Wentworth Resources Provides Q2 2017 And Half Year Financial Statements

Announced Date :  Aug 10, 2017


Wentworth Resources Limited, the Oslo Stock Exchange (Wentworth Resources) and London Stock Exchange listed independent, East Africa-focused oil & gas company, has announced its results for the quarter and six months ended 30 June 2017.
Corporate

On 23 May 2017, the Company completed a private placement and issued 16,953,496 new common shares, for cash consideration of $0.326 (GBP 0.25 or NOK 2.73) per share for total gross proceeds of $5.53 million (GBP4.2 million or NOK46.3 million).

Financial

Gas sales revenue of $2.15 million for the quarter, compared to $2.94 million in Q1 2017 and $3.43 million in Q2 2016.    For the Half-year 2017 revenue was $5.10 million compared to $6.64 million in 2016. 

Net loss of $1.25 million and $1.66 million in Q2 and Half-year 2017 compared to net losses of $0.17 million and $1.08 in 2016 respectively.

Capital expenditures of $0.61 million during Q2 and $1.3 million during Half-year 2017 which compares to $2.16 million and $2.82 million in 2016 respectively.

Cash and cash equivalents on hand of $3.83 million compared with $0.98 million on hand at December 31, 2016.

Working capital of $9.08 million compared to $4.96 million at December 31, 2016.

Drew $0.56 million on new overdraft credit facility for working capital purposes during Q2 2017.

Operational

Tanzania

Following 2016, a year in which gas demand varied significantly on a month to month basis as existing government owned gas infrastructure was upgraded, new infrastructure was commissioned and industry participation in the gas supply and electrical power generation was established, gas demand started to stabilise in the first half of 2017. 

Since the end of the wet season during Q2 2017 when hydro power generation is at its annual peak, gas production volumes have increased substantially.

The Mnazi Bay field achieved average gross daily gas production during the quarter of 30.7 MMscf/d and 36.9 MMscf/d during the first half of 2017, with June 2017 production averaging 44.3 MMscf/d.  Gross gas sales for Q2 to date have reached over 60 MMscf/d with management's forecast for the full year 2017 remaining within the guided range of 40 to 50 MMscf/d. 

Managed working capital with focus on petitioning purchasers of gas to improve the timeliness of settling amounts owing and working with our two main creditors, local banks and the operator of the Manzi Bay Concession, to pay obligations upon settlement of receivables.

Mozambique

Proceeding with plan to commence the drilling of an appraisal well on the Tembo discovery next year, before acquiring additional seismic if necessary. Consideration to acquiring additional seismic will be contingent upon the results of the appraisal well.

Continued work on reprocessing existing 2-D vibroseis seismic data, completed Tembo-1 well analysis and continued mapping and interpretation of all existing data with a view to selecting a well location.

Continued the process of securing an industry partner to participate in the appraisal programme in advance of drilling an appraisal well.

Geoff Bury, Managing Director, commented:

"Second quarter production was impacted by the rainy season during which hydro power generation is used as a substitute for gas-fired power generation but production rebounded to an average for July of 61 MMscf/d and we continue to maintain an average production guidance for the year of between 40 and 50 MMscf/d.

The Company is effectively managing working capital through a period of slower payments from its government agency customers TPDC and TANESCO. These efforts include being fully engaged with Maurel & Prom and our local Tanzania based banking institutions to effectively settle obligations as cash flows improve through higher production volumes.

We continue to advance the process of securing a farm-in partner for the drilling of an appraisal well in Mozambique and have received very positive initial interest from industry. The Mozambique government has expressed their support for the drilling of an appraisal well in 2018 in advance of the need to acquire new seismic data over the gas discovery area. The Company is currently determining a well location and expects to secure a farm-in partner before the commencement of drilling operations."

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