885,058) (19,902,084)
Purchase of property, plant and equipment (17,030) (3,543)
Net cash used in investing activities (21,870,844) (18,561,771)
Cash flows from financing activities
Proceeds from issue of shares and share options (net of issue costs) – 38,214,498
Net cash from financing activities – 38,214,498
Net (decrease)/increase in cash and cash equivalents (25,116,370) 20,207,463
Cash and cash equivalents at the beginning of the year 39,064,938 18,847,347
Exchange (loss)/gain on cash and cash equivalents (4,426,533) 10,128
–
Cash and cash equivalents at the end of the year 9,522,035 39,064,938
Group and company
2008
$
2007
$
Cash available on demand 584,285 741,614
Cash on deposit 8,937,750 38,323,324
Total 9,522,035 39,064,938
Cash and cash equivalents consist of cash at bank on demand and balances on deposit with an original maturity of three months or less.
The notes on pages 24 to 38 form an integral part of these financial statements. Borders & Southern Annual Report 2008 23 
Company Cash Flow Statement
for the year ended 31 December 2008
2008 2007
$$ $$
Cash flow from operating activities (4,713,772)
Loss before tax (295,660)
Adjustments for: 9,850
Depreciation – 16,074
Share-based payment 101,377 77,823
Finance income (986,177) (1,379,691)
Finance expense 4,426,533 –
Foreign exchange differences (22,651) –
Cash flows from operating activities before changes 
in working capital
(1,184,840) (1,581,454)
(Increase) in trade and other receivables (12,835,069) (23,196,643)
(Decrease)/increase in trade and other payables (2,110,676) 2,177,223
Decrease in intangibles – 3,253,717
Net cash (outflow) from operating activities (16,130,585) (19,347,157)
Cash flows used in investing activities
Interest received 981,913 1,343,856
Purchase of other financial assets (9,950,668) –
Purchase of intangible assets (17,030) (3,543)
Net cash used in investing activities (8,985,785) 1,340,313
Cash flows from financing activities
Proceeds from issue of shares and share options (net of issue costs) – 38,214,498
Net cash from financing activities – 38,214,498
Net (decrease)/increase in cash and cash equivalents (25,116,370) 20,207,654
Cash and cash equivalents at the beginning of the year 39,064,938 18,847,347
Exchange (loss)/gain on cash and cash equivalents (4,426,533) 9,937
Cash and cash equivalents at the end of the year 9,522,035 39,064,938
The notes on pages 24 to 38 form an integral part of these financial statements. 24 Borders & Southern Annual Report 2008
Notes to the Financial Statements
for the Year Ended 31 December 2008  
1 ACCOUNTING POLICIES
Basis of preparation
The principal accounting policies adopted in the preparation of the financial statements are set out below and have been consistently applied 
to all years presented.
These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs and IFRIC 
interpretations) issued by the International Accounting Standards Board (IASB) as adopted by the European Union and with those parts of the 
Companies Act 1985 applicable to companies preparing their accounts under IFRS. The parent company financial statements have also been 
prepared in accordance with International Financial Reporting Standards.
Effective 1 July 2008, the Company’s functional currency changed from Pounds sterling (‘£’) to the US dollar (‘$’). This change was made as, 
due to the $ being the currency that mainly influences significant transactions and balances, the directors considered the $ to most faithfully 
represent the economic effects of the underlying transactions, events and conditions in the Company. Concurrent with this change in 
functional currency, the Group adopted the $ as its presentation currency and consequently the financial information for the year ended 31 
December 2007 has been re-presented in $.
In accordance with International Accounting Standards, this change in functional currency has been accounted for prospectively by translating 
all items using the $:£ exchange spot rate on that date, being $1.9902:£1. In the parent company accounts the resulting translated amounts 
for non monetary items at this date have been treated as their historic cost.
For the purposes of changing the Group’s presentation currency, the comparatives for the year ended 31 December 2007 were translated for 
the balance sheet using $:£ exchange spot rate on that date, being $1.9906:£1, for the income statement using the average $:£ exchange rate 
during the year being $2.0015:£1, and for the opening the balances as at 1 January 2007 using the $:£ spot rate on that date being $1.9728:£1. 
Resulting exchange differences have been taken to the Foreign currency reserve.
New and revised Standards effective for 31 December 2008 year ends but are not currently relevant to the group
Amendments
IAS39 & IFRS7- Amendment - Reclassification of Financial Instruments (effective from 1 July 2008).
IAS39 & IFRS7 – Reclassification of financial assets: effective date and transition (effective from 1 July 2008).
Interpretations
IFRIC 11 – (IFRS 2) Group and treasury share transactions (effective from 1 March 2007). 
IFRIC 14 – IAS 19 - The limit on a defined benefit asset, minimum funding requirements and their interaction (effective for accounting periods 
commencing on or after 1 January 2008).
