Borders & Southern Petroleum plc Annual Report & Accounts 2016
Borders & Southern Petroleum plc 
Annual Report & Accounts 2016 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 1 0,000 square 
kilometres.
The Company’s first exploration well, drilled in 2012, 
resulted in a significant, liquids rich, gas condensate 
discovery - Darwin. Activity is now focused on 
commercialising the discovery and assessing the 
near -field prospectivity to provide long term growth 
for the Company.
CONTENTS
STRATEGIC REPORT
01 Highlights
02  Company Overview
03  Market Overview
04 Our Business
06 Strategic Framework
08 CEO's Statement
09 Principal Risks and Uncertainties
DIRECTORS' REPORT
10 Chairman's Statement
11 Board of Directors
12 Corporate Responsibility
13 Remuneration Committee Report
14 Directors' Report
FINANCIAL STATEMENTS
16 Independent Auditor's Report
17   Consolidated Statement of 
Comprehensive Income
18  Consolidated Statement of  
Financial Position
19  Consolidated Statement of  
Changes in Equity
20  Company Statement of  
Financial Position
21  Company Statement of  
Changes in Equity
22  Consolidated Statement of  
Cash Flows
23  Company Statement of Cash Flows
24 Notes to the Financial Statements
35 Corporate Directory 01 Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
Financial
Statements
Directors’ 
Report
Strategic
Report
HIGHLIGHTS 2016
$9.65m
Cash balance at 31 December 2016  
No debt
$1.74m
Administrative expenses 2016 
Low Company overhead 
$40 per barrel
Break -even oil price for a phased  
FPSO development
Farm-out process on-going. 
Maturation of the prospect inventory
DARWIN
Latest project developments
OUR NEAR-FIELD 
PROSPECTIVITY
Find out about the Company's  
high-graded prospects
OUR BUSINESS MODEL
Learn about the Company's strategy  
and outlook
 see pages 2-3
 see page 2
 see pages 6-7
For more information please visit: 
www.borders&southern.com
The industry has faced a 
challenging couple of years 
due to the fall in oil price. 
However , a modest recovery 
has seen renewed interest in 
growth opportunities. With 
our Darwin project having  
a break-even oil price of $40 
per barrel, we are optimistic 
that we can attract partners 
to help with its appraisal  
and development 
HARRY DOBSON, NON-E XECUTIVE CHAIRMAN Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
02
Covington
Morgan
Darwin East
Darwin West
Seismic amplitude map showing Darwin and 
near-field prospects Covington and Morgan
COMPANY OVERVIEW
Darwin
Darwin is a significant, 
liquids rich, gas condensate 
discovery. The reservoir 
comprises high quality, 
laterally continuous shallow 
marine sands. The trap 
consists of two tilted fault 
blocks. The discovery is 
exceptionally imaged on 
3D seismic, where the 
hydrocarbons are marked 
by a clear flat spot and 
amplitude conformance 
to structure.
Near-Field Prospectivity
The Company has a strong portfolio of exploration 
prospects that provides future growth potential. 
Within a 15km radius of the discovery well, we have 
identified a number of amplitude supported 
prospects that have a total un-risked P50 recoverable 
resource estimate of over a billion barrels.
An East -West seismic line 
through the Darwin 
discovery well, highlighting 
untested prospects Sullivan 
and Stokes. Inset map 
shows the strong amplitude 
anomalies associated with 
these two near -field 
prospects.
61/17-1
Darwin
Stokes 03 Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
Financial
Statements
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Strategic
Report
DARWIN COMMERCIALISATION 
The scoping engineering study completed in 2016 demonstrated 
that, if successfully appraised, Darwin could be commercialised by 
a straightforward FPSO development utilising proven, off-the-shelf 
technology. The plan would be to produce the liquids and re-inject the 
dry gas back into the reservoir. An initial development could target 270 
million barrels of condensate, requiring just 4 production wells and 3 gas 
re-injectors. A leased FPSO would be located in either 2000m of water, 
above the discovery, or in 1100m of water using a 14km subsea flowline. 
Initial condensate production would be 56,000 bpd. Estimated capex: 
$1.36 billion (including 25% contingency).
MARKET OVERVIEW
TECHNICAL SUMMARY
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 un-risked)
Condensate API 46 to 49 degrees
Initial condensate yield 148 stb/MMscf
Oil price
0
30
60
90
120
150
Jan 2014
Mar 2017
The dramatic fall in oil price during 
2014 posed significant challenges 
for the industry. Companies 
responded by reducing their capital 
expenditure and strengthening 
their balance sheets. A major focus 
has been to reduce the cost of 
production, leading many companies 
to restructure their portfolios, 
exiting high cost projects and 
building positions in low cost 
options such as onshore US oil shale 
plays. Companies are striving to 
be low on the industry cost curve, 
thereby gaining resilience against 
future oil price fluctuations.
During 2016 the oil price rallied 
a little, underpinned by OPEC’s 
agreed cuts in production. This has 
encouraged some companies to 
start looking for growth projects 
again in order to replace their 
declining reserves.
DARWIN’S POSITION ON THE 
INDUSTRY COST CURVE 
The engineering study completed 
in 2016 scoped out an FPSO 
development for the Darwin 
discovery, providing cost estimates 
to input into our project economic 
models. Using these costs we can 
see that Darwin is positioned low 
on the global cost curve, with a 
break-even oil price of $40 per barrel 
(this includes a 25% contingency 
in the capex). This is due to the 
attractive fiscal terms offered by the 
Falkland Islands Government and 
the quality of the Darwin reservoir 
that requires a low number of 
development wells to be drilled 
and therefore minimising capex. 
Stokes
Sullivan
Sullivan Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
04
OUR BUSINESS
Borders & Southern’s aim is to discover 
hydrocarbons and monetise them for the benefit 
of all its stakeholders. We can create value through 
exploration and appraisal success, progressing 
discoveries through to production.
Our key strengths Delivering our business
Asset quality
Through early opportunity identification and capture, 
the Company holds a very strong acreage position within the 
South Falkland Basin. We have a 100% interest in 3 Production 
licences (10,000 square kilometres) within the optimal part of  
the basin. The licences contain our Darwin discovery along with 
a multi-billion barrel prospect inventory.
Licence extension
In the first half of the year we received confirmation from the Falkland Islands Government that our 
licences had been extended. Production Licences PL018, PL019 and PL020 have been extended by 
three years without any additional work programme commitment. The expiry date is now October 2020. 
A further extension could be achieved by committing to additional work, such as drilling more wells. The 
Discovery Area licence, relating to Darwin East, has been extended by four years so that the expiry date 
is now January 2022. 
