TIDMWEN
RNS Number : 4650K
Wentworth Resources PLC
02 September 2021
2 September 2021
WENTWORTH RESOURCES PLC
("Wentworth" or the "Company")
Interim Results for the six months ended 30 June 2021
Wentworth achieves record financial results due to growing
demand and increasingly stronger fundamentals in 2021; declaring
increased interim dividend of $1.32 million
Wentworth Resources (AIM: WEN), the independent,
Tanzania-focused natural gas production company , is pleased to
announce its interim financial results for the six months ended 30
June 2021. All dollar values are expressed in US dollars unless
stated otherwise.
HIGHLIGHTS
Health and Safety
-- The health and safety of our people, partners and local
communities remains our priority; on 2 August 2021, the Company
celebrated a five year zero Lost Time Incident Rate milestone
-- Robust precautionary measures remain in place related to
COVID-19 to ensure the ongoing safety of our staff; to date, there
has been no disruption to operations at Mnazi Bay due to
COVID-19
Record Financial Results
-- Interim dividend of $1.32 million declared, an increase of
10% from H1 2020 ($1.2 million), bringing the total dividend
distribution declared in the last 12 months to $5.12 million, in
line with the Company's stated progressive capital return
policy
-- Revenues grew 40% to $11.7 million (H1 2020: $8.3 million),
due to record levels of production at Mnazi Bay
-- Adjusted earnings before interest, taxes, depreciation,
amortization, and exploration (EBITDAX) rose 75% to $7.0 million
(H1 2020: $4.0 million)
-- Strong financial position with $21.0 million cash in hand at
2 September 2021 (2 September 2020: $16.7 million) with zero
debt
-- Tanzania Petroleum Development Corporation ("TPDC") continues
to remain fully current with all invoices for gas sales
-- Payment plan to settle outstanding arrears from Tanzania
Electric Supply Company ("TANESCO") established with over half the
outstanding balance received in August
Strong Operational Performance
-- Reiterate increased production guidance range for the year of
70 - 80 MMscf/day (gross) compared to previous guidance of 65 - 75
MMscf/day
-- Production at Mnazi Bay averaged 80 MMscf/day (H1 2020: 58
MMscf/day), the highest H1 production performance achieved to
date
-- Production capacity of existing wells and production facilities increased to 100 MMscf/day
-- Operational costs of production down 72% to $0.48/Mscf (H1
2020: $1.72/ Mscf), due to continued focus on cost efficiencies
-- Wentworth's share of Gross 2P Reserves as at 31 December 2020
estimated by RPS to be 90.8 Bcf with a post-tax NPV10 of $116.6
million
Corporate Updates
-- Appointed Juliet Kairuki, independent Non-Executive Director,
as part of the ongoing process of Board refreshment
-- Bob McBean retired as Chairman of the Board but continues to
support the Company as President of Wentworth Tanzania
-- Tim Bushell appointed Non-executive Chairman as part of planned Board succession
-- Board refresh to continue with the appointment of an
additional independent Non-Executive Director later this year
-- Existing management team to be strengthened with a new senior
hire identified and expected to be appointed shortly
-- Growth within Tanzania continues to be a key focus to
capitalise on in-country track record, improving demand dynamics
and operational performance
Sustainability Remains a Priority
-- Stakeholder engagement key to Wentworth's sustainability
strategy; strong relationships with in-country partners including
the Government of Tanzania and local communities evidenced by
ongoing demand growth, operational performance and payment of
receivables
-- Maintaining a robust ESG framework remains a priority
following the launch of the inaugural Sustainability Report this
year
-- A key focus for 2021 is Wentworth's climate strategy, to
ensure effective measurement and mitigation of climate-related
impacts; further updates will be shared in due course
-- Announced membership of the United Nations ("UN") Global
Compact, underlining our commitment to operating responsibly in
line with the UN's Ten Principles on human rights, labour,
environment and anti-corruption and to take strategic action to
support the UN's Sustainable Development Goals
Robust 2021 Outlook
-- Record H1 performance to date with average production volumes
of 80.33 MMscf/day (gross) compared with H1 2020 average of 58.28
MMscf/day (gross)
-- All-time production volume highs at Mnazi Bay of 110.65
MMscf/day including monthly average production of 101.85 MMscf/day
(gross) during March 2021, demonstrating the ability to supply
greater than 100 MMscf/day (gross) during periods of high
demand
-- Strong in-country natural gas demand in H1 2021 enabled an
increase in annual average production guidance for 2021 to 70-80
MMscf/day (gross) from 65-75 MMscf/day (gross) - Wentworth remains
on track to meet guidance
-- Ongoing delivery of the Company's progressive capital returns policy
Increasing Dividend Declared
A dividend is declared of GBP 0.52 pence per share (US$1.32
million), payable by the end of October 2021. A final dividend for
the year ending 31 December 2021 will be determined by the Board
with the full year results and is expected to be approximately
$2.64 million in line with the Company's stated policy of 1/3 : 2/3
split between the interim and final dividend. Assuming a final
dividend is declared, subject to shareholder approval, this would
equate to a total distribution of $3.96 million which represents a
full year dividend of 1.55 pence per share, a yield of
approximately 6.8% at the current share price.
