TIDMWEN
RNS Number : 5941N
Wentworth Resources PLC
26 September 2023
26 September 2023
WENTWORTH RESOURCES PLC
("Wentworth" or the "Company")
lnterim Results for the six months ended 30 June 2023
Wentworth Resources ( : WEN), the independent, Tanzania-focused
natural gas production company, announces its interim financial
results for the six months ended 30 June 2023. AII dollar values
are expressed in US dollars unless stated otherwise.
Katherine Roe, CEO, commented:
"The first half of 2023 saw continued strong production, further
highlighting the quality of the Mnazi Bay asset, alongside an
ongoing exemplary safety record which remains a key priority for
Wentworth. Furthermore, our strengthened financial position
underscores the robust nature of the business.
"We continue to work collaboratively with all stakeholders
towards successful completion of the acquisition by Maurel &
Prom in Q4 2023, which we see as representing considerable value
realisation for shareholders."
HIGHLIGHTS
Financial
-- Revenues grew 29% to $19.9 million (H1 2022: $15.5 million)
-- Adjusted earnings before interest, taxes, depreciation,
amortization, and exploration (EBITDAX) increased by 53% to $14.7
million (H1 2022: $9.6 million)
-- Strong financial position with $40.7 million cash (H1 2022: $27.4 million) and zero debt
Operational
-- Health and safety of employees, partners and local
communities continues to be a top priority for Wentworth. On 2
August 2023, the Company celebrated seven years without a Lost Time
lncident (LTI)
-- Average daily production of 98.2 MMscf/d (gross) during the
first six months of 2023 (2022: 92.3 MMscf/d)
-- Wentworth's share of Gross 2P Reserves estimated to be 137 Bcf as at 31 December 2022
Outlook
-- 2023 production guidance maintained at 90 - 100 MMscf/d for
Mnazi Bay as issued in June 2023, up from previous guidance of 85 -
95 MMscf/d issued in March 2023
-- The Company anticipates, given the absence of recent
investment in the Mnazi Bay field and continued cost recovery in H1
2023, that H2 2023 production will include significant periods
where costs have been fully recovered, leading to substantially
lower revenues
-- The Government's re-examination of the historic cost pool
audit for the years 2013 - 2015 is ongoing; any reduction in the
current expected cost pool balance as a result is likely to further
impact revenue going forward
Update on offer by Etablissements Maurel & Prom S.A.
("M&P")
-- On 5 December 2022, the boards of Wentworth and M&P
announced that they had reached agreement on the terms of a
recommended all cash offer by M&P for the entire issued, and to
be issued, share capital of Wentworth (the "Acquisition"). The
Acquisition is to be implemented by means of a scheme of
arrangement pursuant to Article 125 of the Jersey Companies Law.
The circular in relation to the Scheme was published or made
available to Wentworth Shareholders on 25 January 2023 (the "Scheme
Document")
-- The Acquisition was approved by Wentworth Shareholders at the
Court Meeting and the General Meeting which were held on 23
February 2023, but remains subject to the satisfaction or (where
capable of being waived) waiver of the other Conditions to the
Acquisition as set out in Part III (Conditions to and certain
further terms of the Acquisition and the Scheme) of the Scheme
Document
-- These Conditions include, inter alia, (i) consent from the
Minister responsible for petroleum affairs in Tanzania under the
Petroleum Act 2015 (the "Act") and any other applicable laws; (ii)
the waiver of any right of first refusal or pre-emption right to
which the Tanzania Petroleum Development Corporation is entitled in
respect of the Mnazi Bay asset; and (iii) approval from the
Tanzanian Fair Competition Commission ("FCC"), in each case on
terms satisfactory to M&P, acting reasonably
-- On 11 July 2023, Wentworth was notified that the FCC has
issued a decision notice that application for FCC approval shall
not be determined at this time and that this application will be
marked closed by the FCC
-- Following this, there have been a number of discussions
between the parties to the offer including recent meetings in
country between the CEO of Wentworth and relevant Tanzanian
government stakeholders, as well as the CEO of M&P and relevant
Tanzanian stakeholders, to seek to bring the Acquisition to a
successful conclusion before the agreed 31 December 2023 Long Stop
Date, including at the highest levels of government in Tanzania
-- There has been positive progress in these discussions,
although there can be no certainty that the Conditions will be
satisfied or (where capable of being waived), waived by M&P.
