Borders & Southern Petroleum plc Annual Report & Accounts 2015
Borders & Southern Petroleum plc Annual Report & Accounts 2015 Borders & Southern is an 
independent oil and gas 
exploration company. Based 
in London, the Company’s 
principal area of activity is in 
the F alkland Islands, where it 
operates three Production 
Licences covering an area of 
nearly 10,000 square 
kilometres.
In 2012 the Company made its first significant gas 
condensate discovery and has subsequently been 
evaluating the scale of the hydrocarbon resource 
along with the near -field prospectivity.
Strategic Report
01 Highlights
02 Company Overview
04 Chairman’s Statement
05 Corporate Responsibility
06 Business Model & Strategy
08 CEO’s Statement
09 Principal Risks and Uncertainties
Directors’ Report
10 Board of Directors
12 Corporate Governance
13 Directors’ Report
15 Corporate Responsibility at a Glance
16 Remuneration Committee Report
Financial Statements
17 Independent Auditor’s Report
18 Consolidated Statement of 
Comprehensive Income
19 Consolidated Statement of  
Financial Position
20 Consolidated Statement of  
Changes in Equity
21 Company Statement of  
Financial Position
22 Company Statement of  
Changes in Equity
23 Consolidated Statement of Cash Flows
24 Company Statement of Cash Flows
25 Notes to the Financial Statements
35 Corporate Directory 1 www.bordersandsouthern.com Strategic Report Directors' Report Financial Statements
• Darwin recoverable resource upgrade: 360 million 
barrels of condensate (P 50, unrisked best estimate )
• F arm-out process is active, but continues to be 
impacted by the low oil price environment
• Reduced administrative expenses – 
2015: $1.97 million (2014: $3 million)
• Cash balance at 31 December 2015: $14.0 million 
(2014: $16.1 million)
Highlights
For more information please visit:
www.bordersandsouthern.com
The technical evaluation of our 
exciting Darwin discovery continues 
to make good progress, but the 
consistently low oil price during 2015 
has caused delay in its appraisal 
programme.
Howard Obee, Chief Executive Officer DARWIN
Stebbing
Toroa
Humpback
Falkland Islands
Borders & Southern Petroleum plc
Annual Report & Accounts 2015 2
Company Overview
Borders & Southern was incorporated in June 2004 
and listed on the London Stock Exchange (AIM: BOR) 
in 2005. Its Falkland Islands acreage was signed in 
November 2004. The exploration programme has 
included the acquisition of 2D and 3D seismic data 
followed by the drilling of two wells. This resulted in a 
significant gas condensate discovery, Darwin, which 
is currently being evaluated prior to appraisal drilling.
Number of barrels
360 million
Management unrisked best estimate (P50) of the 
recoverable condensate from the combined 
Darwin East and Darwin West structures.
Management unrisked best estimate (P50) for 
the volume of gas in place is 3.5 tcf. 20
40
60
80
100
120
Jan 2015
Jan 2016
3 www.bordersandsouthern.com Strategic Report Directors' Report Financial Statements
Darwin, our  
gas condensate  
discovery
The Darwin discovery consists of two 
adjacent tilted fault blocks containing 
a high quality clastic reservoir , clearly  
imaged on 3D seismic data.
Brent crude slumped dramatically from over 
$110 per barrel in mid 2014 down to below $30 
per barrel in January 2016. This price drop has 
had a profound effect on the industry.
Borders & Southern has been affected like all of 
our peer group, notably the delay to Darwin’s 
appraisal drilling, due to the challenge in 
securing funding.
BRENT CRUDE
The chart illustrates the price of Brent 
Crude oil ($/barrel) from May 2014 to 
March 2016.
TECHNICAL SUMMARY
The Darwin reservoir comprises Early 
Cretaceous shallow marine sandstone. 
The hydrocarbons have been trapped in 
two simple tilted fault blocks, fault sealed 
to the north and dip closed to the south. 
The gas condensate is highlighted 
seismically by amplitude conformance to 
structure and an associated flat spot. 
The gas condensate/water contact was 
not seen in the discovery well.
Licence PL018
B&S Interest 100%
Structure Tilted Fault Block
Area of seismic anomaly 26 square kilometres
Reservoir Early Cretaceous (Aptian)
Water depth 2,011m
Total depth 4,876m
Gross interval 84.5m
Net pay 67.8m
Average porosity 22% (up to 30%)
Average permeability 337 mD (up to 1D)
Estimated gas in place 3.5 tcf
Estimated recoverable condensate 360 MMbbl (P50)
Condensate API 46 to 49 degrees
Initial condensate yield 148 stb/MMscf
Darwin East – map displaying structural contours and seismic 
amplitude anomalies associated with the trapped hydrocarbons. Borders & Southern Petroleum plc
Annual Report & Accounts 2015 4
Industry setting
The industry downturn, triggered by the 
decline in the oil price, has had a significant 
impact on the Company’s fortunes. Brent has 
fallen from around $110 per barrel in mid 2014, 
to around $35 per barrel at the end of 2015. 
This sustained low oil price has caused 
companies to make dramatic reductions in 
their expenditure, delay major capital projects 
and reduce or stop taking on new 
opportunities. This has made it a particularly 
challenging environment for us in which to 
conduct a farm-out. There are as many views 
on future oil price trends as there are analysts 
and commentators, with little consensus at 
the moment. Most believe a recovery will 
occur, but to what level and exactly when, there 
is no agreement. Consequently, companies 
are trying to re-base their operations to 
weather a low cost, low oil price world. 
Financial position
Borders & Southern’s financial status is 
relatively robust in the current environment, 
with a strong balance sheet and no debt. We 
ended the year with a cash balance of $14.0 
million, compared to $16.1 million at the end of 
2014. Like most companies in our sector, we 
have reduced our expenditure. The 2015 
administrative expense was $1.97 million 
compared to $3.04 million in the previous year. 
This reduced expenditure has not impacted 
our ability to progress technical work and 
advance our understanding of our assets. We 
intend to maintain this capital discipline 
throughout 2016 and beyond.
Project status
The industry recession has delayed the timing 
of the next operations phase on our 
Production Licences. We had hoped to have 
secured partners and funding for a new 
exploration and appraisal drilling programme 
by now, but have had to reset our expectations. 
So whilst the current Production Licence 
period extends through to the end of October 
2017 , we have applied to the Falkland Islands 
Government for an extension.
From a sub-surface point of view we have 
continued to make good progress. Earlier in 
2015, we announced an upgrade in the 
combined Darwin East and West recoverable 
resource estimate (Best estimate P50: 360 
million barrels of condensate) and described 
some of the surrounding prospects in more 
detail. We continue to work the Early 
Cretaceous shallow marine sandstone play 
fairway in detail, re-mapping the discovery and 
analysing the seismic response on near -field 
prospects with the aim of developing reliable 
predictive models for hydrocarbon presence 
and phase.
Additionally, we have spent time re-assessing 
our basin models, incorporating the results 
from recent drilling activity by other operators. 
The Humpback well was located over 250km 
northeast of Darwin and its findings have no 
impact on the prospectivity of our licences. 
In fact, our recent regional basin analysis has 
re-enforced our belief that our licences are 
optimally located in the South Falkland Basin.
Current technical work is aimed at re-assessing 
how a Darwin development would fit into a low 
oil price world. We know that the combination 
of competitive fiscal terms in the Falkland 
Islands and excellent reservoir characteristics 
of the Early Cretaceous shallow marine 
sandstone makes a development competitive 
on the cost curve against other deep water 
developments. However, we need to assess 
just how commercial a project would be in a 
period of sustained low oil prices. Previously we 
had considered 2 to 3 appraisal wells and 10 
development wells (6 producers, 4 gas 
re-injectors) with sub-sea tie back to an FPSO. 