Interim Dividend Payment Timetable:
-- Ex-dividend date: 9 September 2021
-- Record Date: 10 September 2021
-- UK Payment Date (for shareholders who hold shares on the UK Register): 8 October 2021
-- VPS Payment Date (for shareholders who hold shares on the VPS Register): 22 October 2021
Shareholders who hold their shares on the VPS Register on the
Record Date shall receive the dividend in NOK. The exchange rate
shall be determined on the UK Payment Date and the Company shall
inform VPS shareholders via RNS as soon as practicable thereafter
of the NOK sum per share they will receive which shall be settled
on the VPS Payment Date.
Interim Results Conference Calls
Analyst call
The Company is holding a conference call for analysts at 10:00am
BST today, Thursday 2 September 2021 and an updated presentation
will be available at that time on the Company's website:
wentplc.com .
To register for the call, please click on the following
link:
https://secure.emincote.com/client/wentworth/wentworth007/vip_connect
To view the presentation during the call, please click on the
following link:
https://secure.emincote.com/client/wentworth/wentworth007
Investor call
The Company is also holding a conference call for investors at
12.00pm BST today, Thursday 2 September 2021, via Investor Meet
Company.
To register for the call, please click on the following
link:
https://www.investormeetcompany.com/wentworth-resources-plc/register-investor
Katherine Roe, CEO, commented:
"We are delighted to have delivered a record financial and
operational performance in H1 2021 which underpins our decision to
increase our interim dividend once again, to $1.32 million.
Following a challenging period of global economic uncertainty, to
have delivered this record performance demonstrates once again the
strength of our fundamentals. Our commitment to maintaining these
is unwavering.
"Whilst we have enjoyed a robust first half, we remain focused
on meeting our full year potential and meeting the growing demand
in Tanzania for reliable low-cost power. The strength of our team
and partnerships, the reliable performance of the Mnazi Bay asset
and the improving outlook in Tanzania ensures we are in a positive
position for the future."
Enquiries: Katherine Roe, katherine.roe@wentplc.com
Chief Executive Officer +44 (0) 7841 087 230
Wentworth
AIM Nominated Adviser and Joint Broker
Callum Stewart
Ashton Clanfield
Stifel Nicolaus Europe Limited Simon Mensley +44 (0) 20 7710 7600
Joint Broker
Richard Crichton
Peel Hunt LLP Alexander Allen +44 (0) 20 7418 8900
Communications Adviser
Sara Powell
FTI Consulting Ben Brewerton +44 (0) 20 3727 1000
About Wentworth Resources
Wentworth Resources plc (AIM: WEN) is a leading, domestic natural
gas producer in Tanzania with a core producing asset at Mnazi
Bay in the onshore Rovuma Basin in Southern Tanzania.
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.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE
INCOME
Six months ended 30 June
2021 2020
(unaudited) (unaudited)
Note $000 $000
------------- -------------
Total revenue 4 11,663 8,313
Production and operating costs (1,655) (1,734)
Depletion 10 (3,324) (2,616)
------------------------------------ ------ ------------- -------------
Total cost of sales (4,979) (4,350)
Gross profit 6,684 3,963
Recurring administrative costs 5 (2,974) (2,521)
New venture and pre-licence costs (263) (94)
Share-based payment charges 13 (167) (137)
Depreciation 10 (1) (2)
Total costs (3,405) (2,754)
Profit from operations 3,279 1,209
Finance income 6 30 91
Finance costs 6 (590) (84)
------------------------------------ ------ ------------- -------------
Profit before tax 2,719 1,216
Current tax expense (118) (15)
Deferred tax expense 759 (187)
------------------------------------ ------ ------------- -------------
641 (202)
Net and comprehensive profit after
tax 3,360 1,014
Net profit per ordinary share
Basic and diluted (US$/share) 18 0.018 0.005
------------------------------------ ------ ------------- -------------
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL
POSITION
30 June 31 December
2021 2020
(unaudited) (audited)
Note $000 $000
----------------------------------- ------
ASSETS
Current assets
Cash and cash equivalents 22,483 17,787
Trade and other receivables 7 6,899 4,847
29,382 22,634
----------------------------------- ------ -------------
Non-current assets
Exploration and evaluation assets 9 8,129 8,129
Property, plant and equipment 10 69,011 72,307
Deferred tax asset 7,618 6,859
----------------------------------- ------ ------------- ------------
84,758 87,295
----------------------------------- ------ ------------- ------------
Total assets 114,140 109,929
----------------------------------- ------ ------------- ------------
LIABILITIES
Current liabilities
Trade and other payables 12 3,002 2,382
Dividend payable 19 2,600 -
5,602 2,382
----------------------------------- ------ -------------
Non-current liabilities
Decommissioning provision 14 1,578 1,514
----------------------------------- ------
1,578 1,514
----------------------------------- ------ ------------- ------------
Equity
Share capital 17 416,108 416,426
Equity reserve 27,118 26,656
Accumulated deficit (336,266) (337,049)
----------------------------------- ------ ------------- ------------
106,960 106,033
----------------------------------- ------ ------------
Total liabilities and equity 114,140 109,929
----------------------------------- ------ ------------- ------------
The condensed consolidated financial statements of Wentworth
Resources plc, registered number 127571 were approved by the Board
of Directors and authorised for issue on 2 September 2021.
