TIDMWEN
RNS Number : 1660Q
Wentworth Resources PLC
17 June 2020
PRESS RELEASE 17 June 2020
WENTWORTH RESOURCES PLC
("Wentworth" or the "Company")
Operational Update
Wentworth Resources (AIM: WEN), the independent, East
Africa-focused natural gas company , is pleased to announce an
operational update ahead of its Annual General Meeting ("AGM") to
be held today. As previously announced and in light of the COVID-19
pandemic, shareholders (other than the minimum number required to
form a quorum, as arranged by the Company) will not be able to
attend the AGM in person and have been invited to submit questions
by email in advance. Following the conclusion of the AGM, an
Investor Presentation and Q&A answering the submitted questions
will be made available on the Company's website at
www.wentplc.com.
HIGHLIGHTS
2020 Operations and Outlook
-- The health and safety of our employees is the priority and
robust precautionary measures have been put in place to ensure the
continued safety of our staff; there have been no reported cases of
COVID-19 at Mnazi Bay
-- Mnazi Bay remains fully operational, with 2020 production
guidance remaining unchanged at 65-75 MMscf/day (gross)
-- Average daily production from 1 January 2020 to 31 May 2020 of 58.2 MMscf/day (gross)
-- Partnered with the Government of the United Republic of
Tanzania ("Government of Tanzania") to provide PPE, medical
supplies and equipment to hospitals in Mtwara and Dar es Salaam
-- The Government of Tanzania has re-opened business and travel within the country
-- Gas volumes expected to increase in H2 2020 now that the
rainy season has passed and COVID-19 restrictions in Tanzania have
been lifted
Financial
-- Debt free with $15.7 million cash on hand at end May 2020
-- Dividend of $2 million declared on 24 April 2020 payable by
the end of June 2020, bringing a total distribution in respect of
FY 2019 of US$3.0 million, representing an annual yield of 7.8%
based on the closing share price of 16 June 2020
-- Tanzania Petroleum Development Corporation ("TPDC") now fully
current with payments as of end May 2020
-- Tanzania Electric Supply Company ("TANESCO") expected to settle all remaining arrears
Sustainability
-- Wentworth is committed to being a long-term partner for
Tanzania and to deliver low-carbon, domestic energy supply growth
that will underpin the socio-economic development of the country in
the future
-- As a responsible business, Wentworth recognises the
importance of maintaining relationships with its stakeholders that
are based on trust, respect and transparency
-- Wentworth is committed to increasing its disclosure on its
business impact to align with international best practice
-- Work is underway to review Wentworth's current disclosure
frameworks and it looks forward to updating all stakeholders on
progress during H2 2020
Operations
Production over the period from 1 January to 31 May 2020
averaged 58.2 MMscf/day (gross). This period covers the traditional
rainy season when hydroelectric power displaces natural gas-powered
electricity generation, as well as the decreased industrial and
consumer demand as a result of the temporary Government
restrictions put in place to reduce the spread of COVID-19.
Demand in H2 2018 and H2 2019 was c.12% higher than H1 2018 and
H1 2019, respectively. Given this historical context, the expected
rebound in industrial customer demand from the lifting of COVID-19
restrictions, as well as the pick-up in volumes in June 2020,
management expects a significant increase in natural gas demand in
H2 2020. With no operational disruptions due to COVID-19, the
existing well stock at Mnazi Bay is strongly positioned to meet
this expected surge in demand.
As previously announced, the Mnazi Bay JV Partners have agreed
to a limited 2020 firm work programme totalling approximately $4.6
million net to Wentworth. This programme will ensure that Mnazi Bay
maintains well integrity and is primed to support the growing
in-country demand.
Financial
The Company continues to receive consistent monthly payments for
gas sales with TPDC now fully current. The Mnazi Bay Partners are
working with TANESCO to reach settlement of all outstanding
arrears. As previously announced, the Company repaid its term loan
in full on 31 January 2020 and is now debt-free. The Company's net
cash balance at 31 May 2020 was $15.7 million. In accordance with
the Company's sustainable dividend policy, established in 2019,
Wentworth declared its second interim dividend for 2019 in April
2020, which will be paid this month.
Sustainability
The power access gap in Tanzania is growing despite energy
supply increasing, with a reported access rate of only 32.7%,
leaving 7.7 million households without power. Transformational
growth is needed in domestic energy supply to deliver the
Government's target of universal access by 2030 through low-cost,
low carbon solutions, aligned with the UN's Sustainable Development
Goals.
Natural gas will play a critical role in meeting this target to
support cheaper and more reliable electricity as well as
facilitating an enabling environment for carbon-free renewable
energy systems, such as hydro and solar. Wentworth is committed to
being a long-term partner for Tanzania to deliver low-carbon,
domestic energy supply growth that will underpin the socio-economic
development of the country in the near and longer-term. This
commitment underscores our approach to responsible and sustainable
growth in Tanzania that creates shared value for all
stakeholders.
Understanding our business impact on employees, host communities
as well as society at large in Tanzania is critical to ensuring
that our business operates responsibly and aligns with societal
needs. The Company is undergoing a review to increase our
disclosure on our business impacts that aligns with global goals
and internationally recognised reporting frameworks. A further
update will be provided during H2 2020.
Katherine Roe, Chief Executive of Wentworth, said:
"The health and safety of our workforce across our assets and
offices is our priority and I'm grateful to the entire team for
their dedication and hard-work to ensure that our business can
continue to operate safely and seamlessly during this challenging
time. As a result of their efforts, we have seen no impact on
operational performance during the COVID-19 pandemic.
Despite these challenges and Tanzania-specific reduced demand
due to above average rainfall, Wentworth continues to demonstrate
business resilience with a strong balance sheet, and operational
readiness and flexibility.
Emerging from this pandemic, it will be critical for businesses
to be able to transparently demonstrate their impact on society as
well as their resilience to these types of economic shocks in the
future. We know that our business has a real opportunity to deliver
significant, positive change for the people of Tanzania through gas
to power and we are committed to increasing our disclosure on our
business risks and impacts to align Wentworth with international
best practice. The sustainability and ESG landscape is constantly
evolving, meaning that this will be an ongoing journey for
Wentworth and we look forward to updating you further on our
progress later in the year.
In the second half of 2020, we expect to supply increased gas
volumes now that the rainy season has passed and COVID-19
restrictions in Tanzania have been lifted. We look forward to
building on this foundation and remain committed to being a leading
player in Tanzania's energy growth and transition as it seeks to
deliver universal access in the country by 2030."
Enquiries: Katherine Roe, katherine.roe@wentplc.com
Wentworth Resources Chief Executive Officer +44 (0) 7841 087 230
AIM Nominated Adviser and Joint Broker
Callum Stewart
Ashton Clanfield
Stifel Nicolaus Europe Limited Simon Mensley +44 (0) 20 7710 7600
Joint Broker
Richard Crichton
Peel Hunt LLP Alexander Allen +44 (0) 20 7418 8900
Communications Adviser
Sara Powell
FTI Consulting Ben Brewerton +44 (0) 20 3727 1000
About Wentworth Resources
Wentworth Resources plc (AIM: WEN) is a leading, domestic
natural gas producer in Tanzania with a core producing asset at
Mnazi Bay in the onshore Rovuma Basin in 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.
-Ends-
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END
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