T echnical rigor 
We have a small, experienced in-house team, which is 
supplemented by expert consultants. Great care is taken to 
acquire the right type of data and highest quality data possible, 
applying leading-edge technology to address the key technical 
issues. This technical discipline led to the Company being 
successful with its first exploration well.
Reservoir modelling 
We completed a reservoir engineering study that evaluated potential development scenarios, including 
full-field (Darwin East and Darwin West combined) and phased developments (where either Darwin East 
or Darwin West would be developed first). The optimum location for appraisal and development wells 
were assessed and the volume of recovered hydrocarbons and rates of production determined. The 
output from this work fed into a facilities design project and the economic modelling of the discovery. 
One of the scenarios considered an initial development of 270 million barrels of condensate using 4 
production wells and 3 gas re-injector wells, delivering an initial production rate of 56,000 bpd.
Commercial discipline 
The Company has no debt and has maintained a strong balance 
sheet and a low overhead. Strong financial controls are in place. 
Every effort is made to spend our limited financial resources 
wisely, negotiating robust contracts and focusing funds on 
activities that will help progress our project from discovery 
through to development.
Facilities design 
The scoping facilities engineering study demonstrated that, if successfully appraised, Darwin could be 
commercialised by a straightforward FPSO development, utilising proven, off-the-shelf technology. 
Cost estimates were received from the various engineering contractors. Two different options were 
assessed for the FPSO location: in 2,000 metres of water or 1,100 metres of water (using a 14 kilometre 
subsea flowline). Cost estimates for both options were comparable. The total estimated capex required 
for the 270 million barrel development is $1.36 billion (including 25% contingency). This gives a break-
even oil price of $40 per barrel. If the 25% contingency within the capex estimate is not required then the 
break-even oil price would be appreciably lower.
Risk management 
Robust risk management provides a foundation in all that we  
do. Care is taken to identify, monitor and mitigate against the 
different types of risk that the business encounters. We have 
demonstrated that we can operate deep water wells safely  
and with due respect to the environment. We build strong 
relationships with all our stakeholders.
Farm-out
The fall in oil price has had a significant impact on our ability to secure partners and funding for the next 
phase of operations. In the last couple of years, deep water projects have received less attention, as the 
industry has switched towards onshore low cost unconventional plays. However, deep water project 
costs have been reducing and the attention is now returning. Our break-even oil price is certainly 
competitive against global pre-sanction projects. Therefore, we are confident that our attractive 
economics, combined with our outstanding sub-surface case, will attract the necessary investment to 
progress Darwin through to development. Engagement with interested companies continues. 05 Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
Financial
Statements
Directors’ 
Report
Strategic
Report
Good progress has been achieved during 
2016, despite the impact of the low oil  
price environment.
Our key strengths Delivering our business
Asset quality
Through early opportunity identification and capture, 
the Company holds a very strong acreage position within the 
South Falkland Basin. We have a 100% interest in 3 Production 
licences (10,000 square kilometres) within the optimal part of  
the basin. The licences contain our Darwin discovery along with 
a multi-billion barrel prospect inventory.
Licence extension
In the first half of the year we received confirmation from the Falkland Islands Government that our 
licences had been extended. Production Licences PL018, PL019 and PL020 have been extended by 
three years without any additional work programme commitment. The expiry date is now October 2020. 
A further extension could be achieved by committing to additional work, such as drilling more wells. The 
Discovery Area licence, relating to Darwin East, has been extended by four years so that the expiry date 
is now January 2022. 
T echnical rigor 
We have a small, experienced in-house team, which is 
supplemented by expert consultants. Great care is taken to 
acquire the right type of data and highest quality data possible, 
applying leading-edge technology to address the key technical 
issues. This technical discipline led to the Company being 
successful with its first exploration well.
Reservoir modelling 
We completed a reservoir engineering study that evaluated potential development scenarios, including 
full-field (Darwin East and Darwin West combined) and phased developments (where either Darwin East 
or Darwin West would be developed first). The optimum location for appraisal and development wells 
were assessed and the volume of recovered hydrocarbons and rates of production determined. The 
output from this work fed into a facilities design project and the economic modelling of the discovery. 
One of the scenarios considered an initial development of 270 million barrels of condensate using 4 
production wells and 3 gas re-injector wells, delivering an initial production rate of 56,000 bpd.
Commercial discipline 
The Company has no debt and has maintained a strong balance 
sheet and a low overhead. Strong financial controls are in place. 
Every effort is made to spend our limited financial resources 
wisely, negotiating robust contracts and focusing funds on 
activities that will help progress our project from discovery 
through to development.
Facilities design 
The scoping facilities engineering study demonstrated that, if successfully appraised, Darwin could be 
commercialised by a straightforward FPSO development, utilising proven, off-the-shelf technology. 
Cost estimates were received from the various engineering contractors. Two different options were 
assessed for the FPSO location: in 2,000 metres of water or 1,100 metres of water (using a 14 kilometre 
subsea flowline). Cost estimates for both options were comparable. The total estimated capex required 
for the 270 million barrel development is $1.36 billion (including 25% contingency). This gives a break-
even oil price of $40 per barrel. If the 25% contingency within the capex estimate is not required then the 
break-even oil price would be appreciably lower.
Risk management 
Robust risk management provides a foundation in all that we  
do. Care is taken to identify, monitor and mitigate against the 
different types of risk that the business encounters. We have 
demonstrated that we can operate deep water wells safely  
and with due respect to the environment. We build strong 
relationships with all our stakeholders.
Farm-out
The fall in oil price has had a significant impact on our ability to secure partners and funding for the next 
phase of operations. In the last couple of years, deep water projects have received less attention, as the 
industry has switched towards onshore low cost unconventional plays. However, deep water project 
costs have been reducing and the attention is now returning. Our break-even oil price is certainly 
competitive against global pre-sanction projects. Therefore, we are confident that our attractive 
economics, combined with our outstanding sub-surface case, will attract the necessary investment to 
progress Darwin through to development. Engagement with interested companies continues. Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
06
STRA TEGIC FRAMEWORK
 How we create value How we add value
Access
New opportunities
Explore
Test new prospects
Appraise
Assess commerciality
Develop
Start production
Repeatable
Growth
The first stage is to access new 
opportunities, either through Licence 
Rounds or Open Door policies. Early 
entry into a basin and play fairway is 
important so as gain a sizeable footprint 
in the most prospective parts of the 
basin. Rigorous technical work is critical 
at this stage in order to mitigate the 
initially high sub-surface risks.
Borders & Southern gained early entry into 
the South Falkland Basin, originally licencing 
20,000 square kilometres. Our specific aim 
was to test the large folds and tilted fault 
blocks located south of the Falkland Islands. 
We were confident that a regional Jurassic 
to Early Cretaceous marine source rock 
would be present and that we would find 
large structural closures, so the main risk on 
entry was reservoir presence and quality. 