New and revised Standards issued but not effective for 31 December 2008 year ends 
New Standards
IFRS 8 – Operating segments (effective for accounting periods commencing on or after 1 January 2009). The group will apply this standard in 
the accounting period commencing 1 January 2009.
Amendments
IAS 1 – Presentation of financial statements: a revised presentation (effective for accounting periods commencing on or after 1 January 2009). 
The group will apply this standard in the accounting period commencing 1 January 2009.
IAS 23 – Borrowing costs (effective for accounting periods commencing on or after 1 January 2009). This is not considered relevant to the 
group’s operations.
IFRS 2 – Share based payment: vesting conditions and cancellations (effective for accounting periods commencing on or after 1 January 2009). 
The group will apply this amendment in the accounting period commencing 1 January 2009.
IAS 27 – Consolidated and separate financial statements (effective for accounting periods commencing on or after 1 July 2009). The group will 
apply this amendment in the accounting period commencing 1 January 2010.
Notes to the Financial Statements
for the Year Ended 31 December 2008   Borders & Southern Annual Report 2008 25 
IAS32 & IAS1 – Puttable financial instrument and obligations arising on liquidation (effective for accounting periods commencing on or after 
1 January 2009). This is not considered relevant to the group’s operations.
IFRS1 & IAS27 – Cost of an investment in a subsidiary, jointly-controlled entity or associate (effective for accounting periods commencing on 
or after 1 January 2009). The group will apply this amendment in the accounting period commencing 1 January 2009.
IAS39 – Financial Instruments: recognition and measurement: eligible hedged Items (effective for accounting periods commencing on or after 
1 July 2009). This is not considered relevant to the group’s operations.
IFRS7 – Improving disclosures about financial Instruments (effective for accounting periods commencing on or after 1 January 2009). The 
group will apply this amendment in the accounting period commencing 1 January 2009.
IFRIC 9 & IAS39 – Embedded derivatives (effective for accounting periods ending on or after 30 June 2009). This is not considered relevant to 
the group’s operations.
Improvements to IFRSs (2009) – effective for accounting periods commencing on or after 1 January 2009. The group will apply this 
amendment in the accounting period commencing 1 January 2009.
Improvements to IFRSs (2010) – generally effective for accounting periods commencing on or after 1 January 2010. The group will generally 
apply this amendment in the accounting period commencing 1 January 2010.
Revisions
IFRS 3 – Business combinations (effective for accounting periods commencing on or after 1 July 2009). This is not considered relevant to the 
group’s operations.
IFRS 1 – First time adoption of IFRS (effective for accounting periods commencing on or after 1 January 2009). This is not considered relevant 
to the group’s operations.
Interpretations
IFRIC 13 – Customer loyalty programmes (effective for accounting periods commencing on or after 1 July 2008). This is not considered 
relevant to the group’s operations.
IFRIC 15 – Agreements for the construction of real estate (effective for accounting periods commencing on or after 1 January 2009). This is not 
considered relevant to the group’s operations.
IFRIC 16 – Hedges of a net investment in a foreign operation (effective for accounting periods commencing on or after 1 October 2008). This is 
not considered relevant to the group’s operations.
IFRIC 17 – Distributions of non-cash assets to owners (effective for accounting periods commencing on or after 1 July 2009). This is not 
considered relevant to the group’s operations.
IFRIC 18 – Transfers of assets from customers (effective for accounting periods commencing on or after 1 July 2009). This is not considered 
relevant to the group’s operations.
Basis of consolidation
Where the company has the power, either directly or indirectly, to govern the financial and operating policies of another entity or business 
so as to obtain benefits from its activities, it is classified as a subsidiary. The consolidated financial statements present the results of 
the company and its subsidiaries (“the group”) as if they formed a single entity. Intercompany transactions and balances between group 
companies are therefore eliminated in full.
Profit/(loss) for the financial year
The company has taken advantage of the exemption allowed under section 230 of the Companies Act 1985 and has not presented its own 
income statement in these financial statements. The group loss for the year includes a loss after tax of $4,713,772 (2007 - $295,660) which is 
dealt with in the financial statements of the parent company.
The company’s investments in subsidiaries
In the parent company’s accounts subsidiaries are carried at cost less amounts provided for impairment. 26 Borders & Southern Annual Report 2008
Notes to the Financial Statements
for the Year Ended 31 December 2008 (continued)
Income
At the end of the year the group had not commenced commercial production from its exploration sites and therefore has no revenue in the year.
Finance income
Finance income is measured and recognised using the effective rate of interest. The income consists of interest on cash deposits.
Segment reporting
A business segment is a distinguishable component of an enterprise that is engaged in providing an individual product or service or a group of 
related products or services and that is subject to risks and returns that are different from those of other business segments. The group has 
only one business segment, which is the exploration for oil and gas, and is its primary reporting segment.
A geographical segment is a distinguishable component of an enterprise that is engaged in providing products or services within a particular 
economic environment and that is subject to risks and returns that are different from those of components operating in other economic 
environments. The group’s geographical segments are the United Kingdom, the Falkland Islands and other areas Worldwide, and make up the 
group’s secondary reporting segment.