The Company and M&P are working towards the satisfaction or
(where capable of being waived) waiving of the Conditions in Q4
2023
Ends
Enquiries:
Wentworth Resources Katherine Roe katherine.roe@wentplc.com
Chief Executive Officer +44 (0) 7841 087 230
AIM Nominated Adviser and Joint Broker
Callum Stewart
Stifel Nicolaus Europe Limited Simon Mensley +44 (0) 20 7710 7600
Joint Broker
Richard Crichton
Peel Hunt LLP Georgia Langoulant +44 (0) 20 7418 8900
Communications Advisor
Sara Powell
Ben Brewerton
FTI Consulting Ollie Mills +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.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE
INCOME
Six months ended 30
June
2023 2022
(unaudited) (unaudited)
Note $000 $000
-------------- -------------
Total revenue 4 19,920 15,447
Production and operating costs (2,229) (1,922)
Depletion 9 (3,022) (3,945)
----------------------------------- ------- -------------- -------------
Total cost of sales (5,251) (5,867)
Gross profit 14,669 9,580
Recurring administrative costs 5 (4,257) (3,028)
Acquisition costs (1,894) -
New venture and pre-licence costs - (232)
Share-based payment charges 14 (667) (472)
Depreciation 9 (56) (49)
Total costs (6,874) (3,781)
Profit from operations 7,795 5,799
Finance income 6 464 45
Finance costs 6 (148) (290)
----------------------------------- ------- -------------- -------------
Profit before tax 8,111 5,554
Current tax expense (1,042) (223)
Deferred tax expense/(income) (1,777) 841
----------------------------------- ------- -------------- -------------
(2,819) 618
Net and comprehensive profit
after tax 5,292 6,172
Net profit per ordinary share
Basic and diluted (US$/share) 16 0.03 0.03
----------------------------------- ------- -------------- -------------
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL
POSITION
30 June 31 December
2023 2022
(unaudited) (audited)
Note $000 $000
------------------------------- -------
ASSETS
Current assets
Cash and cash equivalents 40,689 30,916
Trade and other receivables 7 8,569 11,101
49,258 42,017
------------------------------- ------- --------------
Non-current assets
Property, plant and equipment 9 38,842 41,814
Deferred tax asset 12,320 14,097
------------------------------- ------- -------------- ------------
51,162 55,911
------------------------------- ------- -------------- ------------
Total assets 100,420 97,928
------------------------------- ------- -------------- ------------
LIABILITIES
Current liabilities
Trade and other payables 11 2,571 5,623
2,571 5,623
------------------------------- ------- --------------
Non-current liabilities
Decommissioning provision 12 1,893 1,818
1,893 1,818
------------------------------- ------- -------------- ------------
Equity
Share capital 15 414,676 414,676
Equity reserve 27,902 27,803
Accumulated deficit (346,622) (351,992)
------------------------------- ------- -------------- ------------
95,956 90,487
------------------------------- ------- ------------
Total liabilities and equity 100,420 97,928
------------------------------- ------- -------------- ------------
The condensed consolidated financial statements of Wentworth
Resources plc, registered number 127571 were approved by the Board
of Directors and authorised for issue on 26 September 2023.
Signed on behalf of the Board of Directors.
Katherine Roe
Chief Executive Officer
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN
EQUITY
Number Share Equity Accumulated Total
Note of shares capital reserve deficit equity
$000 $000 $000 $000
------------------------------ ------- ------------ ---------- ---------- -------------- ---------
Balance at 31 December
2021 (audited) 181,049,139 414,919 26,695 (334,879) 106,735
Dividends 17 - - - (4,133) (4,133)
Net loss and comprehensive
loss - - - (12,980) (12,980)
Share based compensation 15 - - 1,108 - 1,108
Cancellation of own shares (866,572) (243) - - (243)
Balance at 31 December
2022 (audited) 180,182,567 414,676 27,803 (351,992) 90,487
Dividends 17 - - - 78 78
Net profit and comprehensive
profit - - - 5,292 5,292
Share based compensation 15 - - 99 - 99
------------------------------ ------- ------------ ---------- ---------- -------------- ---------
Balance at 30 June 2023
(unaudited) 180,182,567 414,676 27,902 (346,622) 95,956
------------------------------ ------- ------------ ---------- ---------- -------------- ---------
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
Six months ended
30 June
2023 2022
(unaudited) (unaudited)
Note $000 $000
---------------------------------------------- -------
Operating activities
Net profit for the year 5,292 6,172
Adjustments for:
Depreciation and depletion 9 3,078 3,994
Net finance (income)/costs 18 (348) 220
Income tax expense/(income) 2,819 (618)
Share based compensation 14 667 472
11,508 10,240
Change in non-cash working capital:
Trade and other receivables 2,533 (3,794)
Trade and other payables (2,743) (1,019)
---------------------------------------------- -------
Cash generated from operating activities 11,298 5,427
Current tax paid (1,042) (223)
Net cash generated from operating activities 10,256 5,204
---------------------------------------------- ------- -------------- -------------
Investing activities
Additions to property, plant and equipment 9 (111) (402)
Interest income 180 36
Proceeds from disposal - 9
Net cash used in investing activities 69 (357)
Financing activities
Repurchase of own shares - (242)
Lease payment 13 (28) (28)
Dividend 17 78 -
Exercise of share options 15 (568) -
Bank charges 6 (34) (15)
Net cash used in financing activities (552) (285)
---------------------------------------------- ------- -------------- -------------
Net change in cash and cash equivalents 9,773 4,562
Cash and cash equivalents, beginning
of the period 30,916 22,820
Cash and cash equivalents, end of the
period 40,689 27,382
---------------------------------------------- ------- -------------- -------------
1. Incorporation and basis of preparation
Wentworth Resources plc ("Wentworth" or the "Company") is an
East Africa-focused upstream natural gas company. These unaudited
condensed consolidated interim financial statements include the
accounts of the Company and its subsidiaries (collectively referred
to as the "Wentworth Group" or the "Group"). Wentworth is a gas
exploration, development and production operations company
incorporated in Jersey and 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, St Hellier, Jersey JE1
4TR.
