TIDMWEN
RNS Number : 8800X
Wentworth Resources PLC
03 September 2020
PRESS RELEASE 3 September 2020
WENTWORTH RESOURCES PLC
("Wentworth" or the "Company")
Interim Results for the six months ended 30 June 2020
Wentworth Resources (AIM: WEN), the independent,
Tanzania-focused natural gas production company , is pleased to
announce its interim financial results for the six months ended 30
June 2020. All dollar values are expressed in US dollars unless
stated otherwise.
HIGHLIGHTS
2020 Outlook
-- The health and safety of our employees is our priority and
robust precautionary measures remain in place to ensure the
continued safety of our staff; there have been zero reported cases
of COVID-19 at Mnazi Bay
-- Mnazi Bay remains fully operational, with no adverse impact on supply from the pandemic
-- Marginal decline in industrial demand due to weakened
activity as a result of COVID-19 with 2020 production guidance
slightly adjusted to 60-70 MMscf/day (gross)
-- Tanzania's economy has remained resilient with recent data
from the African Development Bank suggesting Tanzania's projected
GDP growth in 2020 is set to be the highest in the East Africa
region at 5.2%
-- Production volumes are expected to be typically higher in H2
2020 than H1 2020 due to the end of the rainy season and the
lifting of COVID-19 restrictions in Tanzania
-- Mnazi Bay is well-positioned to supply increased gas volumes
and support demand growth in H2 2020 and into 2021 with the
capacity to supply volumes of 100 MMscf/day (gross)
Financial
-- Interim dividend of $1.2 million declared, an increase of 20%
from H1 2019 ($1.0 million), bringing the total dividend
distribution declared in the last 12 months to $4.2 million
-- Revenues of $8.3 million, underpinned by long-term fixed
price contracts with the Government of the United Republic of
Tanzania
-- Adjusted EBITDAX of $4.1 million (H1 2019: $3.3 million)
-- Debt free with $16.7 million cash on hand at 2 September 2020
-- Tanzania Petroleum Development Corporation ("TPDC") now fully current with payments
-- Continued commitment from Tanzania Electric Supply Company
("TANESCO") to settle all remaining arrears with payments resuming
in August
Operational
-- Adjusted production guidance range of 60-70 MMscf/day (gross)
-- 58.28 MMscf/day (H1 2019: 66.17 MMscf/day) for the period to
30 June 2020 following weakened demand due to COVID-19 related
restrictions in March and April and an extended rainy season in
January and June (normally March to late May)
-- Industrial demand now recovering after the lifting of
COVID-19 restrictions and natural gas-fired electricity generation
displacing hydro-electric power due to the onset of the dry season.
Proportion of supply to Tanzania's national grid provided by
natural gas increased from 47% to currently 60%. Production
averaged 68.48 MMscf/day for the period 1 July 2020 to 31 August
2020 and 71.77 MMscf/day for the period 1 August 2020 to 31 August
2020
-- Low operational cost of production of $1.72/Mscf (2019: $1.88/Mscf)
-- 2P Reserves of 95 Bscf, valued at $118.6 million (post-tax
NPV10) as at 31 December 2019 as per published RPS Reserves
Assessment Report
Sustainable Growth
-- Wentworth remains focused on identifying sustainable and
responsible growth opportunities that create value for Tanzania,
Wentworth and all its stakeholders
-- With an energy access rate of only 37% according to the IEA,
population growth set to double by 2050 and an economy shifting
from an agricultural to an industrial base, there is a real need
for transformational growth in Tanzania's domestic energy supply to
deliver universal access by 2030
-- Wentworth's robust gas-to-power production platform is
well-positioned to service this future demand growth and we are
committed to growing our platform responsibly to support demand
growth in Tanzania and protect returns for shareholders
Dividend
A dividend is declared of GBP 0.48 pence per share (US$1.2
million), payable by the end of October 2020. A final dividend for
the year ending 31 December 2020 will be determined by the Board
with the full year results and is expected to be approximately $2.4
million in line with the Company's stated policy of 1/3 : 2/3 split
between the interim and final dividend. Assuming a final dividend
is declared, subject to shareholder approval, this would equate to
a total distribution of $3.6 million which represents a full year
dividend of 1.43 pence per share, a yield of approximately 8.2% at
the current share price. Shareholders who hold their shares on the
VPS Register on the Record Date shall receive the dividend in NOK.
The exchange rate shall be determined on the UK Payment Date and
the Company shall inform VPS Shareholders as soon as practicable
thereafter of the NOK sum per share they will receive which shall
be settled on the VPS Payment Date.
