Borders & Southern Petroleum has signed a contract with Ocean Rig UDW for the provision of mobile drilling rig services using the Eirik Raude drilling unit, a dynamically positioned, harsh environment semi-submersible. On completion of its current contract in West Africa in October 2011, the rig will be mobilized to the Falkland Islands to commence our two well drilling program. The wells on our Darwin and Stebbing prospects are currently estimated to take approximately 45 days each. The contract allows for up to three option wells.

Within the last year, Borders & Southern has appointed a drilling manager for the campaign and has contracted AGR Peak Well Management Ltd to perform well engineering, procurement, service contracting and operations supervision. Initial well designs for Darwin and Stebbing are already well advanced and we expect to order subsea wellhead systems and casing strings shortly. Detailed well planning and the contracting of third party services will also commence shortly.

Chief Executive Howard Obee commented, "We are delighted to have signed this contract. It represents a significant milestone for the Company and is the culmination of an intense period of technical and contractual effort. The Eirik Raude is a high specification, harsh environment rig that is ideally suited for our work program."

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