(Alliance News) - East Africa-focused Wentworth Resources PLC on Tuesday said its sales contracts mean it is not impacted by fluctuations in commodity prices.
Wentworth's core asset is the Mnazi Bay concession in Tanzania. Production from five producing wells is approximately 75 million to 90 million standard cubic feet of gas per day.
The firm has two gas sales contracts: one with Tanzania Petroleum Development Co at USD3.24 per one million British thermal units, and another with Tanzania Electric Supply Co at USD5.36 per one million British thermal units.
Both customers are owned by the government of Tanzania, supplying gas to a number of power plants in the country.
As a result, Wentworth said, it is not affected by fluctuations in global commodity prices.
Oil prices have slumped this week. Brent was quoted USD37.24 on Tuesday, hitting near USD30 overnight on Sunday, amid the coronavirus outbreak and a failure by major oil producing nations to agree production cuts.
As of January's end, Wentworth had a cash balance of USD14.2 million. This "strong" cash position "comfortably" allow it to continue funding its dividend policy.
"Noting the uncertainty arising from the recent coronavirus outbreak, Wentworth has undergone an evaluation of its business preparedness and believes it is well positioned to minimise disruption given a limited requirement for stock at Mnazi Bay, IT remote access for employees, and precautionary procedures undertaken by the Tanzanian government," said Wentworth.
Shares were up 5.9% on Tuesday afternoon in London at 18.00 pence each.
By George Collard; georgecollard@alliancenews.com
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