New reservoir engineering studies are looking 
at reduced well count models. Outputs from 
this work will feed into a fresh look at facilities 
engineering concepts and costs and, in turn, a 
new economic evaluation. If we can clearly 
demonstrate the commercial viability of a 
development in a low oil price environment, it 
should assist the farm-out process. 
Outlook
All our technical and commercial work to date 
suggests that Darwin is a robust project, even 
in a low oil price environment. The principal risk 
for the Company over the next 12 months is 
that a sustained low oil price will cause further 
delay to our farm-out and hence funding for 
the next phase of operations. We have 
positioned the Company so that our strong 
balance sheet will allow us to withstand an 
extended period of reduced industry activity. 
As we move forward, we will continue to 
control costs, undertake good science and 
maintain our resolve to monetise the Darwin 
discovery.
Finally, Stephen Posford, 69, one of the 
Company’s founders and a member of the 
Board since the Company’s inception, has 
announced that he intends to retire from 
business activities and will step down from the 
Board prior to the AGM. Stephen has played an 
influential role in the development of the 
Company, which included the significant gas 
condensate discovery in 2012. On behalf of all 
the Directors I would like to thank Stephen for 
his contribution and wish him a healthy, happy 
and long retirement.
Chairman’s Statement
All our technical and commercial work 
to date suggests that Darwin is a 
robust project, even in a low oil price 
environment. The principal risk for the 
Company over the next 12 months is 
that a sustained low oil price will cause 
further project delay.
Harry Dobson, Chairman 5 www.bordersandsouthern.com Strategic Report Directors' Report Financial Statements
Corporate Responsibility
Borders & Southern’s business is to 
create value through the discovery 
and monetisation of hydrocarbons. 
T o be successful we need to ensure that 
all our stakeholders benefit, including 
shareholders, host governments, 
the communities in which we operate, 
employees and our partners. Corporate 
Responsibility is therefore central to 
everything we do. We aim to conduct our 
operations safely, in line with industry 
best practice, demonstrating 
environmental and social responsibility. 
We will maintain good governance, 
identifying and managing risks, and will 
ensure high standards of business ethics.
Howard Obee, Chief Executive
May 2016
Conducting business in a responsible  
and sustainable way
Focusing on limiting and mitigating  
the environmental impact
Ensuring health and safety practices follow 
best practice
Using local suppliers and service  
providers where possible
CORPORATE RESPONSIBILITY AT A GLANCE Borders & Southern Petroleum plc
Annual Report & Accounts 2015 6
Our business model is all about value creation through  
the discovery and monetisation of hydrocarbons.
How we create value Description
1. ACCESS
New opportunities
The first stage is to access new opportunities, either 
through Licence Rounds or Open Door policies.
Our Frontier Exploration strategy directs us to focus 
on untested or emerging basins where significant 
acreage positions can be accessed at relatively 
low cost.
Comprehensive technical screening prior to access 
helps mitigate geological risk, however the project 
risk profile is relatively high at this stage.
Economic modeling of fiscal terms and potential 
discovery volumes is undertaken to ensure project 
rewards merit the investment decision.
2. EXPLORE
Commence operations
Our technical work is underpinned by rigorous 
petroleum systems analysis.
Operations will typically begin with the acquisition of 
2D seismic, at limited financial exposure.
If interpretation of the 2D seismic data provides 
confidence in a working source rock, reservoirs and 
trapping geometries, then further investment will be 
made in the acquisition of 3D seismic data.
Detailed analysis of the 3D seismic will result in the 
development of a prospect inventory, outlining the 
estimated prospect sizes and their associated risks.
Finally, prospects will be high-graded and the 
preparation for a drilling programme will commence.
3. APPRAISE
Assess the commerciality
If the drilling campaign leads to the discovery of 
hydrocarbons, then the well results will be evaluated 
and integrated back into the 3D interpretation.
An appraisal programme will be designed and 
executed in order to constrain the resource 
estimates and to assess the commerciality of a 
potential development project.
T ypically, several more wells will be drilled. Coring and 
reservoir flow tests will be undertaken and 
exhaustive reservoir studies completed.
Positive results from the appraisal programme will 
lead to detailed facilities engineering studies prior to 
a final investment decision to proceed with a 
development.
4. ACCRETE
Build a strong position
Once a working petroleum system has been 
demonstrated through the discovery of 
hydrocarbons, the objective will be to maximise the 
acreage position and add value to the asset.
Near field targets will be tested to extend the 
discovery and exploration will continue focusing on 
analogue prospects within the prospect inventory.
Alternative play types will also be tested in order to 
assess the overall value of the acreage.
5. MONETISE
Maximise asset value
Monetisation can occur at all stages of the business 
cycle. Partners can be brought in at the access, 
exploration or appraisal stages in order to help fund 
new phases of work.
Alternatively, partnering could occur after the 
appraisal stage in order to help fund a development 
project. Significant capital investment is required at 
this stage.
In order to return value to our shareholders, a dilution 
of interest or an asset sale might occur once a 
discovery has been brought into production.
Business Model & Strategy 7 www.bordersandsouthern.com Strategic Report Directors' Report Financial Statements
Our technical work is making great strides forward. Our aim is to reduce 
sub-surface risk and enhance our chance of success.
Progress in 2015 Outlook
In 2014 we had consolidated 2,521 square kilometres of high quality 
PSDM 3D seismic data. This allowed us to undertake a number of 
technical studies during 2015, focused on the main Darwin reservoir 
interval, both within the mapped limits of the discovery and its regional 
extrapolation. Some highlights are outlined below.
Sub-surface analysis will continue to be refined, focusing on our proven 
reservoir along with other potential targets. We also aim to reassess the 
facilities options for a Darwin development scheme, taking a fresh look 
at costs and timing to reflect the current industry environment.
Seismic inversion/Reservoir characterisation
• The objective was to investigate three reservoir intervals: the main 
Darwin Early Cretaceous reservoir, a slightly shallower Early 
Cretaceous sand and a deeper high-amplitude target not penetrated 
by the discovery well.
• Reservoir properties were estimated using seismic data calibrated by 
well-log data. The study integrated pre-stack inversion elastic 
attributes and AVO attributes.
• Statistical results from the study have given us an insight into the 
spatial distribution of porosity and water saturation across the Darwin 
East and West structures and helped characterise the reservoir 
heterogeneity. The results have also provided an understanding of 
the potential reservoir characteristics of nearby prospects.
• The results have allowed us to generate better resource estimates 
and will help us optimise future well locations.
Resource assessment
• The objective was to provide new resource estimates based on 
revised mapping and inputs from the reservoir characterisation 
study.
• Analysis focused on the Early Cretaceous shallow marine sandstone 
play fairway, but incorporated an older, deeper interval that had a 
strong AVO anomaly.
• The study revised the un-risked best estimate (P50) for the 
combined Darwin East and Darwin West structures to be 360 million 
barrels of recoverable condensate.
• Additionally, near -field prospects highlighted by the seismic inversion 
study were defined: Covington, Morgan, Sulivan, Stokes and 
Wickham (described in an RNS, May 2015).
Basin evaluation
• Our understanding of the geological history of the South Falkland 
Basin is constantly evolving. New findings from the detailed studies 
are integrated into our regional models with the objective of 
enhancing our ability to predict the distribution of source rocks, 
reservoirs and seals.
• Drilling results from other operators are also integrated into regional 
models.
• Results from the Humpback well, drilled 250 km northeast of Darwin, 
have little bearing on the prospectivity of our acreage.
• Our current regional models suggest that very good Early 
Cretaceous reservoir development occurs south of the Falkland 
Islands. These models predict that our acreage may contain further 
hydrocarbon accumulations, with potential for oil, gas condensate 
and gas discoveries. Borders & Southern Petroleum plc
Annual Report & Accounts 2015 8
Despite the challenges facing the 
industry today, we remain optimistic 
that our project will find the funding 
necessary to move it forward.