The Company maintains offices in Dar es Salaam in the United
Republic of Tanzania and Jersey.
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 2022 annual
report and financial statements.
Going concern
During the first half of 2023, Wentworth continued its strong
operating and financial performance, posting its best ever
six-month results. Given the essential nature of services provided
and the forecasted impact of recent world events on both
international capital markets and production operations in the
United Republic of Tanzania, the Group assesses that an
interruption to production remains remote.
On 5 December 2022, Wentworth received, and the Board of
Directors subsequently recommended the acceptance of a cash offer
for 100% of the issued and to be issued share capital of the
Company for 32.5 pence per share by Etablissements Maurel et Prom,
S.A. ("M&P"). M&P is the ultimate parent company of the
Operator of the Mnazi Bay licence. On 23 February 2023,
shareholders voted in favour of a scheme of arrangement at a court
meeting held the same day. On 9 June 2023 TPDC informed the Group
of its decision to exercise its right of first refusal ("ROFR") for
Wentworth's interest in the Mnazi Bay asset pursuant to section
86(7) of the Tanzanian Petroleum Act, Cap 392. On 11 July 2023,
Wentworth was notified that the Fair Competition Commission ("FCC")
had issued a decision notice that application for FCC approval
shall not be determined at this time and that this application
would be marked closed. Discussions with relevant Tanzanian
government stakeholders in order to bring the Acquisition to a
successful conclusion before the agreed 31 December 2023 Long Stop
are ongoing as of the date of this report.
It is acknowledged that the above developments introduce
uncertainty as to the timing and manner in which an acquisition (if
any) of the Group will be finalised. The Directors expect that the
Group would continue to operate in its existing state if none of
the proposed arrangements set out above proceed during the going
concern period. Should an acquisition proceed, it is uncertain how
the acquirer intends to integrate Wentworth's interest in the Mnazi
Bay asset with its own operations and whether the legal entities in
which the Group operates will remain in their current form or cease
to operate, in which case the Group will no longer be a going
concern.
Apart from the uncertainty noted above, the Directors view the
continued timely settlement of gas-sales invoices by the Government
of Tanzania to be the most significant financial risk currently
faced by the Group with respect to its ongoing operations.
The Directors have prepared base and sensitised cash flow
information for a period of at least 12 months from the date of
their approval of these financial statements (the going concern
assessment period) on the assumption that the Group continues in
its current form. Based on the application of severe but plausible
down-side scenarios, which include non-settlement of future gas
sales, potential changes in demand, capital spend and operating
costs, the Directors believe that if the Group were to continue in
its present structure it is well placed to manage the Group's
financial exposures and has sufficient cash resources for working
capital needs, committed capital and operational expenditure
programs for the going concern assessment period.
Based on the above factors and with respect to the going concern
assessment period, the Directors believe that it remains
appropriate to prepare the financial statements on a going concern
basis. However, the uncertainty regarding the proposed acquisition
and the subsequent integration of the Group's operations into that
of the acquirer's should the acquisition proceed, indicates the
existence of a material uncertainty related to events or conditions
that may cast significant doubt on the Group's ability to continue
as a going concern and, therefore, that the Group may be unable to
realise its assets and discharge their liabilities in the normal
course of business in a plausible situation that the Group is
reorganised by the acquiring entity. The Group, in its current
form, does have the resources to be able to satisfy its expected
obligations as they fall due. The financial statements do not
include any adjustments that would result from the basis of
preparation being inappropriate.
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 financial statements have been prepared following the same
accounting policies as the annual audited consolidated financial
statements for the year ended 31 December 2022 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 26 September 2023. The disclosures provided
below are incremental to those included in the 2021 annual
consolidated financial statements.
The information for the year ended 31 December 2022 included in
the report was derived from the statutory accounts for that year
which were prepared in accordance with Jersey Company Law. Under
that law the Directors have elected to prepare the Group financial
statement in accordance with UK-adopted international accounting
standards, in conformity with the requirements of the Companies
(Jersey) Law 1991. The auditor's opinion in relation to those
accounts was unqualified, did not draw attention to any matters by
way of emphasis or any other matters as may be required under The
Companies (Jersey) Law 1991.
Jersey Company Law. Under that law the Directors have elected to
prepare the Group financial statement in accordance with UK-adopted
international accounting standards, in conformity with the
requirements of the Companies (Jersey) Law 1991.
Functional and presentation currency
These consolidated financial statements are presented in US
dollars which is the functional currency 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 legal entities within the Wentworth Group are noted in note
10 of this report.
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 in the United Kingdom of Great Britain through the UK
Endorsement Board ("UKEB"):
IFRS 17 'Insurance Contracts': The IASB effective date is 1
January 2023 and the UKEB adopted the amendment on 17 May 2022 .
