TIDMWEN
RNS Number : 8153V
Wentworth Resources PLC
16 December 2021
16 December 2021
WENTWORTH RESOURCES PLC
("Wentworth" or the "Company")
Operational Update
Wentworth expects to achieve milestone average production rate
for 2021 of over 80 MMscf/day
Wentworth (AIM: WEN), the independent, Tanzania-focused natural
gas production company, is pleased to provide an operational update
for the Mnazi Bay gas field and on other corporate initiatives.
Following a successful first half of the year, demand for
natural gas in Tanzania has again remained strong throughout the
second half. This strengthening in demand in 2021 is due to
sustained economic growth, continued demand in the industrial
sector and partly due to lack of supply from hydro-electric
generation as a result of poor rainfall over the catchment areas of
the hydro dams.
The Company, through its partnership in the Mnazi Bay Joint
Venture, continues to provide a reliable source of natural gas for
domestic electricity generation, thereby supporting Tanzania to
secure energy that is critical for its ongoing development and
growth.
The average gross daily production rate from the Mnazi Bay gas
field in December 2021 to date has been approximately 102 MMscf/day
and, as a result of the stronger overall demand during 2021, the
Company expects to achieve a milestone average production rate for
the calendar year of over 80 MMscf/day - exceeding the high-end of
the already upwardly-revised guidance from June 2021.
Operational highlights
-- The health and safety of employees remains paramount and
robust precautionary measures have been and continue to be
implemented to mitigate against the risk of COVID-19 both in the
field and in the Dar es Salaam office. There has been no
operational disruption due to COVID-19 to date
-- The Company expects to achieve an annual average production
rate for 2021 of more than 80 MMcf/day, above the high-end of
revised guidance for the year and significantly above the average
rate in 2020
o Updated guidance as of June 2021 was 70 - 80 MMcf/day (gross),
raised from 65 - 75 MMcf/day (gross)
o 2021 average daily production is approximately 23% higher than
the average daily production rate in 2020, which was 65
MMcf/day
-- Operational costs of production remain low due to continued
focus on cost efficiencies and high degree of operational leverage
at Mnazi Bay
-- The Mnazi Bay JV Partners have delivered on the 2021 work
programme, which was focused on ensuring reliability and
sustainability of supply. Highlights include:
o Slickline operations on the MB-4, MB-2 and MS-1X wells
o Refurbishment of the MB-1 well site superstructure, which was
completed significantly under budget
o Pre-Front End Engineering and Design (FEED) Study on
installing a compressor station to the Gas Production Facility at
Mnazi Bay
-- Subject to regulatory approval of the 2022 budget, the JV
partners expect to continue with standard slickline operations to
optimise the capacity of the Mnazi Bay field and to progress the
compression project which is due for completion in 2023, as well as
further evaluating opportunities to deliver additional gas
supplies
-- The Company intends to explore and evaluate growth
opportunities both within the Mnazi Bay licence and the greater
geographical region to support increasing in-country demand for
natural gas
Strong and growing demand outlook
-- TANESCO announced in November that natural gas will be used
to address a 345MW shortage gap of power to the National Grid to
compensate for the lack of capacity from its hydro-electric power
stations due to low water levels in the dams and rivers of the
catchment areas
-- As part of the plan, TANESCO intends to increase production
by fast-tracking maintenance of its natural gas-plants at Ubungo
and expediting the completion of the Kinyerezi I Extension
Generation Facility
Record financial performance
-- Record financial results announced in September 2021, placing
the Company in the strongest financial position in its history,
with record revenue, EBITDAX, and cash on hand
-- Tanzania Petroleum Development Corporation ("TPDC") continues
to remain fully current with all invoices for gas sales; Tanzania
Electric Supply Company ("TANESCO") has repaid in full its
outstanding arrears and is now fully up to date with due
invoices
-- Strengthening financial position with $24 million cash in
hand at 30 November 2021 2021, after payment of both $2.6 million
final dividend for 2020 in July 2021 and $1.32 million interim
dividend in October, an increase from $22.5 million cash as at 30
June 2021
-- Strength of financial performance enabled an increased
interim dividend to be declared of of GBP 0.52 pence per share, 10%
higher than the 2020 Interim distribution of $1.2 million
-- Wentworth expects a 2021 final dividend of US$2.64 million in