With Howard Obee and Peter Fleming
Our aim for 2015 had been to secure funding 
for the next phase of operations in the Falkland 
Islands, but the continued low oil price and the 
industry’s significant reduction in capital 
expenditure meant that we were unable to 
achieve all our goals.
The industry downturn caused us to move 
quickly to reduce expenditure in order to 
preserve funds, but we ensured that our 
sub-surface work continued to move forward. 
Good progress has been made on that front. 
During the year we reported on a resource 
upgrade for the Darwin discovery and 
described near -field prospects along with their 
resource estimates. We also revised our basin 
geological models, incorporating new findings 
including the well results from other operator’s 
drilling programmes. These regional geological 
studies reinforce our belief that our acreage 
sits in the right part of the South Falkland Basin, 
in an area where we can demonstrate high 
quality reservoirs, mature source rocks that 
have generated both oil and gas and a variety 
of trapping configurations. Our efforts to 
continually enhance our prospect and regional 
interpretations are driven by a need to 
minimise sub-surface risks ahead of the 
next exploration/appraisal campaign.
Current sub-surface work is focused on a field 
development study, remodelling and 
reassessing the reservoir performance in light 
of new mapping. We are considering several 
development possibilities using different 
numbers of production and gas re-injection 
wells, looking to determine the optimum 
commercial solution.
Once completed, this work will feed into a fresh 
look at facilities design, building on an earlier 
screening feasibility study. The objective is to 
assess different alternatives for bringing the 
discovery into production quickly and cost 
effectively. The low oil price environment has 
seen a reduction in many service company 
costs. We need to reassess our project 
economics in light of current cost estimates. 
Previous project economics for a Darwin 
development have suggested that it would be 
competitive against many other global 
opportunities, sitting relatively low on the 
global cost curve, due to the attractive fiscal 
terms and a low well count (a function of the 
high quality reservoir).
Our hope is that this new work will increase the 
commercial attractiveness of the project, 
which can only help our farm-out objectives. 
The industry as a whole continues to be on a 
run of disappointing exploration results, 
particularly for liquids. In this context, the 
South Falkland Basin represents an appealing 
place to explore. From our perspective, the 
Darwin discovery and our licensed acreage has 
many attractions. We can point to our 
assessment of a large volume of recoverable 
condensate, a high quality reservoir and a 
potentially straight forward FPSO 
development that is commercially attractive 
and able to withstand relatively low oil prices. 
Additionally, we have upside potential within 
near -field prospects.
CEO’s Statement 9 www.bordersandsouthern.com Strategic Report Directors' Report Financial Statements
Principal Risks and Uncertainties
RISK STATUS KEY 
(*RS refers to Risk Status)
Risk Nature of risk RS* Mitigation
EXPLORATION 
SUB-SURFACE
Exploration for oil and gas is inherently risky and 
whilst many of these risks can be mitigated, they 
cannot be eliminated.
The Company has a disciplined approach to 
exploration, using industry leading techniques for 
data acquisition and interpretation. Its employees 
and contractors are all very experienced 
geoscientists and engineers.
HEALTH, SAFETY, 
SECURITY AND THE 
ENVIRONMENT
Conducting operations in a remote, 
environmentally sensitive location presents 
many challenges.
Prior to operations, detailed risk assessments and 
mitigation plans are put in place. Policies, plans and 
actions closely follow industry’s best practice.
FUNDING
The Company has a strong balance sheet with 
sufficient funds for overheads in the foreseeable 
future. The challenge is to secure funds for the 
next phase of drilling.
Darwin’s high quality reservoir and attractive fiscal 
terms mean that it is commercially competitive 
against similar global projects. Therefore we are 
confident of securing the necessary partners/
funding.
OIL PRICE
The industry is impacted by the commodity cycle. 
A protracted period of low oil price can result in 
serious constraints for capital investment.
The economics of a Darwin development indicate 
that it is robust in a low oil price environment. 
Whilst the Company cannot influence the 
commodity price, it can work on low cost 
development options.
KEY PERSONNEL
Like many others in our peer group, the Company 
is reliant upon a small number of experienced 
personnel.
The Company has service contracts with key 
employees that provide for notice periods that 
would allow sufficient time to source 
replacements. Also, the Company has a wide 
network of experienced contractors to call upon.
SUPPLY CHAIN
The geographical location and political backdrop 
provide significant logistical challenges.
Meticulous planning with in-built contingency is 
essential for successful operations. Several drilling 
campaigns have now been undertaken by the 
industry so there is a wealth of experience to 
draw upon.
COUNTRY/
POLITICAL
There is an ongoing dispute over the sovereign 
status of the Falkland Islands.
The British Government consistently provides 
strong support for the Falkland Islanders’ right to 
determine their own future.
Risk increase
Risk unchanged
Risk decrease Borders & Southern Petroleum plc
Annual Report & Accounts 2015 10
Board of Directors
HARRY DOBSON
(NON-EXECUTIVE CHAIRMAN)
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., Lytton Minerals Limited, Kirkland Lake 
Gold Inc and Rambler Metals and Mining 
plc. He is experienced in the organisation 
and funding of resource projects, including 
those located in inaccessible locations.
Harry is Chairman of the Remuneration 
Committee and sits on the Audit Committee.
HOWARD OBEE
(CHIEF EXECUTIVE)
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 30 years in the 
oil industry, initially with BP (1985–1992), and 
subsequently with BHP Billiton (1992–2004). 
He trained as an exploration geologist and has 
held numerous technical and commercial 
roles, incorporating exploration, new ventures, 
strategic planning and business development. 
He has experience of executing seismic and 
drilling programmes in frontier basins, including 
those in deep water.
PETER FLEMING
(FINANCE DIRECTOR)
Peter Fleming has over 23 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. He holds masters degrees 
in Business Administration and Finance. 11 www.bordersandsouthern.com Strategic Report Directors' Report Financial Statements
NIGEL HURST-BROWN
(NON-EXECUTIVE DIRECTOR)
Since qualifying as a Chartered Accountant, 
Nigel Hurst -Brown has pursued a career 
in fund management. From 1986 to 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, a member of the Executive 
Committee of its US parent, Hotchkis and 
Wiley Capital Management LLC, and Non-
executive Chairman of Central Asia Metals plc.
Nigel is Chairman of the Audit Committee and 
sits on the Remuneration Committee.
BOARD OF DIRECTORS
Harry Dobson
Non-executive Chairman
A
 
R
Howard Obee
Chief Executive
E
Peter Fleming
Finance Director
E
Nigel Hurst-Brown
Non-executive Director
 
A
 
R
Stephen Posford
Non-executive Director
A
 
R
A Audit Committee
R Remuneration Committee
E Executive Director
STEPHEN POSFORD
(NON-EXECUTIVE DIRECTOR)
Background
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 its proprietary trading department 
in London. He then became Salomon Brothers 
European CEO before retiring in 1996.
Stephen, one of the founders of the company, 
is retiring from business activities and will step 
down from the Board prior to the AGM. Borders & Southern Petroleum plc
Annual Report & Accounts 2015 12
Corporate Governance
Borders & Southern is committed to applying robust Corporate Governance practices across all its activities. Throughout the year the Board has 
sought to comply with a number of the provisions of the UK Corporate Governance Code (“the Code”) in so far as it considers them to be appropriate 
to a company of its size and nature.
The Board
Borders & Southern recognises that an effective Board facilitates the efficient discharge of the duties imposed by law on Directors and contributes to 
the delivery of the Company’s strategic objectives. Accordingly, Borders & Southern has structured its Board so that it:
• has a proper understanding of, and the competencies to deal with, the current and emerging issues in the Company’s business;
• exercises independent judgement; and
• effectively reviews and challenges management’s performance and exercises independent judgement.
