PRESS RELEASE
15 November 2016
Wentworth Resources Limited
("Wentworth" or the "Company")
Q3 2016 Financial Statements and MD&A
Wentworth Resources Limited, the Oslo Stock Exchange (OSE: WRL) and London Stock Exchange (AIM: WRL) listed independent, East Africa-focused oil & gas company, today announces its results for the quarter ended 30 September 2016.
The following should be read in conjunction with the Q3 2016 Management Discussion and Analysis and Financial Statements which are available on the Company's updated website at http://www.wentworthresources.com.
Q3 2016 HIGHLIGHTS
Financial
- Gas sales revenue of $2.38 million for the quarter (Q3 2015: $0.97 million)
- Loss before tax for the quarter of $0.9 million (Q3 2015: $1.25 million)
- Exploration, appraisal and development capital expenditures of $0.97 million (Q3 2015: $1.51 million)
- Outstanding debt reduced to $21.7 million following a $3.33 million principal payment during the period
- Cash and cash equivalents on hand of $3.73 million at September 30, 2016 (December 31, 2015: $2.75 million)
- Working capital was $1.59 million at September 30, 2016 (December 31, 2015: $11.98 million)
- Continue to make progress to expand the Company's external debt capacity of up to $50 million
Operational
Tanzania
- Achieved average gross daily gas production for the third quarter of 34 MMscf/d down from 51 MMscf/d during Q2 2016. Contributing to the production decline from Q2 was the suspension of operations at the Symbion gas-fired power plant as a result of a dispute with the Tanzania Government, overhauls and commissioning of gas turbines at Ubungo II and Kinyerezi I power stations, and allocation of gas demand to industry competitors at the Songo Songo gas processing facility. The year-to-date average gross daily production is 44 MMscf/d
- Expansion of the liquid separation units and gas processing facilities at Manzi Bay was ongoing during Q3 2016 with commissioning and full operations expected in the coming months
- Potential increase in industrial consumer demand includes supplying the Dangote cement plant (30-40 MMscf/d) and resumption of operations at the Symbion power plant (20 MMscf/d)
Mozambique
- Engaged a third-party consulting firm to reprocess approximately 1,000 km of 1984/1985 vibroseis data which represents all of the existing regional seismic coverage over the Tembo appraisal area
- Finalized the design details of a new 2D seismic survey of approximately 700 km data. This survey will further Wentworth's ability to identify a suitable appraisal location for an appraisal well in 2018
- Ongoing analysis of existing seismic and well data in Mozambique and Tanzania to further our understanding of the regional Cretaceous geologic section
- Once the estimated cost of the new 2D seismic survey and preliminary cost of an appraisal well are determined, it is the Company's intention to secure an industry partner prior to commencing further capital activity associated with the appraisal program
Geoff Bury, Managing Director, commented:
"Q3 2016 gas sales volumes were impacted by a combination of factors that were primarily influenced by contractual issues beyond the control of the Mnazi Bay joint venture partners. We anticipate base demand for the remainder of 2016 and all of 2017 to be between 40 and 50 MMscf/d with possible significant increases originating from gas sales to industrial consumers and resumption of operations at the idle gas-fired Symbion power generation plant.
I am also pleased that progress continues to be made to bolster the balance sheet by looking to refinance our existing debt facilities and expand the debt capacity to provide further financial flexibility going forward. We continue to feel confident in the future build up in demand; as the new power plants, Kinyerezi-1 expansion and Kinyerezi II, are under construction and expected to be commissioned and operational during 2018, which coupled with increased industrial demand, provides exceptional long-term potential for the Company."
A conference call for investors, analysts and other interested parties will be held the same day at 06:00 MST (Calgary) / 13:00 GMT (London) / 14:00 CET (Oslo). Call in numbers:
International/ United Kingdom Dial In: +44 (0)20 7026 5967
Canada: +1 647 794 1827
Norway: +47 2350 0296
United States: +1 719 457 1036
The participants will be asked for their name, company and confirmation code. The Wentworth Resources confirmation code is: 1690174.
| Enquiries: | ||
| Wentworth | Lance Mierendorf, Chief Financial Officer | lance.mierendorf@wentworthresources.com +1 403 680 8773 |
| Katherine Roe Vice President Corporate Development & Investor Relations | katherine.roe@wentworthresources.com +44 7841 087 230 | |
| Swedbank First Securities | Broker (Norway) | +47 23 23 80 00 |
| Ove Gusevik | ||
| Jarand Lønne | ||
| Crux Advisers | Investor Relations Adviser (Norway) | +47 909 808 48 |
| Jan Petter Stiff | ||
| Carl Bachke | ||
| Stifel Nicolaus Europe Limited | AIM Nominated Adviser and Broker (UK) | +44 (0) 20 7710 7600 |
| Callum Stewart Nicholas Rhodes | ||
| Ashton Clanfield | ||
| FirstEnergy Capital | Broker (UK) | +44 (0) 20 7448 0200 |
| Hugh Sanderson | ||
| FTI Consulting | Investor Relations Adviser (UK) | wentworth@fticonsulting.com +44 (0) 20 3727 1000 |
| Edward Westropp Tom Hufton | ||
Financial Statements
The following primary statements have been extracted from the Q3 2016 unaudited consolidated financial statements which are located on the Company's website at www.wentworthresources.com.