Property, plant and equipment
Office equipment is initially recorded at cost. Depreciation is provided on office equipment so as to write off the cost, less any estimated 
residual value, over their expected useful economic life as follows:
Office equipment  33 1/3%
Assets are depreciated from the date of acquisition, and on a straight line basis.
Exploration and evaluation expenditure
As permitted under IFRS 6, the group has accounted for exploration and evaluation expenditure using the full cost method, whereby all costs 
associated with oil exploration are capitalised as intangible assets on a project-by-project basis, pending determination of feasibility of the 
project. Costs incurred include appropriate technical and administrative expenses but not general overheads. If an exploration project is 
successful, the related expenditures will be transferred to tangible assets and amortised over the estimated life of the commercial reserves. 
Where a licence is relinquished, a project is abandoned, or is considered to be of no further value to the group the related costs are written off. 
All capitalised costs are reviewed annually against the underlying value of oil and gas reserves, unless the expenditure relates to an area where 
it is too early to make a decision about the value of the assets.
Impairment 
Exploration assets are reviewed regularly for indication of impairment, if any, where circumstances indicate that the carrying value may not be 
recoverable. If an indication of impairment exists, the asset is tested for impairment in accordance with IAS36- Impairment of Assets.
The carrying value is compared against the expected recoverable amount, generally by reference to the present value of future net cash 
flows expected to be generated from the production of commercial reserves. The cash generating unit (“CGU”) applied for impairment 
testing is usually the individual field, except that a number of fields may be grouped together to form a single CGU where the cash flows are 
interdependent. 
Any impairment loss arising from the review is charged to the income statement whenever the carrying amount of the asset exceeds its 
recoverable amount.
Provisions
A provision is recognised in the balance sheet when the group has a present legal or constructive obligation as a result of a past event, and it is 
probable that an outflow of economic benefits will be required to settle the obligation. 
Foreign currencies
Transactions in foreign currencies are translated into US dollars at the exchange rate ruling at the date of the transaction. Monetary assets and 
liabilities denominated in foreign currencies are translated into US dollars at the closing rates at the balance sheet date and the exchange differences 
are included in the income statement. The functional and presentational currency of the parent and all group companies is US dollars. Borders & Southern Annual Report 2008 27 
Operating leases
Rentals payable under operating leases are charged in the profit and loss account on a straight line basis over the lease term.
Share based payments
The fair value of employee share option plans is calculated using the Black-Scholes-Merton pricing model. In accordance with IFRS 2 ‘Share-
based Payments’ the resulting cost is charged to the income statement over the vesting period of the options. The amount of charge is 
adjusted each year to reflect expected and actual levels of options vesting.
Where equity settled share options are awarded to employees, the fair value of the options at the date of grant is charged to the income 
statement over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments 
expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the 
number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. As long as all other 
vesting conditions are satisfied, a charge is made irrespective of whether the market vesting conditions are satisfied. The cumulative expense 
is not adjusted for failure to achieve a market vesting condition.
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately 
before and after the modification, is also charged to the consolidated income statement over the remaining vesting period.
Financial instruments
Financial instruments are initially recorded at fair value. Subsequent measurement depends on the designation of the instrument, as follows:- 
 Trade and other receivables are initially recognised at fair value and subsequently at amortised cost using the effective rate of interest, net 
of allowances for impairment.
 Trade and other payables are initially recognised at fair value and subsequently at amortised cost using the effective rate of interest.
 The group does not hold or issue derivative financial instruments for trading purposes.
 Financial instruments issued by group companies are treated as equity only to the extent that they do not meet the definition of a financial 
liability. The group’s and company’s ordinary shares are all classified as equity instruments.
 Cash and cash equivalents consist of cash at bank on demand and balances on deposit with an original maturity of three months or less.
 Assets available for sale comprise of government treasury stock. They are carried at fair value with changes in fair value recognised directly 
in the available for sale reserve. Where there is a significant or prolonged decline in the fair value of an available for sale financial asset, the 
full amount of the impairment, including any amount previously charged to equity, is recognised in the income statement.
Taxes
The major components of income tax on the profit or loss include current and deferred tax.
Current tax is based upon the profit or loss for the year adjusted for items that are non-assessable or disallowed and is calculated using tax 
rates that have been enacted, or substantively enacted, by the balance sheet date.
Income tax is charged or credited to the income statement, except where the tax relates to items credited or charged directly to equity, in 
which case the tax is also dealt within equity.
Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the balance sheet differs to its tax base.
Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the 
difference can be utilised.
The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the balance sheet date 
and are expected to apply when deferred tax liabilities and assets are settled or recovered. 28 Borders & Southern Annual Report 2008
Notes to the Financial Statements
for the Year Ended 31 December 2008 (continued)
Critical accounting estimates and judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of 
revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the date of the financial statements. If in the future 
such estimates and assumptions, which are based on management’s best judgement at the date of the financial statements, deviate from 
the actual circumstances, the original estimates and assumptions with be modified as appropriate in the year in which the circumstances 
change. Where necessary, the comparatives have been reclassified or extended from the previously reported results to take into accounts 
presentational changes.