Interim Dividend Payment Timetable:
-- Ex-dividend date: 10 September 2020
-- Record Date: 11 September 2020
-- UK Payment Date (for shareholders who hold shares on the UK Register): 9 October 2020
-- VPS Payment Date (for shareholders who hold shares on the VPS Register): 23 October 2020
Interim Results Analyst Conference Call
The Company is holding a conference call for analysts at 9:30am
BST today, Thursday 3 September 2020 and an updated presentation
will be available at that time on the Company's website:
wentplc.com .
To register for the call, please click on the following
link:
https://secure.emincote.com/client/wentworth/wentworth005/vip_connect
To view the presentation during the call, please click on the
following link:
https://secure.emincote.com/client/wentworth/wentworth005
Katherine Roe, CEO, commented:
"Despite a challenging macroeconomic environment due to the
ongoing impacts of the COVID-19 pandemic, Wentworth has continued
to demonstrate business resilience, robust financial and
operational performance which has underpinned our decision to
increase our interim dividend.
Having only launched our sustainable dividend policy in Q3 2019,
we're delighted to have now declared three dividend payments within
the last twelve months returning $4.2m in total to shareholders.
This latest interim dividend also represents a 20% increase
year-on-year from our inaugural dividend in September last year and
demonstrates how our sustainable business model can withstand these
global economic shocks.
Looking ahead to the second half of 2020, with Tanzania now
returning gradually to business-as-usual and following
unprecedentedly high levels of rainfall in the H1 2020, we expect
to see an increase in demand for natural gas during the remaining
part of this year.
Responsible and sustainable growth that creates value for all
our stakeholders remains our priority. We are proud to be a
Tanzanian business that is committed to playing a leading role in
closing the country's energy access gap through low-carbon
solutions as it seeks to deliver universal access by 2030. Through
the provision of reliable, affordable and low-carbon power we have
a significant opportunity to deliver transformational change for
the people of Tanzania and to support the ongoing socio-economic
development of the country. "
Enquiries:
Wentworth Katherine Roe, katherine.roe@wentplc.com
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 Ben Brewerton +44 (0) 20 3727 1000
About Wentworth Resources
Wentworth Resources plc (AIM-listed: 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.
The power demand base in-country is growing and with an
ambitious universal energy access target set by the Government for
2030, Wentworth has a vital role to play in increasing access by
ensuring a reliable, affordable and growing supply of natural gas
into the local market.
In 2019, Wentworth launched its dividend policy and remains
committed to responsible growth that maintains returns for
shareholders.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE
INCOME
Six months ended 30 June
2020 2019
(unaudited) (unaudited)
Note $000 $000
------------- -------------
Total revenue 8,313 8,018
Production and operating costs (1,734) (1,772)
Depletion 8 (2,616) (2,843)
------------------------------------- ------ ------------- -------------
Total cost of sales (4,350) (4,615)
Gross profit 3,963 3,403
Recurring administrative costs 4 (2,527) (2,963)
New venture and pre-licence costs (94) (498)
Share-based payment charges 15 (137) (243)
Depreciation 8 (2) (8)
Total costs (2,760) (3,712)
Profit/(loss) from operations 1,203 (309)
Finance income 5 91 134
Finance costs 5 (78) (559)
------------------------------------- ------ ------------- -------------
Profit/(loss) before tax 1,216 (734)
Current tax expense (15) (11)
Deferred tax expense (187) 587
------------------------------------- ------ ------------- -------------
(202) 576
Net and comprehensive profit/(loss)
after tax 1,014 (158)
Net profit per ordinary share
Basic and diluted (US$/share) 17 0.005 -
------------------------------------- ------ ------------- -------------
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL
POSITION
30 June 31 December
2020 2019
(unaudited) (audited)
Note $000 $000
----------------------------------- ------
ASSETS
Current assets
Cash and cash equivalents 14,182 13,487
Trade and other receivables 6 4,483 6,075
18,665 19,562
----------------------------------- ------ -------------
Non-current assets
Exploration and evaluation assets 7 8,129 8,129
Property, plant and equipment 8 74,970 77,559
Deferred tax asset 5,361 5,548
----------------------------------- ------ ------------- ------------
88,460 91,236
----------------------------------- ------ ------------- ------------
Total assets 107,125 110,798
----------------------------------- ------ ------------- ------------
LIABILITIES
Current liabilities
Trade and other payables 10 1,069 2,125
Current portion of term loans 12 - 1,714
1,069 3,839
----------------------------------- ------ -------------
Non-current liabilities
Decommissioning provision 13 1,150 1,085
----------------------------------- ------
1,150 1,085
----------------------------------- ------ ------------- ------------
Equity
Share capital 16 416,426 416,426
Equity reserve 26,788 26,651
Accumulated deficit (338,308) (337,203)
----------------------------------- ------ ------------- ------------
104,906 105,874
----------------------------------- ------ ------------
Total liabilities and equity 107,125 110,798
----------------------------------- ------ ------------- ------------
The condensed consolidated financial statements of Wentworth
Resources plc, registered number 127571 were approved by the Board
of Directors and authorised for issue on 2 September 2020.
