Wentworth Resources Ltd Wentworth Resources Limited : Update And Q4 2016 Financial Statements And Md&A

 
TIDMWRL 
 
 
 
 
 
 
   PRESS RELEASE 
 
   28 February 2017 
 
   Wentworth Resources Limited 
 
   ("Wentworth" or the "Company") 
 
   Update and Q4 2016 Financial Statements and MD&A 
 
   Wentworth Resources Limited, the Oslo Stock Exchange (OSE: WRL) and 
London Stock Exchange (AIM: WRL) listed independent, East Africa-focused 
oil & gas company, today announces an operational update along with its 
unaudited results for the fourth quarter and twelve months ended 31 
December 2016. 
 
   The following should be read in conjunction with the Q4 2016 Management 
Discussion and Analysis ("MD&A") and Condensed Consolidated Interim 
Financial Statements which are available on the Company's updated 
website at http://www.wentworthresources.com. 
 
   Wentworth shall be issuing its audited 2016 Annual Consolidated 
Financial Statements and MD&A following publication of the results of an 
annual independent evaluation of the gas reserves at 31 December 2016 
within the Mnazi Bay Concession in Tanzania, carried out by RPS Energy 
Canada Ltd. ("RPS"), Calgary, Canada which is expected during March 
2017. 
 
   OPERATIONAL AND FINANCIAL UPDATE 
 
 
   -- Mnazi Bay field production has averaged 44 MMscf/d year-to-date 2017, in 
      line with guidance of 40 - 50 MMscf/d for 2017. 
 
   -- In addition, increasing gas demand from industrial customers, including 
      Goodwill Ceramics and Dangote Cement, is expected in 2017. 
 
   -- Kinyerezi-I Expansion and Kinyerezi-II gas-fired power generation 
      facilities are under construction and on schedule for completion and 
      commission starting in 2018; anticipated additional demand from power 
      sector of 70 - 80 MMscf/d once these new facilities are fully 
      operational. 
 
   -- All capital and operating expenditures incurred during 2016 expected to 
      be fully settled during Q1 2017; minimal capital expenditure planned 
      during 2017. 
 
   -- Production facilities now fully invested with capacity of up to 130 
      MMscf/d and current well deliverability expected to support substantial 
      increase in demand. 
 
   -- Work underway to secure industry partners for the appraisal programme of 
      the Tembo gas discovery in Mozambique; appraisal activities expected to 
      commence once industry partners are secured. 
 
   -- Amended the timing of principal payments on the existing $20.0 million 
      credit facility to better align with the current production profile and 
      without further leveraging the Company at this time. 
 
   -- Secured access to a new $2.5 million overdraft facility for working 
      capital purposes. 
 
 
   Q4 2016 HIGHLIGHTS 
 
   Financial 
 
 
   -- Gas sales revenue of $2.73 million for the quarter, compared to $3.10 
      million in Q4 2015. 
 
   -- Net loss of $0.42 million during Q4 2016 compared to a profit after tax 
      of $32.81 million in Q4 2015,which  includes a non-cash deferred tax 
      recovery of $34.34 million. 
 
   -- Capital expenditures of $0.67 million compared to $0.73 million during Q4 
      2015. 
 
   -- Cash and cash equivalents on hand of $0.98 million compared with $2.75 
      million on hand at December 31, 2015. 
 
   -- Working capital was $4.96 million compared to $11.98 million at December 
      31, 2015. 
 
   -- Reduced outstanding debt to $20.67 million following a $1.0 million 
      principal payment during Q4 2016 (2015 - $26.0 million). 
 
 
   Operational 
 
   Tanzania 
 
 
   -- The Mnazi Bay field achieved average gross daily gas production during 
      the fourth quarter of 39.4 MMscf/d compared to 34.3 MMscf/d during Q3 
      2016 as less downtime was experienced at the gas fired power generation 
      facilities, Ubungo-II and Kinyerezi-I power stations. 
 
   -- Expansion of the liquid separation units and gas processing facilities at 
      Mnazi Bay was ongoing during Q4 2016 with commissioning and full 
      operations expected in Q2 2017. 
 
 
   Mozambique 
 
 
   -- Completed reprocessing of approximately 1,000 km of 1984/1985 vibroseis 
      data which represents all of the existing regional seismic coverage over 
      the Tembo appraisal area. 
 
   -- Finalized the design details of a new 2D seismic survey of approximately 
      700 km of new data. 
 
 
   Geoff Bury, Managing Director, commented: 
 
   "Fourth quarter gas sales volumes were in line with our guidance of 40 
and 50 MMscf/d and we remain confident this level is achievable for 
2017, as we anticipate new demand from a local cement factory and a 
ceramics facility.  We expect a material increase in gas demand 
beginning in 2018 when the new Kinyerezi-I expansion and Kinyerezi-II 
power plants are commissioned.  The Company has taken prudent steps in 
order to reduce administrative and overhead costs coinciding with the 
reduction in capital activity expected in 2017.  During the quarter we 
have also had productive discussions with our external lenders, amending 
the timing of principal payments on the existing $20.0 million facility, 
to better align repayments with the current production profile.  We are 
confident in the Company's ability to generate positive cashflow at the 
existing production levels, allowing any upside in demand during 2017 to 
directly benefit the bottom line." 
 