The Board currently comprises the Chairman, two Executive Directors and two Non-executive Directors. Each of the Executive Directors has 
extensive knowledge of the oil and gas industry combined with general business and financial skills. All of the Directors bring independent judgement 
to bear on issues of strategy, performance, resources, key appointments and standards. The Board meets regularly throughout the year and all the 
necessary information is supplied to the Directors on a timely basis to enable them to discharge their duties effectively.
Role of the Chairman
Harry Dobson was appointed Chairman of the Company at its inception. As Chairman, he is responsible for the effective running of the Board and for 
ensuring that it plays a constructive role in the development of the Company. T ogether with the Chief Executive Officer, the Chairman sets and runs 
the agenda for Board meetings.
Roles of the Non-executive Directors
The Non-executive Directors bring a wealth of business experience to the Board and its Committees. They provide independent views on the 
Company’s performance, operations and strategy. All Directors retire by rotation.
Remuneration Committee
The Board has a Remuneration Committee comprising three Non-executive Directors. The members of the Remuneration Committee and their 
attendance at meetings of the Remuneration Committee during 2015 are detailed in the Directors’ Report.
The strategy of the Remuneration Committee is to ensure the Company:
• remunerates fairly and responsibly. Borders & Southern’s policy is to ensure that the level and composition of remuneration for all employees is 
competitive and reasonable;
• includes both short -term and long-term performance-based components in its remuneration practices; and
• benchmarks its remuneration with comparable companies.
Audit Committee
The Board has an Audit Committee comprising three Non-executive Directors. The members of the Audit Committee and their attendance at 
meetings of the Audit Committee during 2015 are detailed in the Directors’ Report.
The objectives of the Audit Committee are to ensure:
• the accuracy and integrity of the financial statements and related disclosures;
• the keeping of adequate books, records and internal controls;
• the auditor is independent and is qualified and its performance is monitored; and
• compliance with legal and regulatory requirements.
Insurances
The Company has taken out Directors and Officers insurance that provides insurance cover for all Directors and senior officers of the Company. This 
insurance is reviewed annually.
Key Performance Indicators
At this stage in its development, the Company is focusing on the development of its existing Darwin discovery. As and when the Company moves into 
production, financial, operational, health and safety and environmental KPIs will become relevant and will be reported and measured as appropriate.
The Directors do however closely monitor certain financial information, in particular overheads and cash balances, as set out in the Chairman’s 
statement. 13 www.bordersandsouthern.com Strategic Report Directors' Report Financial Statements
Directors’ Report
The Directors present their report and the audited consolidated financial statements for the year ended 31 December 2015.
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 2015, were as follows:
At 31 December 
2015 
Number
At 31 December 
2014 
Number
Harry Dobson 26,670,000 26,670,000
Howard Obee 10,000,000 10,000,000
Peter Fleming 2,200,000 2,200,000
Nigel Hurst-Brown 1,530,000 1,530,000
Stephen Posford 27 ,500,000 27 ,500,000
The ordinary shares in which Harry Dobson is interested are held by the Zila Corporation, a company owned by the Whitmill T rust Company Limited, 
as trustee of The Lotus T rust 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  
of the year
Number of  
options held at  
the end  
of the year
Fair value  
of options
Exercise  
price
Vesting  
period
Howard Obee 1,300,000 1,300,000 24–30 pence 48–58 pence three years
Peter Fleming 1,300,000 1,300,000 24–30 pence 48–58 pence three years
Nigel Hurst-Brown 250,000 250,000 32 pence 58 pence three years
Substantial shareholders
At 29 March 2016 the following held 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 67 ,613,605 13.97%
Allianz Global Investors 38,571,714 7.97%
Stephen Posford 27 ,500,000 5.68%
Capital Research Global Investors 27,293,100 5.64%
Zila Corporation 26,670,000 5.51%
Ignis Investment Services Limited 23,549,230 4.86%
TD Direct Investing 23,151,275 4.78%
Vestra Wealth 16,373,092 3.38%
Halifax Share Dealing 16,073,358 3.32%
Barclays Wealth 15,667 ,633 3.24%
Domicile
The Parent Company of the group, Borders & Southern Petroleum Plc, is a public limited company and is registered and domiciled in England.
Results and dividends
The group statement of comprehensive income is set out on page 18 and shows the results for the year.
The Directors do not recommend the payment of a dividend (2014: $nil).
Review of business and future developments
A review on the operations of the Group is contained in the CEO’s Statement on page 8.
Post reporting date events
There are no events that have occurred since the year end which require reporting.
Charitable and political donations
There were no political or charitable contributions made by the Company or the Group during the year (2014: $nil).
Financial instruments
Details of the use of financial instruments by the Company and its subsidiary undertaking are contained in note 20 of the financial statements. Borders & Southern Petroleum plc
Annual Report & Accounts 2015 14
Directors’ Report continued
Directors’ responsibilities
The Directors are responsible for preparing the Directors’ Report, the Strategic Report and the financial statements in accordance with applicable law 
and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the Group and 
Company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and elected 
to prepare the Company financial statements in accordance with IFRSs. Under company law the Directors must not approve the financial statements 
unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of the profit or loss of the Group for 
that period. The Directors are also required to prepare financial statements in accordance with the rules of the London Stock Exchange for 
companies trading securities on AIM.
In preparing these financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
• state whether they have been prepared in accordance with IFRSs as adopted by the European Union, subject to any material departures disclosed 
and explained in the financial statements;
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and 
disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply 
with the requirements of the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking 
reasonable steps for the prevention and detection of fraud and other irregularities.
Number of Board meetings during 2015
Attendance Board
Remuneration 
Committee
Audit  
Committee
Harry Dobson 4 1 2
Howard Obee 4 – –
Peter Fleming 4 – –
Nigel Hurst-Brown 4 1 2
Stephen Posford 4 1 2
Website publication
The Directors are responsible for ensuring the annual report and the financial statements are made available on a website. Financial statements are 
published on the company’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 company’s website is the responsibility of the 
directors. The Directors’ responsibility also extends to the ongoing integrity of the financial statements contained therein.
Auditor
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 auditor for the purposes of its audit and to establish that the auditor is aware of that information. The Directors are not aware of any 
relevant audit information of which the auditor is unaware.
BDO LLP has expressed its 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 Slack
Company Secretary
11 May 2016 15 www.bordersandsouthern.com Strategic Report Directors' Report Financial Statements
Corporate Responsibility at a Glance
• Conducting business in a responsible and sustainable way.
• Focusing on limiting and mitigating the environmental impact.
• Ensuring health and safety practices follow best practice.
• Using local suppliers and service providers where possible.
Throughout its history, the Company has demonstrated that it conducts its activities in a responsible and sustainable way in line with industry 
best practices.
The Strategic Report on pages 1 to 9 is issued and signed on behalf of the Board by:
Howard Obee
Chief Executive
11 May 2016 Borders & Southern Petroleum plc
Annual Report & Accounts 2015 16
Remuneration Committee Report
On 18 May 2005 all of the Company’s Directors entered into a service agreement with the Company.
The strategies the Remuneration Committee uses to set the remuneration of Directors and senior management are outlined on page 12.
The remuneration of the Directors for the year ended 31 December 2015 was as follows:
Basic salary 
$
Share-based 
payment 
$
Total 
2015 
$
Total 
2014 
$
Harry Dobson – – – –
Stephen Posford – – – 49,661
Howard Obee 383,821 – 383,821 475,457
Nigel Hurst-Brown – – – 66,214
Peter Fleming 307 ,057 – 307 ,057 392,689
690,878 – 690,878 984,021
The share-based payments are the amortisation over the vesting period of the fair value of options issued to Directors in previous years. See note 7 
for more details.
The Group does not operate a pension scheme for its Directors or employees.
