Mnazi Bay Production Facilities, Tanzania Image source: Wentworth Resources

Wentworth Resources Limited, the Oslo Stock Exchange (OSE: WRL) and London Stock Exchange (AIM: WRL) listed independent, East Africa-focused oil & gas company, today announces its results for the quarter and six months ended 30 June 2018. 

Corporate

• Wentworth's share of Tanzanian Proved + Probable (2P) reserves valued at $159.6 million (after-tax NPV10) on 2P reserves of 115.1 Bscf, as at December 31, 2017 and independently verified by RPS;
• Company continues to progress its Canada to UK re-domicile and Oslo Børs delisting plans;
• UK based management team in place following relocation of corporate headquarters from Calgary, Canada to London, UK. CFO Katherine Roe appointed April 1, 2018; CEO Eskil Jersing appointed June 25, 2018.

Financial

• Achieved milestone Mnazi Bay gas sales revenue of $10.79 million, 112% higher compared to H1 2017 of $5.10 million;
• Improved EBITDA by 229% to $4.18 million compared to H1 2017;
• Net loss of $6.5 million (H1 2017: $1.66 million), including a non-cash deferred tax expense of $8.68 million; 
• Cash and cash equivalents on hand of $4.04 million (December 2017: $3.75 million) as at June 30, 2018;
• Working capital of $15.45 million (December 2017: $15.14 million);
• Reduced outstanding long-term loans by $2.67 million during the first half of 2018; 
• Carrying value of long-term loans $13.11 million (December 2017: $15.90 million); 
• Development capital expenditures of $0.69 million on field infrastructure (tie-in) improvements in the Mnazi Bay Concession in Tanzania;
• Exploration capital expenditures of $0.98 million on the Tembo Appraisal License in Mozambique;
• G&A expense of $5.15 million including non-recurring expenses $2.92 million and recurring G&A of $2.23 million (H1 2017: $2.01 million);
• Non-recurring expenses includes, management re-structuring costs of $0.83 million comprising Calgary employee severance and travel expenses related to corporate re-structuring; redomicile costs of $0.34 million comprising consultancy, legal and professional charges and; Tanzanian tax assessments of $1.75 million for the years of 2013 to 2016.

Operational

Tanzania

• Average gross daily gas production for the period increased 115% to 79.3 MMscf/d from 36.9 MMscf/d in H1 2017; above current annual 2018 guidance of 65-75 MMscf/d.
• Exited H1 2018 with a new high daily gas production rate of 89 MMscf/d;
• Production ramp up due to Kinyerezi-I and Ubungo-II power stations operating at near full capacity, commissioning of the Kinyerezi-II gas-fired power station during Q4 2017, increasing growth in demand from Industrial customers and lower quantities of gas supplied by industry competitors;  
• Low operating expense costs of $ 0.43 / Mscf (H1 2017: $1.16 / Mscf) leveraging increased production volumes;
• Received total cash payments of $12.97 million from gas sales and recovery of long-term government receivables during the first half of 2018;
• Regular monthly payments for gas sales continue to be received. As at June 30, 2018 six invoices for gas sales to TPDC were outstanding, with the increase in receivables being accounted for by the increase in gas sales in the outstanding months. Post June 30, 2018, TPDC has paid three invoices.

Mozambique

• A 12-month extension of the Tembo Appraisal License was granted by Instituto Nacional de Petroleo ("INP") on June 16, 2018;
• During the first six months of 2018 above ground security continued to be a concern, especially in the Mocimboa da Praia and Palma regions. The Company continues to monitor the situation;
• Wentworth continues to seek a risk sharing partner, whilst in parallel advancing its technical studies, with a focus on commercial and monetisation options. Work continues on a subsurface review on materiality thresholds, reservoir properties and economic flow rate potential.

Eskil Jersing, Chief Executive Officer, commented: 
"The first half of 2018 has seen Wentworth make material progress on Mnazi Bay Production growth, receipt of revenues and long term receivables, deleveraging of our balance sheet and redomicile of the Company to the UK. In particular, we have exited Q2 2018 with milestone production of 89 MMcf/d on Mnazi bay. Further, we have fully transitioned the Management team from Calgary to the UK and continue to make strides towards a simpler, cheaper, efficient and more robust platform for growth. 
 
We have a strong and empowered team across the Company, all working diligently on maximising the value of our assets and towards a leaner operating model. I look forward to continuing  to help unlock the latent value in our core Mnazi Bay asset and sharing progress on our path to value with all our shareholders."