Signed on behalf of the Board of Directors
Katherine Roe
Chief Executive Officer
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN
EQUITY
Number of Share Equity Accumulated Total
Note shares capital reserve deficit equity
$000 $000 $000 $000
------------------------------- ------ --------------------------- ----------------- --------- ------------- --------
Balance at 31 December
2018 (audited) 186,488,465 416,426 26,588 (338,536) 104,478
Dividends 18 - - - (1,033) (1,033)
Net profit and comprehensive
profit - - - 2,366 2,366
Share based compensation 15 - - 63 - 63
------------------------------- ------ ---------------------------
Balance at 31 December
2019 (audited) 186,488,465 416,426 26,651 (337,203) 105,874
Dividends 18 - - - (2,119) (2,119)
Net profit and comprehensive
profit - - - 1,014 1,014
Share based compensation 15 - - 137 - 137
------------------------------- ------ --------------------------- ----------------- --------- ------------- --------
Balance at 30 June 2020
(unaudited) 186,488,465 416,426 26,788 (338,308) 104,906
------------------------------- ------ --------------------------- ----------------- --------- ------------- --------
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
Six months ended
30 June
2020 2019
(unaudited) (unaudited)
Note $000 $000
-------------------------------------------- ------
Operating activities
Net profit/(loss) for the year 1,014 (158)
Adjustments for:
Depreciation and depletion 8 2,618 2,851
Net finance (income)/costs 5 (13) 425
Deferred tax 187 (587)
Share based compensation 15 137 243
3,943 2,774
Change in non-cash working capital:
Trade and other receivables 1,593 (5,038)
Trade and other payables (1,056) (125)
-------------------------------------------- ------
Net cash generated from/(utilised in)
operating activities 4,480 (2,389)
Investing activities
Interest received 65 -
Additions to property, plant and equipment 8 (29) (21)
Reduction of long-term receivable - 4,737
36 4,716
Change in non-cash working capital - 311
-------------------------------------------- ------ ------------- -------------
Net cash from investing activities 36 5,027
Financing activities
Principal term loan repayments 12 (1,663) (3,330)
Interest on term loan 12 (39) (387)
Interest/renewal fee on overdraft facility 11 - (18)
Payment of contingent PTTEP liability - (848)
Dividends paid 18 (2,119) -
-------------------------------------------- ------
Net cash used in financing activities (3,821) (4,583)
-------------------------------------------- ------ ------------- -------------
Net change in cash and cash equivalents 695 (1,945)
Cash and cash equivalents, beginning
of the period 13,487 11,903
Cash and cash equivalents, end of the
period 14,182 9,958
-------------------------------------------- ------ ------------- -------------
1. Incorporation and basis of preparation
Wentworth Resources PLC ("Wentworth" or the "Company") is an
East Africa-focused upstream oil and natural gas company. These
unaudited condensed consolidated interim financial statements
include the accounts of the Company and its subsidiaries
(collectively referred to as "Wentworth Group of Companies" or the
"Group"). The Company is actively involved in oil and gas
exploration, development and production operations. Wentworth is
incorporated in Jersey and shares of the Company as at 30 June 2020
were listed on the AIM Market of the London Stock Exchange (ticker:
WEN).
The Company's principal place of business is located at 4th
Floor, St Paul's Gate, 22-24 New Street, Jersey JE1 4TR.
The Company maintains offices in Dar es Salaam, United Republic
of Tanzania and London, United Kingdom.
2. Summary of significant accounting policies
Use of judgements and estimates
In preparing these interim financial statements, management has
made judgements and estimates that affect the application of
accounting policies and the reported amounts of assets and
liabilities, income and expenses. Actual results may differ from
these estimates.
The significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation
uncertainty were the same as those described in the 2019 annual
report and financial statements.
Going concern
With the world currently struggling to come to terms with the
unprecedented events of the Covid-19 pandemic and the risk
presented to the continued health and well-being of our workforce
alongside the disruption that preventative measures have had on the
global supply chain in placing restrictions on the transportation
of goods, services and personnel set to continue for some time to
come, considerable time and resource have been allocated by
Directors and senior management in ensuring that Wentworth is best
placed to be able to continue to safely produce gas from Mnazi Bay
alongside the Operator, Maurel et Prom. Given the essential nature
of services provided and the forecasted impact of the virus in the
country, the Group notes that an interruption of production and
unavailability of key workforce is remote. The Directors however
are mindful of the speed with which circumstances may change, both
for the better or for the worse, and all modelling is based on
information that we currently have available to us.
The Group has a long established and collaborative relationship
with the Government of the United Republic of Tanzania, having
operated in-country for many years, however the Directors do
recognise that the Group is dependent upon the continued collection
of gas sales invoices and ongoing operational support of the
Government as its sole gas sales customer through its operating
agencies TPDC and TANESCO.