IFRS 17 establishes principles for the recognition, measurement,
presentation and disclosure of insurance contracts within the scope
of the Standard. The objective of the standard is to ensure that an
entity provides relevant information that faithfully represents
those contracts. The standard provides three measurement approaches
for the accounting of insurance contracts. These include the
General Measurement Model-or Building Block Approach (BBA), the
Premium Allocation Approach (PAA or simplified approach) and the
Variable Fee Approach (VFA). This amendment is not expected to have
impact on the Group's consolidated financial statements.
IAS 12 (amendments) 'Deferred tax related to assets and
liabilities arising from a single transaction': The IASB effective
date is 1 January 2023 and the UKEB adopted the amendment on 2
December 2022. The amendments clarify how companies account for
deferred taxes on certain transactions, such as leases and
decommissioning obligations, with a focus on reducing diversity in
practice. The amendments narrow the scope of the initial
recognition exemption so companies will need to recognise a
deferred tax asset and a deferred tax liability arising from
transactions that give rise to equal and offsetting temporary
differences. This amendment is not expected to have impact on the
Group's consolidated financial statements.
IAS 8 (amendments) 'Definition of accounting estimates': The
IASB effective date is 1 January 2023 and the UKEB adopted the
amendment on 2 December 2022. The amendments clarify how companies
distinguish changes in accounting policies from changes in
accounting estimates, with a primary focus on the definition and
guidance on accounting estimates. The distinction between the two
is important because changes in accounting policies are applied
retrospectively, whereas changes in accounting estimates are
applied prospectively. The amendments clarify that accounting
estimates are monetary amounts in the financial statements subject
to measurement uncertainty. The amendments also clarify the
relationship between accounting policies and accounting estimates
by specifying that a company develops an accounting estimate to
achieve the objective set out by an accounting policy. This
amendment is not expected to have impact on the Group's
consolidated financial statements.
IAS 1 (amendments) 'Disclosure of accounting policies': The IASB
effective date is 1 January 2023 and the UKEB adopted the amendment
on 2 December 2022. The amendments continue the IASB's
clarifications on applying the concept of materiality. These
amendments help companies provide useful accounting policy
disclosures by:
-- requiring companies to disclose their material accounting
policies instead of their significant accounting policies;
-- clarifying that accounting policies related to immaterial
transactions, other events or conditions are themselves immaterial
and do not need to be disclosed; and
-- clarifying that not all accounting policies that relate to
material transactions, other events or conditions are themselves
material.
The IASB also amended IFRS Practice Statement 2 to include
guidance and examples on applying materiality to accounting policy
disclosures. This amendment is not expected to have impact on the
Group's consolidated financial statements.
Future accounting pronouncements
At the date of these interim 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:
Standard Description IASB Issue IASB Effective Secretary
Date Date of State
Adoption
Date
IAS 1 (amendments) Classification 31 October 1 January 2024 Endorsed
of Liabilities 2022
as Current or
Non-current.
----------------- ------------- --------------- ----------
IFRS 16 (amendments) Lease Liability 22 September 1 January 2024 Endorsed
in a Sale and 2022
Leaseback
----------------- ------------- --------------- ----------
IAS 7 and Supplier Finance 25 May 2023 1 January 2024 Endorsed
IFRS 7 (Amendments) Arrangements
----------------- ------------- --------------- ----------
3. Segment information
Net income/(loss) for the six months ended 30 June 2023
Tanzania Operations
(unaudited) Corporate Consolidated
$000 (unaudited) (unaudited)
$000 $000
-------------------------------- -------------------- ----------------- --------------
Total revenue 19,920 - 19,920
Production and operating
costs (2,229) - (2,229)
Depletion (3,022) - (3,022)
-------------------------------- -------------------- ----------------- --------------
Total cost of sales (5,251) - (5,251)
Gross profit 14,669 - 14,669
Recurring administrative
costs (1,085) (3,172) (4,257)
Acquisition costs - (1,894) (1,894)
Share-based payment charges (115) (552) (667)
Depreciation (56) - (56)
Total costs (1,256) (5,618) (6,874)
Profit/(loss) from operations 13,413 (5,618) 7,795
Net finance (costs)/income (15) 331 316
-------------------------------- -------------------- ----------------- --------------
Profit/(loss) before
tax 13,398 (5,287) 8,111
Current tax expense (1,042) - (1,042)
Deferred tax expense (1,777) - (1,777)
-------------------------------- -------------------- ----------------- --------------
Net and comprehensive
Profit/(loss) from continued
operations 10,579 (5,287) 5,292
-------------------------------- -------------------- ----------------- --------------
Net income/(loss) for the six months ended 30 June 2022
Tanzania Operations
(unaudited) Corporate Consolidated
$000 (unaudited) (unaudited)
