REG - Wentworth Resources - Operational Update

Wentworth ResourcesAnnouncement

22/06/2022 07:00

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RNS Number : 7021P  Wentworth Resources PLC  22 June 2022

                22 June 2022

WENTWORTH RESOURCES PLC
("Wentworth" or the "Company")

Annual General Meeting

Operational Update: strong production underpins full year guidance

Wentworth (AIM: WEN), the independent, Tanzania-focused natural gas production
company, is pleased to announce an operational update ahead of its Annual
General Meeting ("AGM") to be held today.

Following record production achieved in 2021, Wentworth and its joint venture
partners continued to realize strong production rates throughout 2022,
recording an average production rate of 92 MMscf/d year to date. The five
producing wells in the Mnazi Bay field and the associated joint venture
operated facilities continued to perform well and without issues. Furthermore,
the reductions in natural gas demand typically seen during the wetter months,
April and May, were less severe and shorter, compared to previous years.  The
Company's production guidance for the year, provided in January 2022, remains
unchanged at 75 - 85 MMscf/d.

The Government of Tanzania remains positive in their recent announcements
regarding their willingness to progress and promote projects of national
interest and it is expected that these positive actions will continue to
promote further growth potential for the Tanzanian economy.

With the Company's recent agreement to acquire Scirocco Energy plc's 25%
interest in the Ruvuma PSA, Wentworth is pleased to report that work on the
338 km(2) 3D seismic, over the discovery and potential development area, is
progressing positively and is intended to provide data critical to the
development of the field and to optimize further drilling locations. The
operator, ARA Petroleum Tanzania, has indicated that the Chikumbi-1 well will
be drilled following the completion of the seismic programme and that first
gas from the project is possible by late 2024, following the award of a
25-year development licence and construction of a pipeline connecting the
field to the Madimba gas processing facility which is located within the Mnazi
Bay licence area. The Company looks forward to updating the market as
operations on this transformational new project progress.

 

Operational Highlights and Outlook

·    Average daily production year to date is 92.2 MMscf/day (gross),
compared with 79.9 MMscf/day (gross) during the same period in 2021

·    Record quarterly average daily production of 98.5 MMscf/day (gross)
achieved in Q1 2022

·    Wentworth and Mnazi Bay JV Partners supply approximately 50% of
natural gas demand in Tanzania which is primarily used for essential baseload
electricity but is also expanding to include a multitude of industrial users

·    The Mnazi Bay JV Partners continue to progress the 2022 work
programme, which is focused on ensuring reliable gas production through
diligent field maintenance

·    The Operator will conduct essential maintenance during a two-day shut
down planned for late June

·    The health and safety of the employees at Mnazi Bay remains of
paramount importance as is evidenced with our continued efforts to ensure
robust health and safety standards. As of 31 May 2022, the Mnazi Bay
operations have reported zero lost time incidents for a period of five years
and 301 days

·    Evaluation of the Mnazi Bay licence area for additional exploration
and production potential is ongoing

Financial

·    Declared a final dividend in respect of FY 2021 of 1.16 pence per
share ($2.6 million); a total dividend distribution in respect of 2021 of 1.7
pence per share ($4.0 million) representing an increase from 2020 ($3.8
million) and a yield of approximately 7.1% (based on current market
capitalisation)

·    Debt free with cash on hand of $26 million

·    TPDC receivable $2.4 million representing 1-month of gas sales (fully
current)

·    TANESCO receivable $753k representing 6-months of gas sales ($615k
representing 5-months of gas sales in arrears)

Corporate

·    Actively progressing the Company's strategy to diversify the asset
portfolio with high quality growth opportunities as demonstrated with the
recent Ruvuma acquisition

·    Strict commitment to maintain sustainable progressive capital returns

·    Continued focus on growth within Tanzania and the broader region by
capitalising on a strong operational track record and in-depth local knowledge

·    Maintenance of a highly skilled Board and management team

·    Progressively engaged with shareholders by providing regular updates
and management access

Sustainability

·    In light of the COP26 conference in 2021, Tanzania announced its
commitment to reduce greenhouse gas emissions by 30% by 2030. In doing so, the
Government cemented its commitment to decreasing its already-limited emissions
output and reinforcing incentives for low-carbon energy sources such as
natural gas

·    Natural gas will play a critical role in meeting a reduction in
emissions with reliable baseload electricity helping to further replace
carbon-intensive off-grid fuel sources such as heavy fuel oil and diesel

·    Ongoing ESG strategy remains a priority following the publication of
Wentworth's second Sustainability Report for 2021; it addresses how Wentworth
proactively manages its impacts by upholding relevant international standards
and adopting a responsible approach to doing business in Tanzania; the Company
is progressing its initiatives with Vitol and the Government of Tanzania on
how to best address these goals

 

Katherine Roe, Chief Executive of Wentworth, said:

"I am delighted that Wentworth has made such a strong start to the year with
production, supporting our full year guidance and providing the confidence to
announce a further dividend increase and maintain our attractive yield, one of
the highest in the independent E&P sector.

 

"Mnazi Bay continues to provide Tanzania with approximately half of the
country's natural gas demand and our contribution to the country's growth will
be further enhanced by our recently announced acquisition of a 25% stake in
the nearby Ruvuma gas development project.

 

"Ruvuma is a transformational transaction for Wentworth and represents an
attractively priced, low risk entry into a high growth opportunity which
cements our position as a leading supplier of domestic gas to Tanzania."

 

Ends

 Enquiries:

 Wentworth Resources              Katherine Roe,                                                              katherine.roe@wentplc.com (mailto:katherine.roe@wentplc.com)
                  Chief Executive Officer                                                     +44 (0) 7841 087 230

 Stifel Nicolaus Europe Limited   AIM Nominated Adviser and Joint Broker                                      +44 (0) 20 7710 7600
                  Callum Stewart
                  Ashton Clanfield
                  Simon Mensley

 Peel Hunt LLP                    Joint Broker                                                                +44 (0) 20 7418 8900
                  Richard Crichton
                  Alexander Allen

 FTI Consulting                   Communications Advisor

                  Sara Powell                                                                 wentworth@fticonsulting.com
                  Ben Brewerton                                                               +44 (0) 20 3727 1000

                  Ollie Mills

 

 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.

 

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.

 

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