The Directors have, therefore, judged that on a risk-weighted
basis which takes into consideration both the probability of
occurrence and an estimate of the financial impact, the continued
timely settlement of gas-sales invoices by the Government of the
United Republic of Tanzania continues to be the most significant
risk currently faced by the Group. To this end, should no
settlement of future gas sales invoices be received from the date
of approval of these financial statements, we have assessed that
the Group would be able to continue to operate for a period of up
to 12-months without the need for a further injection of working
capital.
Further to this, based on the application of reasonable and
foreseeable sensitivities, which include potential changes in
demand, capital spend, operating costs, the Directors believe that
the Group is well placed to manage its financial exposures. The
Directors have judged that owing to a combination of the stability
of this relationship which has seen payment terms continue to
improve during H1 2020 and its much improved financial position
having fully repaid all of its fixed-term debt in January 2020, the
Group has sufficient cash resources for its working capital needs,
committed capital and operational expenditure programmes for at
least the next 12-months based on the Directors' worst case
scenario of no settlement of future gas sales as noted above.
The Directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the
foreseeable future and therefore continue to adopt the going
concern basis of accounting in preparing the annual financial
statements.
Basis of presentation and statement of compliance
These unaudited condensed consolidated interim financial
statements have been prepared by management in accordance with
International Accounting Standard 34, "Interim Financial
Reporting". The preparation of interim financial statements
requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expenses. Actual
results may differ from these estimates.
These unaudited condensed consolidated interim financial
statements have been prepared following the same accounting
policies as the annual audited consolidated financial statements
for the year ended 31 December 2019 and should be read in
conjunction with the annual audited consolidated financial
statements and the notes thereto. These unaudited condensed
consolidated interim financial statements were approved by the
Board of Directors on 2 September 2020. The disclosures provided
below are incremental to those included in the 2019 annual
consolidated financial statements.
The information for the year ended 31 December 2019 included in
the report was derived from the statutory accounts for that year
which were prepared in accordance with International Financial
Reporting Standards ('IFRSs') issued by the International
Accounting Standards Board and interpretations issued by the
International Financial Reporting Interpretations committee
('IFRIC') of the IASB as adopted by the EU up to 31 December 2019,
a copy of which has been delivered to the Registrar of Companies.
The auditor's opinion in relation to those accounts was
unqualified, did not draw attention to any matters by way of
emphasis and also did not contain a statement under section 498 (2)
or 498 (3) if the Companies Act 2006.
Functional and presentation currency
These consolidated financial statements are presented in US
dollars which is the functional currency the majority of the
Group.
Basis of consolidation
These unaudited condensed consolidated interim financial
statements include the accounts of the Company and its
subsidiaries. Subsidiaries are entities that the Company controls.
An investor controls an investee when it is exposed, or has rights,
to variable returns from its involvement with the investee and can
affect those returns through its authority over the investee. The
existence and effect of potential voting rights are considered when
assessing whether a company controls another entity. Subsidiaries
are fully consolidated from the date on which control is
transferred to the Company. They are deconsolidated from the date
that control ceases.
The following legal entities are within the Wentworth Group of
companies:
Legal entity Registered Holdings Functional
at currency
30 June 2020
Wentworth Resources plc Jersey Ultimate US dollar
Parent
----------- -------------- -----------
Wentworth Resources (UK) Limited United 100% GBP
Kingdom
----------- -------------- -----------
Wentworth Holdings (Jersey) Jersey 100% US dollar
Limited
----------- -------------- -----------
Wentworth Tanzania (Jersey) Jersey 100% US dollar
Limited
----------- -------------- -----------
Wentworth Gas (Jersey) Limited Jersey 100% US dollar
----------- -------------- -----------
Wentworth Gas Limited Tanzania 100% US dollar
----------- -------------- -----------
Cyprus Mnazi Bay Limited Cyprus 39.925% US dollar
----------- -------------- -----------
Wentworth Mozambique (Mauritius) Mauritius 100% US dollar
Limited
----------- -------------- -----------
Wentworth Moçambique Mozambique 100% US dollar
Petroleos, Limitada (1)
----------- -------------- -----------
(1) The Wentworth Moçambique Petroleos, Limitada is in the
process of voluntary liquidation after relinquishment of the Tembo
Block Appraisal Licence.
All inter- company transactions, balances and unrealized gains
on transactions between the parent and subsidiary companies are
eliminated on consolidation.
