PRESS
RELEASE |
11
January 2019 |
WENTWORTH
RESOURCES PLC
("Wentworth" or the "Company")
Commercial,
Operational Update and 2019 Production Guidance
Wentworth, the Oslo Stock Exchange
(OSE: WEN) and AIM (AIM: WEN) listed independent, East
Africa-focused oil & gas company, is today providing an update
to shareholders.
Tanzania
Operations
Gas demand for the Company's
producing reserves continued to grow in the final quarter of 2018,
resulting from combined demand from the Kinyerezi-1, Kinyerezi-2
and Ubungo II power stations, and the burgeoning demand growth from
industrial customers including Dangote Cement and Goodwill
Ceramics. This demand from off-takers collectively resulted in an
average daily production in Q4 2018 of 87.3 MMscf/d and for the
month of December 2018 of 92.5 MMscf/d.
The average production for the
full year 2018 was 83.2 MMscf/d; above the Company's 2018
production guidance range of 65 - 75 MMscf/d and greater than the
Daily Committed Quotient ("DCQ") of 80.0 MMscf/d, which the Joint
Venture Partners are required to supply under the Gas Sales
Agreement with TPDC and for the TANESCO-owned, Mtwara Power Station
(ca.2.5 MMscf/d).
Commercial
The Company is pleased to inform
shareholders that monthly payments for November and December 2018
(post allocation of the Tanzania Petroleum Development Corporation
("TPDC") receivable, adjusted to reflect the Ziwani-1 exploration
well and associated 3D seismic costs as previously announced) for
gas sales generated from the Mnazi Bay Concession of $3.0 million
net to Wentworth, have been received. Payments were received from
both TPDC and Tanzania Electric Supply Company Limited ("TANESCO").
The Company is pleased to report that due arrears from TPDC and
TANESCO, have steadily reduced over the course of 2018 and now
stand at three months for both off-takers.
As a result of the continued
demand and sustainable payment landscape, the Company has continued
to meet and pay-down its debt commitments from free cash-flow in
2018 and expects to be substantially debt free within the next
twelve months, with the final payment on its single outstanding
loan facility falling due in January 2020. As at 31 December 2018,
outstanding debt was $8.3 million (excluding $2.5 million corporate
overdraft facility), with cash of $11.8 million.
2019 Production
Guidance and Outlook
Discussions continue with TPDC
with regards reducing the Madimba gas receiving facility export
pressure from the current 92.5barg to ca.75barg. This will allow
for a sustained overall production rate and/or plateau period from
the current well stock, prior to installation of compression
facilities. As communicated by the Company on 3 October 2018, this
is technically and operationally feasible, has the potential to
extend the production plateau by c.18 months on a standalone basis
and c.42 months including slickline and chokes upgrade work; and
would be immediately accretive to asset value.
As of 7 January 2019, the field
was delivering ca.89.6 MMscf/d: 86.8MMscf/d to TPDC with an
additional 2.8 MMscf/d to TANESCO. Current demand for Mnazi Bay gas
is estimated by the Joint Venture Operator to be in excess of 95
MMscf/d.
For 2019, the Company anticipates
further growth in gas demand with the extension to the Kinyerezi-1
power plant which is expected to come online in Q4 2019. This
facility will initially require 5 MMscf/d and will build up
approximately 30 MMscf/d of gas requirement when fully commissioned
over a six-month period. Continued gas demand growth in 2019 is
also expected, primarily from the Dangote Cement Plant and other
smaller industrial consumers; adding an additional 10-15 MMscf/d to
national demand needs by Q2 2019.
Wentworth's operational activities
in 2019 will include working with TPDC to determine the optimal
operating transnational pipeline inlet pressure for the system and
ensuring the maintenance of the current production plateau using
existing wells and infrastructure. The Mnazi Bay Joint Venture
anticipates conducting slickline and choke upgrade activities and
will perform regular pressure build up tests to further reduce
uncertainty with respect to in-place and recoverable gas volumes
over the forthcoming year. These activities will help to ensure
that forecast production meets the Daily Committed Quotient ("DCQ")
of 80.0 MMscf/d, which the Mnazi Bay Joint Venture is required to
supply under the Gas Sales Agreement with TPDC and for the
TANESCO-owned, Mtwara Power Station (ca.2.5 MMscf/d), without
risking a shortfall in 2019 and beyond.
For 2019, full year average daily
production, is expected by the Company to be in the range of 75 to
85 MMscf/d in order to sustain the current plateau rate from the
existing five producing well stock. The Company will continue to
update the market as new sources of demand materialise, in addition
to operational updates on the asset.
Mozambique
Further to its announcement dated
17 December 2018, the Company is in the process of relinquishing
the Tembo Appraisal License with a planned effective exit date of
30 April 2019. The Company continues to assess suitable upstream
opportunities in country, through its strong relationships with ENH
and INP.
Eskil Jersing, CEO, commented:
"We are pleased
that the Mnazi Bay asset has successfully
ramped up to deliver sustainable and material production rates,
with minimal downtime in 2018. The Mnazi Bay Joint Venture
continues to work with all stakeholders on the four key value
catalysts, referred to in the 3 October 2018 RNS, to ensure that we
derive the maximum possible production value from the Mnazi Bay
field. We look forward to updating the market
on our progress in 2019, in a rapidly developing demand-led
landscape. With the intended relinquishment of the Tembo appraisal
licence in Q2 2019, our efforts this year will be primarily focused
on maintaining efficient operations at our Mnazi Bay asset,
strengthening our financial position and executing on our M&A
led growth mandate."
-Ends-
Enquiries:
Wentworth |
Eskil Jersing,
Chief Executive Officer
Katherine Roe,
Chief Financial Officer |
eskil.jersing@wentplc.com
+44 (0)118 2065427
katherine.roe@wentplc.com
+44 (0)118 2065428 |
Stifel Nicolaus Europe Limited |
AIM Nominated Adviser and Broker
(UK)
Callum Stewart
Ashton Clanfield
Simon Mensley |
+44 (0) 20 7710 7600 |
Peel Hunt LLP |
Broker (UK)
Richard Crichton
James Bavister |
+44 (0) 20 7418 8900 |
Vigo |
Investor Relations Adviser (UK)
Patrick d'Ancona
Chris McMahon |
+44 (0) 20 7390 0230 |
About Wentworth
Resources
Wentworth Resources is a publicly
traded (OSE: WEN, AIM: WEN), independent oil & gas company with
natural gas production; exploration and appraisal opportunities,
all in the onshore Rovuma Delta Basin of coastal southern Tanzania
and northern Mozambique.
Inside
Information
The information contained within
this announcement is deemed by Wentworth to constitute inside
information as stipulated under the Market Abuse Regulation (EU)
no. 596/2014 ("MAR"). On the publication of this announcement via a
Regulatory Information Service ("RIS"), this inside information is
now considered to be in the public domain.
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
considering 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, 2017, available on
Wentworth's website, for further description of the risks and
uncertainties associated with Wentworth's business.
Notice
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 West Corporation on behalf of West
Corporation 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 Plc via Globenewswire
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