A single ultra-high-net-worth Middle Eastern investor has backed the Falklands-focused explorer with a £2m direct placing as it pushes its Darwin discovery towards appraisal.
Borders & Southern Petroleum (AIM: BOR) has secured £2m before expenses via a direct placing to a single ultra-high-net-worth Middle Eastern investor, funding continued work on its wholly-owned Darwin gas condensate discovery offshore the Falkland Islands.
The placing was done at 11.5p per share, alongside 8.7 million two-year warrants exercisable at 20p, a structure that points to the backer's confidence in a substantial re-rating of the stock well above current levels. The identity of the investor, described as exceptionally well-connected, has itself drawn attention given the company's traditionally thin shareholder register.
The cash injection will cover licence and Discovery Area fees, technical and commercial studies, and general running costs as Borders & Southern works to move Darwin towards commercial appraisal. The company's interim results to June covered a $0.726m loss and cash of $0.441m, with some warrants already exercised at 10p, underlining how tight the balance sheet had become before this latest raise.
Darwin remains the company's flagship asset, underpinned by 2,517 square kilometres of 3D seismic data and two exploration wells, the first of which delivered what management has called a potentially major find. The company's chief executive has pointed to P50 recoverable liquids estimates of 462 million barrels and further exploration upside across the licence area.
Commentators note that much of that exploration upside already looks reflected in the valuation, and that any future well or development programme could carry a hefty price tag, particularly given the historic lack of institutional investors able to follow their money into the stock. For now, the fresh funding buys Borders & Southern time to progress technical studies, with the warrant strike at 20p effectively setting the market's own marker for where the next re-rating test lies.
This report is based on Borders & Southern Petroleum’s announcement and coverage by UK Investor Magazine. Company announcements can be tracked via London Stock Exchange RNS and Investegate, and the full results calendar is worth watching for the next update.
This article is for general information only and does not constitute investment advice or a recommendation to buy or sell any security. Photo: Maria Lupan on Unsplash.
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