   "The Company is focused on advancing a new 2D seismic acquisition 
program over the Tembo appraisal area in Mozambique and will be looking 
to secure an industry partner to share the costs and risk on the 
appraisal of the gas discovery." 
 
   "We enter 2017 with a positive outlook and with a business which is well 
positioned to take full advantage of the growing gas to power energy 
sector in Tanzania." 
 
   A conference call for investors, analysts and other interested parties 
will be held this morning at 01:30 MST (Calgary) / 08:30 GMT (London) / 
09:30 CET (Oslo).  Call in numbers: 
 
   Call in numbers: 
 
   Canada: [phone] 
 
   Norway: [phone] 
 
   United States: [phone] 
 
   International/ United Kingdom Dial In: [phone] 
 
   The participants will be asked for their name, company and confirmation 
code. The Wentworth Resources confirmation code is: 3878585. 
 
 
 
 
Enquiries: 
 
              Lance Mierendorf,                                            [e-mail] 
Wentworth      Chief Financial Officer                                                 [phone] 
              Katherine Roe                                                 [e-mail] 
               Vice President Corporate Development & Investor Relations               [phone] 
Crux          Investor Relations Adviser 
 Advisers      (Norway)                                                                             [phone] 
              Carl Bachke 
Stifel 
 Nicolaus 
 Europe 
 Limited      AIM Nominated Adviser and Broker (UK)                                           [phone] 
              Callum Stewart 
               Nicholas Rhodes 
              Ashton Clanfield 
FirstEnergy 
 Capital      Broker (UK)                                                                     [phone] 
 Hugh Sanderson 
FTI           Investor Relations Adviser (UK)                              [e-mail] 
 Consulting                                                                 [phone] 
 Edward Westropp 
 
 
 
   Financial Statements 
 
   The following primary statements have been extracted from the Q4 2016 
unaudited condensed consolidated financial statements which are located 
on the Company's website at www.wentworthresources.com. 
 
   WENTWORTH RESOURCES LIMITED 
 
   Unaudited Condensed Consolidated Interim Statement of Financial Position 
 
   United States $000s, unless otherwise stated 
 
 
 
 
                                                 December 31,  December 31, 
                                                     2016          2015 
ASSETS 
Current assets 
Cash and cash equivalents                                 979         2,746 
Trade and other receivables                             6,699         3,253 
Prepayments, deposits and advances to partners            187           841 
Current portion of long-term receivables               12,283        18,190 
                                                       20,148        25,030 
Non-current assets 
Long-term receivables                                  18,034        18,897 
Exploration and evaluation assets                      45,538        43,141 
Property, plant and equipment                          93,366        95,168 
Deferred tax asset                                     31,145        34,341 
                                                      188,083       191,547 
Total assets                                          208,231       216,577 
 
LIABILITIES 
Current liabilities 
Trade and other payables                                8,675         6,269 
Current portion of long-term loans                      5,258         5,270 
Current portion of other liability                      1,260         1,508 
                                                       15,193        13,047 
Non-current liabilities 
Long-term loans                                        15,254        20,512 
Other liability                                         1,100         1,634 
Decommissioning provision                                 773           973 
                                                       17,127        23,119 
Equity 
Share capital                                         411,493       411,493 
Equity reserve                                         26,275        25,683 
Accumulated deficit                                 (261,857)     (256,765) 
                                                      175,911       180,411 
Total liabilities and equity                          208,231       216,577 
 
 
   WENTWORTH RESOURCES LIMITED 
 
   Unaudited Condensed Consolidated Interim Statement of Comprehensive Loss 
 
   United States $000s, unless otherwise stated 
 
 
 

 
                     Three months ended December  Twelve months ended December 
                                 31,                                       31, 
                         2016          2015           2016           2015 
 
Total revenue               2,730          3,101         11,750          4,637 
 
Operating expenses 
Production and 
 operating                  (923)          (569)        (3,371)        (3,214) 
General and 
 administrative           (1,264)        (2,035)        (5,397)        (6,367) 
Depreciation and 
 depletion                  (729)        (1,045)        (3,864)        (1,707) 
Share based 
 compensation               (121)          (173)          (592)          (767) 
Loss from operating         (307)          (721)        (1,474)        (7,418) 
 
Finance income              1,051          1,020          4,693          4,818 
Finance costs             (1,045)        (1,829)        (5,115)        (4,707) 
 
Loss before tax             (301)        (1,530)        (1,896)        (7,307) 
 
Deferred tax 
 (expense)/recovery         (121)         34,341        (3,196)         34,341 
 
Net (loss)/profit 
 and comprehensive 
 (loss)/profit              (422)         32,811        (5,092)         27,034 
 
Net (loss)/profit 
per ordinary share 
Basic and diluted 
 (US$/share)                    -           0.19         (0.03)           0.17 
 
   WENTWORTH RESOURCES LIMITED 
 
   Unaudited Condensed Consolidated Interim Statement of Changes in Equity 
 
   United States $000s, unless otherwise stated 
 
 
 