Changes in accounting policies
The following accounting standards, amendments and
interpretations, which had no significant impact on these financial
statements, became effective in the current reporting period on
adoption by the EU through the European Financial Reporting
Advisory Group ('EFRAG'):
IFRS 3 (amendments) 'Definition of a Business': The IASB
effective date is 1 January 2020 and the amendment is yet to be
endorsed by the EU. The amendment provides clearer application
guidance to help companies distinguish between a business and a
group of assets when applying IFRS 3 'Business Combinations'. The
amendment also clarifies that applying the classification of a
business would not be appropriate if substantially all of the fair
value of the gross assets acquired is concentrated in a single
identifiable asset or group of similar identifiable assets. This
amendment is not expected to have an impact on the Group's
consolidated financial statements.
IAS 1 and IAS 8 (amendments) 'Definition of Material': The IASB
effective date is 1 January 2020 and the amendment has been
endorsed by the EU. The amendment revises the definition of
material stating that 'information is material if omitting,
misstating or obscuring it could reasonably be expected to
influence the decisions that the primary users of general purpose
financial statements make on the basis of those financial
statements, which provide financial information about a specific
reporting entity'. This amendment is not expected to have an impact
on the Group's consolidated financial statements.
IFRS 9, IAS 39 and IFRS 7 (amendments) 'Interest Rate Benchmark
Reform': The IASB effective date is 1 January 2020 and the
amendment has been endorsed by the EU. The amendment requires that
for interest rate hedges affected by Interbank Offered Rate
('IBOR') reform, the interest rate benchmark is not altered when
considering whether a forecast transaction is highly probable, or
whether there is an economic relationship between the hedged cash
flow and the hedging instrument. This would apply for a limited
period until there is no longer uncertainty relating to IBOR
reform. This amendment is not expected to have an impact on the
Group's consolidated financial statements.
Future accounting pronouncements
At the date of these financial statements the standards and
interpretations listed below were issued but not yet effective. The
adoption of these standards may result in future changes to
existing accounting policies and disclosures. The Company is
currently evaluating the impact that these standards will have on
results of operations and financial position:
IFRS 17 'Insurance Contracts': The IASB effective date is 1
January 2021 and the standard is yet to be endorsed by the EU. IFRS
17 will replace IFRS 4 'Insurance Contracts' and applies to all
types of insurance contracts as well as to certain guarantees and
financial instruments with discretionary participation features.
This standard is not expected to have an impact on the Group's
consolidated financial statements.
3. Segment information
Net income/(loss) for the six months ended 30 June 2020
Tanzania Operations
(unaudited) Corporate Consolidated
$000 (unaudited) (unaudited)
$000 $000
-------------------------------- -------------------- ----------------- --------------
Total revenue 8,313 - 8,313
Production and operating
costs (1,734) - (1,734)
Depletion (2,616) - (2,616)
-------------------------------- -------------------- ----------------- --------------
Total cost of sales (4,350) - (4,350)
Gross profit 3,963 - 3,963
Recurring administrative
costs (1,033) (1,494) (2,527)
New venture and pre -
licence costs - (94) (94)
Share-based payment charges (36) (101) (137)
Depreciation (2) - (2)
Total costs (1,071) (1,689) (2,760)
Profit/(loss) from operations 2,892 (1,689) 1,203
Finance (costs)/income (55) 68 13
-------------------------------- -------------------- ----------------- --------------
Profit/(loss) before
tax 2,837 (1,621) 1,216
Current tax expense (15) - (15)
Deferred tax expense (187) - (187)
-------------------------------- -------------------- ----------------- --------------
Net and comprehensive
Profit/(loss) from continued
operations 2,635 (1,621) 1,014
-------------------------------- -------------------- ----------------- --------------
Net income/(loss) for the six months ended 30 June 2019
Tanzania Operations
(unaudited) Corporate Consolidated
$000 (unaudited) (unaudited)
$000 $000
-------------------------------- -------------------- ----------------- --------------
Total revenue 8,018 - 8,018
Production and operating
costs (1,772) - (1,772)
Depletion (2,843) - (2,843)
-------------------------------- -------------------- ----------------- --------------
Total cost of sales (4,615) - (4,615)
Gross profit 3,403 - 3,403
Recurring administrative
costs (980) (1,983) (2,963)
New venture and pre
- licence costs - (498) (498)
Share-based payment
charges (4) (239) (243)
Depreciation (7) (1) (8)
Total costs (991) (2,721) (3,712)
Profit/(loss) from operations 2,412 (2,721) (309)
Finance costs (271) (154) (425)
-------------------------------- -------------------- ----------------- --------------
