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(Sharecast News) - Borders & Southern Petroleum reported a slightly wider annual loss for 2025 on Friday, while saying the final investment decision on the Sea Lion project had reinvigorated interest in its Darwin gas condensate discovery and wider Falklands portfolio.
The AIM-traded independent oil and gas explorer, which holds a 100% interest in three production licences in the South Falkland Basin, said its operating loss for the year ended 31 December was $1.4m, compared with $1.2m in 2024.
Administrative expenses rose to $1.5m from $1.2m, while the group reported a loss before tax of $1.4m, compared with $1.2m a year earlier.
Basic and diluted losses per share were unchanged at 0.16cents.
The company ended the year with cash of $2.5m, up from $2.1m at the end of 2024, after raising a further $2.8m before expenses through capital raises in early 2025.
Net assets stood at $297.8m at year end, compared with $296.3m a year earlier. Intangible assets, mainly relating to exploration assets, were $295.3m.
Borders & Southern said the final investment decision declared by Navitas Petroleum and Rockhopper Exploration on the Sea Lion development was a pivotal basin-opening event for the Falkland Islands.
Chairman Harry Dobson and chief executive Harry Baker said the significance of Sea Lion "cannot be overstated", adding that the project would bring the Falkland Islands' first oil field into production in the first quarter of 2028 after 30 years of work and more than $1bn of industry investment.
They said the milestone had put Borders & Southern's Darwin project and broader prospect portfolio "firmly in the spotlight", reinvigorating the company's farm-out process.
"Sea Lion FID has brought both new and old potential partners back into the data room, and we are in active dialogue with multiple interested parties," they said.
"The board is very confident of finding the right and best outcome for all stakeholders."
Borders & Southern said it was constrained in what it could disclose publicly because of commercial sensitivities around potential transactions with multiple third parties.
The company said recent corporate activity across the Atlantic margins reflected renewed industry focus on reserve replacement after years of underinvestment, while the Middle East war had reinforced the need to diversify global hydrocarbon supply.
The board said Borders & Southern remained well backed, with its four largest shareholders owning more than 45% of the company and its top 25 shareholders owning more than 85%.
"We are in the enviable position of being well backed and well financed," Dobson and Baker said.
"Darwin is a world-class asset and we intend to extract full value for all our stakeholders."
The company noted in its going concern statement that it had no external borrowings or debt, but said it would need to complete a capital raise later in 2026 or early 2027 under current cash flow forecasts.
It also had a commitment to drill a well before the expiry of its production and discovery area licences on 31 December 2026.
Borders & Southern said it planned to fund well development through a farm-out, or by raising additional capital if a farm-out was not completed.
If neither route was successful, it would seek an extension to the licences and associated drilling commitment, consistent with previous extensions.
The directors said they considered the required funding would be forthcoming, but acknowledged a material uncertainty that could cast significant doubt on the group's ability to continue as a going concern.
At 1323 BST, shares in Borders & Southern Petroleum were down 4.35% at 11p.
Reporting by Josh White for Sharecast.com.
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