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For those who are REALLY interested in WRL, there was a meeting at Hotel "The Thief" in Oslo last September. MD Geoff Bury answered questions an spoke for about 2 hours about MB and Tembo and a possible future. The long version: https://www.dropbox.com/s/09m02osew9grvv8/170914_WRL_Oslo_the_Thief_MB_Part_I.mp3 https://www.dropbox.com/s/43n421xp0h7uu8b/170914_WRL_Oslo_the_Thief_Tembo_Part_II.mp3 https://www.dropbox.com/s/zov4wnfdmkcb8h2/170914_WRL_Oslo_the_Thief_Tembo_Part_III.mp3 https://www.dropbox.com/s/l0ocu5dojwiipd4/170914_WRL_Oslo_the_Thief_Tembo_Part_IV.mp3 The short version: https://www.dropbox.com/s/d064km3uk6oq4ge/170914_WRL_Oslo_the_Thief_1bbl.mp3 https://www.dropbox.com/s/162xioxmipqptcp/170914_WRL_Oslo_the_Thief_About_survival.mp3 Enjoy :-)
You're welcome. :-) WRL has gained increased attention from Malcy over the last few months. More reading/listening: http://www.malcysblog.com/?s=wentworth&submit=Go
Thanks for the info, Josik - will make interesting bed time reading.
Thanks Josik, makes perfect sense :)
cperkin; Q2 is the rainy season. "Taking into account the seasonal variability of Q2 due to displacement hydro-electric power generation during the annual rainy season, as well as production from industry competitors the average production for the full year 2017 was 49.1 MMscf/d." http://www.lse.co.uk/share-regulatory-news.asp?shareprice=WRL&ArticleCode=9fj1vw92&ArticleHeadline=Wentworth_Resources_Limited__Operational_Update_and_2018_Production_Guidance
Thanks for sharing Josik. Why the drop in production and revenues forecasted for Q218?
Bought my first shares in 2011 but have been without any over longer periods. Here's my model for production / income / cash flow. https://www.dropbox.com/s/qidecgz1c0hwv94/WRL-Cash_Flow_per_quarter_2016-2018-Estimates_per_Jan_2018.xlsx
Bought my first shares in WRL in summer 2015. A long wait with endless delays for reasons out of WRL control, but I really think that the long waited producction increase is now finally happening. By the way, I made a mistake in my earlier post: to get a quick estimate of the net gas sales, you can assume it is about 75% of gross sales. (You can also multiplythe 3 monthly average production rate with 62 I think, which is even simpler)
I am a newbie having taken a position late last year Led, Josik and Mick I know have years of experience, as do others and have a very good understanding and knowledge of all things WRL
Thanks again for providing the supporting detail on the mechanics of the finances, certainly helps to assist my understanding. How long have you guys been invested here?
A very different story in Cameroon for VOG, the Government basically did not renew/extend a contract and VOG lost 53% of their production demand overnight from Logbaba - expected to be a very temporary situation whilst negotiations are completed. The situation in Tanzania is very different with demand increasing for both the new gas powered plants and industrial end users.
LedZep, What you calculated is gross gas sales. Net gas sales is a bit more complicated (with a 60-40% split between cost gas and profit gas, and tax deduction on profit gas), but as a quick workaround you can assume that net gas sales (to TPDC) is roughly 62% percent of gross gas sales. Josik is the expert here on this, he has created a very detailed spreadsheet about WRL's balance. What do you mean with "extended credit" period? TPDC is 4 months behind in payments (but payments have stabilised and are regular now) and TANESCO is catching up (but is still ca 9 months behind I believe). What happened in Cameroon?
Sorry to be the new kid at school, raising questions that have already been discussed, but on trawling through the numbers , there appears to be a disconnect, ( that probably has an obvious answer). Using Q3 report, Q3 figures: i.e. $4.1m for 91 days production. Avg 60 mmscfs/d during Q3 Notional cost of $3.04 / mm btus Conversion: 1mm scfs = 1037,000,000 btus Notional cost of $3.04 * 1037 / mm scfs = $3152/mmscfs WRL interest = 32% Theoretical revenue for Q3 = 91 * 60 * (3152*0.32) = $5.5m compared to reported $4.1m Is there some royalty payment / local tax / land holder fee payable ( as per Texas), that reduces the notional $/mmscf? Or are there other contributing factors, maintenance/holidays etc that have reduced production period, but these would have been stated, surely. Whats the general view on the "extended credit" period that appears to be in operation, particularly as production increases and the bills get larger, and with regard to VOGs recent experience in Cameroon? Apologies for what may have already been discussed but trying to get to grips with the WRL company.