line with the company's policy of a 1/3 : 2/3 split between the
interim and the final dividend - which would bring total capital
returns for FY2021 to US$3.96 million
Corporate update
-- Planned Board succession and refresh continued throughout the
year with the appointment of Tim Bushell as Non-executive Chairman
and Juliet Kairuki as independent Non-Executive Director
-- As part of the ongoing process of Board refreshment, John
Bentley will be stepping down at the end of this year, to be
replaced by an additional independent Non-Executive Director, with
the Company in advanced stages of this search
-- Existing management team strengthened with the appointment of
Aaron LeBlanc as Chief Operating Officer, bringing extensive
technical and managerial experience as well as a strong track
record in Tanzania
-- Growth within Tanzania continues to be a key focus to
capitalise on in-country track record, proven improving demand
dynamics and operational performance
Sustainability priorities
-- Stakeholder engagement is key to Wentworth's sustainability
strategy; strong relationships with in-country partners including
the Government of Tanzania and local communities are evidenced by
ongoing demand growth, operational performance and payment of
receivables
-- To further formalise its strategic focus on climate action
and its broader ESG priorities, Wentworth formed a Board
Sustainability Committee in September of this year with Juliet
Kairuki appointed as Chair, providing greater oversight of the
business' ESG risks and opportunities
-- Maintaining its robust ESG framework remains a priority following the launch of the inaugural Sustainability Report this year. The publication of the 2021 report is expected in April 2022
-- Measurement and mitigation of climate-related impacts is a
critical component of Wentworth's climate strategy. In November, a
new agreement between Wentworth and Vitol SA was established to
jointly develop new community-focused carbon credit programmes in
Tanzania aligned to the UN Sustainable Development Goals
o Immediate objective is for Wentworth to offset all scope 1 and
2 emissions and partially offset scope 3 emissions by 2022
o Wentworth's emissions footprint remains one of the lowest in
the UK-listed E&P sector on a scope 1 and 2 basis with an
emissions intensity in 2020 of 0.42kg/CO2 boe (1,676.9t CO2
e)Wentworth's priority is to take continuous action to reduce
emissions as swiftly as possible with further progress made in 2021
on reduction initiatives to be outlined in the 2021 Sustainability
Report.
Katherine Roe, CEO, commented:
"As we reach the end of 2021, at Wentworth we have been
delighted to reflect on our many successes of the year. Our most
recent being our expectation to beat our revised guidance and to
achieve a milestone average production rate for 2021 of over 80
MMscf/day.
The demand dynamics in Tanzania are becoming increasingly
compelling with an ambitious economic growth plan set to accelerate
energy demand further over the coming years. And whilst driving up
energy access through our natural gas production has a
transformational role to play on the socio-economic outcomes for
our communities in Tanzania, we have also used this year to ensure
we are playing a responsible role in mitigating and minimising our
impacts as much as we can and as quickly as we can. Our carbon
offset partnership with Vitol is evidence of this and we are
excited about taking this journey with them for the benefit of our
communities in country.
We thank John Bentley for his invaluable contribution and many
years of being part of our Wentworth team. He has been an integral
part of the Board during his tenure and he will be missed on both a
professional and personal level.
Looking ahead to year end, we remain in the strongest position
in our corporate history, with half the Company's market
capitalisation backed by cash. Our robust fundamentals have ensured
that we remain financially and operationally resilient allowing us
to increase our returns to shareholders year on year. We remain
committed to our sustainable and progressive dividend policy and
look forward to reporting back on full year performance in
2022."
Ends
Enquiries: Katherine Roe, katherine.roe@wentplc.com
Wentworth Resources Chief Executive Officer +44 (0) 7841 087 230
AIM Nominated Advisor and
Joint Broker
Callum Stewart
Stifel Nicolaus Europe Ashton Clanfield
Limited Simon Mensley +44 (0) 20 7710 7600
Joint Broker
Richard Crichton
Peel Hunt LLP Alexander Allen +44 (0) 20 7418 8900
Communications Advisor
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
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Wentworth to constitute inside information as stipulated under the
Market Abuse Regulation (EU) no. 596/2014 ("MAR"). On the
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