Wentworth (AIM: WEN), the AIM listed independent, East Africa-focused oil & gas company, is pleased to announce the following updates.
Further to the announcement of the Company’s results for the year ended 31 December 2018 on 24 April 2019, Wentworth confirms that the Annual Report and Financial Statements for the year ended 31 December 2018 are available on the Company’s website at www.wentplc.com. Hard copies have today been posted to those shareholders who elected to receive them, together with documentation for the 2019 Annual General Meeting.
The Annual General Meeting is scheduled to be held at 10.00am on Wednesday 26 June 2019 at the offices of Pinsent Masons, 30 Crown Place, Earl Street, London, EC2A 4ES.
Monthly payments continue to be consistently received from both Tanzanian Petroleum Development Company (“TPDC”) and Tanzania Electric Supply Company Limited (“TANESCO”) and arrears due from both off-takers continue to remain at three months.
As previously announced, the 2012 Ziwani-1 exploration well and associated 3D seismic costs were paid by Maurel et Prom (“M&P”) and Cove Energy as part consideration for their entry into the Mnazi Bay asset, thereby fully carrying Artumas, now Wentworth, (the “Ziwani Carry”). The net Ziwani Carry was $8.4 million. Sustained, regular payments have enabled Wentworth to settle the Ziwani carry, with the final deduction of $1.3 million being made in January 2019.
The Company has also made the final contingent payment to PTT Exploration and Production Public Company Limited (“PTTEP”) of $441k, net to Wentworth. Following this payment, Wentworth has no further ongoing liability to PTTEP.
Production guidance for 2019 of 75 – 85 MMscf/d remains unchanged. Average production to end April 2019 was 73 MMscf/d, materially impacted by increased hydro-electric supply during the rainy season from March through late May and additional gas supplied into the transnational pipeline from SongoSongo. The Company expects to see existing demand underpinned and set to increase over the second half of 2019, due to:
The current wet season expected to be over by late May 2019 and thus output from the hydro-electric plants will diminish;
Repairs to the three turbines at Ubungo II plant completed by end of May 2018;
Ongoing power evacuation problems at the Kinyerezi power stations resolved by end of Q2 2019;
Kinyerezi-1 and Kinyerezi-2 power stations to run at near full capacity for H2 2019;
Demand from the Dangote Cement plant expected to increase in the coming months as gas generation increases with the retirement of its older diesel plants;
The new Kinyerezi-1 Extension TANESCO facility is expected to begin its commissioning phase starting Q3 2019, gradually bringing on-stream demand of c.24 MMcf/d over the remainder of 2019, with final commissioning in 2020.
Workover and Pressure Monitoring. The operator, M&P, has successfully completed a workover and pressure monitoring campaign involving slick-line operations on the Mnazi Bay wells. The pressure monitoring data is in-line with expectations and looks to continue for the foreseeable future with the goal of further delineating potential upside, especially in the lower MB sand packages. The accompanying slick-line work performed on the MB-2, MB-3 and MB-4 wells was part of an on-going production strategy by M&P to optimize production over the life of the field. Further routine operations are expected throughout 2019.
Inlet pressure. TPDC agreed on 17 April 2019 to reduce the inlet delivery pressure to the transnational pipeline at the Madimba Gas Processing Facility (“Madimba GPF”), from 95barg to 85barg. Decreasing the inlet delivery pressure increases volumes available prior gas compression capex, gives the Joint Venture more flexibility to operate the wells, allows management of the reservoir efficiently, and extends production plateau or production at higher rates in the current configurations, all things being equal. The Company views this as a positive step and shows a spirit of co-operation and pragmatism amongst the stakeholders of the Mnazi Bay Concession.
Tembo appraisal block, Mozambique. On 25 April 2019, the Company received approval of the relinquishment of the Tembo Appraisal Block from the Honourable Minister of Natural Resources and Energy. The Company has now closed its office in Maputo and is working with the Instituto Nacional de Petroleo (“INP”) to transfer the remaining assets, namely the Palma Camp back to the Government of Mozambique. Disposal of legacy surplus drilling inventory stored at the Muxara Camp in Pemba is expected to be completed by late May 2019. The Company is taking the necessary actions, in accordance with Mozambique Petroleum Law and industry best practice, to ensure that all liabilities relating to the concession area, especially in relation to environmental issues, are conclusively dealt with prior to a full and final exit of the block by 15 June 2019.
Eskil Jersing, CEO, commented:
“We continue to improve our fundamentals, with regular revenue receipts, debt reduction, completion of the Ziwani carry payment and final payment to PTTEP.
We maintain our 2019 production guidance and have line of sight to increasing demand in H2 2019 and beyond. The agreement to an inlet pressure reduction at Madimba is a key commercial trigger and it is encouraging that the Joint Venture has been able to agree on a pragmatic first step, with all the associated look-through benefits to asset value.
Our Mozambique country exit continues smoothly, on time and with no liability exposure.
With regards to M&A due diligence efforts, we have worked hard over the last six months on a range of transaction options both at a Corporate and asset level and feel confident at being able to execute on inorganic, self-sustaining growth opportunities in 2019.”
Source: Wentworth Resources