$000 $000
-------------------------------- -------------------- ----------------- --------------
Total revenue 15,447 - 15,447
Production and operating
costs (1,922) - (1,922)
Depletion (3,945) - (3,945)
-------------------------------- -------------------- ----------------- --------------
Total cost of sales (5,867) - (5,867)
Gross profit 9,580 - 9,580
Recurring administrative
costs (1,968) (1,060) (3,028)
New venture and pre -
licence costs - (232) (232)
Share-based payment charges (77) (395) (472)
Depreciation (49) - (49)
Total costs (2,094) (1,687) (3,781)
Profit/(loss) from operations 7,486 (1,687) 5,799
Net finance costs (104) (141) (245)
-------------------------------- -------------------- ----------------- --------------
Profit/(loss) before
tax 7,382 (1,828) 5,554
Current tax expense (223) - (223)
Deferred tax expense 841 - 841
-------------------------------- -------------------- ----------------- --------------
Net and comprehensive
Profit/(loss) from continued
operations 8,000 (1,828) 6,172
-------------------------------- -------------------- ----------------- --------------
Selected balances as at 30 June 2023
Mozambique
Operations
Tanzania (Discontinued)
Operations
(unaudited) (unaudited) Corporate Consolidated
$000 $000 (unaudited) (unaudited)
$000 $000
------------------------- ---------------- ---------------- -------------- ----------------
Current assets 25,667 9 23,582 49,258
Property, plant and
equipment 38,842 - - 38,842
Deferred tax asset 12,320 - - 12,320
------------------------- ---------------- ---------------- -------------- ----------------
Total assets 76,829 9 23,582 100,420
------------------------- ---------------- ---------------- -------------- ----------------
Current liabilities 2,220 - 351 2,571
Non-current liabilities 1,893 - - 1,893
------------------------- ---------------- ---------------- -------------- ----------------
Total Liabilities 4,113 - 351 4,464
------------------------- ---------------- ---------------- -------------- ----------------
Capital additions for the six months ended 30 June 2023
Additions to property,
plant
and equipment 111 - - 111
------------------------ -------- ---- ------ ------
Selected balances as at 30 June 2022
Mozambique
Operations
Tanzania (Discontinued)
Operations
(unaudited) (unaudited) Corporate Consolidated
$000 $000 (unaudited) (unaudited)
$000 $000
---------------------------- ---------------- ---------------- -------------- ----------------
Current assets 18,831 101 17,795 36,727
Exploration and evaluation
assets 8,129 - - 8,129
Property, plant and
equipment 62,884 - - 62,884
Deferred tax asset 9,080 - - 9,080
---------------------------- ---------------- ---------------- -------------- ----------------
Total assets 98,924 101 17,795 116,820
---------------------------- ---------------- ---------------- -------------- ----------------
Current liabilities 1,160 - 3,180 4,340
Non-current liabilities 2,023 - - 2,023
---------------------------- ---------------- ---------------- -------------- ----------------
Total Liabilities 3,183 - 3,180 6,363
---------------------------- ---------------- ---------------- -------------- ----------------
Capital additions for the six months ended 30 June 2022
Additions to property,
plant
and equipment 413 - - 413
------------------------ -------- ---- ------ ------
4. Revenue
Six months ended 30 June
------------------------------
2023 2022
(unaudited) (unaudited)
$000 $000
-------------- --------------
Revenue from gas sales 18,539 15,224
Revenue from condensate sales 22 -
Other revenue 1,359 223
19,920 15,447
-------------- --------------
Other revenue represents the recovery of Corporate Income Taxes
(CIT) $1.4 million (June 2022: $223k) incurred through adjustments
to TPDC gas sales entitlements. The CIT paid and recovered during
the six months of 2023 was higher in comparison to the same period
in 2022 due to an increase in gas revenue and a small adjustment
for an under provision in the previous year.
Condensate revenue during the first half was $22k, however, in
2022 this was recognised during the second half of the financial
year.
5. General and administrative costs
Six months ended 30 June
2023 2022
(unaudited) (unaudited)
$000 $000
-------------- --------------
Employee salaries and benefits 1,357 1,096
Contractors and consultants 532 536
Travel and accommodation 85 157
Professional, legal and advisory 939 325
Office and administration 306 211
Corporate and public company costs 1,038 703
-------------- --------------
Total g eneral and administrative costs 4,257 3,028
-------------- --------------
Employee salaries and benefits were higher during the six months
ended 30 June 2023 compared to the same period in 2022 due to $152k
of charges expensed on the exercise of share-based payments and an
inflationary increase in wages and salaries.
Professional, legal and advisory costs were higher during the
six months ended 30 June 2023 compared to same period of 2022 due
to audit fee overruns of $556k (GBP439k) following additional
procedures conducted by KPMG with respect to the proposed
acquisition of the Group by M&P.
Corporate and public company costs were higher during the six
months ended 30 June 2023 compared to same period of 2022 due to
certain one-off third part services including TCFD (Task Force on
Climate-related Financial Disclosures), socioeconomic analysis and
other related charges.