Signed on behalf of the Board of Directors
Katherine Roe
Chief Executive Officer
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN
EQUITY
Number of Share Equity Accumulated Total
Note shares capital reserve deficit equity
$000 $000 $000 $000
------------------------- ------- ------------------------- ---------------- ---------- -------------- ---------
Balance at 31 December
2019 (audited) 186,488,465 416,426 26,651 (337,203) 105,874
Dividends 19 (3,274) (3,274)
Net profit and
comprehensive
profit - - - 3,428 3,428
Share based compensation 15 - - 300 - 300
Repurchase of own shares - - (295) - (295)
------------------------- ------- -------------------------
Balance at 31 December
2020 (audited) 186,488,465 416,426 26,656 (337,049) 106,033
Dividends 19 (2,600) (2,600)
Repurchase of own shares 16 (939,326) (318) 295 23 -
Net profit and
comprehensive
profit - - - 3,360 3,360
Share based compensation 15 - - 167 - 167
------------------------- ------- ------------------------- ---------------- ---------- -------------- ---------
Balance at 30 June 2021
(unaudited) 185,549,139 416,108 27,118 (336,266) 106,960
------------------------- ------- ------------------------- ---------------- ---------- -------------- ---------
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
Six months ended
30 June
2021 2020
(unaudited) (unaudited)
Note $000 $000
---------------------------------------------- ------
Operating activities
Net profit for the year 3,360 1,014
Adjustments for:
Depreciation and depletion 10 3,325 2,618
Net finance (income)/costs 6 560 (7)
Deferred tax (759) 187
Share based compensation 15 167 137
6,653 3,949
Change in non-cash working capital:
Trade and other receivables (2,041) 1,593
Trade and other payables 545 (1,056)
---------------------------------------------- ------
Net cash generated from operating activities 5,157 4,486
Investing activities
Interest received 19 65
Additions to property, plant and equipment 10 (29) (29)
Net cash (used in)/from investing activities (10) 36
Financing activities
Principal term loan repayments - (1,663)
Interest on term loan - (39)
Dividends paid 19 - (2,119)
Other finance cost (451) (6)
Net cash used in financing activities (451) (3,827)
---------------------------------------------- ------ ------------- -------------
Net change in cash and cash equivalents 4,696 695
Cash and cash equivalents, beginning
of the period 17,787 13,487
Cash and cash equivalents, end of the
period 22,483 14,182
---------------------------------------------- ------ ------------- -------------
1. Incorporation and basis of preparation
Wentworth Resources plc ("Wentworth" or the "Company") is an
East Africa-focused upstream natural gas company. These unaudited
condensed consolidated interim financial statements include the
accounts of the Company and its subsidiaries (collectively referred
to as the "Wentworth Group" or simply the "Group"). Wentworth is a
gas exploration, development and production operations company
incorporated in Jersey and listed on the AIM Market of the London
Stock Exchange (ticker: WEN).
The Company's principal place of business is located at 4th
Floor, St Paul's Gate, 22-24 New Street, St Hellier, Jersey JE1
4TR.
The Company maintains offices in Dar es Salaam in the United
Republic of Tanzania and Jersey.
2. Summary of significant accounting policies
Use of judgements and estimates
In preparing these interim financial statements, management has
made judgements and estimates that affect the application of
accounting policies and the reported amounts of assets and
liabilities, income and expenses. Actual results may differ from
these estimates.
The significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation
uncertainty were the same as those described in the 2020 annual
report and financial statements.
Going concern
In March 2021 it was announced that President John Magufuli had
tragically passed away, however, despite this the country and its
people have responded with stoicism and resilience and seem more
determined than ever to enter a new period of prosperity under the
leadership of their new leader, President Samia Suluhu Hassan, the
first female president of the United Republic of Tanzania.
The Group has a long established and collaborative relationship
with the Government of the United Republic of Tanzania, having
operated in-country for many years, however the Directors do
recognise that the Group is dependent upon the continued collection
of gas sales invoices and ongoing operational support of the
Government as its sole gas sales customer through its operating
agencies TPDC and TANESCO.
The United Republic of Tanzania has experienced successive waves
of COVID-19 at varying times throughout the period and whilst
COVID-19 continues to present a potential risk to the continued
health and well-being of our workforce, it has not affected the
ability of the business to meet the ongoing offtake requirements of
our customers, TPDC and TANESCO, both of whom have demanded
increased volumes over the six-month period to 30 June 2021.
Given the essential nature of services provided and the
forecasted impact of the virus in the country, the Group notes that
an interruption of production and unavailability of key workforce
is remote. The Directors however are mindful of the speed with
which circumstances may change, both for the better or for the
worse, and all modelling is based on information that is currently
available.
The Directors have, therefore, judged that on a risk-weighted
basis, which takes into consideration both the probability of
occurrence and an estimate of the financial impact, the continued
timely settlement of gas-sales invoices by the Government of the
United Republic of Tanzania continues to be the most significant
risk currently faced by the Group. To this end, should no
settlement of future gas sales invoices be received from the date
of approval of these financial statements, we have assessed that
the Group would be able to continue to operate for the foreseeable
future without the need for a further injection of working
capital.
Further to this based on the application of reasonable and
foreseeable sensitivities, which include potential changes in
demand, capital spend and operating costs, the Directors believe
that the Group is well placed to manage its financial exposures The
Directors have judged that owing to the stability of this
relationship which has seen payment terms sustained with its main
customer, TPDC, during 2021 and an agreement reached with TANESCO
for the settlement of their historic debt, the Group has sufficient
cash resources for its working capital needs, committed capital and
operational expenditure programmes for the foreseeable future based
on the Directors worst case scenario of no settlement of future gas
sales as noted above.