Profit/(loss) before
tax 2,141 (2,875) (734)
Current tax expense - (11) (11)
Deferred tax expense 587 - 587
-------------------------------- -------------------- ----------------- --------------
- (11) 576
-------------------------------- -------------------- ----------------- --------------
Net and comprehensive
Profit/(loss) from continued
operations 2,728 (2,886) (158)
-------------------------------- -------------------- ----------------- --------------
Selected balances at 30 June 2020
Mozambique
Operations
Tanzania (Discontinued)
Operations
(unaudited) (unaudited) Corporate Consolidated
$000 $000 (unaudited) (unaudited)
$000 $000
---------------------------- ---------------- ---------------- -------------- ----------------
Current assets 6,613 118 11,934 18,665
Exploration and evaluation
assets 8,129 - - 8,129
Property, plant and
equipment 74,968 - 2 74,970
Deferred tax asset 5,361 - - 5,361
---------------------------- ---------------- ---------------- -------------- ----------------
Total assets 95,071 118 11,936 107,125
---------------------------- ---------------- ---------------- -------------- ----------------
Current liabilities 462 - 607 1,069
Non-current liabilities 1,150 - - 1,150
---------------------------- ---------------- ---------------- -------------- ----------------
Total Liabilities 1,612 - 607 2,219
---------------------------- ---------------- ---------------- -------------- ----------------
Capital additions for the six months ended 30 June 2019
Additions to property,
plant
and equipment 29 - - 29
------------------------ --------------- ---- ---
Selected balances at 30 June 2019
Mozambique
Operations
Tanzania (Discontinued)
Operations
(unaudited) (unaudited) Corporate Consolidated
$000 $000 (unaudited) (unaudited)
$000 $000
---------------------------- ---------------- ---------------- -------------- ------------------
Current assets 18,315 233 4,192 22,740
Exploration and evaluation
assets 8,129 - - 8,129
Property, plant and
equipment 80,943 - 4 80,947
Deferred tax asset 4,623 - - 4,623
---------------------------- ---------------- ---------------- -------------- ----------------
Total assets 112,010 233 4,196 116,439
---------------------------- ---------------- ---------------- -------------- ----------------
Current liabilities 10,173 211 465 10,849
Non-current liabilities 1,027 - - 1,027
---------------------------- ---------------- ---------------- -------------- ----------------
Total Liabilities 11,200 211 465 11,876
---------------------------- ---------------- ---------------- -------------- ----------------
Capital additions for the six months ended 30 June 2019
Additions to property,
plant
and equipment 19 - 2 21
------------------------ --------------- ---- ---
4. General and administrative costs
Six months ended 30 June
2020 2019
(unaudited) (unaudited)
$000 $000
------------- -------------
Employee salaries and benefits 903 986
Contractors and consultants 524 535
Travel and accommodation 71 123
Professional, legal and advisory 232 530
Office and administration 255 323
Corporate and public company costs 542 466
------------- -------------
Total g eneral and administrative costs 2,527 2,963
5. Finance income and finance costs
Six months ended 30 June
2020 2019
(unaudited) (unaudited)
$000 $000
------------- -------------
Finance income
Interest received 66 -
Finance costs amortization 25 134
91 134
------------- -------------
Finance costs
Accretion - decommissioning provision (65) (58)
Interest expense (13) (343)
Foreign exchange loss - (158)
(78) (559)
------------- -------------
Net finance income/(costs) 13 (425)
------------- -------------
6. Trade and other receivables
Balance at Balance at
30 June 2020 31 December 2019
(unaudited) (audited)
Trade receivable from TPDC 2,347 4,014
Other receivable from TPDC 73 513
Trade receivable from TANESCO 922 789
Dissenting Shareholders 282 -
Other receivables 859 759
-------------- ------------------
4,483 6,075
-------------- ------------------
The other receivable from TPDC represents income tax $73k (2019:
$513k) paid by Wentworth Gas Limited, a wholly owned subsidiary of
the Company. The income tax will be recovered from TPDC profit gas
(security revenue) through future gas sales.
Subsequent to 30 June 2020, the Group has received total
payments of $3.85 million from TPDC and $147k from TANESCO,
significantly reducing the receivables balance at 2 September
2020.
Other receivables include $360k of VAT receivable and $437k of
prepayments and accrued income.
Amounts receivable with respect to dissenting shareholder rights
represent the agreed buy-back of shares from certain Norwegian
shareholders on the 2018 corporate transition to UK and Oslo Børs
delisting, further details of which are disclosed in notes 10 and
16.
7. Exploration and evaluation assets
$000
------
Balance at 31 December 2019 (audited)
and 30 June 2020 (unaudited) 8,129
------
Exploration costs comprise the acquisition and interpretation of
3D Seismic 225 Km(2) and 2D High Resolution Seismic 281 Km(2) at
Mnazi Bay.
There have been no indicators of impairment during the period
and as such no full impairment review has been undertaken.