Management has made the following judgements which have the most significant effects on the amounts recognised in the financial 
statements:
 Recoverability of exploration and evaluation costs
The group uses the full cost method of accounting, whereby exploration and evaluation costs are capitalised as intangible assets if the 
associated project is commercially viable, and reviewed for impairment. This requires judgement assessments as to (a) the likely future 
commerciality of the asset, and (b) future revenues and costs relating to the project in order to determine the recoverable value of the asset.
The key sources of estimation uncertainty at the balance sheet date, which have significant risk of causing a material adjustment to the 
carrying amounts of assets and liabilities within the next financial year, are as follows:
 Share options
The group’s share based payments were recognised at fair value, as in the prior period, using a 65% (2007: 50%) volatility rate. This is set out 
in greater detail in note 7.
2 EXPENSES BY NATURE
2008
$
2007
$
Staff costs (note 5) 431,120 441,254
Share-based payment-equity settled 101,377 77,823
Exploration and evaluation expenditure – 237,338
Services provided by the auditors: – –
Audit fee 31,517 32,024
Other services:
Auditing of the accounts of the associate of the company under legislation – 8,006
Other taxation services 58,257 –
Exchange differences 21,627 263,191
Depreciation of office equipment 9,850 16,074
Operating lease expenses-property 256,834 227,262
Sundry items 376,962 412,420
Total administrative expenses 1,287,544 1,715,392
3 LOSS PER SHARE
The calculation of the basic loss per share is based on the loss attributable to ordinary shareholders divided by the weighted average number 
of shares in issue during the year. The loss for the financial year for the group was $4,727,900 (2007 - $335,701) and the weighted average 
number of shares in issue for the year was 194,344,170 (2007 - 144,351,668). 
Potentially Dilutive Share Options
Due to the loss in the year for 2008 and 2007, the effect of the share options in issue is anti-dilutive and therefore diluted earnings per share 
has not been calculated.
At 31 December 2008 there were options over 1,000,000 shares outstanding which are potentially dilutive (2007 - 700,000). These options 
are described in Note 7. For the majority of the options their exercise price is greater than the weighted average share price during the year and 
it would not be advantageous of the holders to exercise these, therefore these options do not have a diluted effect. Borders & Southern Annual Report 2008 29 
4 SEGMENT ANALYSIS
For the purpose of segmental information the operations of the group consist of one class of business, the exploration for hydrocarbon liquids 
and gas. 
During the year the group’s exploration and evaluation activities took place outside the UK, substantially in the Falkland Islands. These costs 
are capitalised, where appropriate, in accordance with the accounting policies as set out in note 1 above.
The operating profit/(loss) of the group is analysed as follows:
2008
$
2007
$
United Kingdom 1,287,544 (1,478,054)
Falkland Islands – (60,660)
Worldwide (excluding UK and Falkland Islands) – (176,678)
1,287,544 (1,715,392)
Total assets are analysed as follows:
Group Company
2008 
$
2007
$
2008
$
2007
$
United Kingdom 19,739,420 39,386,087 55,876,319 62,622,038
Falkland Islands 36,040,860 23,155,802 – –
55,780,280 62,541,889 55,876,319 62,622,038
Capital expenditure for the group during the year of $12,885,058 (2007 - $19,902,084) relates solely to the Falkland Islands. Depreciation 
expense for the group during the year of $9,850 (2007: $16,074) relates solely to the United Kingdom.
5 STAFF COSTS
Company and Group:
Staff costs (including directors) comprise:
2008
$
2007
$
Wages and salaries 385,581 394,733
Employers national insurance contribution 45,539 46,521
Share based payment-equity settled 101,377 77,823
532,497 519,077
The average number of employees (including directors) employed during the year by the company was 6 (2007 - 6) and for the group was 6 
(2007 - 6). All employees and directors of the group and the company were involved in management.
In 2008 the group granted to staff of Borders and Southern Petroleum Plc, for nil consideration, share options with a total fair value of 
$208,635 (2007 - $45,164), of which $27,532 (2007 - $7,466) has been expensed during the year. In addition $73,845 (2007 - $70,357) has 
been expensed during the year in respect of share options granted in prior years. 30 Borders & Southern Annual Report 2008
Notes to the Financial Statements
for the Year Ended 31 December 2008 (continued)
6 DIRECTORS’ EMOLUMENTS
The directors’ emoluments for the period are as follows:
2008
$
2007
$
Directors’ fees 215,358 220,434
Share based payments – equity settled 12,165 14,071
227,523 234,505
The fees and share-based payments made to each director are disclosed in the Remuneration Committee Report.