Consequently, the Directors are confident that the Group will
have sufficient funds to continue to meet its liabilities as they
fall due for at least 12 months from the date of approval of the
financial statements and therefore have prepared the financial
statements on a going concern basis.
Basis of presentation and statement of compliance
These unaudited condensed consolidated interim financial
statements have been prepared by management in accordance with
International Accounting Standard 34, "Interim Financial
Reporting". The preparation of interim financial statements
requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expenses. Actual
results may differ from these estimates.
These unaudited condensed consolidated interim financial
statements have been prepared following the same accounting
policies as the annual audited consolidated financial statements
for the year ended 31 December 2020 and should be read in
conjunction with the annual audited consolidated financial
statements and the notes thereto. These unaudited condensed
consolidated interim financial statements were approved by the
Board of Directors on 2 September 2021. The disclosures provided
below are incremental to those included in the 2020 annual
consolidated financial statements.
The information for the year ended 31 December 2020 included in
the report was derived from the statutory accounts for that year
which were prepared in accordance with International Financial
Reporting Standards ('IFRSs') issued by the International
Accounting Standards Board and interpretations issued by the
International Financial Reporting Interpretations committee
('IFRIC') of the IASB as adopted by the EU up to 31 December 2020,
a copy of which has been delivered to the Registrar of Companies.
The auditor's opinion in relation to those accounts was
unqualified, did not draw attention to any matters by way of
emphasis and also did not contain a statement under section 498 (2)
or 498 (3) if the Companies Act 2006.
Functional and presentation currency
These consolidated financial statements are presented in US
dollars which is the functional currency of the Group.
Basis of consolidation
These unaudited condensed consolidated interim financial
statements include the accounts of the Company and its
subsidiaries. Subsidiaries are entities that the Company controls.
An investor controls an investee when it is exposed, or has rights,
to variable returns from its involvement with the investee and can
affect those returns through its authority over the investee. The
existence and effect of potential voting rights are considered when
assessing whether a company controls another entity. Subsidiaries
are fully consolidated from the date on which control is
transferred to the Company. They are deconsolidated from the date
that control ceases.
The following legal entities are within the Wentworth Group:
Legal entity Registered Holdings Functional
at currency
30 June 2021
Wentworth Resources plc Jersey Ultimate US dollar
Parent
----------- -------------- -----------
Wentworth Resources (UK) Limited United 100% GBP
Kingdom
----------- -------------- -----------
Wentworth Holdings (Jersey) Jersey 100% US dollar
Limited
----------- -------------- -----------
Wentworth Tanzania (Jersey) Jersey 100% US dollar
Limited
----------- -------------- -----------
Wentworth Gas (Jersey) Limited Jersey 100% US dollar
----------- -------------- -----------
Wentworth Gas Limited Tanzania 100% US dollar
----------- -------------- -----------
Cyprus Mnazi Bay Limited Cyprus 39.925% US dollar
----------- -------------- -----------
Wentworth Mozambique (Mauritius) Mauritius 100% US dollar
Limited
----------- -------------- -----------
Wentworth Moçambique Mozambique 100% US dollar
Petroleos, Limitada (1)
----------- -------------- -----------
(1) Wentworth Moçambique Petroleos, Limitada is in the process
of voluntary liquidation after relinquishment of the Tembo Block
Appraisal Licence.
All inter- company transactions, balances and unrealized gains
on transactions between the parent and subsidiary companies are
eliminated on consolidation.
Changes in accounting policies.
The following accounting standards, amendments and
interpretations, which had no significant impact on these financial
statements, became effective in the current reporting period on
adoption in the United Kingdom of Great Britain through the newly
established UK Endorsement Board ("UKEB"):
IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 (amendments)
'Interest Rate Benchmark Reform': The IASB effective date is 1
January 2021 and the UKEB adopted the amendment on 5 January 2021.
The amendment requires that for interest rate hedges affected by
Interbank Offered Rate ('IBOR') reform, the interest rate benchmark
is not altered when considering whether a forecast transaction is
highly probable, or whether there is an economic relationship
between the hedged cash flow and the hedging instrument. This would
apply for a limited period until there is no longer uncertainty
relating to IBOR reform. This amendment is not expected to have an
impact on the Group's consolidated financial statements.
IFRS 16 (amendments) 'Covid-19-Related Rent Concessions': The
IASB effective date is 1 April 2021 and the UKEB adopted the
amendment on 12 May 2021. The amendment provides lessees with an
exemption from assessing whether a COVID-19-related rent concession
is a lease modification. This amendment is not expected to have an
impact on the Group's consolidated financial statements.
Future accounting pronouncements
At the date of these financial statements the standards and
interpretations listed below were issued but not yet effective. The
adoption of these standards may result in future changes to
existing accounting policies and disclosures. The Company is
currently evaluating the impact that these standards will have on
results of operations and financial position:
IFRS 17 (Amendments) 'Insurance Contracts': The IASB effective
date is 1 January 2023. IFRS 17 will replace IFRS 4 'Insurance
Contracts' and applies to all types of insurance contracts as well
as to certain guarantees and financial instruments with
discretionary participation features. This standard is not expected
to have an impact on the Group's consolidated financial
statements.