From 1 January 2015, the Non-Executive Directors have elected not to receive a salary until further notice. 17 www.bordersandsouthern.com Strategic Report Directors' Report Financial Statements
Independent Auditor’s Report
to the members of Borders & Southern Petroleum plc
We have audited the financial statements of Borders & Southern Petroleum Plc for the year ended 31 December 2015 which comprise the 
consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated statement of changes in 
equity, the Company statement of financial position, the Company statement of changes in equity, the consolidated statement of cash flows, the 
Company statement of cash flows and the related notes. The financial reporting framework that has been applied in their preparation is applicable law 
and International Financial Reporting Standards (IFRSs) as adopted by the European Union and, as regards the Parent Company financial statements, 
as applied in accordance with the provisions of the Companies Act 2006.
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work 
has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for 
no other purpose. T o the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the 
Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of Directors and auditors
As explained more fully in the statement of Directors’ responsibilities, the Directors are responsible for the preparation of the financial statements 
and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in 
accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Financial 
Reporting Council’s (FRC’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the FRC’s website at www.frc.org.uk/auditscopeukprivate.
Opinion on financial statements
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and the Parent Company’s affairs as at 31 December 2015 and of the 
Group’s loss for the year then ended;
• the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;
• the Parent Company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union and as 
applied in accordance with the provisions of the Companies Act 2006; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and Directors’ Report for the financial year for which the financial statements are prepared 
is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received from branches 
not visited by us; or
• the Parent Company’s financial statements are not in agreement with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Scott Knight (Senior Statutory Auditor)
For and on behalf of BDO LLP , statutory auditor
London
United Kingdom
11 May 2016
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127). Borders & Southern Petroleum plc
Annual Report & Accounts 2015 18
Consolidated Statement of Comprehensive Income 
For the Year Ended 31 December 2015
Note
2015 
$000
2014 
$000
Administrative expenses (1,968) (3,037)
Loss from operations 2 (1,968) (3,037)
Finance income 8 47 59
Finance expense 8 (679) (910)
Loss before tax (2,600) (3,888)
T ax expense 9 – –
Loss for the year and total comprehensive loss for the year attributable to owners 
of the parent (2,600) (3,888)
Basic and diluted loss per share (see note 3) (0.54) cents (0.8) cents
The notes on pages 25 to 34 form part of the financial statements. 19 www.bordersandsouthern.com Strategic Report Directors' Report Financial Statements
Consolidated Statement of Financial Position
At 31 December 2015
2015 2014
Note $000 $000 $000 $000
Assets
Non-current assets
Property, plant and equipment 10 10 11
Intangible assets 11 289,590 289,966
T otal non-current assets 289,600 289,977
Current assets
Other receivables 13 297 329
Cash and cash equivalents 14,011 16,079
T otal current assets 14,308 16,408
T otal assets 303,908 306,385
Liabilities
Current liabilities
T rade and other payables 14 (283) (250)
T otal assets 303,625 306,135
Equity
Share capital 15 8,530 8,530
Share premium 15 308,602 308,602
Other reserves 2,370 2,280
Retained deficit (15,861) (13,261)
Foreign currency reserve (16) (16)
T otal equity 303,625 306,135
The notes on pages 25 to 34 form part of the financial statements.
The financial statements were approved by the Board of Directors and authorised for issue on 11 May 2016.
Howard Obee Peter Fleming
Director Director
Company Number: 5147938 Borders & Southern Petroleum plc
Annual Report & Accounts 2015 20
Consolidated Statement of Changes in Equity 
For the Year Ended 31 December 2015
Share capital 
$000
Share premium 
$000
Other reserves 
$000
Retained deficit 
$000
Foreign currency 
reserve 
$000
Total 
$000
Balance at 1 January 2014 8,530 308,602 2,035 (9,373) (16) 309,778
Loss and total comprehensive loss 
for the year – – – (3,888) – (3,888)
Recognition of share based payments – – 245 – – 245
Balance at 31 December 2014 8,530 308,602 2,280 (13,261) (16) 306,135
Loss and total comprehensive loss 
for the year – – – (2,600) – (2,600)
Recognition of share based payments – – 90 – – 90
Balance at 31 December 2015 8,530 308,602 2,370 (15,861) (16) 303,625
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 Amount subscribed for share capital in excess of nominal value.
Other reserves Fair value of options issued.
Retained deficit Cumulative net gains and losses recognised in the consolidated statement of 
comprehensive income.
Foreign currency reserves Differences arising on change of presentation and functional currency to US dollars.
The notes on pages 25 to 34 form part of the financial statements. 21 www.bordersandsouthern.com Strategic Report Directors' Report Financial Statements
Company Statement of Financial Position
At 31 December 2015
2015 2014
Note $000 $000 $000 $000
Assets
Non-current assets
Property, plant and equipment 10 10 11
Investments 12 – –
T otal non-current assets 10 11
Current assets
Other receivables 13 290,066 290,472
Cash and cash equivalents 14,011 16,079
T otal current assets 304,077 306,551
T otal assets 304,087 306,562
Liabilities
Current liabilities
T rade and other payables 14 (283) (250)
T otal net assets 303,804 306,312
Equity
Called up share capital 15 8,530 8,530
Share premium 15 308,602 308,602
Other reserves 2,370 2,280
Retained deficit (15,680) (13,082)
Foreign currency reserve (18) (18)
T otal equity 303,804 306,312
The notes on pages 25 to 34 form part of the financial statements.
The financial statements were approved by the Board of Directors and authorised for issue on 11 May 2016.
Howard Obee Peter Fleming
Director Director
Company Number: 5147938 Borders & Southern Petroleum plc
Annual Report & Accounts 2015 22
Company Statement of Changes in Equity
At 31 December 2015
Share capital 
$000
Share premium 
reserve 
$000
Other reserves 
$000
Retained deficit 
$000
Foreign currency 
reserve 
$000
Total 
$000
Balance at 1 January 2014 8,530 308,602 2,035 (9,196) (18) 309,953
Loss and total comprehensive loss  
for the year – – – (3,886) – (3,886)
Recognition of share based payments – – 245 – – 245
Balance at 31 December 2014 8,530 308,602 2,280 (13,082) (18) 306,312
Loss and total comprehensive loss  
for the year – – – (2,598) – (2,598)
Recognition of share based payments – – 90 – – 90
Balance at 31 December 2015 8,530 308,602 2,370 (15,680) (18) 303,804
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 Amount subscribed for share capital in excess of nominal value.
Other reserves Fair value of options issued.
Retained deficit Cumulative net gains and losses recognised in the consolidated statement of 
comprehensive income.
Foreign currency reserves Differences arising on change of presentation and functional currency to US Dollars.
The notes on pages 25 to 34 form part of the financial statements. 23 www.bordersandsouthern.com Strategic Report Directors' Report Financial Statements
Consolidated Statement of Cash Flows
FOR THE YEAR ENDED 31 DECEMBER 2015
2015 2014
Note $000 $000 $000 $000
Cash flow from operating activities
Loss before tax (2,600) (3,888)
Adjustments for:
Depreciation 1 2
Share-based payment 90 245
Net finance costs 632 851
Realised foreign exchange gains (8) 5
Cash flows from operating activities before changes  
in working capital (1,885) (2,785)
Decrease in other receivables 32 689
Decrease/(increase) in trade and other payables 33 (518)
Tax paid – (185)
Net cash outflow from operating activities (1,820) (2,799)
Cash flows used in investing activities
Interest received 47 59
Purchase of intangible assets (773) (3,555)
Proceeds from disposal of intangible assets 1,149 –
Net cash used in investing activities 423 (3,496)
Cash flows from financing
Proceeds from issue of shares – –
Cash flows from financing activities – –
Net decrease in cash and cash equivalents (1,397) (6,295)
Cash and cash equivalents at the beginning of the year 16 16,079 23,290
Exchange loss on cash and cash equivalents (671) (916)
Cash and cash equivalents at the end of the year 14,011 16,079 Borders & Southern Petroleum plc
Annual Report & Accounts 2015 24
Company Statement of Cash Flows
for the Year Ended 31 December 2015
2015 2014
Note $000 $000 $000 $000
Cash flow from operating activities
Loss before tax (2,598) (3,886)
Adjustments for:
Depreciation 1 2
Share-based payment 90 245
Net finance costs 632 851
Realised foreign exchange gains (8) 3
Cash flows from operating activities before changes 
in working capital (1,883) (2,785)
Decrease in other receivables 32 689
Increase/(decrease) in trade and other payables 33 (518)
Tax paid – (185)
Net cash outflow from operating activities (1,818) (2,799)
Cash flows from investing activities
Interest received 47 59
Decrease/(increase) in amounts due from 
group undertaking 374 (3,555)
Purchase of property, plant and equipment – –
Net cash used in investing activities 421 (3,496)
Net decrease in cash and cash equivalents (1,397) (6,295)
Cash and cash equivalents at the beginning of the year 16 16,079 23,290
Exchange loss on cash and cash equivalents (671) (916)
Cash and cash equivalents and cash held in escrow 
at the end of the year 14,011 16,079 25 www.bordersandsouthern.com Strategic Report Directors' Report Financial Statements
Notes to the Financial Statements
for the Year Ended 31 December 2015
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 and parent 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 2006 applicable to companies preparing their accounts under IFRS.
