Final Results

Borders & Southern (AIM: BOR), the London based independent oil and gas exploration company with assets offshore the Falkland Islands, announces its audited results for the year ended 31 December 2025. Full copies of the Company's Annual Report and Accounts, including the Company Overview, Chairman's Statement, Remuneration Committee Report, Directors' Report, Auditor's Report and full Financial Statements, will be available on the Company's website and posted to Shareholders along with the notice of the AGM shortly.

Summary

• Raised a further $2.8 million (£2.2 million) before expenses through capital raises in early 2025
• Cash balance on 31 December 2025: $2.5 million (2024: $2.1 million)
• Administrative expense for the year: $1.5 million (2024: $1.2 million)
• Operating loss of $1.4 million (2024: $1.2 million)
• FID being declared by Navitas Petroleum and partner Rockhopper Exploration on Sea Lion is a pivotal basin-opening event.
• Company in active dialogue re the farm-out process with multiple interested parties

Chairman's and CEO's review

After a second full year as CEO, it is my pleasure, once again, to update shareholders with the Company's progress.

However, we are very much constrained in what we can and cannot say publicly, bound by both the legislation governing a publicly traded company and the commercial sensitivities regarding potential transactions with multiple third parties.

There has been a plethora of corporate activity along the Atlantic Margins over the past 12 months. After years of under-spending, the industry's need for reserve replacement is in sharp focus. The war in the Middle East has re-emphasized the need to diversify the geographic source of global hydrocarbons and companies are actively seeking those replacement barrels in alternative jurisdictions.

The key piece of corporate development directly affecting Borders and Southern was FID being declared by Navitas Petroleum and partner Rockhopper Exploration on Sea Lion. The significance of this basin-opening play cannot be overstated.

After 30 years of work and over a billion dollars of industry investment, the Falkland Island's first oil field will be brought into production in Q1 2028. A truly pivotal moment for both the Falkland Islands, its people and the oil companies based in the region. This event has put Borders & Southern's Darwin project, and our extensive prospect portfolio firmly in the spotlight; re-invigorating the farm-out process. We would also acknowledge the continued sterling efforts of the Falkland Island Government ("FIG") in providing the legislation necessary to deliver the Islands' first development. The Company continues to work closely with FIG and local players to build upon this foundation with our own development.

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. The Board is very confident of finding the right and best outcome for all stakeholders.

We are in the enviable position of being well backed and well financed. The top four shareholders own over 45% and the top 25 over 85% of the Company. All of this enables the Board, who are also major shareholders and fully aligned, to secure the best possible outcome for our shareholders, not just the first offer. Darwin is a world-class asset and we intend to extract full value for all our stakeholders.

I would like to thank shareholders for their support and patience. We are completely focused on delivering the best deal possible for you and are in an excellent position to achieve that.

Equity attributable to the equity owners of the parent company

The following describes the nature and purpose of each reserve within owners' equity:

Notes

Accounting policies

Basis of preparation

The financial information for the year ended 31 December 2025 set out in this announcement does not constitute the Company's statutory accounts. These financial statements included in the announcement have been extracted from the Group annual financial statements for the year ended 31 December 2025. The financial statements have been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards adopted for use in the European Union. However, this announcement does not itself contain sufficient information to comply with IFRS.

The auditor has issued its opinion on the Group's financial statements for the year ended 31 December 2025 which is unmodified and is available for inspection at the Company's registered address and will be posted to the Group's website.

Going concern

The 31 December 2025 financial statements have been prepared based on the going concern basis, which assumes the continuity of normal business activities and the realisation of assets and extinguishment of liabilities in the ordinary course of business. The going concern assessment of the Parent Company has been performed as part of the Group's going concern assessment.

At 31 December 2025, the Group had a net cash position of $2.56m (31 December 2024: $2.09m). The Group does not have any external borrowings or debts. The Group and the Parent Company have a commitment to drill a well before the expiry of their production and discovery area licences on 31 December 2026 (see note 19). The Group plans to fund the well developments through a farm-out or by raising additional capital if the farm-out is not successful. If the Group does not successfully raise the capital needed or identify a suitable farm-out partner, the Group will seek to gain an extension to the licences and the associated commitment to drill the well. This is in line with previous extensions and the Directors are confident that further extensions will be granted. Historically, the Falkland Islands Government has required the Group to show evidence of its ability to pay the licence fees before an extension. The Directors are discussing a further extension of the production and discovery area licences with the Falkland Islands Government including the conditions and commitments attached to the licences.

In performing their assessment of the Group and the Parent Company's ability to continue as going concerns, the Directors have prepared a cashflow forecast for the period ending 30 June 2027, which indicates that in current conditions the Group and the Parent Company will not have sufficient cash to cover its costs during the going concern period, so the company will need to complete a capital raise later in 2026 or early 2027. At present the cost base of the business principally consists of administrative costs, listing costs and costs to maintain the licences in good-standing.

As noted above, the Company will not have sufficient cash to cover its costs during the going concern period. Furthermore, the Group and Parent Company also have a commitment to drill a well before the expiry of their production and discovery area licences on 31 December 2026. Therefore, they need to secure further funding, either through a farm-out or by raising capital if the farm-out is not successful. However, neither option is guaranteed. This indicates the existence of a material uncertainty which may cast significant doubt on the Group and the Parent Company's ability to continue as going concerns and therefore, the Group and the Parent Company may be unable to realise their assets and discharge their liabilities in the ordinary course of business.

The Directors consider that the required funding will be forthcoming and therefore the going concern basis of preparation is deemed appropriate. The financial statements do not include any adjustments that would be necessary if the Group and the Parent Company were unable to continue as going concerns.

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 $1,387,000 (2024 - loss $1,217,000) and the weighted average number of shares in issue for the year was 868,315,310 (2024 - 753,828,155). 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 68,894,131 (2024: 48,026,666) potentially dilutive ordinary shares being the share options.