IAS 1 (Amendments) 'Classification of Liabilities as Current or
Non-current': The IASB effective date is 1 January 2023. The
amendment provides a more general approach to the classification of
liabilities under IAS 1 based on the contractual arrangements in
place at the reporting date. This amendment is not expected to have
an impact on the Group's consolidated financial statements.
IAS 16 (Amendments) 'Property, Plant and Equipment': The IASB
effective date is 1 January 2022. The amendment prohibits deducting
from the cost of an item of property, plant and equipment any
proceeds from selling items produced while bringing that asset to
the location and condition necessary for it to be capable of
operating in the manner intended by management. Instead, an entity
recognises the proceeds from selling such items, and the cost of
producing those items, in profit or loss. This amendment is not
expected to have an impact on the Group's consolidated financial
statements.
IAS 37 (Amendments) 'Onerous Contracts - Cost of Fulfilling a
Contract': The IASB effective date is 1 January 2022. The
amendments specify that the 'cost of fulfilling' a contract
comprises the 'costs that relate directly to the contract'. Costs
that relate directly to a contract can either be incremental costs
of fulfilling that contract (examples would be direct labour,
materials) or an allocation of other costs that relate directly to
fulfilling contracts (an example would be the allocation of the
depreciation charge for an item of property, plant and equipment
used in fulfilling the contract). This amendment not expected to
have an impact on the Group's consolidated financial
statements.
3. Segment information
Net income/(loss) for the six months ended 30 June 2021
Tanzania Operations
(unaudited) Corporate Consolidated
$000 (unaudited) (unaudited)
$000 $000
-------------------------------- -------------------- ----------------- --------------
Total revenue 11,663 - 11,663
Production and operating
costs (1,655) - (1,655)
Depletion (3,324) - (3,324)
-------------------------------- -------------------- ----------------- --------------
Total cost of sales (4,979) - (4,979)
Gross profit 6,684 - 6,684
Recurring administrative
costs (767) (2,207) (2,974)
New venture and pre -
licence costs - (263) (263)
Share-based payment charges (36) (131) (167)
Depreciation (1) - (1)
Total costs (804) (2,601) (3,405)
Profit/(loss) from operations 5,880 (2,601) 3,279
Net finance costs (44) (516) (560)
-------------------------------- -------------------- ----------------- --------------
Profit/(loss) before
tax 5,836 (3,117) 2,719
Current tax expense (118) - (118)
Deferred tax expense 759 - 759
-------------------------------- -------------------- ----------------- --------------
Net and comprehensive
Profit/(loss) from continued
operations 6,477 (3,117) 3,360
-------------------------------- -------------------- ----------------- --------------
Net income/(loss) for the six months ended 30 June 2020
Tanzania Operations
(unaudited) Corporate Consolidated
$000 (unaudited) (unaudited)
$000 $000
-------------------------------- -------------------- ----------------- --------------
Total revenue 8,313 - 8,313
Production and operating
costs (1,734) - (1,734)
Depletion (2,616) - (2,616)
-------------------------------- -------------------- ----------------- --------------
Total cost of sales (4,350) - (4,350)
Gross profit 3,963 - 3,963
Recurring administrative
costs (1,030) (1,491) (2,521)
New venture and pre -
licence costs - (94) (94)
Share-based payment charges (36) (101) (137)
Depreciation (2) - (2)
Total costs (1,068) (1,686) (2,754)
Profit/(loss) from operations 2,895 (1,686) 1,209
Net finance (costs) /
income (58) 65 7
-------------------------------- -------------------- ----------------- --------------
Profit/(loss) before
tax 2,837 (1,621) 1,216
Current tax expense (15) - (15)
Deferred tax expense (187) - (187)
-------------------------------- -------------------- ----------------- --------------
Net and comprehensive
Profit/(loss) from continued
operations 2,635 (1,621) 1,014
-------------------------------- -------------------- ----------------- --------------
Selected balances at 30 June 2021
Mozambique
Operations
Tanzania (Discontinued)
Operations
(unaudited) (unaudited) Corporate Consolidated
$000 $000 (unaudited) (unaudited)
$000 $000
---------------------------- ---------------- ---------------- -------------- ----------------
Current assets 14,934 101 14,347 29,382
Exploration and evaluation
assets 8,129 - - 8,129
Property, plant and
equipment 69,010 - 1 69,011
Deferred tax asset 7,618 - - 7,618
---------------------------- ---------------- ---------------- -------------- ----------------
Total assets 99,691 101 14,348 114,140
---------------------------- ---------------- ---------------- -------------- ----------------
Current liabilities 2,730 - 2,872 5,602
Non-current liabilities 1,578 - - 1,578
---------------------------- ---------------- ---------------- -------------- ----------------
Total Liabilities 4,308 - 2,872 7,180
---------------------------- ---------------- ---------------- -------------- ----------------
Capital additions for the six months ended 30 June 2021
Additions to property,
plant
and equipment 29 - - 29
------------------------ ----- ---- ---
Selected balances at 30 June 2020
Mozambique
Operations
Tanzania (Discontinued)
Operations
(unaudited) (unaudited) Corporate Consolidated
$000 $000 (unaudited) (unaudited)
$000 $000