The consolidated financial statements have been prepared under the historical cost convention.
New and revised standards effective for 31 December 2015 year end
There were no new standards issued in respect of the year ended 31 December 2015 that were relevant for adoption by the Group.
New and revised standards issued but not effective for 31 December 2015 year end
We are still considering the impact of IFRS 15 and 16 and it is not anticipated that the other new standards issued but not effective for the year ended 
31 December 2015 would be relevant for adoption by the Group.
Basis of consolidation
Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed 
to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. 
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control 
ceases. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used 
by other members of the Group. All intra-Group transactions, balances, income and expenses are eliminated on consolidation.
Business combinations
The acquisition method of accounting is used to account for business combinations by the Group. The consideration transferred for the acquisition 
of a business is the fair value of the assets transferred, liabilities incurred and the equity interests issued by the Group. The consideration transferred 
includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition related costs are expensed as 
incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair 
values at the acquisition date.
Going concern
The Directors are of the opinion that the Group has adequate financial resources to enable it to undertake its planned programme of exploration and 
appraisal activities for a period of at least 12 months.
Loss for the financial year
The Company has taken advantage of the exemption allowed under Section 408 of the Companies Act 2006 and has not presented its own income 
statement in these financial statements. The group loss for the year includes a loss after tax of $2,599,393, (2014 – loss after tax of $3,887 ,512) which 
is dealt with in the financial statements of the Parent Company.
The Company’s investments in subsidiaries
The Parent Company’s subsidiaries are carried at cost less amounts provided for impairment.
Finance income
Finance income consists of interest on cash deposits and foreign exchange gains.
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief 
operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as 
the Board of Directors.
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
The Group applies the requirements of IFRS 6 Exploration for and evaluation of mineral resources in respect of its exploration and evaluation 
expenditure. The requirements of IFRS 6 are not applied to expenditure incurred by the Group before legal title to explore for and evaluate 
hydrocarbon resources in a specific area, generally referred to as pre-licence expenditure. Likewise the group do not apply the requirements of IFRS 6 
after the point at which the technical feasibility and commercial viability of extracting hydrocarbons are demonstrable. Borders & Southern Petroleum plc
Annual Report & Accounts 2015 26
Notes to the Financial Statements continued
for the Year Ended 31 December 2015
The costs of exploring for and evaluating hydrocarbon resources are accumulated and capitalised as intangible assets by reference to appropriate 
cash-generating units (CGU), generally referred to as full cost accounting. Such CGUs have been determined by the Group to be a Darwin CGU and a 
Stebbing CGU and are noted as not being larger than an operating segment as determined in accordance with IFRS 8 Operating segments.
Capitalised exploration and evaluation expenditure may include, amongst other costs, costs of licence acquisition, third party technical services and 
studies, seismic acquisition, exploration drilling and testing but do not include general overheads. Any property, plant and equipment (PPE) acquired 
for use in exploration and evaluation activities is classified as property, plant and equipment. However, to the extent that such PPE is consumed in 
developing an intangible exploration and evaluation asset the amount reflecting that consumption is recorded as part of the cost of the intangible 
exploration and evaluation asset.
Intangible exploration and evaluation assets are not depreciated and are carried forward, subject to the provisions of the Group’s impairment of 
exploration and evaluation policy, until the technical feasibility and commercial viability of extracting hydrocarbons are demonstrable. At such point 
exploration and evaluation assets are assessed for impairment and any impairment loss is recognised before reclassification of the assets to a 
category of property, plant and equipment.
Impairment of exploration and evaluation expenditure
The Group’s exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of the 
exploration and evaluation assets may exceed the assets recoverable amount.
In accordance with IFRS 6 the Group firstly considers the following facts and circumstances in their assessment of whether the Group’s exploration 
and evaluation assets may be impaired:
• whether the period for which the Group has the right to explore in a specific area has expired during the period or will expire in the near future, and 
is not expected to be renewed;
• whether substantive expenditure on further exploration for and evaluation of mineral resources in a specific area is neither budgeted nor planned;
• whether exploration for and evaluation of hydrocarbons in a specific area have not led to the discovery of commercially viable quantities of 
hydrocarbons and the Group has decided to discontinue such activities in the specific area; and
• whether sufficient data exists to indicate that although a development in a specific area is likely to proceed, the carrying amount of the exploration 
and evaluation assets is unlikely to be recovered in full from successful development or by sale.
If any such facts or circumstances are noted, the Group, as a next step, perform an impairment test in accordance with the provisions of IAS 36. In 
such circumstances the aggregate carrying value of the exploration and evaluations assets is compared against the expected recoverable amount of 
the CGU. The recoverable amount is the higher of value in use and the fair value less costs to sell.
The Group has identified two cash-generating units, a Darwin CGU and a Stebbing CGU. In accordance with the provisions of IFRS 6 the level identified for 
the purposes of assessing the Group’s exploration and evaluation assets for impairment may comprise one or more cash-generating units.
Provisions
A provision is recognised in the statement of financial position 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
T ransactions 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 reporting date and the 
exchange differences are included in the statement of comprehensive income. The functional and presentational currency of the parent and all 
Group companies is the US dollar.
Operating leases
Rentals payable under operating leases are charged to the statement of comprehensive income 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 pricing model. Non-employee options granted as part of 
consideration for services rendered are valued at the fair value of those services. Where information on the fair value of services rendered is not 
readily available, the fair value is calculated using the Black-Scholes pricing model.
In accordance with IFRS 2 Share-based payments the resulting cost is charged to the statement of comprehensive income 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, the fair value of the options at the date of grant is charged to the statement of comprehensive 
income over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to 
vest at each reporting 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 statement of comprehensive income over the remaining vesting period.
1 Accounting policies continued 27 www.bordersandsouthern.com Strategic Report Directors' Report Financial Statements
Financial instruments
Financial instruments are initially recorded at fair value. Subsequent measurement depends on the designation of the instrument, as follows:
• T rade 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.
• T rade and other payables are initially recognised at fair value and subsequently at amortised cost using the effective rate of interest.
• 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. Some of 
these funds are held in restricted deposits or escrow accounts as security for suppliers to the Company.
Taxes
The major components of 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 reporting date.
T ax is charged or credited to the statement of comprehensive income, 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 statement of financial position 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 reporting date and are 
expected to apply when deferred tax liabilities and assets are settled or recovered.