In 2006, the group granted to two directors of Borders and Southern Petroleum Plc, for nil consideration, 50,000 share options each, with a 
total fair value of $42,214. Of this amount $12,165 (2007 - $14,071) has been expensed during the year.
The directors are the key management personnel.
7 SHARE-BASED PAYMENT
On 18 July 2008, the group granted 300,000 share options to an employee of Borders and Southern Petroleum Plc, for nil consideration. The 
options will be cancelled if the employee leaves the company. 
31 December 
2008 Weighted 
average exercise 
price
31 December 
2008 Number
31 December 
2007 Weighted 
average exercise 
price
31 December 
2007 Number
Outstanding at the beginning of the year 42p 700,000 48p 500,000
Granted during the year 70p 300,000 26p 200,000
Outstanding at the end of the year 1,000,000 700,000
The exercise price of the options outstanding at the year end ranged between 26p and 70p and their weighted average contractual life was 
4 years.
The following information is relevant in the determination of the fair value of the options granted during the year under the equity-settled 
share based remuneration scheme operated by the company. Borders & Southern Annual Report 2008 31 
31 December 2008 31 December 2007
Equity-settled scheme
Option pricing model used Black-Scholes Black-Scholes
Weighted average share price at grant date 70p 26p
Exercise price 70p 26p
Weighted average contractual life (days) 1,460 1,460
Expected volatility 65% 50%
Expected dividend growth rate 0% 0%
Risk-free interest rate 1.5% 4.10%
Share-based remuneration expense for the year in respect of the
equity-settled scheme for options granted during the year.
$27,532 $7,466
Share-based remuneration expense for the year in respect of the
equity-settled scheme for options granted during 2006.
$13,016 $70,357
Share-based remuneration expense for the year in respect of the
equity-settled scheme for options granted during 2007.
$60,829 –
Total share-based remuneration expense for the year $101,377 $77,823
8 FINANCE INCOME AND EXPENSE
Finance income
2008
$
2007
$
Bank interest receivable 951,024 1,379,691
Treasury stock interest 35,153 –
986,177 1,379,691
Finance expense
Finance expense
2008
$
2007
$
Exchange loss on cash and other financial assets 4,426,533 –
The foreign exchange loss arises on the treasury stock and cash balances held in £ due to the devaluation of the £ against the $ during the 
second half of the year. 32 Borders & Southern Annual Report 2008
Notes to the Financial Statements
for the Year Ended 31 December 2008 (continued)
9 TAXEXPENSE
Current tax expense
2008
$
2007
$
UK corporation tax on loss for the year – –
Factors affecting current period tax charge
The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the UK applied to profits 
for the year are as follows:
2008
$
2007
$
Loss before and after taxation (4,727,900) (335,701)
Standard rate corporation tax charge of 28.5% (2007: 30%) (1,347,452) (100,710)
Expenses not deductible for tax purposes 134,289 28,103
Depreciation in (deficit)/excess of capital allowances (2,988) 3,218
Unutilised tax losses carried forward 1,216,151 69,389
Total current tax for the year ––
The rate of UK corporation tax changed from 30% to 28% with effect from 1 April 2008. The average rate applicable for the period is 
therefore 28.5% (2007: 30%).
Factors that may affect future tax charges
The group has a deferred tax asset of $1,205,527 (2007 - $489,794) in respect of unrelieved tax losses of $4,305,453 at 31 December 2008 
(2007 - $1,632,647), and a deferred tax asset of $nil in respect of accelerated capital allowances (2007- $3,305). The rate of tax used in the 
calculation of the deferred tax assets is 28% (2007-30%). The deferred tax asset has not been recognised in the financial statements as the 
economic benefit is uncertain. Borders & Southern Annual Report 2008 33 
10 PROPERTY, PLANT AND EQUIPMENT
Group and company
Office 
equipment
$
Cost
As at 1 January 2007 48,891
Additions 3,543
As at 31 December 2007 52,434
Depreciation
As at 1 January 2007 28,611
Charge for the year 16,074
As at 31 December 2007 44,685
Net book value
As at 31 December 2007 7,749
As at 31 December 2006 20,280
$
Cost
As at 1 January 2008 52,434
Additions 17,030
As at 31 December 2008 69,464
Depreciation
As at 1 January 2008 44,685
Charge for the year 9,850
As at 31 December 2008 54,535
Net book value
As at 31 December 2008 14,929 34 Borders & Southern Annual Report 2008
Notes to the Financial Statements
for the Year Ended 31 December 2008 (continued)
11 INTANGIBLE ASSETS
Group
Exploration
and
evaluation
costs
$
Cost
As at 1 January 2007 3,258,772
Additions 19,902,084
Disposal to income statement (5,054)
As at 31 December 2007 23,155,802
Net book value
As at 31 December 2007 23,155,802
As at 31 December 2006 3,258,771
Group
Exploration
and
evaluation
costs
$
Cost
As at 1 January 2008 23,155,802
Additions 12,885,058
As at 31 December 2008 36,040,860
Net book value
As at 31 December 2008 36,040,860
12 INVESTMENTS IN SUBSIDIARY
Company
2008
$
2007
$
Cost
As at 1 January 2008 and 31 December 2008 2 2
Net book value
As at 31 December 2007 and 31 December 2008 2 2
The company owns the one ordinary £1 subscriber share, being 100% of the issued share capital, in Borders and Southern Falkland Islands 
Limited. The company was registered in England and its principal activity is oil and gas exploration. Borders & Southern Annual Report 2008 35 
13 TRADEANDOTHERRECEIVABLES
Group Company
2008
$
2007
$
2008
$
2007
$
Amounts owed by group undertakings – – 36,136,897 23,235,949 
Other receivables 66,492 114,543 66,492 114,543 
Prepayments and accrued income 185,296 198,857 185,296 198,857 
251,788 313,400 36,388,685 23,549,349
All amounts shown under receivables fall due for payment within one year.