---------------------------- ---------------- ---------------- -------------- ----------------
Current assets 6,613 118 11,934 18,665
Exploration and evaluation
assets 8,129 - - 8,129
Property, plant and
equipment 74,968 - 2 74,970
Deferred tax asset 5,361 - - 5,361
---------------------------- ---------------- ---------------- -------------- ----------------
Total assets 95,071 118 11,936 107,125
---------------------------- ---------------- ---------------- -------------- ----------------
Current liabilities 462 - 607 1,069
Non-current liabilities 1,150 - - 1,150
---------------------------- ---------------- ---------------- -------------- ----------------
Total Liabilities 1,612 - 607 2,219
---------------------------- ---------------- ---------------- -------------- ----------------
Capital additions for the six months ended 30 June 2020
Additions to property,
plant
and equipment 29 - - 29
------------------------ ----- ---- ---
4. Revenue
Six months ended 30 June
---------------------------
2021 2020
(unaudited) (audited)
$000 $000
-------------- -----------
Revenue from gas sales 11,530 8,310
Revenue from condensate sales 12 3
Other revenue 121 -
11,663 8,313
-------------- -----------
Other revenue represents the recovery of corporate income taxes
incurred through adjustments to TPDC gas sales entitlements
5. General and administrative costs
Six months ended 30 June
2020 2019
(unaudited) (audited)
$000 $000
-------------- -----------
Employee salaries and benefits 1,054 903
Contractors and consultants 476 524
Travel and accommodation 58 71
Professional, legal and advisory 326 232
Office and administration 225 249
Corporate and public company costs 835 542
-------------- -----------
Total general and administrative costs 2,974 2,521
6. Finance income and finance costs
Six months ended 30 June
2021 2020
(unaudited) (audited)
$000 $000
-------------- -----------
Finance income
Interest received 19 66
Finance costs amortization - 25
Writeback credit losses on TANESCO receivable 11 -
30 91
-------------- -----------
Finance costs
Dividend withholding tax costs (440) -
Accretion - decommissioning provision (63) (65)
Interest expense - (13)
Bank Fees & Service Charge (11) (6)
Foreign exchange loss (76) -
(590) (84)
-------------- -----------
Net finance income/(costs) (560) 7
-------------- -----------
In May 2021, Wentworth Gas Limited fully repaid its intercompany
loan facility with Wentworth Gas (Jersey) Limited, its parent
company. The loan was made to Wentworth Gas Limited to fund the
ongoing development and operation of its share of Mnazi Bay
operations prior to the production of natural gas at commercial
rates. Subsequent to this, surplus cash generated from Mnazi Bay
was repatriated to Jersey by way of dividend, which incurred
dividend withholding tax deductions at a rate of 10% in
Tanzania.
7. Trade and other receivables
Balance at Balance at
30 June 2021 31 December 2020
(unaudited) (audited)
Trade receivable from TPDC 3,096 1,943
Other receivables from TPDC 336 215
Trade receivable from TANESCO 1,893 1,316
Other receivables 1,574 1,373
-------------- ------------------
6,899 4,847
-------------- ------------------
The receivable from TPDC represents June 2021 gas sales of $1.9
million, paid in August 2021, and the 2020 take-or-pay ("TOP") gas
sales invoice of $1.2 million, paid in July 2021 (December 2020:
1.9 million representing one months of gas sales and no take-or-pay
shortfall gas).
Commencing on the commercial operations date for each contract
year, TPDC as the buyer of Mnazi Bay gas, must either; purchase,
take delivery of and pay for Mnazi Bay gas supplied to them; or pay
a minimum of at least 85% of the agreed adjusted annual contract
quantity ("ACQ"). The ACQ is set by the Operator on annual basis
and 85% of this amount, adjusted for any shortfalls in supply
and/or any other contractual requirements, becomes the take-or-pay
("TOP") obligation for the contract year. If TPDC do not take full
delivery of gas purchased by them in any contract year, then they
shall be entitled to receive that gas as make-up gas in subsequent
years subject to certain time constraints. During 2020 the ACQ was
set at 21.2 BCF which crystallised a TOP obligation of 18.0 BCF, of
which 1.6 BCF was invoiced to them but not supplied by Mnazi Bay
due to in-country gas demand constraints.
The receivable from TANESCO as at 30 June 2021 was $1.9 million
representing twenty months of gas sales (December 2020: $1.3
million representing fourteen months of gas sales). In August 2021
TANESCO paid $930k representing ten months of gas sales. The
balance is expected to be paid as per an agreed plan to settle all
currently outstanding Mnazi Bay arrears.
Other receivables from TPDC represent income tax of $336k
(December 2020: $215k) paid by Wentworth Gas Limited, a wholly
owned subsidiary of the Company. The income tax is anticipated to
be recovered from TPDC's share of profit gas within the next
12-months under the terms of the Mnazi Bay PSA, which provides for
the recovery of all corporate taxes imposed upon partners from
TPDC's share of profit gas sales.
Other receivables include VAT recoverable of $818k (December
2020: $600k), gas condensate sales of $59k (December 2020: $47k),
corporate tax prepayments of $483k (December 2020: $508k) and other
prepayments of $214 (December 2020: $218k).
8. Tanzania Government receivables
As at 30 June 2021, the undiscounted Tanzanian Government
receivable is $6.5 million (December 2020: $6.5 million).
