27 Jun 2019 07:00
Production Guidance and Operational Update
PRESS RELEASE 27 June 2019
WENTWORTH RESOURCES PLC ("Wentworth" or the "Company")
Production Guidance and Operational Update
Wentworth (AIM: WEN), the AIM listed independent, East Africa-focused oil & gas company announces the following operational update.
Mnazi Bay Operations
Average production to 24 June 2019 was 65.6 MMscf/d, gross, impacted in Q2 2019 by increased hydro-electric supply during the rainy season. The wet season is now over and output from the hydro-electric power plants is starting to diminish.
As previously announced, the Company expects to see existing demand underpinned and set to increase over the second half of 2019, due to:
Repairs to turbines at Ubungo II plant now complete;Ongoing power evacuation problems at the Kinyerezi power stations now resolved by completion of the K-1 transmission station in May 2019;Kinyerezi-1 and Kinyerezi-2 power stations are running at near full capacity and are expected to continue throughout H2 2019;Demand from the Dangote Cement plant (power and clinker needs) is expected to reach up to 20 MMscfd in H2 2019; andThe new Kinyerezi-1 Extension TANESCO facility is expected to begin its commissioning phase starting Q4 2019, gradually bringing on-stream demand of up to 30 MMcf/d into 2020.Production has additionally been impacted by additional gas supplied into the transnational pipeline from the SongoSongo field, following the signing of a new Gas Sales Agreement (“GSA”) with the government of Tanzania in May 2019 by Pan African Energy Tanzania Limited (“PAET”). PAET are currently supplying c.20 MMScf/d into the National Natural Gas Pipeline (“NNGP”) and the Company anticipates that this additional supply will continue throughout H2 2019.
As a result of the above, full year average daily Mnazi Bay production for 2019 is now expected to be in the range of 60 to 75 MMscf/d.
As previously announced and planned, routine workover and pressure monitoring will continue throughout H2 2019 in order to optimise the performance of the field.
Thanks to consistent monthly payments that continue to be received from both Tanzanian Petroleum Development Company (“TPDC”) and Tanzania Electric Supply Company Limited (“TANESCO”), the Company continues to deleverage its balance sheet and comfortably meet its debt obligations, which now stand at $5 million. The Company anticipates being debt free in Q1 2020 with a final debt repayment in January 2020; cash balance at 31 May 2019 was $10.6 million.
Eskil Jersing, CEO, commented:
“We have adjusted our 2019 production guidance to take into account the additional 20 MMscf/d supplied into the NNGP from the only other in-country supplier, due to a new GSA executed post our 11 January 2019 guidance. Demand outlook continues to be strong and the Mnazi Bay joint venture partners continue to be well placed to supply that demand into the later part of 2019 and beyond.
“Regular, timely receipt of invoices enables us to repay our existing term loan whilst building cash and benefiting from reduced corporate costs post the redomicile last year.
“Finally, I am pleased to say that our Mozambique country exit has been executed smoothly and with no liability exposure or any ongoing forward costs.”
| Enquiries: Wentworth | Eskil Jersing, Chief Executive Officer Katherine Roe, Chief Financial Officer | eskil.jersing@wentplc.com +44 (0)118 2065427 katherine.roe@wentplc.com +44 (0)118 2065428 |
| Stifel Nicolaus Europe Limited | AIM Nominated Adviser and Joint Broker Callum Stewart Ashton Clanfield Simon Mensley | +44 (0) 20 7710 7600 |
| Peel Hunt LLP | Joint Broker Richard Crichton James Bavister | +44 (0) 20 7418 8900 |
| Vigo | Investor Relations Adviser Patrick d'Ancona Chris McMahon | +44 (0) 20 7390 0230 |
About Wentworth Resources
Wentworth Resources is a publicly traded (AIM: WEN), independent oil & gas company with natural gas production, exploration and appraisal opportunities in the Rovuma Delta Basin of coastal 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.
Cautionary note regarding forward-looking statements
This press release may contain certain forward-looking information. The words "expect", "anticipate", believe", "estimate", "may", "will", "should", "intend", "forecast", "plan", and similar expressions are used to identify forward looking information.
The forward-looking statements contained in this press release are based on management's beliefs, estimates and opinions on the date the statements are made in light of management's experience, current conditions and expected future development in the areas in which Wentworth is currently active and other factors management believes are appropriate in the circumstances. Wentworth undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless required by applicable law.
Readers are cautioned not to place undue reliance on forward-looking information. By their nature, forward-looking statements are subject to numerous assumptions, risks and uncertainties that contribute to the possibility that the predicted outcome will not occur, including some of which are beyond Wentworth's control. These assumptions and risks include, but are not limited to: the risks associated with the oil and gas industry in general such as operational risks in exploration, development and production, delays or changes in plans with respect to exploration or development projects or capital expenditures, the imprecision of resource and reserve estimates, assumptions regarding the timing and costs relating to production and development as well as the availability and price of labour and equipment, volatility of and assumptions regarding commodity prices and exchange rates, marketing and transportation risks, environmental risks, competition, the ability to access sufficient capital from internal and external sources and changes in applicable law. Additionally, there are economic, political, social and other risks inherent in carrying on business in Tanzania. There can be no assurance that forward-looking statements will prove to be accurate as actual results and future events could vary or differ materially from those anticipated in such statements.
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Attachment
270619 Operation Update RNS FINAL