Wentworth Resources PLC Production Guidance and Operational Update (7992T)

TIDMWEN

RNS Number : 7992T

Wentworth Resources PLC

19 November 2019

PRESS RELEASE 19 November 2019

WENTWORTH RESOURCES PLC

("Wentworth" or the "Company")

Production Guidance and Operational Update

Wentworth (AIM: WEN), the AIM listed independent, East Africa-focused natural gas company announces the following operational update.

Highlights

   --     Average Q3 production of 77.93 MMscf/d 

-- Anticipated full year average daily Mnazi Bay production within guidance; range tightened to 68 - 72 MMscf/d from 60 - 75 MMscf/d

   --     Recompletion of MB-4 anticipated to offset production loss from MB-2 
   --     Maiden dividend paid in October 2019 
   --     Debt free expected in January 2020 

Mnazi Bay Operations

Average production for the ten months to 31 October 2019 was 70.35 MMscf/d gross, with full year production currently anticipated to be within the range of 68 - 72 MMscf/d. Q3 production averaged 77.93 MMscf/d; however, this was constrained by the MB-2 well being temporarily shut-in due to a rupture in the flowline between MB-2 and the MB-3 cluster.

The Mnazi Bay Joint Venture Partners ("JV Partners") are currently assessing all options for bringing the MB-2 well back online in a timely manner. In the interim, the JV Partners are planning the recompletion of the MB-4 well to the Lower Mnazi Bay sands. This will allow for production of c. 90 MMscf/d gross from the field, expected to commence in December, whilst the MB-2 repairs are ongoing, allowing the JV Partners to meet Tanzania's existing and growing demand for natural gas.

The Company expects to see production increase through the remainder of 2019, due to:

-- Increased utilisation of gas-to-power generation over hydro; and specifically, in relation to the Kinyerezi-1, Kinyerezi-2, and Ubungo II power stations;

-- Demand maintained from industrial customers such as Dangote Cement plant, which is currently using 15 MMscf/d and the Goodwill Ceramics Factory, which is currently using 5 MMscf/d; and

   --     Recompletion of the MB-4 well during the ongoing repairs to the MB-2 flowline. 

For 2020, the Company expects the Mnazi Bay Field to have increased deliverability as the JV Partners continue to execute on its field development and optimisation plans. The work programme anticipated during 2020 includes:

   --     Repairing the MB-2 flowline to restore production from the well (ongoing); 

-- Removing the plug from MB-4 to add production from the Lower Mnazi Bay sands (late Nov - Dec); and

   --     Replacing the chokes on the MB-2, MB-3, MB-4 and MS-1X wells in Q1 2020. 

This minimal capex programme will allow the field to meet the increased demand that is expected once the Kinyerezi-1 extension is completed and commissioned, expected, mid-late 2020.

The Company also continues to receive consistent monthly payments from both Tanzanian Petroleum Development Company ("TPDC") and Tanzania Electric Supply Company Limited ("TANESCO"), with receivables from TPDC now standing at one month. As previously announced, the Company anticipates being debt free in Q1 2020 with its final debt repayment of $1.67 million due in January 2020. The Company's gross cash balance at 31 October 2019 was c.$14 million.

Katherine Roe, Interim CEO and CFO, commented:

"We have established a highly robust operational and commercial foundation for the business. We are working well with our JV Partners to ensure we achieve optimal field management and are fully aligned with our Operator on remedial works for MB-2 and recompletion plans for MB-4. Stable production from the field to meet existing and growing demand is allowing the JV Partners to anticipate higher production levels into 2020 and we will look to provide full year 2020 production guidance early in the new year. Receivables are now the lowest the JV Partners have experienced since production into the transnational pipeline began. With a near debt free position, growing cash balance, a maiden dividend paid last month and a simplified corporate platform, Wentworth is in robust financial health and well positioned to meet the increasing demand we foresee in Tanzania."

 
Enquiries: 
 Wentworth                         Katherine Roe,                             [e-mail] 
                                   Interim CEO and Chief Financial Officer    [phone] 
                                 Nominated Adviser and Joint Broker 
                                  Callum Stewart 
                                  Ashton Clanfield 
Stifel Nicolaus Europe Limited    Simon Mensley                                [phone] 
                                 Joint Broker 
                                  Richard Crichton 
 Peel Hunt LLP                    James Bavister                              [phone] 
                                 Investor Relations Adviser 
                                  Patrick d'Ancona 
 Vigo                             Chris McMahon                               [phone] 
 

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.

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.

-Ends-

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November 19, 2019 02:00 ET (07:00 GMT)