$000
Balance at 31 December 2019 -
Accretion 565
Change in estimated timing of receipt (565)
Balance of amortised cost at 31 December -
2020
Accretion 282
Change in estimated timing of receipt (282)
------
Balance of amortised cost at 31 December -
2021
------
The Group has an agreement with the Government of the United
Republic of Tanzania (TANESCO, TPDC and the Ministry of Energy and
Minerals) to be reimbursed for all the project development costs
associated with Umoja T&D expenditures at cost. An audit of the
Mtwara Energy Project ("MEP") development expenditures was
completed in November 2012 and costs of approximately $8.1 million
were verified to be reimbursable. After deducting costs associated
with the Tariff Equalisation Fund and VAT input credits associated
with the MEP totaling $1.6 million, the amount agreed to be
reimbursed was $6.5 million.
During 2017, the Government initiated its first review of the
costs to verify the balance owing by it. On 8 February 2018 the
Government issued the results which differed from the previously
audited and approved gross receivable of $6.5 million, which the
Group maintains was accurate and correct.
The Government is conducting a second review and due to the age
and uncertainty surrounding the receivable and its recoverability,
the Group made a provision in-full during 2018 against the carrying
amount without prejudice to the ongoing commercial discussions with
the Government, the Group has reviewed this at the year-end and
continues to feel the provision is appropriate.
9. Exploration and evaluation assets
$000
------
Balance at 31 December 2020 (audited)
and 30 June 2021 (unaudited) 8,129
------
Exploration costs comprise the acquisition and interpretation of
3D Seismic 225 Km(2) and 2D High Resolution Seismic 281 Km(2) at
Mnazi Bay.
There have been no indicators of impairment during the period
and as such no full impairment review has been undertaken.
10. Property, plant and equipment
Natural gas properties Office and other equipment
Total
$000 $000 $000
----------------------- ------------------------------------ --------
Cost
Balance at 31 December 2020 (audited) 104,400 613 105,013
Additions 29 - 29
Balance at 30 June 2021 (unaudited) 104,429 613 105,042
----------------------- ------------------------------------ --------
Accumulated depreciation and depletion
Balance at 31 December 2020 (audited) (32,097) (609) (32,706)
Depletion (3,324) - (3,324)
Depreciation (1) - (1)
Balance at 30 June 2021 (unaudited) (35,422) (609) (36,031)
--------- ------ ---------
Carrying amounts
31 December 2020 (audited) 72,303 4 72,307
30 June 2021 (unaudited) 69,007 4 69,011
There have been no indicators of impairment during the period
and as such no full impairment review has been undertaken
11. Subsidiary undertakings
The principal subsidiary undertakings at 30 June 2021 are:
Name of Company Country of Class Types Percentage Nature
incorporation of shares of ownership holding of business
held
-------------------------- --------------- ----------- -------------- ----------- -------------
Wentworth Resources United Kingdom Ordinary Direct 100% Investment
(UK) Limited holding
company
Wentworth Holdings Jersey Ordinary Direct 100% Investment
(Jersey) Limited holding
company
Wentworth Tanzania Jersey Ordinary Indirect 100% Investment
(Jersey) Limited holding
company
Wentworth Gas (Jersey) Jersey Ordinary Indirect 100% Investment
Limited holding
company
Wentworth Gas Limited Tanzania Ordinary Indirect 100% Exploration
production
company
Cyprus Mnazi Bay Cyprus Ordinary Indirect 39.925% Exploration
Limited production
company
Wentworth Mozambique Mauritius Ordinary Indirect 100% Investment
(Mauritius) Limited holding
company
Wentworth Moçambique Mozambique Ordinary Indirect 100% Exploration
Petroleos, Limitada company
(1)
(1) Wentworth Moçambique Petroleos, Limitada is in the process
of liquidation after relinquishment of the Tembo Block Appraisal
Licence.
12. Trade and other payables
Balance at Balance at
30 June 2021 31 December 2020
(unaudited) (audited)
$000 $000
Payable to Mnazi Bay Operator 891 884
Trade payables 607 181
Other payables and accrued expenses 1,504 1,317
3,002 2,382
-------------- ------------------
The payable to Mnazi Bay Operator represents the accrued cash
call for the second quarter of 2021 for field costs between 1 April
and 30 June 2021 totaling $891k which was settled on 22 July
2021.
Other payables and accrued expenses include $1.2 million
(December 2020: nil) deferred revenue liability for the 2020 TOP
gas sales invoice which was paid by TPDC in July 2021 (see note 7
for details on TOP and how this is calculated).
13. Overdraft credit facility
The Company is in the process of signing a one-year, $2.5
million overdraft credit facility with a United Republic of
Tanzania Government owned bank, TPB Bank which merged with TIB
Commercial Bank (the previous lender) in June 2020.
The overdraft facility will have an interest rate of 8% per
annum to be paid monthly when the facility funds are drawn down.
Security provided to the lender is first ranking debenture over the
fixed and floating assets of the Company's United Republic of
Tanzania assets to secure $3.125 million being 125% of the
facility.