After drilling our first well, this risk was 
removed as all play elements in the basin 
were proved. We now believe our acreage is 
located in the optimum part of the basin for 
hydrocarbon generation and entrapment.
The early stages of exploration are 
all about making the right choices of 
data acquisition. Given that financial 
resources are finite for all companies, 
acquiring the right type of data, amount 
of data and quality of data is critical for 
risk mitigation. Rigorous petroleum 
systems analysis of the acquired data is 
then important to determine the best 
plays, high-grade the prospect inventory 
and ultimately establish the best drilling 
locations to test the play fairways.
Borders & Southern has acquired 2,541 
square kilometres of high quality PSDM 3D 
seismic data. This has allowed us to evaluate 
and high-grade all the play fairways. We 
selected two independent plays for the 
initial drilling programme. The first well, 
Darwin, tested Aptian shallow marine sands 
within a tilted fault block. This resulted in 
a significant, liquids rich, gas condensate 
discovery. The second well, Stebbing, tested 
Tertiary aged reservoirs within a simple four-
way dip closed anticline. This well had strong 
hydrocarbon shows, but failed to reach its 
main reservoir objective.
If a discovery displays the potential for 
commerciality, the next stage will be its 
appraisal. All the data collected during 
the exploration drilling programme are 
evaluated and integrated into the sub-
surface interpretations. An appraisal 
well programme will be designed to 
constrain the resource estimates and 
assess the distribution and deliverability 
of the reservoir. Typically, coring and 
flow testing of the reservoir will be 
undertaken. The appraisal programme 
provides the basic data required for 
development planning. 
The data collected during our 2012 drilling 
campaign has been fully integrated 
into our sub-surface analysis. Darwin is 
an exceptionally imaged hydrocarbon 
accumulation. This clear definition on 3D 
seismic will help in its appraisal. Options 
for appraisal well locations have been 
determined and well designs completed. 
As soon as partners and funding have been 
secured, the appraisal programme will be 
able to proceed. 
 
If the appraisal drilling confirms the 
commerciality of the discovery, the 
next stage will focus on the engineering 
aspects of the project. Design concepts 
for a development will be evaluated 
and selected and detailed cost analysis 
completed. Pre-FEED and FEED 
studies will be undertaken prior to a 
final investment decision. This leads to 
the execution of the development and 
ultimately the start of production.
As part of our assessment of Darwin’s 
commerciality, we have already completed 
two scoping development studies. These 
indicate that the discovery could be 
commercialised by a straightforward FPSO 
development, utilising proven, off-the-shelf 
technology. The liquids will be produced 
and exported to market whilst the dry 
gas re-injected back into the reservoir. 
Several development scenarios have been 
considered and contractor cost estimates 
received. The completed scoping studies 
will provide a good foundation for future 
detailed engineering work. 
Once a working petroleum system has 
been established by the discovery of 
hydrocarbons, the objective is to add 
value through follow-up discoveries. 
Using the knowledge gained through the 
exploration and appraisal phases, the 
prospect inventory can be high-graded 
and drilled up. 
Borders & Southern has a very strong 
prospect inventory. Management’s total  
un-risked P50 recoverable resource 
estimate for near-field prospects (those 
within 15 kiliometres of the discovery) is over 
a billion barrels. Many of these are amplitude 
supported. Substantial upside occurs 
outside of the near-field prospect inventory. 
The Company intends to test additional 
exploration prospects as soon as possible, 
but its priority is to progress its discovery 
through to development. 
Our strategy is focused on frontier or  
emerging basins where substantial volumes  
of hydrocarbons are yet to be discovered.  
Our aim is to make significant discoveries  
and progress them through to development. 07 Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
Financial
Statements
Directors’ 
Report
Strategic
Report
 How we create value How we add value
Access
New opportunities
Explore
Test new prospects
Appraise
Assess commerciality
Develop
Start production
Repeatable
Growth
The first stage is to access new 
opportunities, either through Licence 
Rounds or Open Door policies. Early 
entry into a basin and play fairway is 
important so as gain a sizeable footprint 
in the most prospective parts of the 
basin. Rigorous technical work is critical 
at this stage in order to mitigate the 
initially high sub-surface risks.
Borders & Southern gained early entry into 
the South Falkland Basin, originally licencing 
20,000 square kilometres. Our specific aim 
was to test the large folds and tilted fault 
blocks located south of the Falkland Islands. 
We were confident that a regional Jurassic 
to Early Cretaceous marine source rock 
would be present and that we would find 
large structural closures, so the main risk on 
entry was reservoir presence and quality. 
After drilling our first well, this risk was 
removed as all play elements in the basin 
were proved. We now believe our acreage is 
located in the optimum part of the basin for 
hydrocarbon generation and entrapment.
The early stages of exploration are 
all about making the right choices of 
data acquisition. Given that financial 
resources are finite for all companies, 
acquiring the right type of data, amount 
of data and quality of data is critical for 
risk mitigation. Rigorous petroleum 
systems analysis of the acquired data is 
then important to determine the best 
plays, high-grade the prospect inventory 
and ultimately establish the best drilling 
locations to test the play fairways.
Borders & Southern has acquired 2,541 
square kilometres of high quality PSDM 3D 
seismic data. This has allowed us to evaluate 
and high-grade all the play fairways. We 
selected two independent plays for the 
initial drilling programme. The first well, 
Darwin, tested Aptian shallow marine sands 
within a tilted fault block. This resulted in 
a significant, liquids rich, gas condensate 
discovery. The second well, Stebbing, tested 
Tertiary aged reservoirs within a simple four-
way dip closed anticline. This well had strong 
hydrocarbon shows, but failed to reach its 
main reservoir objective.
If a discovery displays the potential for 
commerciality, the next stage will be its 
appraisal. All the data collected during 
the exploration drilling programme are 
evaluated and integrated into the sub-
surface interpretations. An appraisal 
well programme will be designed to 
constrain the resource estimates and 
assess the distribution and deliverability 
of the reservoir. Typically, coring and 
flow testing of the reservoir will be 
undertaken. The appraisal programme 
provides the basic data required for 
development planning. 
The data collected during our 2012 drilling 
campaign has been fully integrated 
into our sub-surface analysis. Darwin is 
an exceptionally imaged hydrocarbon 
accumulation. This clear definition on 3D 
seismic will help in its appraisal. Options 
for appraisal well locations have been 
determined and well designs completed. 
As soon as partners and funding have been 
secured, the appraisal programme will be 
able to proceed. 
 
If the appraisal drilling confirms the 
commerciality of the discovery, the 
next stage will focus on the engineering 
aspects of the project. Design concepts 
for a development will be evaluated 
and selected and detailed cost analysis 
completed. Pre-FEED and FEED 
studies will be undertaken prior to a 
final investment decision. This leads to 
the execution of the development and 
ultimately the start of production.