6. Finance income and finance costs
Six months ended 30 June
2023 2022
(unaudited) (unaudited)
$000 $000
-------------- --------------
Finance income
Interest income 180 36
Gain on disposal of office equipment - 9
Foreign exchange gains 284 0
464 45
-------------- --------------
Finance costs
Foreign exchange loss - (167)
Accretion - decommissioning provision (76) (80)
Intercompany loan withholding tax costs (32) (25)
Bank Fees & Service Charge (34) (15)
Lease interest expenses (note 13) (1) (3)
Loss on disposal of office equipment (note 9) (5)
(148) (290)
-------------- --------------
Net finance income/(costs) 316 (245)
-------------- --------------
7. Trade and other receivables
Balance at Balance at
30 June 2023 31 December 2022
(unaudited) (audited)
Receivables from the Operator - M&P 3,245 2,747
Trade receivables from TPDC 3,356 2,479
Trade receivables from TANESCO 748 1,035
Other receivables from TPDC 377 3,563
Other receivables 843 1,277
------------------ ----------------------
8,569 11,101
------------------ ----------------------
Receivables from the Operator: As at 30 June 2023, $3.2 million
was receivable from the Operator, M&P (December 2022: $2.7
million) representing one month of gas sales of $3.0 million
(December 2022: $2.5 million) which was paid by TPDC to M&P in
June 2023 but payment to Wentworth was made in July 2023. Also
included is $276k (December 2022: $265k) representing two months
gas sales paid by TANESCO to M&P in June 2023 but payment to
Wentworth was made in July 2023.
Receivables from TPDC: As at June 2023, $3.4 million was
receivable from TPDC (December 2022: $2.5 million) representing one
month of gas sales invoice (December 2022: one month). The invoice
was settled in full in July 2023.
Receivables from TANESCO: As at June 2023, $748k was received
from TANESCO (December 2022: $1 million) representing five months
of gas sales (December 2022: seven months). Subsequent to 30 June
2023, TANESCO have paid three of these invoices, totalling
$441k.
Other receivables from TPDC : represent income tax of $149k
(December 2022: $2.9 million) paid by Wentworth Gas Limited, a
wholly owned subsidiary of the Company and income tax of $206k
(December 2022: $675k) paid by CMBL, a 39.925% owned subsidiary of
the Company. The income tax is anticipated to be recovered from
TPDC's share of profit gas within the next 12 months under the
terms of the Mnazi Bay PSA, which provides such a mechanism for the
recovery of all corporate taxes.
Other receivables from TPDC also include gas condensate sales of
$22k (December 2022: nil).
Other receivables: include VAT recoverable of $208k (December
2022: $306k), corporate tax prepayments of $460k (December 2022:
$546k), various prepaid expenses $175k (December 2022: $425k). In
accordance with IFRS 9, the Company notes no material expected
credit losses.
8. Government of Tanzania receivables
The Group has an agreement with the Government of the United
Republic of Tanzania (TANESCO, TPDC and the Ministry of Energy) to
be reimbursed for all the project development costs associated with
Umoja transmission and distribution expenditures at cost, which was
divested on 7 February 2012.
The Government is conducting an ongoing review and due to the
age and uncertainty surrounding the receivable and its
recoverability, the Group made a provision in full during 2018
against the carrying amount without prejudice to the ongoing
commercial discussions with the Government, the Group has reviewed
this and continues to feel the provision is appropriate.
9. Property, plant and equipment
Natural gas properties Office and other equipment Right of use
Total
$000 $000 $000 $000
----------------------- ----------------------------------- ------------- --------
Cost
Balance at 31 December 2022
(audited) 104,788 617 135 105,540
Additions 110 1 - 111
Disposals - (12) - (12)
Balance at 30 June 2023
(unaudited) 104,898 606 135 105,639
----------------------- ----------------------------------- ------------- --------
Accumulated depreciation and depletion
Balance at 31 December 2022 (audited) (63,197) (432) (97) (63,726)
Depletion and depreciation (3,022) (30) (26) (3,078)
Disposals - 7 - 7
Balance at 30 June 2023 (unaudited) (66,219) (455) (123) (66,797)
--------- ------ -------- ---------
Carrying amounts
31 December 2022 (audited) 41,591 185 38 41,814
30 June 2023 (unaudited) 38,679 151 12 38,842
There have been no further indicators of impairment during the
period and as such no full impairment review has been
undertaken.
During the six months, the Group made cash additions to PPE
totaling $111k (2022: $402k).
During the period the Group disposed of communication equipment
which was carried at a cost of $12k and depreciation of $7k at the
date of disposal. A loss on disposal of $5k was recognised within
finance income (note 6).
10. Subsidiary undertakings
The principal subsidiary undertakings as at 30 June 2023
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 Cyprus Ordinary Indirect 39.925% Exploration
Limited (1) production
company
Wentworth Mozambique Mauritius Ordinary Indirect 100% Investment
(Mauritius) Limited holding
company
Wentworth Moçambique Mozambique Ordinary Indirect 100% Exploration
Petroleos, Limitada company
(2)
(1) CMBL is considered a jointly controlled entity and accounted
for as a joint operation rather than a JV.
(2) The Wentworth Moçambique Petroleos, Limitada is in the
process of liquidation following the relinquishment of the Tembo
Block Appraisal Licence in April 2019.
11. Trade and other payables
Balance at Balance at
30 June 2023 31 December 2022
(unaudited) (audited)
$000 $000
Payable to Mnazi Bay Operator - M&P 1,212 1,634
Trade payables 184 1,070
Lease liability - current portion (note 13) 14 41
Other payables and accrued expenses 1,161 2,878
2,571 5,623
--------------- -------------------
The Payable to Mnazi Bay Operator - M&P represents the
accrued cash call for field costs for the second quarter of 2023
totaling $1.1 million (December 2023: $1.2 million). The cash call
was settled in July 2023. Also included are $121k a cash call for
CMBL administration costs for the first half of 2023.