14. Decommissioning and Abandonment provision
A reconciliation of the decommissioning obligations is provided
below:
Balance at Balance at
30 June 2021 31 December 2020
(unaudited) (audited)
$000 $000
-------------- ------------------
Balance at 1 January 1,514 1,085
Change in accounting estimates - 299
Accretion 64 130
Balance at 30 June and 31 December 1,578 1,514
-------------- ------------------
15. Share-based payments
Six months ended 30 June
2021 2020
(unaudited) (audited)
$000 $000
------------------------------------------------------------------------------ --------------
Share based compensation recognized in the statement of Comprehensive income 167 137
------------------------------------------------------------------------------ -------------- -----------
Movement in the total number of share options outstanding and
their related weighted average exercise prices are summarized as
follows:
Number of Weighted average exercise price (US$))
options
------------ ---------------------------------------
Outstanding at 1 January 2021 7,813,711 0.30
Lapse (500,000) -
Outstanding at 30 June 2021 7,313,711 0.25
------------ ---------------------------------------
The following table summarizes share options outstanding and
exercisable at 30 June 2021:
Outstanding Exercisable
Exercise Exercise Number of options Weighted average Number of options
price (NOK) price (US$)(1) remaining life
(years)
------------- ---------------- ------------------ ----------------- ------------------
3.85 0.45 750,000 4.5 750,000
4.08 0.48 250,000 1.8 250,000
5.18 0.61 1,500,000 2.9 1,500,000
- - 890,075 7.4 -
- - 495,422 7.9 -
- - 2,485,621 8.5 -
- - 942,593 9.1 -
7,313,711 2,500,000
------------------ ----------------- ------------------
(1) The US Dollar to Norwegian Kroner exchange rate used for
determining the exercise price at 30 June 2021 is 0.11686.
16. Repurchase of own shares
On 18 December 2020, the Company entered into a settlement
agreement with a dissenting shareholder to purchase 702,874
ordinary shares of the Company at NOK 2.91 ($0.339) per ordinary
share less dividend payments made with respect to those shares from
the notification of dissent. The cost to the Company with respect
to this buyback was NOK 2.04 million ($237k).
On 21 December 2020, the Company entered into a second
settlement agreement with a separate dissenting shareholder to
purchase a further 236,452 ordinary shares of the Company at NOK
2.91 ($0.338) per ordinary share less dividend payments made with
respect to those shares from the notification of dissent. The cost
to the Company with respect to this buyback was NOK 688k
($80k).
The following table summarises dissenting shareholder
settlements and fair valuation:
Gross amount Dividend Settled
$000 deducted amount $000
$000
------------------------------------- ------------- ---------- -------------
Settlement of 702,874 ordinary
shares at NOK 2.91 (US$0.339) each 237 (17) 220
Settlement of 236,452 ordinary
shares at NOK 2.91 (US$0.338) each 80 (5) 75
Exchange rate difference 1 - -
------------------------------------- ------------- ---------- -------------
318 (22) 295
------------------------------------- ------------- ---------- -------------
The $295k was recognised within equity reserves at 31 December
2020 (see note 17) and was transferred to the share capital reserve
on 3 February 2021, the date that the shares were cancelled and
removed from the Company register.
17. Share capital
Authorised, called up, allotted 2021 2020
and fully paid
(unaudited) (audited)
--------------------------------- ---------------------- ----------------------
Ordinary Ordinary
shares $000 shares $000
--------------------------------- ------------ -------- ------------ --------
Balance at 1 January 186,488,465 416,426 186,488,465 416,426
--------------------------------- ------------ -------- ------------ --------
Repurchase of own shares (939,326) (318) - -
--------------------------------- ------------ -------- ------------ --------
Balance at 30 June and 31
December 185,549,139 416,108 186,488,465 416,426
--------------------------------- ------------ -------- ------------ --------
All of the 939,326 ordinary shares repurchased were cancelled
and removed from the Company register on 3 February 2021.
Reserves
Balance at Balance at
30 June 2021 31 December
2020
(unaudited) (audited)
$000 $000
---------------- ---------------
Balance at 1 January 26,656 26,651
LTIP charges 167 300
Repurchase of own shares (note 16) 295 (295)
---------------- ---------------
Balance at 31 December 27,118 26,656
---------------- ---------------
The buyback of stock from dissenting shareholders totalling
939,326 ordinary shares (note 16) was settled in-full in December
2020, cancelled and removed from the share register on 3 February
2021. At 31 December 2020 these shares were included within equity
reserves and were removed in year 2021.
18. Earnings per share
Basic and diluted EPS
2021 2020
(unaudited) (audited)
$000 $000
------------- ------------
Net profit for the period 3,360 1,014
------------- ------------
Weighted average number of ordinary shares outstanding 185,720,397 186,488,465
Dilutive weighted average number of ordinary shares outstanding 185,720,397 186,488,465
------------- ------------
Net profit per ordinary share 0.018 0.005
------------- ------------
19. Dividends
The following dividends were declared (2020: declared and paid)
by the Company during the year.
2021 2020
(unaudited) (audited)
$000 $000
------------------------------------------ ------------- -----------
1.0 pence (2020: 0.9 pence) per ordinary
share 2,600 2,120
------------------------------------------ ------------- -----------
On 26 June 2020, the Company paid an interim dividend of 0.9
pence per ordinary share, being a total dividend distribution of
$2.1 million for the financial year ended 31 December 2019.
On 21 April 2021, the Company declared a final dividend of 1.0
pence per ordinary share which was paid on 23 July 2021, being a
total dividend distribution of $2.6 million. The declared and paid
final dividend bring distributions to shareholders with regard to
the financial year ended 31 December 2020 to $3.8 million, an
increase of 27% from 2019 distributions of $3.0 million and in line
with the Company's stated commitment to a sustainable and
progressive dividend. The interim dividend of NOK 0.05683 (GBP 0.48
pence, US$ 0.00619) per ordinary share, being a total dividend
distribution of $1.1 million was paid on 23 October 2020.
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END
IR ZZGGLRMNGMZM
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