Member Info for HighYield

Thank you for the link, cperkin. I hope you don't get banned from the AEX forum for sharing positive comments about WEN. Wen shareholders are the enemy, right?

I think, that is because it was MP that funded the Ziwani well (hope I remered the name of the well correctly) and that well has now been fully recovered. I do not know if they report the cost recovery as revenue, but I should think so. WEN did not book revenue for 1.7 MUSD worth of gas sales in 1H because of the cost recovery for MP. I am looking for about 19 MUSD in revenue for 2019 for WEN.

Mick 2020, based on an average production of 70mscf/d from Mnazi bay, I am expecting Wentworth to report revenue of about 18 MUSD for 2019.

Nice to see some activity on this board again. I have been very upset with the way Wentworth informed about the carry of the Ziwani 1 well. I think the Ziwani 1 carry should have been reported as a liability in the balance sheet. Instead, the company reduced revenue from sales of gas, from 2H 2018. You have to lokk very thorough in the annual report to find information about this. Page 23 in the annual report, https://wentplc.com/wp-content/uploads/2019/05/Wentworth-Resources-Annual-Report-2018-FINAL_Web.pdf
The net effect might have been 6 MUSD, as operating cost were unusually low in 2H 2018.

Wentworth’s entitlement to gas has been reduced
by $7.1 million with respect to the fully carried
repayment of the Ziwani-1 Exploration well and
associated 3D seismic costs. The 2012 Ziwani-1
well and associated 3D seismic costs were paid
by Maurel et Prom and Cove Energy as part
consideration for their entry into the Mnazi Bay
asset, thereby fully carrying Wentworth for that
part of the exploration work programme. As at
year-end 2018, $1.3 million of the $8.4 million cost
gas remains to be recovered by Maurel et Prom.

The departure of CEO Eskil Jersing may explain for the recent drop in the share price.
"Wentworth (AIM: WEN), the AIM listed independent, East Africa-focused oil & gas company announces that Eskil Jersing, Chief Executive, is stepping down from the Board and leaving the Company with immediate effect.

Katherine Roe, currently Wentworth's Chief Financial Officer, has been appointed as Interim Chief Executive. Katherine will retain oversight of the finance function as part of her new role, with full support from the Board."

Sorry for repeating old news then, as I had not noticed that post from Jules.

Agree with you, "Good stuff for all gas producers in Tanzania!"

who are interested in the Tanzanian gas story. Another peer-company who's name should not be menthioned in this forum has made a new presentation.
https://wentplc.com/wp-content/uploads/2019/10/2019-10-28-London-121-OG-conference.pdf
The demand supply outlook is on page 5, for those who are interested. This post will likely be removed as it could be seen, by die hard AEX fans, as an attempt to market another company on the AEX site.

Ticker code WHEN is more suitable for this company (WEN)

https://dailynews.co.tz/news/2019-07-015d19bd978c63c.aspx

https://www.ippmedia.com/en/news/tpdc-we-shall-drill-well-fiscal-201920

Mick2020, there was a gap in the numbers for 2017 and 2016 as well. I suppose it could be some kind of tax or royalty that is deducted from the gross number. The 2017 annual report disclose more details regarding production and revenue (page 3). https://wentplc.com/wp-content/uploads/2018/11/Wentworth-annual-2017-low-res-secure.pdf

My view is that the company should have reported the carry of the Ziwani well as a liability in the balance sheet, as they have reported the TPDC recievable as an asset. Furthermore, when they informed the market about the Ziwani carry it was very unclear, at least to me. Maybee you as a native speaker understood that revenue would be reduced by the Ziwani carry going forward. This is from the RNS from 15 November 2018.

“Pursuant to the Joint Operating and Farm-Out Agreements, the Wentworth Carry is recovered by Maurel et Prom, post operating, but prior all exploration and development expenditures from cost gas sales. Wentworth expect Maurel et Prom to fully recover the Ziwani-1 well and associated seismic costs from their adjusted allocation of the TPDC receivable over the next nine months. The Company notes that ongoing operating costs continue to be recovered in preference to all other costs, minimally offsetting the impact of the prioritised recovery of the Wentworth Carry.”

The annual report finally explains for the shortfall in revenue in the second half of 2018.
"Wentworth’s entitlement to gas has been reduced
by $7.1 million with respect to the fully carried
repayment of the Ziwani-1 Exploration well and
associated 3D seismic costs. The 2012 Ziwani-1
well and associated 3D seismic costs were paid
by Maurel et Prom and Cove Energy as part
consideration for their entry into the Mnazi Bay
asset, thereby fully carrying Wentworth for that
part of the exploration work programme. As at
year-end 2018, $1.3 million of the $8.4 million cost
gas remains to be recovered by Maurel et Prom."