14 OTHERFINANCIALASSETS
Group Company
2008
$
2007
$
2008
$
2007
$
Available for sale investments 9,950,668 – 9,950,668 –
Available for sale investments consist of UK Treasury Stock denominated in £.
15 TRADEANDOTHERPAYABLES
Group Company
2008
$
2007
$
2008
$
2007
$
Trade payables 124,649 2,213,884 124,649 2,213,884
Other taxes and social security costs 12,281 16,092 12,281 16,092
Other payables 11,831 2,092 11,831 2,092
Accruals and deferred income 46,009 77,673 38,822 66,189
194,770 2,309,741 187,583 2,298,257
16 SHARE CAPITAL
2008
$
2007
$
Authorised
750,000,000 ordinary shares of 1 pence each 14,926,125 14,926,125
Allotted, called up and fully paid
194,344,170 ordinary  shares of 1 pence each 3,867,741 3,867,741 36 Borders & Southern Annual Report 2008
Notes to the Financial Statements
for the Year Ended 31 December 2008 (continued)
17 RELATED PARTY TRANSACTIONS
Company
During the year Borders & Southern Petroleum Plc paid expenses of $11,359,028 (2007 - $19,935,351) on behalf of Borders & Southern 
Falkland Islands Limited. At the year end $36,136,897 (2007 - $23,235,949) was due from the subsidiary.
There have been no transactions with directors during the year. The remuneration paid to each director is disclosed in the Remuneration 
Committee Report.
18 OPERATING LEASES
As at 31 December 2008 the future aggregate minimum lease payments under non-cancellable operating leases are as follows:
Land and Buildings
2008
$
2007
$
Within one year 202,723 125,468
19 CONTINGENT LIABILITIES
The group and company had no contingent liabilities at 31 December 2008.
20 CAPITAL COMMITMENTS
The group and company had no capital commitments at 31 December 2008
21 FINANCIAL INSTRUMENTS
The main risks arising from the group’s operations are interest rate risk and foreign currency translation risk. The group monitors risk on a 
regular basis and takes appropriate measures to ensure risks are managed in a controlled manner.
a) Interest rate risk
The group’s financial assets and liabilities accrue interest at prevailing floating rates in the United Kingdom or at pre-arranged fixed rates, as 
described further below. The group does not currently use derivative instruments to manage its interest rate risk.
At 31 December 2008 the company held cash at bank and in deposits under its control of $9,522,035 (2007 - $39,064,938), in addition to UK 
Treasury stock of $9,950,668, which matures in March 2009.  These form the majority of the group's working capital. Of the cash at bank and 
in deposit, $584,285 (2007 - $741,614) relates to deposits placed with banking institutions that are available on demand which carry interest 
at prevailing United Kingdom deposit floating rates. The balance represents restricted deposits of $8,937,750 (2007 - $38,323,324) with 
weighted average fixed interest rate of 1.7% for three months.
b) Foreign currency translation risk
The operational currency of the oil and gas exploration and evaluation activities of the group is US $, services and treasury function is UK £. 
Balances are held in £ sterling and US $ are purchased when required and used to meet exploration and evaluation needs. Borders & Southern Annual Report 2008 37 
The interest rate risk and foreign currency profile of financial assets and liabilities of the group and the company are as follows: 
Group Group
Current financial assets Assets 
available for 
sale
2008
$
Loans and 
receivables
2008
$
Assets 
available for 
sale
2007
$
Loans and 
receivables
2007
$
Held in UK £:
Trade and other receivables – 66,492 –114,543
Other financial assets 9,950,668 – ––
Cash and cash equivalents – 1,668,280 –17,848,167
Total current financial assets held in UK £ 9,950,668 1,734,772 –17,962,710
Held in US $:
Cash and cash equivalents – 7,853,755 ––
Total financial assets 9,950,668 9,588,527 –17,962,710
Company Company
Current financial assets Assets 
available for 
sale
2008
$
Loans and 
receivables
2008
$
Assets 
available for 
sale
2007
$
Loans and 
receivables
2007
$
Held in UK £:
Trade and other receivables – 66,492 – 23,350,492
Other financial assest 9,950,668 – ––
Cash and cash equivalents – 1,668,280 –17,848,167
Total current financial assets held in UK £ 9,950,668 1,734,772 –41,198,659
Held in US $:
Trade and other receivables – 36,136,897 ––
Cash and cash equivalents – 7,853,755 ––
Total financial assets 9,950,668 45,725,424 –41,198,659
Following on from the change in the Company’s functional currency, the amount owed by group undertaking was re-denominated into a 
US$ balance. 38 Borders & Southern Annual Report 2008
Notes to the Financial Statements
for the Year Ended 31 December 2008 (continued)
Foreign currency translation risk:
If there was a 10% change in the year end exchange rate there would be a movement in the US$ equivalent of financial assets held in UK£ of 
$1,167,718 for the group and $3,789,745 for the company (2007 - $1,796,271 for the group and $4,119,866 for the company). 