As part of our assessment of Darwin’s 
commerciality, we have already completed 
two scoping development studies. These 
indicate that the discovery could be 
commercialised by a straightforward FPSO 
development, utilising proven, off-the-shelf 
technology. The liquids will be produced 
and exported to market whilst the dry 
gas re-injected back into the reservoir. 
Several development scenarios have been 
considered and contractor cost estimates 
received. The completed scoping studies 
will provide a good foundation for future 
detailed engineering work. 
Once a working petroleum system has 
been established by the discovery of 
hydrocarbons, the objective is to add 
value through follow-up discoveries. 
Using the knowledge gained through the 
exploration and appraisal phases, the 
prospect inventory can be high-graded 
and drilled up. 
Borders & Southern has a very strong 
prospect inventory. Management’s total  
un-risked P50 recoverable resource 
estimate for near-field prospects (those 
within 15 kiliometres of the discovery) is over 
a billion barrels. Many of these are amplitude 
supported. Substantial upside occurs 
outside of the near-field prospect inventory. 
The Company intends to test additional 
exploration prospects as soon as possible, 
but its priority is to progress its discovery 
through to development. 
MONETISE Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
08
CEO’S ST A TEMENT
Throughout 2016 we maintained a 
disciplined budget, whilst strengthening 
our technical and commercial case and 
continuing with our efforts to farm-out 
the Company’s Falkland Islands project. 
The year-end cash balance of $9.65 million 
(31 December 2015: $14 million) was 
impacted by significant changes in the US 
Dollar-Sterling exchange rate. Most of the 
Company’s funds are held in Sterling to 
reflect its ongoing expenditures. The drop in 
the value of the pound, resulted in a nearly 
$2 million reduction in the reported cash 
balance and increased the loss by the same 
amount. The 2016 Administrative expense 
of $1.74 million, comparing favourably 
against the previous year ($1.97 million in 
2015), partially reflects the impact of the 
exchange rate. 
Borders & Southern’s objective is to be a 
successful explorer, finding hydrocarbons 
and monetising them for the benefit of all 
its shareholders and stakeholders. The 
first stage was realised in 2012 when we 
announced a significant, liquids rich, gas 
condensate discovery (Darwin). Subsequent 
technical analysis proved the scale of 
the discovery. Management’s current 
un-risked P50 Best Estimate resource is 
3.5 tcf of wet gas in place with 360 million 
barrels of recoverable condensate. 
The second stage, of monetising the 
discovery, has been slower in achievement 
as competent partners are sought to help 
fund Darwin’s appraisal and development. 
Our ability to deliver on this has been 
impacted by the 2014 fall in oil price and the 
dramatic reduction in capital expenditure 
by the industry in the subsequent period. 
During the last year, the oil price has made 
a modest recovery, underpinned by OPEC’s 
agreed cuts in production. As a response, 
many of the large and mid-sized companies, 
who have spent the last couple of years 
reducing their costs and strengthening 
their balance sheets, are now considering 
growth objectives again. This gives us 
grounds for optimism that we can complete 
a successful farm-out and get back to an 
operational phase and the appraisal drilling.
We believe that the Darwin discovery 
and its surrounding exploration portfolio 
compares very favourably against other 
global opportunities. Our technical 
and commercial work during 2016 was 
directed to test our project’s commercial 
competitiveness. Through facilities 
engineering studies and reservoir modelling 
we demonstrated that the break-even oil 
price for an initial 270 million barrel FPSO 
phased Darwin development would be 
$40 per barrel. If the 25% contingency 
included within the estimated $1.36 billion 
capex is reduced, through more detailed 
engineering work, the break-even oil price 
would be appreciably lower. The attractive 
economics are largely influenced by the 
Falkland Islands Government’s fiscal terms 
and the requirement for only a limited 
number of development wells due to the 
laterally continuous, high quality reservoir 
and extremely mobile hydrocarbon phase.
HOWARD OBEE
CHIEF E XECUTIVE
The robust economics and 
compelling sub-surface  
case give us a real sense of 
optimism for progressing 
Darwin through to a 
successful development
HOWARD OBEE, CHIEF E XECUTIVE
Over the last few years global exploration 
success rates have decreased significantly. 
Discovery volumes have been skewed 
towards dry gas, with new large liquids finds 
being relatively scarce. In this context, 
the Darwin condensate is an important 
resource. Through meticulous technical 
and commercial work, we have continued 
to take risk out of the project, to enhance 
its attractiveness to third parties. At 
the same time, we have matured the 
Company’s exciting prospect inventory, 
which provides significant scope to add 
to the discovered volumes. As previously 
reported, management’s un-risked P50 
Best Estimate recoverable resource for 
near-field prospects (not including Darwin), 
those located within a 15km radius of the 
discovery well, exceed 1 billion barrels. Many 
of these prospects are supported by seismic 
amplitude anomalies and are considered 
by management to be relatively low risk. 
The largest prospect within the near-
field inventory and the current most 
likely candidate for an exploration well, 
following Darwin appraisal, is Sullivan. 
Stratigraphically older than the Darwin 
reservoir, in a section not yet penetrated by 
a well, the prospect is defined by a strong 
seismic amplitude anomaly measuring 
120 square kilometres. The AVO response 
is very similar to that associated with 
the Darwin discovery. If this anomaly 
does represent another gas condensate 
accumulation, then Management’s 
un-risked P50 Best Estimate volumes 
comprise 5.6 tcf of gas in place with 473 
million barrels of recoverable condensate. 
In addition to the near-field prospects, 
significant exploration potential exists in the 
rest of the Company’s acreage in a range of 
structural and stratigraphic prospects. The 
scale and quality of the prospect inventory 
will provide considerable growth options 
for the Company in years to come. But in 
the near term, we will maintain our capital 
discipline during this extended period of 
low oil price and continue to refine and 
advance our technical understanding of 
the sub-surface. However, the principal 
focus remains the farm-out and attracting 
funds for the appraisal of Darwin.
HOWARD OBEE
CHIEF E XECUTIVE
18 May 2017 09 Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
Financial
Statements
Directors’ 
Report
Strategic
Report
PRINCIPAL RISKS 
AND UNCERT AINTIES
RISK STATUS KEY 
(*RS refers to Risk Status)
Risk increase
Risk unchanged
Risk decrease
Risk Nature of Risk RS Mitigation
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 demonstrated that it takes 
a disciplined approach to exploration using 
latest technologies and industry experts to 
undertake the necessary technical work. 