Certainly have been some chunky buys throughout, bodes well it would seem and a great first week for you LedZep, well done! Have a lovey weekend all, looking forward to the 2018 journey with WRL
Appears to be a regular chunky buyer since the last RNS was issued. Unable to buy a share @ 16.20pm today. More large orders to be filled next week??
Perhaps there is an outside chance that the Tanzanian government will pay (part of) the 6.5 mln that it owes to WRL this year as well.... https://tarumbeta.blogspot.nl/2018/01/tanzania-government-to-pay-internal.html
Thanks guys for the additional info and detail. Can't understand why there is not more awareness of WRL, particularly with the write ups by Malcy. Hey-ho, greater opportunity to tuck a few away in the SIPP. Cheers
One should have in mind that payment of the receivable is not recognized as revenue in the PL statement, but included in the cash flow as the receivable is settled for cash. Beside the receivable on TPDC amounting 20.6 MUSD as of the end of Q3 17, WRL has another receivable of 6,5 MUSD on the Government. However, the settlement of this receiveble has not yet started and it is still unclear how and when it will be settled. Book value of these receivables are slightly lower as they have been discounted due to their long-term nature. WRL says in the Q3 report "Based on the Company�s internal estimates of potential gas sales volumes, the $20.59 million receivable as at September 30, 2017 is expected to be fully recovered by Q4 2018." This would amount to about 4.1 MUSD/quarter on average. However, gas sales are expected to grow in 2018, so payments would be higher in 2018, compared to Q4 17. So Mick 2020's estimate of 4.4 MUSD per quarter in 2018, sounds about right to me as well.
Back at my computer now, so I can provide some numbers (all my personal estimates!) At 75 MMscf/d, I expect total gas sales of $5.1 mln per quarter and 4.4 mln per quarter for TPDC receivables, so nearly 3.2 mln income per month. Obviously the income from TPDC receivables will disappear once the outstanding amount has been paid (I expect that to happen in 2019). Note that monthly expenditure (G&A, P&O, interest, capex) is currently around US$ 1 mln (slowly dropping)
Ledzep, WRL has currently 3 sources of income: 1) gas sales to TPDC (the largest part, as you calculated) 2) gas sales to Tanesco (higher price, but small amount) 3) as long as the TPDC recoverables remain, almost all of TPDC�s stake in Mnazy Bay (20%) for the gas sales (back to TPDC). This is a significant source of income for the whole of 2018. I think total income will be more than 2.5 mln / month at 75 MMscf/d total production. Good luck
mick: Not sure how you have calculated the potential for $2.5m gas sales per month, but my rough calcs would be closer to $1.70m per month for 2018, assuming top end of guidance at 75mmscfs per day - from: Avg price per mmscf for Q1- Q3,2017= $9.2m/(45*273 days) = $749 Top end of guidance for 2018 - 75 mmscf/day = 365*75*749 = $20.5m, or $1.70m per month. (Assuming stable gas prices) Using $749/mmscf/d should yield approx $13.4m for full year 2017 (at avg 49mm scf/d) Is there an anticipated gas price increase in the pipeline (so to speak)? Even from these lower numbers moving revenue from $11m to $13m to $20m is still pretty good, and the guidance figures for 2018 do feel conservative, considering the future plans re: turbines and customers, but normally good practice to "under promise and over deliver" than vice - versa. Could be that next news will be the appointment of new CEO, who then would be in position to oversee the farm out process for Tembo, IMO, rather than walk into a fait accompli.
Peel Hunt have a GBX 40.00 PT on the stock. The PT suggests a potential upside of 50.94% from Wentworth Resources (LON:WRL)�s last stock close price. This rating was revealed to investors in analysts note on Monday morning. https://goo.gl/tTqFdq
Thanks for the welcome guys. At least some volume going through today, but looking forward to a whole lot more in the coming weeks/months.
A great first day for you LedZep, well done. In saying that, I am not at all disappointed either ;)
Limited to �1500 buys, at the mo, following the two significant buys. Not surprising with only 85m shares available, outside of significant shareholders holding.