PRESS RELEASE 14 January 2021
WENTWORTH RESOURCES PLC
("Wentworth" or the "Company")
Operational Update and 2021 Production Guidance
Wentworth Resources plc (AIM: WEN), the independent, Tanzania-focused natural gas production company, is pleased to announce the following operational update and provide production guidance for 2021.
· The health and safety of our employees remains a top priority and robust precautionary measures remain in place to ensure the continued safety of our staff; to date, there have been zero reported cases of COVID-19 at Mnazi Bay
· Mnazi Bay continues to remain fully operational with no material adverse impact on supply from the pandemic
· 2020 full year production averaged 65.36 MMscf/day (gross), within the annual production guidance range of 60-70 MMscf/day (gross)
· Repairs to the MB-2 flowline were completed on 9 December 2020, increasing the capacity of the field to over 100MMscf/day
· December 2020 production averaged 82.93 MMscf/day (gross), with five days reaching 103 MMscf/day (gross), and a record high of 103.36 MMscf/day achieved on 15 December 2020; demonstrating both the capabilities of the field and the potential for natural gas demand to dramatically increase during the hot, dry season
· Production guidance for full year 2021 has been set at 65-75 MMscf/day (gross)
· Interim dividend of $1.2 million paid in October 2020, an increase of 20% from the Company's maiden interim distribution of $1.0 million in 2019
· Total dividend distributions paid to shareholders during the 2020 calendar year increased to $3.2 million
· Debt free with $17.8 million cash on hand at 31 December 2020 (unaudited)
· The JV Partners have agreed a 2021 firm work programme totalling approximately $4.4 million net to Wentworth
· Strengthening of working partnership with Tanzania Petroleum Development Corporation ("TPDC") which continues to settle all gas sales invoices in full as they fall due and remains fully current with payments
· Discussions with Tanzania Electric Supply Company ("TANESCO") are on-going to settle all remaining arrears, which currently stand at 15 months totalling approximately $1.3 million net to Wentworth
Sustainable and responsible growth in Tanzania that protects long-term shareholder returns remains a priority for the business. 2020 was a very active period for the Company with a number of discussions initiated to support our growth ambitions and these remain on-going with key stakeholders in Tanzania.
Our commitment to further growth in Tanzania is underpinned by our long track record in-country and the increasing requirement for a reliable, affordable and low-carbon energy supply. Wentworth's robust gas-to-power production platform is well-positioned to service this future demand growth, working hand-in-hand with low carbon technologies, such as hydropower.
During 2020, the Company undertook a strategic review of its ESG priorities and reporting and looks forward to publishing its inaugural Sustainability Report this year.
Sustainable Dividend Policy
Since the commencement of Wentworth's dividend policy in September 2019, the Company has made distributions totalling $4.2 million to shareholders. The Company will declare its final dividend for year ended 2020 along with the Company's Final Results expected in April 2021.
Katherine Roe, CEO, commented:
"We are pleased to announce that Mnazi Bay has remained fully operational since the start of the pandemic. Despite strong hydropower generation from a heavy rainy season during the first half of 2020 and a slowdown in industrial demand in Q2 2020 due to COVID-related restrictions, we saw this trend reverse swiftly following the lifting of those restrictions. In the second half of 2020, we saw demand increasing to levels that ensured we comfortably met our production guidance, with 2020 full year volumes of 65.36 MMscf/day, the middle of our guidance range of 60-70 MMscf/day (gross).
"The record volumes we enjoyed in December demonstrates the tangible increase in demand during the hot, dry season which, alongside the increasing industrialisation of Tanzania's economy, provides a robust outlook for 2021 with production guidance set at 65-75MMscf/day (gross). This guidance reflects both historical demand profiles, Wentworth's evolving understanding of the demand landscape, and the developing process of production allocation between suppliers. Reaching this target will be further supported through recent repairs to the MB-2 flowline during December, which has increased the capacity of the field to over 100MMscf/day.
"We continue to align our commitment to delivering a positive impact for Tanzania whilst delivering long-term, sustainable returns for our shareholders - we strongly believe these two commitments must go hand-in-hand. For our shareholders, we're proud to have paid $3.2 million of dividend distributions during the 2020 calendar year and remain committed to an ongoing sustainable dividend policy going forward.
"The future demand outlook underpins our strategy for ambitious growth in Tanzania to transform the country by increasing low-carbon energy access to meet the universal access target set for 2030 set by the Government of Tanzania and aligned with the UN's Sustainable Development Goals."
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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.
The information contained within this announcement is deemed by Wentworth to constitute inside information as stipulated under the Market Abuse Regulation (EU) no. 596/2014 ("MAR"). On the publication of this announcement via a Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.