HEAL TH SAFETY AND 
ENVIRONMENT
Conducting operations in a remote, 
environmentally sensitive location present 
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 continues to have a strong 
balance sheet with sufficient funds for 
overheads in the foreseeable future. The 
challenge is to secure funds for the Darwin 
appraisal programme
The recent engineering study demonstrated 
that Darwin’s is one of the lowest cost 
projects in terms of break even oil price. 
Therefore we are confident of securing 
funding.
OIL PRICE
Rapid changes in commodity prices have a 
material impact on the industry in terms of 
economics and capital spending
The oil price appears to have settled in a 
$50-$55/bbl range and costs across the 
industry have reduced to reflect this. Darwin  
is a very attractive investment proposition  
at these oil prices.
KEY PERSONNEL
As a small company, it 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.
SUPPLY CHAIN
The geographical location and political 
backdrop provide logistical challenges.
Several drilling campaigns have now been 
undertaken over the last decade so the supply 
chain has been well tested.
POLITICAL
Argentina continue to challenge the 
sovereignty of the Falkland Islands.
The British Government consistently provides
strong support for the Falkland Islanders’ 
right to determine their own future. Recent 
discussions between the UK and Argentinian 
governments have been more supportive.
The Strategic Report on pages 1 to 9 is issued and signed on behalf of the Board by:
HOWARD OBEE
CHIEF E XECUTIVE
18 May 2017 Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
10
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.
 
The Board currently comprises the 
Chairman, two Executive Directors and  
one Non-Executive Director. 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. 
All Directors retire by rotation.
I regularly review the composition and 
structure of the Board to ensure it both 
meets industry good practice and is fit for 
purpose given where the Company is in 
terms of its development and scale.
MY ROLE AS CHAIRMAN
I was appointed Chairman of the Company 
at its inception. As Chairman, I am 
responsible for the effective running of  
the Board and for ensuring that it plays  
a constructive role in the development of 
the Company. Together with the Chief 
Executive Officer, I also set and run the 
agenda for Board meetings. 
ROLES OF THE NON-EXECUTIVE 
DIRECTOR
Nigel Hurst-Brown brings a wealth of 
business experience to the Board and its 
Committees. He provides independent 
views on the Company’s performance, 
operations and strategy. 
REMUNERATION COMMITTEE
The Board has a Remuneration Committee 
comprising two Non-Executive Directors. 
The members of the Remuneration 
Committee and their attendance at 
CHAIRMAN’S ST A TEMENT
HARRY DOBSON
NON-E XECUTIVE CHAIRMAN
Borders & Southern is 
committed to acting 
responsibly in all of its 
business activities
HARRY DOBSON
NON-E XECUTIVE CHAIRMAN
meetings of the Remuneration Committee 
during 2016 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 two Non-Executive Directors. 
The members of the Audit Committee and 
their attendance at meetings of the Audit 
Committee during 2016 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 CEO’s statement.
HARRY DOBSON
NON-E XECUTIVE CHAIRMAN 11 Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
Financial
Statements
Directors’ 
Report
Strategic
Report
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 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 
over 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 has over 20 
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.
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 and 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.
CORPORATE GOVERNANCE – BOARD OF DIRECTORS
HOWARD OBEE
CHIEF E XECUTIVE
HARRY DOBSON
NON-E XECUTIVE CHAIRMAN
PETER FLEMING
FINANCE DIRECTOR
NIGEL HURST-BROWN
NON-E XECUTIVE DIRECTOR
A A R R E E
A Audit Committee
R Remuneration Committee
E Executive Director Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
12
CORPORATE RESPONSIBILITY
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. 13 Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
Financial
Statements
Directors’ 
Report
Strategic
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 10.
The remuneration of the Directors for the year ended 31 December 2016 was as follows:
Basic 
salary
$
Share-based 
payment
$
Total
2016
$
Total 
2015
$
Harry Dobson – – – –
Howard Obee 344,486 – 344,486 383,821
Nigel Hurst-Brown – 582 582 –
Peter Fleming 275,589 – 275,589 307,057
620,075 – 620,657 690,878
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.
REMUNERA TION COMMITTEE REPORT Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
14
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 2016, were as follows:
At 
31 December 
2016
Number
At 
31 December 
2015
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
The ordinary shares in which Harry Dobson holds an interest is 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
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 1,250,000 0.5-32 pence 1.8-58 pence three years
Substantial shareholders
At 27 January 2017 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
Lansdowne Partners Limited Partnership 67,613,605 13.97%
Allianz Global Investors 33,921,782 7.01%
TD Direct Investing 20,186,701 5.94%
Stephen Posford 27,500,000 5.68%
Zila Corporation 26,670,000 5.51%
Standard Life Investments 23,549,230 4.86%
Barclays Wealth 18,747,389 3.87%
Hargreaves Lansdowne Asset Management 16,612,664 3.43%
Vestra Wealth 15,698,622 3.24%
Halifax Share Dealing 14,834,036 3.06%
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 17 and shows the result for the year.
The Directors do not recommend the payment of a dividend (2015: $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 (2015: $nil).
DIRECTORS’ REPORT 15 Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
Financial
Statements
Directors’ 
Report
Strategic
Report
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.
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. 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; and
• 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 2016
Attendance Board
Remuneration
Committee
Audit
Committee
Harry Dobson 3 1 2
Howard Obee 3 – –
Peter Fleming 3 – –
Nigel Hurst-Brown 3 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
18 May 2017 Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
16
We have audited the financial statements of Borders & Southern Petroleum Plc for the year ended 31 December 2016 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. To 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 2016 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, based on the work undertaken in the course of the audit:
• 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.
• The Strategic Report and Directors’ Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and Parent Company and its environment obtained in the course of the audit, 
we have not identified material misstatements in the Strategic Report or the Directors’ Report.
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
18 May 2017
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
INDEPENDENT AUDITOR’S REPORT 
TO THE MEMBERS OF BORDERS & SOUTHERN PETROLEUM PLC 17 Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
Financial
Statements
Directors’ 
Report
Strategic
Report
Note
2016
$000
2015
$000
Administrative expenses (1,744) (1,968)
Loss from operations 2 (1,744) (1,968)
Finance income 8 30 47
Finance expense 8 (1,890) (679)
Loss before tax (3,604) (2,600)
Tax expense 9 – –
Loss for the year and total comprehensive loss for the year attributable to owners  
of the parent (3,604) (2,600)
Basic and diluted loss per share (see note 3) (0.74) cents (0.54) cents
The notes on pages 24 to 34 form part of the financial statements.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2016 Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
18
Note
2016 2015
$000 $000 $000 $000
Assets
Non-current assets
Property, plant and equipment 10 12 10
Intangible assets 11 290,381 289,590
Total non-current assets 290,393 289,600
Current assets
Other receivables 13 1,167 297
Cash and cash equivalents 9,645 14,011
Total current assets 10,812 14,308
Total assets 301,205 303,908
Liabilities
Current liabilities
Tax payables 9 – –
Trade and other payables 14 (1,136) (283)
Total net assets 300,069 303,625
Equity
Share capital 15 8,530 8,530
Share premium 308,602 308,602
Other reserves 2,418 2,370
Retained deficit (19,465) (15,861)
Foreign currency reserve (16) (16)
Total equity 300,069 303,625
The notes on pages 24 to 34 form part of the financial statements.
