Wentworth Resources, the independent, Tanzania-focused natural gas production company, has announced its interim financial results for the six months ended 30 June 2023. AII dollar values are expressed in US dollars unless stated otherwise.

Katherine Roe, CEO, commented:

'The first half of 2023 saw continued strong production, further highlighting the quality of the Mnazi Bay asset, alongside an ongoing exemplary safety record which remains a key priority for Wentworth. Furthermore, our strengthened financial position underscores the robust nature of the business. 

'We continue to work collaboratively with all stakeholders towards successful completion of the acquisition by Maurel & Prom in Q4 2023, which we see as representing considerable value realisation for shareholders.'

HIGHLIGHTS

Financial

• Revenues grew 29% to $19.9 million (H1 2022: $15.5 million)
• Adjusted earnings before interest, taxes, depreciation, amortization, and exploration (EBITDAX) increased by 53% to $14.7 million (H1 2022: $9.6 million)
• Strong financial position with $40.7 million cash (H1 2022: $27.4 million) and zero debt

Operational

• Health and safety of employees, partners and local communities continues to be a top priority for Wentworth.  On 2 August 2023, the Company celebrated seven years without a Lost Time lncident (LTI)
• Average daily production of 98.2 MMscf/d (gross) during the first six months of 2023 (2022: 92.3 MMscf/d)         
• Wentworth's share of Gross 2P Reserves estimated to be 137 Bcf as at 31 December 2022

Outlook

• 2023 production guidance maintained at 90 - 100 MMscf/d for Mnazi Bay as issued in June 2023, up from previous guidance of 85 - 95 MMscf/d issued in March 2023
• The Company anticipates, given the absence of recent investment in the Mnazi Bay field and continued cost recovery in H1 2023, that H2 2023 production will include significant periods where costs have been fully recovered, leading to substantially lower revenues
• The Government's re-examination of the historic cost pool audit for the years 2013 - 2015 is ongoing; any reduction in the current expected cost pool balance as a result is likely to further impact revenue going forward

Update on offer by Etablissements Maurel & Prom  ('M&P')

• On 5 December 2022, the boards of Wentworth and M&P announced that they had reached agreement on the terms of a recommended all cash offer by M&P for the entire issued, and to be issued, share capital of Wentworth (the "Acquisition"). The Acquisition is to be implemented by means of a scheme of arrangement pursuant to Article 125 of the Jersey Companies Law. The circular in relation to the Scheme was published or made available to Wentworth Shareholders on 25 January 2023 (the "Scheme Document")
• The Acquisition was approved by Wentworth Shareholders at the Court Meeting and the General Meeting which were held on 23 February 2023, but remains subject to the satisfaction or (where capable of being waived) waiver of the other Conditions to the Acquisition as set out in Part III (Conditions to and certain further terms of the Acquisition and the Scheme) of the Scheme Document
• These Conditions include, inter alia, (i) consent from the Minister responsible for petroleum affairs in Tanzania under the Petroleum Act 2015 (the "Act") and any other applicable laws; (ii) the waiver of any right of first refusal or pre-emption right to which the Tanzania Petroleum Development Corporation is entitled in respect of the Mnazi Bay asset; and (iii) approval from the Tanzanian Fair Competition Commission ("FCC"), in each case on terms satisfactory to M&P, acting reasonably
• On 11 July 2023, Wentworth was notified that the FCC has issued a decision notice that application for FCC approval shall not be determined at this time and that this application will be marked closed by the FCC
• Following this, there have been a number of discussions between the parties to the offer including recent meetings in country between the CEO of Wentworth and relevant Tanzanian government stakeholders, as well as the CEO of M&P and relevant Tanzanian stakeholders, to seek to bring the Acquisition to a successful conclusion before the agreed 31 December 2023 Long Stop Date, including at the highest levels of government in Tanzania
• There has been positive progress in these discussions, although there can be no certainty that the Conditions will be satisfied or (where capable of being waived), waived by M&P. The Company and M&P are working towards the satisfaction or (where capable of being waived) waiving of the Conditions in Q4 2023