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Penny shares might be each thrilling and terrifying. At some point they’re languishing at fractions of a penny, the subsequent they’re surging a whole lot of p.c and grabbing headlines. This 12 months, one AIM-listed vitality agency has accomplished simply that. Borders & Southern Petroleum (LSE: BOR) has rocketed 388% in 2025 alone, regardless of having no income to its identify.
That begs the query — is there extra to return, or has the ship already left the harbour?
Speculative prospects
Borders & Southern’s a London-based impartial oil and fuel exploration firm. Its flagship Darwin mission, situated within the Falkland Islands, has been the principle driver of pleasure. The agency’s prolonged its manufacturing licences to the tip of 2026 and is now making ready to make use of a cell offshore vessel for manufacturing, storage and offloading.
The objective is to convey the Darwin discipline into manufacturing as soon as additional appraisal drilling confirms its financial viability.
One factor that’s caught my eye is the extent of insider confidence. Round 41% of excellent shares at the moment are owned by firm executives. That’s not one thing I usually see with AIM penny shares, and it’s normally an indication that administration genuinely believes within the agency’s prospects.
The financials, surprisingly, don’t look too dangerous both. The corporate has £237.5m in belongings in opposition to solely £943,000 in liabilities, suggesting a clear steadiness sheet. Its price-to-book (P/B) ratio of 0.39 additionally implies the shares aren’t buying and selling at an enormous premium to their underlying worth. Add within the £1.5m fundraising accomplished in late 2024, and the enterprise has managed to purchase itself extra time to advance Darwin.
However right here’s the catch: Borders & Southern has by no means made a revenue. It reported a lack of £952,000 in FY 2024, persevering with a long term of unfavourable earnings since inception. For an oil explorer, that’s commonplace — nevertheless it does imply the corporate’s reliant on future fundraising to remain afloat.
If it fails to safe extra capital, it might need to subject further shares, diluting current shareholders within the course of. That’s an actual danger traders have to weigh up earlier than getting carried away by the hovering share value.
A worthwhile danger?
So is it price contemplating? For my part, Borders & Southern sits firmly within the ‘high-risk, possible-high-reward’ class. Penny shares like this may both go tenfold or collapse to zero. The Darwin mission may remodel the corporate right into a severe producer, however the lack of present income means every thing rests on profitable appraisal drilling and eventual business manufacturing.
For an investor wanting to boost a portfolio with one thing speculative, this may very well be a inventory to take a look at. Nevertheless it ought to solely ever be a tiny slice of a diversified portfolio. Personally, I want dependable dividend payers for long-term passive revenue.
For instance, Pharos Vitality and Enwell Vitality are two penny shares that may attraction to traders who’d want publicity to extra established vitality companies. Each generate income and function producing belongings, giving them a steadier monetary footing.
Nonetheless, I can’t deny the thrill that penny shares like Borders & Southern convey to the market. In any case, that’s what retains the AIM index so fascinating.