The financial statements were approved by the Board of Directors and authorised for issue on 18 May 2017.
Howard Obee
Director
Peter Fleming
Director
CONSOLIDATED STATEMENT OF FINANCIAL POSITION 
FOR THE YEAR ENDED 31 DECEMBER 2016 19 Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
Financial
Statements
Directors’ 
Report
Strategic
Report
Share  
capital
$000
Share  
premium 
$000
Other  
reserves
$000
Retained  
deficit
$000
Foreign
currency
reserve
$000
Total
$000
Balance at 1 January 2015 8,530 308,602 2,280 (13,261) (16) 306,135
Comprehensive income for the year
Loss and total comprehensive loss  
for the year – – – (2,600) – (2,600)
Total comprehensive Income for the year – – – (2,600) – (2,600)
Contributions by and distributions to owners
Share-based expense – – 90 – – 90
Total contributions by and distributions 
to owners – – 90 – – 90
Balance at 31 December 2015 8,530 308,602 2,370 (15,861) (16) 303,625
Comprehensive income for the year
Loss and total comprehensive loss for 
the year – – – (3,604) – (3,604)
Total comprehensive Income for the year – – – (3,604) – (3,604)
Contributions by and distributions to owners
Share-based expense – – 48 – – 48
Total contributions by and distributions 
to owners – – 48 – – 48
Balance at 31 December 2016 8,530 308,602 2,418 (19,465) (16) 300,069
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 Comprises the cumulative charge recognised under IFRS 2 in respect of share-based 
payment awards.
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 24 to 34 form part of the financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 
FOR THE YEAR ENDED 31 DECEMBER 2016 Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
20
Note
2016 2015
$000 $000 $000 $000
Assets
Non-current assets
Property, plant and equipment 10 12 10
Investments 12 – –
Other receivables 13 290,560 289,769
Total non-current assets 290,572 289,779
Current assets
Other receivables 13 1,166 297
Cash and cash equivalents 9,645 14,011
Total current assets 10,811 14,308
Total assets 301,383 304,087
Liabilities
Current liabilities
Trade and other payables 14 (1,135) (283)
Total net assets 300,248 303,804
Equity
Called up share capital 15 8,530 8,530
Share premium 308,602 308,602
Other reserves 2,418 2,370
Retained deficit (19,284) (15,680)
Foreign currency reserve (18) (18)
Total equity 300,248 303,804
The Parent Company has taken advantage of the exemption from the requirement to publish its own income statement. The Parent 
Company’s loss for the year ended 31 December 2016 was £3,604,000 (2015: £2,598,000).
The notes on pages 24 to 34 form part of the financial statements.
The financial statements were approved by the Board of Directors and authorised for issue on 18 May 2017.
Howard Obee
Director
Peter Fleming
Director
Company number: 5147938
COMPANY STATEMENT OF FINANCIAL POSITION
AS A T 31 DECEMBER 2016 21 Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
Financial
Statements
Directors’ 
Report
Strategic
Report
Share
capital
$000
Share
premium
reserve
$000
Other
reserves
$000
Retained
deficit
$000
Foreign
currency 
reserve
$000
Total
$000
Balance at 1 January 2015 8,530 308,602 2,280 (13,082) (18) 306,312
Comprehensive income for the year
Loss and total comprehensive loss for 
the year – – – (2,598) – (2,598)
Total comprehensive Income for the year – – – (2,598) – (2,598)
Contributions by and distributions to owners
Share-based expense – – 90 – – 90 
Total contributions by and distributions 
to owners – – 90 – – 90
Balance at 31 December 2015 8,530 308,602 2,370 (15,680) (18) 303,804
Comprehensive income for the year
Loss and total comprehensive loss for 
the year – – – (3,604) – (3,604)
Total comprehensive Income for the year – – – (3,604) – (3,604)
Contributions by and distributions to owners
Share-based expense – – 48 – – 48
Total contributions by and distributions 
to owners – – 48 – – 48
Balance at 31 December 2016 8,530 308,602 2,418 (19,284) (18) 300,248
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 Comprises the cumulative charge recognised under IFRS 2 in respect of share-based 
payment awards.
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 page 24 to 34 form part of the financial statements.
COMPANY STATEMENT OF CHANGES IN EQUITY 
FOR THE YEAR ENDED 31 DECEMBER 2016 Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
22
Note
2016 2015
$000 $000 $000 $000
Cash flow from operating activities
Loss before tax (3,604) (2,600)
Adjustments for:
Depreciation 1 1
Share-based payment 48 90
Net finance costs 1,860 632
Realised foreign exchange gains 25 (8)
Cash flows from operating activities before changes  
in working capital (1,670) (1,885)
(Increase)/decrease in other receivables (476) 32
Increase in trade and other payables 29 33
Net cash outflow from operating activities (2,117) (1,820)
Cash flows used in investing activities
Interest received 30 47
Purchase of intangible assets (849) (773)
Proceed from disposal intangible assets 430 1,149
Net cash used in investing activities (389) (423)
Cash flows from financing
Cash flows from financing activities – –
Net decrease in cash and cash equivalents (2,506) (1,397)
Cash and cash equivalents at the beginning of the year 16 14,011 16,079
Exchange loss on cash and cash equivalents (1,860) (671)
Cash and cash equivalents and cash held in escrow at 
the end of the year 9,645 14,011
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2016 23 Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
Financial
Statements
Directors’ 
Report
Strategic
Report
Note
2016 2015
$000 $000 $000 $000
Cash flow from operating activities 
Loss before tax (3,604) (2,598)
Adjustments for:
Depreciation 1 1
Share-based payment expense 48 90
Net finance costs 1,860 632
Realised foreign exchange gains 25 (8)
Cash flows from operating activities before changes  
in working capital (1,670) (1,883)
(Increase)/decrease in other receivables (869) 32
Increase in trade and other payables 852 33
Net cash outflow from operating activities (1,687) (1,818)
Cash flows from investing activities
Interest received 30 47
(Increase)/decrease in amounts due from Group undertaking (849) 374
Net cash used in/(from) investing activities (819) 421
Net decrease in cash and cash equivalents (2,506) (1,397)
Cash and cash equivalents at the beginning of the year 16 14,011 16,079
Exchange loss on cash and cash equivalents (1,860) (671)
Cash and cash equivalents and cash held in escrow at 
the end of the year 9,645 14,011
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2016 Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
24
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 2016 year end
There were no new standards issued in respect of the year ended 31 December 2016 that were relevant for adoption by the Group.
