After the hysteria triggered by the rumours of a gigantic oil discovery at Borders and Southern’s Darwin East well in the South Falklands basin, all is quiet. For now!
Borders and Southern of course disappointed many investors who piled into the shares a couple of weeks ago after stories in the Sun newspaper of oil which turned out to be false given that Darwin was in fact a gas condensate discovery (RNS 23th April). The company raised £47 million in an institutional placing last week at 84p (currently 84p) to allow further analysis of the discovery and undertake additional 3D seismics.
The Leiv Eiriksson rig is due to move to the Border’s Stebbing prospect shortly. The second BOR well has estimated recoverable resource of 710 to 1,280 million barrels. The well is geologically independent to Darwin.I am still wondering whether the rig could move to Falkland Oil and Gas acreage first to allow Border’s to finalise their analysis work given the cost of drilling the South Falklands is so high.
News of Falkland Oil and Gas’s farm in partner are also awaited. In March 2012 they announced a farm out deal but the details of the partner remain confidential. Rockhopper is also expected to announce a deal at some stage this year after the publication of an updated competent persons report last month.
Contrarian Investor UK