Group Company
Current financial liabilities Financial 
liabilities 
measured at 
amortised cost
2008
$
Financial 
liabilities 
measured at 
amortised cost
2007
$
Financial 
liabilities 
measured at 
amortised cost
2008
$
Financial 
liabilities 
measured at 
amortised cost
2007
$
Held in UK£:
Trade and other payables 103,242 371,269 96,053 359,785
Held in US $:
Trade and other payables 79,247 1,922,380 79,247 1,922,380
Total financial liabilities 182,489 2,293,649 175,300 2,282,165
Foreign currency translation risk:
If there was a 10% change in the year end exchange rate there would be a movement in the US$ equivalent of financial liabilities held in UK£ 
of $10,324 for the group and $9,605 for the company (2007 - $37,127 for the group and $35,979 for the company). 
c) Credit risk
The group has no customers so formal credit procedures are in the process of being established. Credit risk on cash balances is managed by 
only banking with reputable financial institutions with a high credit rating. The only significant concentration of credit risk is cash held at bank 
and the maximum credit risk exposure for the group and company is detailed in the table below:
2008 2007
Carrying 
Value
$
Maximum 
exposure
$
Carrying 
Value
$
Maximum 
exposure
$
Cash and cash equivalents 9,522,035 9,522,035 39,064,938 39,064,938
Maximum credit risk exposure 9,522,035 9,522,035 39,064,938 39,064,938
Fair values
The fair values of the group’s financial assets and liabilities at 31 December 2008 and at 31 December 2007 are materially equivalent to their 
carrying value as disclosed in the balance sheet and related notes.
Capital
The objective of the directors is to maximise shareholder return and minimise risk by keeping a reasonable balance between debt and equity. 
To date the group has minimised risk by being purely equity financed. The group considers its capital to comprise its ordinary share capital, 
share premium, accumulated retained earnings and other reserves. Borders & Southern Annual Report 2008 39 
Directors
David Harry Williamson Dobson
Stephen James Douglas Posford
Howard Kevin Obee
Christopher Nigel Hurst-Brown
Peter William Fleming
Secretary
William John Walton Slack
Registered office
3 Copthall Avenue
London
EC2R 7BH
Business address
33 St James’s Square
London
SW1Y 4JS
Nominated Advisor 
And Joint Broker
Panmure Gordon & Co
Moorgate Hall
155 Moorgate
London
EC2M 6XB
Joint Broker
Ocean Equities Limited
3 Copthall Avenue
London
EC2R 7BH
Solicitors to the company
as to English Law
Denton Wilde Spate 
1 Fleet Place
London
EC4M 7WS
Registrars
Capita Registrars
Northern House
Woodsome Park
Fenay Bridge
Huddersfield
HD8 0LA
Bankers
Lloyds TSB Bank plc 
19-21 The Quadrant 
Richmond 
Surrey 
PW9 1BP
Independent Auditors
BDO Stoy Hayward LLP 
Chartered Accountants & 
Registered Auditors 
55 Baker Street
London 
W1U 7EU
Investor Relations
Tavistock Communications Limited
131 Finsbury Pavement
London
EC2A 1NT
Corporate Directory 40 Borders & Southern Annual Report 2008
NOTICE is given that the annual general meeting of Borders & Southern Petroleum plc (the Company) will be held at 33 St James Square, 
London SW1Y 4JS on 23 June at 11:00 am for the following purposes.
Items 1 to 6 will be proposed as ordinary resolutions and items 7 and 8 as special resolutions.
1  To receive the accounts of the Company and the directors’ report and the auditors’ report thereon for the year ended 31 December 2008. 