Interesting article that could be relevant for AEX as well.

https://www.thecitizen.co.tz/News/Business/-Why-Swala-has-delayed-drilling-again/1840414-5104236-73rf1i/index.html

Thank you Crusty for your reply. You use the word excitement, while I use the word risk. You might be right in your assumption that when private investors are looking at a company with operations in Tanzania, they are looking for blue sky scenarios and high risk instead of stable operations and cash-flow. However, I would not look to much at historical share price performance as a guidance for the future. I think there are many dissapointed AEX share holders that are hoping for a descent exit when som positive news finally comes. And as you state in a later post, holdings in the Ntoroya asset has been reduced to a third ( assuming successful farm-out). That should realistically cap the upside. But, one never knows when it comes to AEX shareholders.
I am happy to hear that your portfolio also includes a number of stable investments as well.

It will be exciting to see what the future brings for both companies, and thank you again for a very civil discussion. WEN holders are not often met by that attitude when discussing WEN/AEX.

Thanks for your reply CrustyPete, I do agree that both companies face similar type of problems with the authorities dragging their feet when it comes to extending or approving new licenses. However, I do not see the logic for saying, I have made one pick for exposure towards the Tanzanian gas story and thats it, and I will stay by that one until the end no matter what.

Let's assume that the authorities continues to drag their feet, and do not extend or approve any new licenses going forward.
What's the value in AEX, probably close to zero. On the other hand, WEN has producing reserves with a NPV 15% above 100 MUSD, which is about twice their current market cap. I find it very unlikely that Tanzania would not honour their existing agreements, especially when discussing with Big Oil about billions of USD in LNG investments offshore.
I do appreciate your comments, as you seems to be able view AEX with critical eyes, an ability very few AEX posters on this board have. I would really like to hear why you still prefer AEX instead of WEN.

Just for the record, WEN is likely to post large loss in their full-year earnings to be released later this month, as they will write-off their +40 MUSD investment in Mosambique.

I have on several occasions before argued on this board that it could be a good idea to diversify your exposure towards the Tanzania gas story by including WEN as well. But without any success I assume, as you all "know" that AEX is simply the best investment ever and Jay is the a genious and really hands on CEO. All the same, I try once more. Please take 20 minutes of your time and listen to a recent presentation of WEN by Eskill Jersing. The presentation also includes some comments about AEX and Solo and well as his general view about the Tanzanian gas market and outlook. Yes, I know WEN has got debt (although the cash amount is higher), and AEX the market cap of AEX and WEN are about the same.

https://www.youtube.com/watch?v=D2-SXPJSkkw

JH77, thanks for the information. My guess is that they will have to raise their offer in order to receive at leat 57% acceptance.

I am not that familiar with the procedures, when a company makes a bid for another. Will DNO not be able to raise their bid above 152p? If the bid lapses, will they have to wait 12 months before they can come with another bid?

" DNO notes that if its Offer lapses, it cannot make a new offer for another 12
months (subject to the exceptions in the Code) and there can be no assurances as
to DNOs long-term ambitions. What it can make assurances about is that DNO
will redouble efforts to achieve board representation for the owners of Faroe to
ensure improvement of corporate governance practices, to ensure greater
shareholder say on pay, to ensure greater scrutiny and proper oversight of
further dilutive actions, including generous options awards to directors, and to
ensure implementation of a culture of shareholder value creation."

Anaysister

I assume this is the statement that you have in mind. No it is not clear, and I think that is part of the game plan, to put some doubt if the bid stands or not.

"This is a significant deal for Faroe, and we need to understand it before making a judgement. While Faroe has asserted this is not designed to stop the DNO offer, we need to ask if this is good value for a company seeking growth: to swap out of its high quality, large scale, core growth hub, Njord, operated by the national oil company of Norway, Equinor, and to take on instead mature and declining production assets - in a deal with Equinor itself. That is the test this deal needs to satisfy."

workover

Thanks for your reply. I would not worry too much about their future reputation, if they were to succeed in getting 50% from a relatively low bid. It is up to the shareholders to accept their bid or not. As of now, it looks as though some shareholders have sold out already. Traded volume since the bid was lauched is more than 40 million shares in the range 1.55-1.60. My guess is that DNO may reach 50% control, if they raise their bid to 1.70-1.80 level. It will be interesting to follow the development.
Regarding valuation multiples like EBITDA, one have to have in mind that the tax level in the Nowegian sector is 78%.