8. Property, plant and equipment
Natural gas properties Office and other equipment
Total
$000 $000 $000
----------------------- ------------------------------------ --------
Cost
Balance at 31 December 2019 (audited) 104,046 608 104,654
Additions 29 - 29
Balance at 30 June 2020 (unaudited) 104,075 608 104,683
----------------------- ------------------------------------ --------
Accumulated depreciation and depletion
Balance at 31 December 2019 (audited) (26,490) (605) (27,095)
Depletion (2,616) - (2,616)
Depreciation (2) - (2)
Balance at 30 June 2020 (unaudited) (29,108) (605) (29,713)
--------- ------ ---------
Carrying amounts
31 December 2019 (audited) 77,556 3 77,559
30 June 2020 (unaudited) 74,967 3 74,970
There have been no indicators of impairment during the period
and as such no full impairment review has been undertaken
9. Subsidiary undertakings
The principal subsidiary undertakings at 30 June 2020 are:
Name of Company Country Class Types Percentage Nature
of incorporation of shares of ownership holding of business
held
-------------------------- ------------------ ----------- -------------- ----------- -------------
Wentworth Resources United Kingdom Ordinary Direct 100% Investment
(UK) Limited holding
company
Wentworth Holdings Jersey Ordinary Direct 100% Investment
(Jersey) Limited holding
company
Wentworth Tanzania Jersey Ordinary Indirect 100% Investment
(Jersey) Limited holding
company
Wentworth Gas (Jersey) Jersey Ordinary Indirect 100% Investment
Limited holding
company
Wentworth Gas Limited Tanzania Ordinary Indirect 100% Exploration
production
company
Cyprus Mnazi Bay Limited Cyprus Ordinary Indirect 39.925% Exploration
production
company
Wentworth Mozambique Mauritius Ordinary Indirect 100% Investment
(Mauritius) Limited holding
company
Wentworth Moçambique Mozambique Ordinary Indirect 100% Exploration
Petroleos, Limitada company
(1)
(1) The Wentworth Moçambique Petroleos, Limitada is in the
process of liquidation after relinquishment of the Tembo Block
Appraisal Licence.
10. Trade and other payables
Balance at Balance at
30 June 2020 31 December 2019
(unaudited) (audited)
$000 $000
Payable to Mnazi Bay Operator 291 1,303
Trade payables 186 150
Provision for Dissenting 282 -
Shareholders
Other payables and accrued
expenses 310 672
1,069 2,125
-------------- ------------------
The payable to Mnazi Bay Operator represents the accrued Q2 2020
joint-venture cash-call for field costs between 1 April and 30 June
2020 totalling $791k of which $500k was paid to the Operator in
advance and $291k was settled on its due date of 24 July 2020.
Following the completion of the corporate transition to UK and
Oslo Børs delisting, three shareholders exercised certain Dissent
Rights under Canadian law which may require the Company to buy back
their equity holdings at fair value. The Company received Dissent
Rights notices over a total of 2,329,326 shares with an anticipated
fair value of $696,519 after adjusting for dividends that had been
paid to those shareholders. $281,666 of the $696,519 has been
agreed and will be settled. This amount has been provided for in
full within these financial statements. The further $414,853
remains under dispute and subject to further negotiation and has
therefore been classified as a contingent liability per note
14.
11. Overdraft credit facility
The Company has a rolling one-year, $2.5 million overdraft
credit facility with a United Republic of Tanzania Government owned
bank which is in the process of being renewed for a further 12
months to 5 April 2021 subject to the mutual agreement of the bank
and the Company. The overdraft facility has an interest rate of the
lender's base lending rate, minus 1% per annum to be paid
monthly.
The credit facility, which was fully repaid on 9 July 2018, was
not drawn-down at the period ended 30 June 2020.
Security provided to the lender includes a debenture over the
fixed and floating assets of the Company's United Republic of
Tanzania assets and a deed of assignment of 20% of the revenue and
cash flow from sales of natural gas from the United Republic of
Tanzania assets.
12. Long term loan
Credit facility from United Republic of Tanzania based banks
On 8 December 2014, Wentworth Gas Limited, a wholly owned
subsidiary of the Company, entered into a $20.0 million loan to
finance field infrastructure development within the Mnazi Bay
Concession in the United Republic of Tanzania.
The term of the loan was initially forty-eight months in
duration commencing on the first draw-down date with the loan
bearing interest at six-month LIBOR rate plus 750 basis points,
subject to a minimum (floor) of 8% p.a. and a maximum (ceiling) of
9.5% p.a. Security was in the form of a debenture creating first
ranking charge over all the assets of WGL (assets of WGL include a
25.4% participation interest in the Mnazi Bay Concession),
assignment over any TPDC long-term receivable and assignment of
revenues generated from the Mnazi Bay Concession.
During 2017, the Company executed amendments to the credit
facility agreement, which included the restructuring of principal
loan repayments and added provisions. The new provisions contained
a requirement for the Company to maintain two financial covenants,
the Debt Service Coverage Ratio and Loan Life Coverage Ratio, both
calculated semi-annually beginning on 30 June and 31 December. The
interest rate was amended to the interest rate of six-month LIBOR
rate plus 750 basis points subject to a minimum (floor) of 8.5%
p.a. and no maximum (ceiling).