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 will be modified as appropriate in the year in which the circumstances change. Where 
necessary, the comparatives will be reclassified 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
Expenditure is capitalised as an intangible asset by reference to appropriate CGUs and is assessed for impairment when circumstances suggest that 
the carrying amount may exceed its recoverable value. This assessment involves judgement as to:
(i) the timing of future development of the asset;
(ii) funding structures and financing costs of development;
(iii) commercial development opportunities for extracting value from the asset; and
(iv) modelling inputs such as the appropriateness of discount rates, reserve and resource estimates, oil and gas pricing predictions, etc.
Share options
The Group’s share-based payments were recognised at fair value using a 60% volatility rate based on long-term average standard deviation of the 
Company’s share price and a 1.5% risk free rate based on current UK Government bond yields.
See note 7 .
2 Loss from operations
2015 
$000
2014 
$000
Staff costs (note 5) 1,090 1,321
Share-based payment – equity settled 90 245
Services provided by the auditors:
Fees payable to the Company’s auditors for the audit of the Parent Company and consolidated 
annual accounts 70 74
Fees payable to the Company’s auditor and its associates for other services:
Tax services 6 9
Consultancy – 27
Depreciation of office equipment 1 2
Operating lease expenses-property 321 329
Foreign exchange loss 679 910
1 Accounting policies continued Borders & Southern Petroleum plc
Annual Report & Accounts 2015 28
Notes to the Financial Statements continued
for the Year Ended 31 December 2015
3 Basic and dilutive (loss)/earnings per share
The calculation of the basic and dilutive 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 $2,599,393 (2014 – loss $3,887 ,512) and the weighted 
average number of shares in issue for the year was 484,098,484 (2014 – 484,098,484). During the year the potential ordinary shares are anti-dilutive 
and therefore diluted loss per share has not been calculated. At the statement of financial position date, there were 6,150,000 (2014 – 6,150,000) 
potentially dilutive ordinary shares being the share options (see note 7 for further details).
4 Segment analysis
The Company operates in one operating segment (exploration for oil and gas) and in substantially one geographical market (the Falkland Islands), 
therefore no additional segmental information is presented.
Of the Group’s total non-current assets, the property, plant and equipment is based in the UK and all other non-current assets are located in the 
Falkland Islands.
5 Staff costs
Company and Group:
Staff costs (including Directors) comprise:
2015 
$
2014 
$
Wages and salaries 964 1,172
Employers national insurance contribution 126 149
T otal 1,090 1,321
Share-based payment – equity settled 90 201
1,180 1,522
The average number of employees (including Directors) employed during the year by the Company was six (2014 – six) and for the Group was six 
(2014 – six). All employees and Directors of the Group and the Company are considered to be the key management personnel.
Of the $90,000 (2014 – $244,715) share-based payment charge included in the consolidated statement of comprehensive income, $90,000 (2014 – 
$201,053) has been charged in respect of share options granted to staff (including Directors) in the current and prior years. The remaining $nil (2014 
– $43,662) relates to share options granted to external parties, see note 7 for further details.
6 Directors’ emoluments
The Directors’ emoluments for the year are as follows:
2015 
$
2014 
$
Directors’ fees 691 861
Share-based payments – equity settled – 123
691 984
The fees and share-based payments made to each Director are disclosed in the Remuneration Committee Report. During the year, the highest paid 
Director received total remuneration of $383,821 (2014 – $475,457). 29 www.bordersandsouthern.com Strategic Report Directors' Report Financial Statements
7 Share-based payment
2015 
Weighted 
average exercise 
price
2015 
Number
2014 
Weighted 
average exercise 
price
2014 
Number
Outstanding at the beginning of the year 39p 6,150,000 56p 6,150,000
Granted during the year – – 11.25p 1,400,000
Cancelled during the year – – 52p 1,400,000
Outstanding at the end of the year 39p 6,150,000 39p 6,150,000
Exercisable at the end of the year 50p 4,150,000 52p 3,750,000
The weighted average contractual life of the options outstanding at the year end was 6 years (2014 – 7 years).
The range of exercise prices of share options outstanding at the end of the year is 11.25- 7 4p (2014 – 11.25p- 7 4p).
The following information is relevant in the determination of the fair value of the options granted during the prior years under the scheme operated by 
the company.
2014 2013
Equity-settled scheme
Option pricing model used Black-Scholes Black-Scholes
Weighted average share price at grant date 11.25p 15p
Exercise price 11.25p 15p
Weighted average contractual life (days) 1,460 1,460
Expected volatility 60% 75%
Risk-free interest rate 1.5% 1.25%
Fair value of options 5p 9p
Option life 4 years 4 years
The expected volatility used to calculate the share-based remuneration expense was based on the standard deviation of the Company’s monthly 
close share prices since inception.
8 Finance income and expense
Finance income
2015 
$000
2014 
$000
Bank interest received 47 59
Foreign exchange gain – –
47 59
Finance expense
2015 
$000
2014 
$000
Foreign exchange loss 679 910
679 910 Borders & Southern Petroleum plc
Annual Report & Accounts 2015 30
Notes to the Financial Statements continued
for the Year Ended 31 December 2015
9 Tax expense
Current tax expense
2015 
$000
2014 
$000
UK corporation tax on loss for the year at 20.25% (2014 – 21.5%) – –
Adjustments recognised in the current year in relation to the current tax of prior years – –
T otal current and deferred tax for the year – –
Factors affecting current year 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 losses for the 
year are as follows:
2015 
$000
2014 
$000
Loss before and after taxation (2,600) (3,888)
Standard rate corporation tax charge at 20.25% (2014 – 21.5%) (527) (836)
Expenses not deductible for tax purposes 296 466
Adjustments to tax charge in respect of previous periods 0 0
Adjust closing deferred tax to average rate of 20.25% 84 40
Adjust opening deferred tax to average rate of 20.25% (6) (15)
Movement in unrecognised deferred tax for the year 153 345
Small companies relief – –
T otal current and deferred tax for the year – –
Factors that may affect future tax charges
The Group has a deferred tax asset of approximately $671,128 (2014 – $546,848) in respect of unrelieved tax losses of approximately $3,728,488 as at 
31 December 2015 (2014 – $2,734,239). The rate of tax used in the calculation of the deferred tax asset is 18% (2014 – 20%). The deferred tax asset 
has not been recognised in the financial statements as the timing of the economic benefit is uncertain.
10 Property, plant and equipment
Group and Company
Office equipment 
$000
Cost
As at 1 January 2014 113
Additions
As at 31 December 2014 113
Depreciation
As at 1 January 2014 100
Charge for the year 2
As at 31 December 2014 102
Net book value
As at 31 December 2014 11
Office equipment 
$000
Cost
As at 1 January 2015 113
Additions –
As at 31 December 2015 113
Depreciation
As at 1 January 2015 102
Charge for the year 1
As at 31 December 2015 103
Net book value
As at 31 December 2015 10 31 www.bordersandsouthern.com Strategic Report Directors' Report Financial Statements
11 Intangible assets
Group
Exploration and 
evaluation costs 
$000
Cost
As at 1 January 2014 286,950
Additions 3,016
As at 31 December 2014 289,966
Net book value
As at 31 December 2014 289,966
Group
Exploration and 
evaluation costs 
$000
Cost
As at 1 January 2015 289,966
Additions 773
Disposals (1,149)
As at 31 December 2015 289,590
Net book value
As at 31 December 2015 289,590
On 8 November 2012 the Company received approval from The Falkland Islands Government to proceed into the second term for Production 
Licenses PL018, PL019 and part of PL020. The other part of PL020, License PL021 and PL022 were relinquished. The second term of the licences 
expires on 1 November 2017 .
12 Investments in subsidiary
Company
2015 
$
2014 
$
Cost
As at 1 January and 31 December 2 2
Net book value
As at 31 December 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.
13 Other receivables
Group Company
2015 
$000
2014 
$000
2015 
$000
2014 
$000
Amounts owed by Group undertakings – – 289,769 290,143
Other receivables 165 204 165 204
Prepayments and accrued income 132 125 132 125
297 329 290,066 290,472
All amounts shown under receivables fall due for payment within one year.
