10 Mar 2020 07:00
PRESS RELEASE 10 March 2020
WENTWORTH RESOURCES PLC("Wentworth" or the "Company")
Update
Wentworth (AIM: WEN), the AIM listed independent, East Africa-focused natural gas company provides the following update, in light of the fall in oil prices and global stock markets.
Commodity Pricing
Wentworth sells its gas under long-term fixed price contracts that provide for price escalations based on the US consumer price index. Wentworth currently sells gas under two contracts:
1. to Tanzania Petroleum Development Corporation ("TPDC") at $3.24/MMBTU, which supplies Kinyerezi and Ubungo power generation facilities as well as a limited number of industrial customers; and
2. to Tanzania Electric Supply Company ("TANESCO") at $5.36/MMBTU, which supplies the Mtwara power generation facility.
As such, the Company is not impacted by fluctuations in global commodity prices.
Financial Update
The Company continues to receive consistent monthly payments for gas sales with receivables from TPDC standing at just one month. As previously stated, the Company fully repaid its term loan on 31 January 2020. The Company's net cash balance at 31 January 2020, following the final repayment of its term loan, was $14.2 million.
The Company's strong cash position and consistent payments comfortably allow the Company to fully fund its dividend policy, which, based on yesterday's closing share price of 17 pence, equates to a 7.2% annual yield.
2020 Capital Programme
As previously stated, the Mnazi Bay JV Partners have agreed a limited 2020 firm work programme totalling approximately $4.6 million net to Wentworth.
Operational Resilience
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.
Enquiries: Wentworth | Katherine Roe,Chief Executive Officer | katherine.roe@wentplc.com+44 (0)118 2065428 |
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Stifel Nicolaus Europe Limited | Nominated Adviser and Joint Broker Callum StewartAshton ClanfieldSimon Mensley | +44 (0) 20 7710 7600 |
Peel Hunt LLP | Joint Broker Richard CrichtonJames Bavister | +44 (0) 20 7418 8900 |
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Vigo | Investor Relations Adviser Patrick d'AnconaChris McMahon | +44 (0) 20 7390 0230 |
About Wentworth Resources
Wentworth Resources is a publicly traded (AIM: WEN), independent natural gas company with production, exploration and appraisal opportunities for domestic power generation and local industry in the Rovuma Delta Basin of coastal southern Tanzania.
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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