New and revised standards issued but not effective for 31 December 2016 year end
At the date of authorisation of this report the following standards and interpretations, which have not been applied in this report, were in issue 
but not yet effective:
 
• IFRS 9 Financial Instruments (effective date for annual periods beginning on or after 1 January 2018);
• IFRS 15 Revenue from Contracts with customers (effective date for annual periods beginning on or after 1 January 2018);
• IFRS 16 Leases (effective date for annual periods beginning on or after 1 January 2019);
• IAS 12 (amended) Recognition of Deferred Tax Asset for Unrealised Losses;
• IAS 7 Disclosure Initiative; and
• IFRS 2 (amended) Classification and Measurement of Share-based Present Transactions.
The Group considers that the only Standard that may have any impact is IFRS 9. The new Standard will replace existing accounting Standards. 
It is applicable to financial assets and liabilities and will introduce changes to existing accounting concerning classification, measurement and 
impairment (introducing an expected loss method). The Group considers that whilst IFRS 16 may impact on the Group, the effect will not be 
significant as the operating leases held by the Group are of low value.
The Group is not revenue generating thus there is no impact of IFRS 15 as there are no revenue contracts in place.
The Group will adopt the above Standards at the time stipulated by that Standard. The Group does not at this time anticipate voluntary early 
adoption of any of the Standards.
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.
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.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016 25 Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
Financial
Statements
Directors’ 
Report
Strategic
Report
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 33.33%
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.
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. The Group has determined that their operating 
licences are recognised in one CGU. A CGU is not 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, performs 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 of disposal. The Group has 
identified one cash-generating unit. 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.
1 Accounting policies continued Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
26
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 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.
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;
• 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; and
• cash and cash equivalents consist of cash at bank on demand and balances on deposit with an original maturity of three months or less. 
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.
Tax 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.
1 Accounting policies continued
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2016 27 Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
Financial
Statements
Directors’ 
Report
Strategic
Report
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 account 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.
With regards to the Parent Company financial statements – impairment of financial assets:
Investment in subsidiaries
The Company has an investment in a subsidiary. Investments are valued at cost, less allowance for impairment. Impairment reviews are 
performed annually. The assessment of recoverability involves judgement. 
2 Loss from operations
2016
$000
2015
$000
Staff costs (note 5) 984 1,090
Share-based payment- equity settled 48 90
Services provided by the auditors:
Fees payable to the Company’s auditors for the audit of the Parent Company  
and consolidated annual accounts 51 70
Fees payable to the Company’s auditor and its associates for other services:
Tax advisory 6 6
Consultancy
Depreciation of office equipment 1 1
Operating lease expenses-property 317 321
Foreign exchange loss 1,890 679
3 Basic and dilutive loss 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 $3,604,000 (2015 – loss $2,599,393) and 
the weighted average number of shares in issue for the year was 484,098,484 (2015 – 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 
7,050,000 (2015: 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, office equipment is based in the UK and all other non-current assets are located in the Falkland 
Islands.
1 Accounting policies continued Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
28
5 Staff costs
Company and Group:
Staff costs (including Directors) comprise:
2016
$ 000
2015
$ 000
Wages and salaries 868 964
Employers’ national insurance contribution 115 126
Employers’ pension contribution 1 –
984 1,090
Share-based payment-equity settled 48 90
1,032 1,180
The average number of employees (including Directors) employed during the year by the Company was five (2015 – six) and for the Group was 
five (2015 – six). All employees and Directors of the Group and the Company are considered to be the key management personnel.
Of the $48,000 (2015 – $90,000) share-based payment charge included in the consolidated statement of comprehensive income, $48,000 
(2015 – $90,000) has been charged in respect of share options granted to staff (including Directors) in the current and prior years. 
6 Directors’ emoluments
The Directors’ emoluments for the year are as follows:
2016
$ 000
2015
$ 000
Directors’ fees 620 691
Share-based payments – equity settled 1 –
621 691
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 $344,486 (2015- $383,281). 
In 2013, the Group granted 600,000 share options to an employee of the Group with a total fair value of $84,203. Of this amount, $16,687 has 
been expensed during the year. The options vest after three years and expire after 10 years.
In 2014, the Group granted 1,400,000 share options to an employee of the Group with a total fair value of $49,071. Of this amount, $30,225 
has been expensed during the year. The options vest after three years and expire after 10 years. During 2014, 1,400,000 that had been issued 
to the same employee were cancelled.
In 2016, the Group granted 1,000,000 share options to a Director of the Group with a total fair value of $6,714. Of this amount, $582 has been 
expensed during the year. The options vest after three years and expire after 10 years.
Because of the difficulty in measuring the fair value of the services received, this has been determined by reference to the fair value of the 
options granted. A Black-Scholes model has been used to determine the fair value of options granted (see note 7).
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2016 29 Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
Financial
Statements
Directors’ 
Report
Strategic
Report
7 Share-based payment
2016
Weighted 
average exercise
price
2016
Number
2015
Weighted 
average exercise 
price
2015
Number
Outstanding at the beginning of the year 39p 6,150,000 39p 6,150,000
Granted during the year 1.8p 1,000,000 –
Expired during the year 48p 100,000 –
Outstanding at the end of the year 33p 7,050,000 39p 6,150,000
Exercisable at the end of the year 30p 4,650,000 50p 4,150,000
The weighted average contractual life of the options outstanding at the year end was five years (2015 – six years).
The range of exercise prices of share options outstanding at the end of the year is 1.8-74p (2015 – 11.25p-74p).
The following information is relevant in the determination of the fair value of the options granted during the year under the scheme operated 
by the Company.
2016
Equity-settled scheme
Option pricing model used Black-Scholes
Weighted average share price at grant date 1.8p
Exercise price 1.8p
Weighted average contractual life (days) 1,460
Expected volatility 60%
Risk-free interest rate 1.0%
Fair value of options 0.5p
Option life 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 
 2016
$000
2015
$000
Bank interest received 30 47
30 47
Finance expense
 2016
$000
2015
$000
Foreign exchange loss 1,890 679
1,890 679 Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
30
9 Tax expense
Current tax expense
There is no current tax expense for the year (2015: $nil).
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: 
2016
$000
2015
$000
Loss before and after taxation (3,604) (2,600)
Standard rate corporation tax charge at 20.00% (2015 – 20.25%) (721) (527)
Expenses not deductible for tax purposes 268 296
Adjust closing deferred tax to average rate of 20.00% 9 84
Adjust opening deferred tax to average rate of 20.00% (13) (6)
Movement in unrecognised deferred tax for the year 457 153
Total current and deferred tax for the year – –
Factors that may affect future tax charges
The Group has a deferred tax asset of approximately $1,022,473 (2015 – $671,128) in respect of unrelieved tax losses of approximately 
$6,014,546 at 31 December 2016 (2015 – $3,728,488). The rate of tax used in the calculation of the deferred tax asset is 17% (2015 – 18%).