Amounts owed by Group undertakings are not interest bearing and are payable on demand.
There are no past dues or impaired receivables at year end. Borders & Southern Petroleum plc
Annual Report & Accounts 2015 32
Notes to the Financial Statements continued
for the Year Ended 31 December 2015
14 Trade and other payables
Group Company
2015 
$000
2014 
$000
2015 
$000
2014 
$000
T rade payables 81 24 81 24
Other taxes and social security costs 42 48 42 48
Accruals and deferred income 160 178 160 178
283 250 283 250
15 Share capital
2015 
$
2014 
$
Authorised
750,000,000 ordinary shares of 1 pence each (2014 – 750,000,000) 14,926 14,926
Allotted, called up and fully paid
484,098,484 ordinary shares of 1 pence each (2013 – 484,098,484) 8,530 8,530
Share capital
Brought forward 8,530 8,530
Carried forward 8.530 8,530
Share premium
Brought forward 308,602 308,602
Carried forward 308,602 308,602
16 Cash and cash equivalents and restricted use cash
Group and Company
2015 
$000
2014 
$0000
Cash available on demand 13,011 540
Cash on deposit 1,000 15,539
T otal 14,011 16,079
Cash and cash equivalents consist of cash at bank on demand and balances on deposit with an original maturity of three months or less.
17 Related party transactions
Company
During the year Borders & Southern Petroleum Plc paid expenses of $77 4,513 (2014 – $3,017 ,706) on behalf of Borders & Southern Falkland Islands 
Limited. At the year end $289,976,373 (2014 – $290,145,043) was due from the subsidiary.
The employees and Directors of the Group and the Company are considered to be the key management personnel. There were no transactions 
between the Group, the Company and the key management personnel during the year. The remuneration paid to the key management personnel is 
disclosed in note 6.
18 Commitments
The total future value of minimum lease payments on office property is due as follows:
Land and Buildings
2015 
$
2014 
$
Not later than one year 240 329
The Group licence commitment is to drill one exploration well before 1 November 2017 .
19 Events after the reporting period
There were no reportable events post reporting date. 33 www.bordersandsouthern.com Strategic Report Directors' Report Financial Statements
20 Financial instruments
The main risks arising from the Group’s operations are cash flow interest rate risk, foreign currency translation risk and credit risk. The Group monitors 
risk on a regular basis and takes appropriate measures to ensure risks are managed in a controlled manner.
Liquidity is not considered to be a risk due to the sufficient cash funds readily available by the Group at the year end.
The Group is exposed to risks that arise from its use of financial instruments. This note describes the Group’s objectives, policies and processes for 
managing those risks and the methods used to measure them. There have been no substantive changes in the group’s exposure to financial 
instrument risks, its objectives, policies and processes for managing those risks or the methods used to measure them from previous periods unless 
otherwise stated in the note.
Principal financial instruments
The principal financial instruments used by the group from which financial instrument risk arises, held by category, are as follows:
• Other receivables.
• Cash and cash equivalents.
• T rade and other payables.
The fair values of the Group’s financial assets and liabilities at 31 December 2015 and as at 31 December 2015 are materially equivalent to the carrying 
value as disclosed in the statement of financial position and related notes.
Market risk
a) Cash flow interest rate risk
The Group is exposed to cash flow interest rate risk from monies held at bank and on deposit at variable rates. The considerations below and the 
figures quoted are the same for both Group and Company.
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 2015 the Group held cash at bank and in deposits under its control of $14,011,005 (2014 – $16,078,547) which forms the majority of 
the Group’s working capital. Of the cash at bank and in deposit $13,011,005 (2014 – $539,971) 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 
$1,000,000 (2014 – $15,569,416) with a weighted average fixed interest rate of 0.2% (2014 – 0.2%) for 3 months. If there was 1% change in interest 
rates the impact on the statement of comprehensive income would be $132,610 (2014 – $44,427).
b) Foreign currency translation risk
The operational currency of the oil and gas exploration and evaluation activities of the Group is US$ and the Group’s functional and presentational 
currency is US$. Foreign exchange risk arises because the Group’s services and treasury function is UK sterling, which results in gains or losses on 
retranslation into US$. T o minimise this foreign currency risk cash balances are held in both £ sterling and US$.
The foreign currency profile of financial assets and liabilities of the Group and the Company are as follows:
Group Company
Other receivables 
measured at 
amortised cost 
2015 
$000
Other receivables 
measured at 
amortised cost 
2014 
$000
Other receivables 
measured at 
amortised cost 
2015 
$000
Other receivables 
measured at 
amortised cost 
2014 
$000
Current financial assets
Held in UK£:
Other receivables 297 329 297 329
Cash and cash equivalents 12,826 16,030 12,826 16,030
T otal current financial assets held in UK£ 13,123 16,359 13,123 16,359
Held in US$:
T rade and other receivables – – 289,769 290,143
Cash and cash equivalents 1,185 49 1,185 49
T otal financial assets 14,308 16,408 304,077 306,551
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 
$1,454,000 (2014 – $1,818,000) and $1,189,000 (2014 – $1,487 ,000) respectively for the Group and Company. Borders & Southern Petroleum plc
Annual Report & Accounts 2015 34
Notes to the Financial Statements continued
for the Year Ended 31 December 2015
Group Company
Financial liabilities 
measured at 
amortised cost 
2015 
$000
Financial liabilities 
measured at 
amortised cost 
2014 
$000
Financial liabilities 
measured at 
amortised cost 
2015 
$000
Financial liabilities 
measured at 
amortised cost 
2014 
$000
Held in UK£:
T rade and other payables 283 250 283 250
T otal financial liabilities 283 250 283 250
If there was a 10% change in the year end exchange rate there would be a movement in the US$ equivalent of financial liabilities held in the UK£ of 
$28,300 (2014 – $25,000) for the Group and Company.
Credit risk
Neither the Group nor the Company have customers so formal credit procedures are in the process of being established. During drilling operations, 
the Group incurred 100% of costs that were shared with other companies and these were invoiced to these companies with all amounts due for 
these shared costs paid to the group during the year. 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 on an ongoing basis is cash held at bank and the maximum credit risk exposure for 
the Group and Company is detailed in the table below:
2015 2014
Carrying Value 
$000
Maximum 
exposure 
$000
Carrying Value 
$000
Maximum  
exposure 
$000
Cash and cash equivalents 14,011 14,011 16,079 16,079
Maximum credit risk exposure 14,011 14,011 16,079 16,079
The maximum credit risk for the Company is $303,780,000 (2014 – $306,222,000). The amounts owed by Group undertakings of $289,796,000 
(2014 – $290,143,000) are considered to have no credit risk exposure from the Parent Company’s point of view.
Capital
The objective of the Directors is to maximise shareholder return and minimise risk by keeping a reasonable balance between debt and equity. T o 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 deficit and other reserves.
20 Financial instruments continued 35 www.bordersandsouthern.com Strategic Report Directors' Report Financial Statements
Corporate Directory
Directors
Harry Dobson
Howard Obee
Peter Fleming
Stephen Posford
Nigel Hurst -Brown
Secretary
William Slack
Registered office
One Fleet Place 
London 
EC4M 7WS
Business address
33 St James’s Square 
London 
SW1Y 4JS
Nominated adviser and 
joint broker
Panmure Gordon & Co 
1 New Change 
London 
EC4M 9AF
Joint broker
Mirabaud Securities LLP 
33 Grosvenor Place 
London 
SW1X 7HY
Solicitors
SNR Denton UKMEA LLP 
One 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 
TW9 1BP
HSBC Bank plc 
70 Pall Mall 
London 
SW1Y 5EZ
Independent auditors
BDO LLP 
55 Baker Street 
London 
W1U 7EU Borders & Southern Petroleum plc
Annual Report & Accounts 2015 36
Notes  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 Annual Report & Accounts 2015