Other payables and accrued expenses include income tax liability
$206k (December 2022: $994k), audit and tax advice fees accrual
$728k (December 2022: $350k), other third-party services of $166k
(December 2021: $852K) and payroll taxes $61k (December 2022:
$53k).
12. Decommissioning and Abandonment provision
A reconciliation of the decommissioning obligations is provided
below:
Balance at Balance at
30 June 2023 31 December
2022
(unaudited) (audited)
$000 $000
--------------- --------------
Balance at 1 January 1,818 1,929
Change in accounting estimates - (250)
Accretion 75 139
Balance at 30 June and 31 December 1,893 1,818
--------------- --------------
13. Lease liability
The Group recognised a lease liability of $14k (December 2022:
$41k), the whole amount is current (December 2022: $41k) and is
presented in trade and other payables:
Balance at Balance at
30 June 2023 31 December
2022
(unaudited) (audited)
$000 $000
-------------- -------------
Balance at 1 January 41 82
Additions - 11
Lease interest expenses 1 5
Lease payment (28) (57)
Balance at 31 December 14 41
-------------- -------------
Current portion (note 11) 14 41
-------------- -------------
14. Share-based payments
Six months ended 30 June
2023 2022
(unaudited) (unaudited)
$000 $000
------------------------------------------------------------------------------ --------------
Share-based compensation recognised in the Statement of Comprehensive Income 667 472
------------------------------------------------------------------------------ -------------- --------------
During the six months ended 30 June 2023, share-based
compensation was $667k (2022: $472k) which included an accounting
charge of $115k under accrued on the exercise of options (2022:
$nil).
Movement in the total number of share options outstanding and
their related weighted average exercise prices are summarised as
follows:
Number of Weighted average exercise price (US$))
options
------------- ---------------------------------------
Outstanding at 1 January 2023 13,785,049 0.07
Exercised (2,485,621) -
Lapsed (250,000) 0.38
Outstanding at 30 June 2023 11,049,428 0.07
------------- ---------------------------------------
During the six months ended 30 June 2023, an award under the
Company's LTIP over 2,485,621 conditional rights reached the end of
its performance period resulting in the award vesting over
2,437,376 ordinary shares in the Company and 250,000 options
lapsed. In addition, the Remuneration Committee exercised its
discretion to award dividend equivalents in the sum of $129k
(GBP105k) pursuant to the rules of the LTIP. Dividend equivalents
were only awarded in respect of dividends paid since 15 June 2021,
the date the performance conditions were amended. The Remuneration
Committee elected to settle the LTIP by way of the transfer of
1,291,809 shares held by the Company in treasury and the payment of
$439k (GBP355k) in cash (which was used to settle the tax
liability).
The following table summarises share options outstanding and
exercisable at 30 June 2023:
Outstanding Exercisable
Exercise Exercise Number of options Weighted average Number of
price (NOK) price (US$)(1) remaining life options
(years)
------------- ---------------- ------------------ ----------------- ------------
- - 1,016,430 9.0 -
- - 3,014,590 8.8 -
- - 957,447 8.4 -
- - 3,368,368 8.0 -
- - 942,593 7.1 -
3.85 0.36 750,000 2.5 750,000
5.18 0.48 1,000,000 0.8 1,000,000
11,049,428 1,750,000
------------------ ----------------- ------------
(1) The US Dollar to Norwegian Kroner exchange rate used for
determining the exercise price at 30 June 2023 is 0.09269.
15. Share capital and reserves
Balance at Balance at
30 June 2023 31 December 2022
(unaudited)
(audited)
-------------------------------------- ---------------------- ----------------------
Ordinary Ordinary
shares $000 shares $000
-------------------------------------- ------------ -------- ------------ --------
Balance at 1 January 180,182,567 414,676 181,049,139 414,919
-------------------------------------- ------------ -------- ------------ --------
Repurchase of own shares: Cancelled
and removed from the share register
during the first half of 2022 - - (866,572) (243)
-------------------------------------- ------------ -------- ------------ --------
Balance at 30 June 2023 and 31
December 2022 180,182,567 414,676 180,182,567 414,676
-------------------------------------- ------------ -------- ------------ --------
The holders of 178,952,098 ordinary shares are entitled to
receive dividends as declared from time to time and are entitled to
one vote per share at meetings of the Company. 1,230,469 ordinary
shares held in treasury are not entitled to receive dividends or
entitled to vote.