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 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
Office equipment
$000
Cost
As at 1 January 2016 113
Additions 2
As at 31 December 2016 115
Depreciation
As at 1 January 2016 102
Charge for the year 1
As at 31 December 2016 103
Net book value
As at 31 December 2016 12
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2016 31 Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
Financial
Statements
Directors’ 
Report
Strategic
Report
11 Intangible assets
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
Group
Exploration and 
evaluation costs
$000
Cost
As at 1 January 2016 289,590
Additions 1,613
Disposals (822)
As at 31 December 2016 290,381
Net book value
As at 31 December 2016 290,381
On 31 May 2016 the Company received notice from The Falkland Islands Government that the Company’s application to extend the expiry 
date of the Second Term for Production Licenses PL018, PL019 and part of PL020 has been extended until 31 October 2020. On the same 
day the Company also received notice that the expiry date of Darwin East Discovery Area has been extended until 31 January 2022.
12 Investments in subsidiary
Company
2016
$000
2015
$000
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 has its registered office at One Fleet Place, London EC4M 7WS and its principal activity is oil and gas exploration . Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
32
13 Other receivables
Group Company
2016
$000
2015
$000
2016
$000
2015
$000
Amounts owed by Group undertakings – – 290,560 289,769
Other receivables 1,069 165 1,068 165
Prepayments and accrued income 98 132 98 132
1,167 297 291,726 290,066
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. The Directors have considered the classification 
of the amounts owed by Group undertakings and consider that the intention is not to pay the amounts within the next year and as such have 
reclassified these amounts as non current. The comparative has also been reclassified.
14 Trade and other payables
Group Company
2016
$000
2015
$000
 2016
$000
 2015
$000
Trade payables 84 81 85 81
Other taxes and social security costs 99 42 99 42
Accruals and deferred income 953 160 951 160
1,136 283 1,135 283
15 Share capital
2016
$000
2015
$000
Authorised
750,000,000 ordinary shares of 1 pence each
(2015 – 750,000,000) 14,926 14,926
Allotted, called up and fully paid
484,098,484 ordinary shares of 1 pence each
(2015 – 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
 2016
$000
2015
$0000
Cash available on demand 374 13,011
Cash on deposit 9,271 1,000
Total 9,645 14,011
Cash and cash equivalents consist of cash at bank on demand and balances on deposit with an original maturity of three months or less.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2016 33 Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
Financial
Statements
Directors’ 
Report
Strategic
Report
17 Related party transactions
Company
During the year Borders & Southern Petroleum Plc paid expenses of $1,1612,551 (2015 – $774,513) on behalf of Borders & Southern Falkland 
Islands Limited. At the year end $288,230,000 (2015 – $289,769,373) 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
2016
$000
2015
$000
Not later than one year 80 321
The Group licence commitment is to drill one exploration well before 1 November 2020. 
19  Events after the reporting period
There were no reportable events post reporting date.
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; and
• trade and other payables.
The fair values of the Group’s financial assets and liabilities at 31 December 2016 and as at 31 December 2015 are materially equivalent to the 
carrying value as disclosed in the statement of financial position and related notes.
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 2016 the Group held cash at bank and in deposits under its control of $9,644,090 (2015 – $14,011,005) which forms the 
majority of the Group’s working capital. Of the cash at bank and in deposit $372,613 (2015 – $13,011,005) 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 $9,271,477 (2015 – $1,000,000) with a weighted average fixed interest rate of 0.2% (2015-0.2%) for three 
months. If there was 1% change in interest rates the impact on the statement of comprehensive income would be $92,714 (2015 – $10,000). Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
34
b) Foreign currency translation risk
The operational currency of the oil and gas exploration and evaluation activities of the exploration subsidiary is the US$. The consolidated 
financial statements are presented in US$ as this best reflects the economic environment of the oil exploration sector in which the Group 
operates. 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$. To minimise this foreign currency risk cash balances are held in both £ sterling and US$.
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
2016
$000
Other receivables 
measured at 
amortised cost
2015
$000
Other receivables 
measured at 
amortised cost
2016
$000
Other receivables 
measured at 
amortised cost
2015
$000
Current financial assets
Held in UK£:
Other receivables 1,167 297 1,166 297
Cash and cash equivalents 8,892 12,826 8,892 12,826
Total current financial assets held in UK£ 10,059 13,123 10,058 13,123
Held in US$:
Trade and other receivables – – 288,230 289,769
Cash and cash equivalents 752 1,185 752 1,185
Total financial assets 10, 811 14,308 299,040 304,077
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 
$1,005,800 (2015: $1,312,325) for the Group and Company.
Group Company
Financial liabilities 
measured at 
amortised cost
2016
$000
Financial liabilities 
measured at 
amortised cost
2015
$000
Financial liabilities 
measured at 
amortised cost
2016
$000
Financial liabilities 
measured at 
amortised cost
2015
$000
Held in UK£:
Trade and other payables 1,136 283 1,135 283
Total financial liabilities 1,136 283 1,135 283
If there was a 10% change in the year end exchange rate there would be a movement in the US$ equivalent of financial liabilities held in the 
UK£ of $113,500 (2015 – $28,300) for the Group and Company. 
c) Credit risk
Neither the Group nor the Company have sales customers so formal credit procedures are not usually relevant. Recently the Company sold 
some its inventory held in The Falkland Islands and monies due from this were outstanding at year end. These balances were partially offset 
by monies owed by the Company to the same entity. 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:
2016 2015
Carrying 
Value
$000
Maximum
exposure
$000
Carrying
Value
$000
Maximum
exposure
$000
Cash and cash equivalents 9,645 9,645 14,011 14,011
Maximum credit risk exposure 9,645 9,645 14,011 14,011
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 deficit and other reserves.
20 Financial instruments continued
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2016 35 Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
Financial
Statements
Directors’ 
Report
Strategic
Report
Solicitors SNR Denton UK 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
Independent auditors BDO LLP
55 Baker Street
London
W1U 7EU
Directors Harry Dobson
Howard Obee
Peter Fleming
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 advisor
and joint broker
Panmure Gordon & Co
Moorgate Hall
155 Moorgate
London
EC2M 6XB
Joint broker Mirabaud Securities LLP
5th Floor
The Verde Building
10 Bressenden Place
London
SW1E 5DH
CORPORATE DIRECTORY Borders & Southern Petroleum plc  
Annual Report & Accounts 201 6
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 2016