13 January 2016
WENTWORTH RESOURCES LIMITED
("Wentworth" or "the Company")
Mnazi Bay Operational Update
Wentworth, the Oslo Stock Exchange (OSE: WRL) and AIM (AIM: WRL) listed independent, East Africa-focused oil & gas company, is pleased to provide an operational update on its producing gas assets in Mnazi Bay, Tanzania.
Further to the Company's announcement on 4 November 2015 that gas deliveries to the new transnational pipeline had commenced and production volumes were ramping up, Wentworth reports that Q4 2015 gross gas production into the pipeline and directly to a power plant in Mtwara averaged 46 MMscf/d, with production averaging 55 MMscf/d during the month of December 2015. To date, growing gas demand from the power sector has been impacted by delays experienced in commissioning the new Kinyerezi power plant and the conversion of the Ubungo power plant from diesel to gas. These delays are considered to be short term in nature and all of the power generation facilities that will utilize Mnazi Bay gas in the generation of electricity are expected to become fully operational during Q1 2016. As a result, production volumes into the pipeline are now expected to reach between 70 and 80 MMscf/day during Q1 2016 and thereafter remain consistent throughout 2016, with the potential for a further increase in volumes depending on demand. The existing Mnazi Bay gas wells continued to perform in line with expectations and are anticipated to be more than capable of meeting expected demand. As a result, no new development wells are currently planned for 2016.
Payments by the buyer, Tanzania Petroleum Development Corporation ("TPDC"), to the Joint Venture, for gas sales delivered to the new pipeline have been consistently paid in accordance with the agreed terms. Under the Gas Sales Agreement signed on 12 September 2014, the sale price has been set at US$3.00 per million BTU (approximately US$3.07 per thousand cubic feet, rising in line with the US CPI industrial index) commencing in 2016.
The Company ended 2015 with cash of approximately $2.7 million and debt of $26 million of which $7.4 million of principal and interest is due to be repaid from internally generated cash flow during H2 2016.
Although no firm exploration plans have been made in 2016, the Joint Venture plans to align exploration activities in the Mnazi Bay concession with gas demand growth within Tanzania. Management will look to provide an update to shareholders as these plans progress.
Geoff Bury, Managing Director, commented:
"I am pleased that the commissioning of the pipeline and the gas offtake facilities have all gone smoothly and that the Mnazi Bay wells have performed as expected; the Joint Venture's position as the main feedstock for the new gen-sets in Tanzania provides a unique position from which to benefit from the growing demand for power. Moreover, the expectation of increasing production without the need for additional capital expenditure will further enhance our rapidly strengthening financial position. Wentworth is in the unique position for a small E&P company to experience a growing cash balance on the back of increasing gas production with no commodity price risk."
"The newly elected Government has demonstrated its commitment to the future growth and development of Tanzania's power industry and continues to work diligently to enable new and existing power plants to become fully operational in the coming months."
| Enquiries: || || |
| || Geoffrey Bury,|
+1 403 993 4450
| || || |
| Wentworth || Lance Mierendorf,|
Chief Financial Officer
+1 403 680 8773
| || Katherine Roe|
Head of Investor Relations & Corporate Communications
+44 7841 087 230
| Swedbank First Securities || Broker (Norway) || +47 23 23 80 00 |
| || Ove Gusevik || |
| || Jarand Lønne|
| Crux Advisers || Investor Relations Adviser |
| +47 909 808 48 |
| || Jan Petter Stiff || |
| || Carl Bachke|
| Stifel Nicolaus Europe Limited || AIM Nominated Adviser and Broker (UK) || +44 (0) 20 7710 7600 |
| || Callum Stewart || |
| || Ashton Clanfield|
| FirstEnergy Capital || Broker (UK) || +44 (0) 20 7448 0200 |
| || Hugh Sanderson|
| FTI Consulting || Investor Relations Adviser (UK) || email@example.com |
+44 (0) 20 3727 1000
| || Edward Westropp|
| || || |
About Wentworth Resources
Wentworth Resources is a publicly traded (OSE:WRL, AIM:WRL), independent oil & gas company with: natural gas production; midstream assets; a committed exploration and appraisal drilling programme; and large-scale gas monetisation opportunities, all in the Rovuma Delta Basin of coastal southern Tanzania and northern Mozambique.
Wentworth holds a 31.94% participation interest in production operations and a 39.925% participation interest in exploration operations of the Mnazi Bay Concession. M&P is operator and holds a 48.06% participation interest in production operations and 60.075% participation interest in exploration operations with Tanzania Petroleum Development Corporation ("TPDC") holding the remaining 20% participation interest in production operations.
Gerold Fong, Vice President of Exploration (BSC Geophysics, 1982) who has 31 years of experience in the exploration and production industry, has read and approved the technical disclosure in this regulatory announcement.
Cautionary note regarding forward-looking statements
This press release may contain certain forward-looking information. The words "expect", "anticipate", believe", "estimate", "may", "will", "should", "intend", "forecast", "plan", and similar expressions are used to identify forward looking information.
The forward-looking statements contained in this press release are based on management's beliefs, estimates and opinions on the date the statements are made in light of management's experience, current conditions and expected future development in the areas in which Wentworth is currently active and other factors management believes are appropriate in the circumstances. Wentworth undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless required by applicable law.
Readers are cautioned not to place undue reliance on forward-looking information. By their nature, forward-looking statements are subject to numerous assumptions, risks and uncertainties that contribute to the possibility that the predicted outcome will not occur, including some of which are beyond Wentworth's control. These assumptions and risks include, but are not limited to: the risks associated with the oil and gas industry in general such as operational risks in exploration, development and production, delays or changes in plans with respect to exploration or development projects or capital expenditures, the imprecision of resource and reserve estimates, assumptions regarding the timing and costs relating to production and development as well as the availability and price of labour and equipment, volatility of and assumptions regarding commodity prices and exchange rates, marketing and transportation risks, environmental risks, competition, the ability to access sufficient capital from internal and external sources and changes in applicable law. Additionally, there are economic, political, social and other risks inherent in carrying on business in Tanzania and Mozambique. There can be no assurance that forward-looking statements will prove to be accurate as actual results and future events could vary or differ materially from those anticipated in such statements. See Wentworth's Management's Discussion and Analysis for the year ended December 31, 2014, available on Wentworth's website, for further description of the risks and uncertainties associated with Wentworth's business.
Neither the Oslo Stock Exchange nor the AIM Market of the London Stock Exchange has reviewed this press release and neither accepts responsibility for the adequacy or accuracy of this press release.
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Wentworth Resources Limited via Globenewswire