 
                 Number of      Share       Equity    Accumulated     Total 
                  shares       capital     reserve      deficit      equity 
                                  $           $            $            $ 
 
Balance at 
 December 31, 
 2014           154,122,700      404,225      24,916    (283,799)      145,342 
Net loss and 
 comprehensive 
 loss                     -            -           -       27,034       27,034 
Share based 
 compensation             -            -         767            -          767 
Issue of share 
 capital         15,412,269        7,639           -            -        7,639 
Share issue 
 costs                    -        (371)           -            -        (371) 
Balance at 
 December 31, 
 2015           169,534,969      411,493      25,683    (256,765)      180,411 
 
 
Balance at 
 December 31, 
 2015           169,534,969      411,493      25,683    (256,765)      180,411 
Net loss and 
 comprehensive 
 loss                     -            -           -      (5,092)      (5,092) 
Share based 
 compensation             -            -         592            -          592 
Balance at 
 December 31, 
 2016           169,534,969      411,493      26,275    (261,857)      175,911 
 
 
   WENTWORTH RESOURCES LIMITED 
 
   Unaudited Condensed Consolidated Interim Statement of Cash Flows 
 
   United States $000s, unless otherwise stated 
 
 
 
 
                                Three months ended       Twelve months ended 
                                      December 31,              December 31, 
                                 2016     2015         2016         2015 
Operating activities 
Net (loss)/profit for 
 the period                     (422)       32,811      (5,092)       27,034 
Adjustments for: 
Depreciation and 
 depletion                        729        1,045        3,864        1,707 
Finance (income)/costs, 
 net                              (6)          809          422        (111) 
Deferred tax 
 expense/(recovery)               121     (34,341)        3,196     (34,341) 
Share based compensation          121          173          592          767 
Change in non-cash 
 working capital              (1,371)        (348)      (2,506)          175 
Net cash (utilized 
 in)/generated from 
 operating activities           (828)          149          476      (4,769) 
 
Investing activities 
Acquisitions of 
 evaluation and 
 exploration assets             (736)          687      (2,371)     (10,299) 
Acquisitions of 
 property, plant and 
 equipment                    (2,338)        (692)      (2,347)     (12,926) 
Reductions of/(additions 
 to) long-term 
 receivable                     2,469          556       10,763      (1,116) 
Interest income                     -            7            -            7 
Net cash (used in)/from 
 investing activities           (605)          558        6,045     (24,334) 
 
Financing activities 
Proceeds from long-term 
 loan                               -            -            -       20,000 
Repayment of long-term 
 loan                         (1,000)            -      (5,333)            - 
Interest paid                   (214)        (243)      (2,073)        (906) 
Issue of share capital, 
 net of issue costs                 -            -            -        7,268 
Payment of other 
 liability                      (102)            -        (882)            - 
Net cash (used in)/from 
 financing activities         (1,316)        (243)      (8,288)       26,362 
 
 
Net change in cash and 
 cash equivalents             (2,749)          464      (1,767)      (2,741) 
Cash and cash 
 equivalents, beginning 
 of the period                  3,728        2,282        2,746        5,487 
Cash and cash 
 equivalents, end of the 
 period                           979        2,746          979        2,746 
 
 
   About Wentworth Resources 
 
   Wentworth Resources is a publicly traded (OSE:WRL, AIM:WRL), independent 
oil & gas company with: natural gas production; exploration and 
appraisal opportunities; and large-scale gas monetisation initiatives, 
all in the Rovuma Delta Basin of coastal southern Tanzania and northern 
Mozambique. 
 
   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 and 
Mozambique. 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. See 
Wentworth's Management's Discussion and Analysis for the year ended 
December 31, 2015, available on Wentworth's website, for further 
description of the risks and uncertainties associated with Wentworth's 
business. 
 
   Notice 
 
 
 
   Neither the Oslo Stock Exchange nor the AIM Market of the London Stock 
Exchange has reviewed this press release and neither accepts 
responsibility for the adequacy or accuracy of this press release. 
 
   This information is subject of the disclosure requirements pursuant to 
section 5-12 of the Norwegian Securities Trading Act. 
 
   This announcement contains inside information as defined in EU 
Regulation No. 596/2014 and is in accordance with the Company's 
obligations under Article 17 of that Regulation. 
 
   Q4 2016 MDA: http://hugin.info/136496/R/2082587/784880.pdf 
   Q4 2016 Financial Statements: 
http://hugin.info/136496/R/2082587/784879.pdf 
   2017 02 28 Press Release: http://hugin.info/136496/R/2082587/784845.pdf 
 
   This announcement is distributed by Nasdaq Corporate Solutions on behalf 
of Nasdaq Corporate Solutions clients. 
 
   The issuer of this announcement warrants that they are solely 
responsible for the content, accuracy and originality of the information 
contained therein. 
 
   Source: Wentworth Resources Limited via Globenewswire 
 
 
  http://www.wentworthresources.com/ 
 

(END) Dow Jones Newswires

February 28, 2017 02:00 ET (07:00 GMT)

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