Equity Reserve
Balance at Balance at
30 June 2023 31 December
2022
(unaudited) (audited)
$000 $000
-------------- -------------
Balance at 1 January 27,803 26,695
Options charges 552 1,108
Exercise of options (453) -
-------------- -------------
Balance at 31 December 27,902 27,803
-------------- -------------
16. Earnings per share
Basic and diluted EPS
2023 2022
(unaudited) (audited)
$000 $000
-------------- ------------------------------------
Net profit/(loss) for the period 5,292 (12,980)
-------------- ------------------------------------
Weighted average number of ordinary shares outstanding 180,182,567 180,530,238
Dilutive effect of share options outstanding 9,299,428 11,785,049
-------------- ------------------------------------
Dilutive weighted average number of ordinary shares outstanding 189,481,995 192,315,287
-------------- ------------------------------------
Basic net profit per ordinary share 0.03 0.07
-------------- ------------------------------------
Diluted net profit per ordinary share 0.03 0.07
-------------- ------------------------------------
17. Dividends
2023 2022
(unaudited) (audited)
$000 $000
------------------------------------- -------------- ------------
Dividend overprovision (78) -
2022: 1.16 pence per ordinary share - 2,680
------------------------------------- -------------- ------------
(78) 2,680
------------------------------------- -------------- ------------
The interim dividend paid on 7 September 2022, included an
overprovision of dividend payment $78k to shares held in treasury.
The amount was refunded during the first six months of 2023.
On 6 April 2022, the Company declared a final dividend of 1.16
pence per ordinary share which was paid on 29 July 2022, being a
total dividend distribution of $2.7 million. The declared and paid
final dividend brings distributions to shareholders with regard to
the financial year ended 31 December 2021 to $4.0 million.
18. Supplemental cash flow information
Six months ended 30 June
2023 2022
(unaudited) (unaudited)
$000 $000
-------------- --------------
Finance income
Interest income 180 36
Foreign exchange gains 284 -
464 45
-------------- --------------
Finance costs
Foreign exchange loss - (167)
Accretion - decommissioning provision (76) (80)
Bank Fees & Service Charge (34) (15)
Lease interest expenses (note 13) (1) (3)
Loss on disposal of office equipment (note 9) (5)
(116) (265)
-------------- --------------
Net finance costs 348 (220)
-------------- --------------
19. Deferred tax expense
During the six months ended 30 June 2023, deferred tax expenses
of $1.8 million (2022: income of $841k) were recorded, principally
due to the increased gas revenues recognised during first half of
2023 and, with respect to 2022, due to changes made to the income
tax computation during that period following clarification on the
interpretation of tax laws in Tanzania recently enacted by the
TRA.
20. Subsequent events
On 11 July 2023, Wentworth was notified that the FCC has issued
a decision notice that the application by M&P for FCC approval
shall not be determined at this time and that the application will
be marked closed by the FCC.
M&P and Wentworth are in consultation with relevant
Tanzanian government stakeholders in order to bring the acquisition
to a successful conclusion before the agreed 31 December 2023 long
stop date. Based on discussions with relevant Tanzanian government
stakeholders, Wentworth considers it probable that a new
application will need to be made to the FCC in order for the FCC
condition to be satisfied. There can be no certainty that the
conditions will be satisfied or (where capable of being waived),
waived by M&P.
On 31 July 2023, the performance period ended in respect of an
award of conditional rights over 942,593 ordinary shares granted to
Katherine Roe, CEO, pursuant to the terms of the LTIP Plan. The
Remuneration Committee reviewed the extent to which the performance
conditions applicable to the award over the performance period were
satisfied, and confirmed that, 95.62% of the award, representing
901,364 ordinary shares, vested. In addition, in accordance with
the rules of the LTIP ("LTIP Rules"), the Committee determined to
pay dividend equivalents on part of the award.
The Committee determined that the award be satisfied partly by
the transfer of 477,722 ordinary shares held in treasury, and
partly in cash in the sum of $176k (GBP140k), to enable the tax
liability to be settled, and a payment of $40k (GBP32k) in respect
of dividend equivalents.
Non-IFRS Measures
The Group uses certain performance measures that are not
specifically defined under IFRS, or other generally accepted
accounting principles. These non-IFRS measures include adjusted
EBITDAX.
Adjusted EBITDAX
Adjusted EBITDAX is a non-IFRS measure that does not have a
standardised meaning prescribed by IFRS. This non-IFRS measure is
included because management uses the information to analyse cash
generation and financial performance of the Group. Adjusted EBITDAX
is defined as earnings before interest, taxation, depreciation,
depletion and amortisation, impairment, share-based payments,
provisions, and pre-licence expenditure
Standard
Estimates of reserves and resources have been prepared in
accordance with the June 2018 Petroleum Resources Management System
("PRMS") as the standard for classification and reporting with an
effective date of 31 December 2020.
Qualified Person Review
Cameron Snow, Head of Subsurface and Business Development, is a
geologist with 16 years' experience across North America, South
America, Africa, and Europe. He holds a BS in Geology from North
Carolina State University, an MS in Geology from Utah State
University, a PhD in Geological and Environmental Science from
Stanford University, and an MBA from Imperial College London. Mr.
Snow has read and approved the technical disclosure in this
regulatory announcement.
Glossary
Bcf/Bscf Billion standard cubic feet
MMscf/d Million standard cubic feet per day
------------------------------------
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END
IR FLFETAAIEFIV
(END) Dow Jones Newswires
September 26, 2023 02:00 ET (06:00 GMT)
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