On 30 January 2020 the final principal repayment of $1,663k was
made.
$000
--------
Balance as at 31 December 2019 (audited) 1,714
Proceeds from loan -
Loan repayment (1,663)
--------
Total changes from financing cash flows (1,663)
--------
Interest expense 13
Interest paid (39)
Finance cost accretion (25)
--------
Total other charges (51)
--------
Balance as at 30 June 2020 (unaudited) -
--------
During the six months period ended 30 June 2020, the Company
incurred interest expense on long-term loan, inclusive of accretion
of financing costs, of $(12k) (2019: $209k). A total of $39k was
settled in cash (2019: $387k).
13. Decommissioning and Abandonment provision
A reconciliation of the decommissioning obligations is provided
below:
Balance at Balance at
30 June 2020 31 December 2019
(unaudited) (audited)
$000 $000
-------------- ------------------
Balance at 1 January 1,085 969
Accretion 65 116
Balance at 30 June and 31 December 1,150 1,085
-------------- ------------------
14. Contingent liabilities
Following the completion of the corporate transition to UK and
Oslo Børs delisting, three shareholders exercised certain Dissent
Rights under Canadian law which may require the Company to buy back
their equity holdings at fair value. The Company received Dissent
Rights notices over a total of 2,329,326 shares with an anticipated
fair value of $696,519 after adjusting for dividends that had been
paid to those shareholders. $281,666 of the $696,519 has been
agreed and will be settled. This amount has been provided for in
full within these financial statements. The further $414,853
remains under dispute and subject to further negotiation and has
therefore been classified as a contingent liability.
15. Share-based payments
Six months ended 30 June
2020 2019
(unaudited) (unaudited)
$000 $000
------------------------------------------------------------------------------ -------------
Share based compensation recognized in the statement of Comprehensive income 137 243
------------------------------------------------------------------------------ ------------- -------------
Movement in the total number of share options outstanding and
their related weighted average exercise prices are summarized as
follows:
Number of Weighted average
options exercise price
(US$))
------------ -----------------
Outstanding at 1 January
1 2020 6,385,497 0.57
Granted 2,485,621 -
Outstanding at 30 June
2020 8,871,118 0.41
------------ -----------------
The following table summarizes share options outstanding and
exercisable at 30 June 2020:
Outstanding Exercisable
Exercise Exercise Number of options Weighted average Number of options
price (NOK) price (US$)(1) remaining life
(years)
------------- ---------------- ------------------ ----------------- ------------------
3.60 0.37 1,600,00 0.3 1,600,000
3.85 0.40 750,000 5.5 750,000
4.08 0.42 250,000 2.8 250,000
5.18 0.53 1,900,000 3.9 1,900,000
5.57 0.57 500,000 0.8 500,000
- - 3,871,118 9.5 -
8,871,118 5,000,000
------------------ ----------------- ------------------
(1) The US Dollar to Norwegian Kroner exchange rate used for
determining the exercise price at 30 June 2020 is 0.102621.
16. Share capital
2020 2019
(unaudited) (audited)
$000 $000
---------------------------------- ------------- -----------
Authorised, called up, allotted
and fully paid
---------------------------------- ------------- -----------
186,488,465 (2019 - 186,488,465)
ordinary shares 416,426 416,426
---------------------------------- ------------- -----------
17. Earnings per share
Basic and diluted EPS
2020 2019
(unaudited) (unaudited)
$000 $000
------------- -------------
Net profit/(loss) for the period 1,014 (158)
------------- -------------
Weighted average number of ordinary shares outstanding 186,488,465 186,488,465
Dilutive weighted average number of ordinary shares outstanding 186,488,465 186,488,465
------------- -------------
Net profit per ordinary share 0.005 -
------------- -------------
18. Dividends
The following dividends were declared and paid by the Company
during the year.
2020 2019
(unaudited) (unaudited)
$000 $000
-------------------------------------------------- ------------- -------------
0.9 pence (US$ 0.0114; NOK 0.10872) per ordinary
share
(2019: 0.45 pence (US$ 0.00583; NOK 0.0514)
per ordinary share) 2,119 1,033
-------------------------------------------------- ------------- -------------
On 24 April 2020, the Company declared a dividend of GBP 0.9
pence per share, being a total dividend distribution of $2.0
million. This second dividend with respect to the audited results
to 31 December 2019 follows the Company's maiden interim dividend
of $1.0 million, which was declared in September 2019, bringing a
total distribution in respect of 2019 to $3.0 million, which
delivers an annual yield of approximately 7.2%, based on the
closing share price at 20 April 2020, in line with previous
guidance.
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END
IR DGGDCGBGDGGD
(END) Dow Jones Newswires
September 03, 2020 02:00 ET (06:00 GMT)
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