2 To approve the directors remuneration report for the year ended 31 December 2008.
3  To reappoint BDO Stoy Hayward LLP as auditors of the Company until the conclusion of the next general meeting of the Company at 
which accounts of the Company are laid before the members
4 To authorise the directors to determine the remuneration of BDO Stoy Hayward LLP as the auditors of the Company.
5 To re-elect Howard Obee, who retires by rotation under the articles of association, as a director of the Company.
6 That in substitution for all existing authorities (but without prejudice to the exercise of any such authority prior to the date hereof):
(i)  the directors be and are generally and unconditionally authorised to exercise all powers of the Company to allot relevant securities 
(within the meaning of Section 80 of the Companies Act 1985 (the Act
(ii)  the directors be and are generally and unconditionally authorised to exercise all powers of the Company to allot relevant securities 
(within the meaning of Section 80 of the Act) in connection with a rights issue or other offering in favour of ordinary shareholders 
where the equity securities respectively attributable to the interests of all ordinary shareholders are proportionate (as nearly as 

  Provided that:
  (a)  the authorities in sub-paragraphs (i) and (ii) above shall expire (unless previously renewed, varied or revoked by the Company 

  (b)  the Company may before such expiry make an offer or agreement which would or might require relevant securities to be 
allotted after such expiry and the directors may allot relevant securities in pursuance of such an offer or agreement as if the 
relevant authority conferred hereby had not expired.
7  That, subject to Resolution 6 being passed, the directors be empowered, pursuant to Section 95 of the Act (but without prejudice to the 
exercise of any such authority prior to the date hereof), to allot equity securities (as defined in Section 94(2) to 94(3A) of the Act) out of 
any relevant securities (as defined in Section 80 of the Act) which they are from time to time authorised to allot, as if Section 89(1) of the 
Act did not apply to such allotment as follows:
(i)  in connection with a rights issue or other offering in favour of ordinary shareholders where the equity securities respectively 
attributable to the interests of all ordinary shareholders are proportionate (as nearly as may be) to the respective numbers of 
ordinary shares held by them (but with such exclusions or other arrangements as the directors may deem necessary or expedient 
to deal with fractional entitlements, record dates or other legal or practical problems under the laws of, or the requirements of, any 
recognised regulatory body or any stock exchange in any territory, or as regards shares held by an approved depositary or in issue in 

(ii)  generally in connection with an issue of equity securities (other than pursuant to sub-paragraph (i) above) up to an aggregate 

  Provided that:

  (b)  the Company may before such expiry make an offer, agreement or other arrangement which would or might require equity 
securities to be allotted after such expiry and the directors may allot equity securities pursuant to any such offer, agreement 
or other arrangement as if the authority hereby conferred had not so expired.
Notice of Annual General Meeting Borders & Southern Annual Report 2008 41 
8That:
(i)  Article 18.1 of the articles of association of the Company shall be deleted and replaced with the following: “Subject to Article 18.4, 
an annual general meeting shall be called on not less than twenty-one clear days’ notice. All other general meetings shall be called 
 (ii)  notwithstanding the subsequent coming into force of the Companies (Shareholders’ Rights) Regulations 2009, a general meeting 
other than an annual general meeting may be called on not less than 14 clear days’ notice.
By order of the Board
Secretary
28 May 2009 
Registered office:
3 Copthall Avenue
London, EC2R 7BH
Notes:
1.  A member entitled to attend and vote at the Meeting is also entitled to appoint one or more proxies to attend and, on a poll, vote 
instead of him. A proxy need not be a member of the Company.
2.  To be valid, the instrument appointing a proxy, together with the power of attorney or other authority, if any, under which it 
is signed (or a copy of such power of authority certified by a notary) must be deposited with the Company’s Registrars, Capita 
Registrars, Proxy Department, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4BR not less than 48 hours before the time 
fixed for the Meeting. A form of proxy is enclosed with this notice. Completion and return of the form of proxy will not preclude 
shareholders from attending or voting at the Meeting if they wish.
3.  Copies of directors’ service contracts and the terms of engagement of non-executive directors with the Company, together with 
the register of directors’ share interests, are available for inspection at the registered office of the Company during normal business 
hours on each business day until the conclusion of the Annual General Meeting and will also be available for inspection at the place 
of the Meeting from at least 15 minutes prior to the commencement of the Meeting until its conclusion.
4.  Any person to whom this notice is sent who is a person nominated under section 146 of the Companies Act 2006 to enjoy 
information rights (a Nominated Person) may, under an agreement between him or her and the shareholder by whom he or she 
was nominated, have a right to be appointed (or to have someone else appointed) as a proxy for the Annual General Meeting. If a 
Nominated Person has no such proxy appointment right or does not wish to exercise it, he or she may, under any such agreement, 
have a right to give instructions to the shareholder as to the exercise of voting rights.
5.  The statement of the rights of shareholders in relation to the appointment of proxies in notes 1 and 2 above does not apply to 
Nominated Persons. The rights described in these paragraphs can only be exercised by shareholders of the Company.  33 St James’s Square
London SW1Y 4JS
United Kingdom
Telephone: +44 (0)20 7661 9348
Fax: +44 (0)20 7661 8055
info@bordersandsouthern.com
www.bordersandsouthern.com
borders&southern
petroleum plc