WENTWORTH RESOURCES LIMITED
Unaudited Condensed Consolidated Interim Statement of Financial Position
United States $000s, unless otherwise stated
| September 30, 2016 | December 31, 2015 | |
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | 3,728 | 2,746 |
| Trade and other receivables | 6,144 | 3,253 |
| Prepayments, deposits and advances to partners | 261 | 841 |
| Current portion of long-term receivables | 12,020 | 18,190 |
| 22,153 | 25,030 | |
| Non-current assets | ||
| Long-term receivables | 19,731 | 18,897 |
| Exploration and evaluation assets | 44,803 | 43,141 |
| Property, plant and equipment | 94,159 | 95,168 |
| Deferred tax asset | 31,266 | 34,341 |
| 189,959 | 191,547 | |
| Total assets | 212,112 | 216,577 |
| LIABILITIES | ||
| Current liabilities | ||
| Trade and other payables | 10,894 | 6,269 |
| Current portion of long-term loans | 8,593 | 5,270 |
| Current portion of other liability | 1,072 | 1,508 |
| 20,559 | 13,047 | |
| Non-current liabilities | ||
| Long-term loans | 12,906 | 20,512 |
| Other liability | 1,321 | 1,634 |
| Decommissioning provision | 1,114 | 973 |
| 15,341 | 23,119 | |
| Equity | ||
| Share capital | 411,493 | 411,493 |
| Equity reserve | 26,154 | 25,683 |
| Accumulated deficit | (261,435) | (256,765) |
| 176,212 | 180,411 | |
| Total liabilities and equity | 212,112 | 216,577 |
WENTWORTH RESOURCES LIMITED
Unaudited Condensed Consolidated Interim Statement of Comprehensive Loss
United States $000s, unless otherwise stated
| Three months ended September 30, | Nine months ended September 30, | |||
| 2016 | 2015 | 2016 | 2015 | |
| Total revenue | 2,384 | 972 | 9,020 | 1,536 |
| Operating expenses | ||||
| Production and operating | (778) | (752) | (2,448) | (2,645) |
| General and administrative | (1,065) | (1,479) | (4,133) | (4,332) |
| Depreciation and depletion | (832) | (434) | (3,135) | (662) |
| Share based compensation | (107) | (136) | (471) | (594) |
| Loss from operating activities | (398) | (1829) | (1,167) | (6,697) |
| Finance income | 1,463 | 1,205 | 3,802 | 3,899 |
| Finance costs | (1,960) | (625) | (4,230) | (2,979) |
| Loss before tax | (895) | (1,249) | (1,595) | (5,777) |
| Deferred tax expense | (2,696) | - | (3,075) | - |
| Net loss and comprehensive loss | (3,591) | (1,249) | (4,670) | (5,777) |
| Net loss per ordinary share | ||||
| Basic and diluted (US$/share) | (0.02) | (0.01) | (0.03) | (0.04) |
WENTWORTH RESOURCES LIMITED
Unaudited Condensed Consolidated Interim Statement of Changes in Equity
United States $000s, unless otherwise stated
| Number of shares | Share capital | Equity reserve | Accumulated deficit | Total equity | |
| $ | $ | $ | $ | ||
| Balance at December 31, 2014 | 154,122,700 | 404,225 | 24,916 | (283,799) | 145,342 |
| Net loss and comprehensive loss | - | - | - | (5,777) | (5,777) |
| Share based compensation | - | - | 594 | - | 594 |
| Issue of share capital | 15,412,269 | 7,639 | - | - | 7,639 |
| Share issue costs | - | (371) | - | - | (371) |
| Balance at September 30, 2015 | 169,534,969 | 411,493 | 25,510 | (289,576) | 147,427 |
| Balance at December 31, 2015 | 169,534,969 | 411,493 | 25,683 | (256,765) | 180,411 |
| Net loss and comprehensive loss | - | - | - | (4,670) | (4,670) |
| Share based compensation | - | - | 471 | - | 471 |
| Balance at September 30, 2016 | 169,534,969 | 411,493 | 26,154 | (261,435) | 176,212 |
WENTWORTH RESOURCES LIMITED
Unaudited Condensed Consolidated Interim Statement of Cash Flows
United States $000s, unless otherwise stated
| Three months ended September 30, | Nine months ended September 30, | ||||
| 2016 | 2015 | 2016 | 2015 | ||
| Operating activities | |||||
| Net loss for the period | (3,591) | (1,249) | (4,670) | (5,777) | |
| Adjustments for: | |||||
| Depreciation and depletion | 832 | 434 | 3,135 | 662 | |
| Finance costs/(income), net | 497 | (580) | 428 | (920) | |
| Deferred tax expense | 2,696 | - | 3,075 | - | |
| Share based compensation | 107 | 136 | 471 | 594 | |
| Change in non-cash working capital | (108) | (1,855) | (1,135) | 523 | |
| Net cash generated from/(utilized in) operating activities | 433 | (3,114) | 1,304 | (4,918) | |
| Investing activities | |||||
| Acquisitions of evaluation and exploration assets | (541) | (3,834) | (1,635) | (10,986) | |
| Acquisitions of property, plant and equipment | - | (4,834) | (9) | (12,234) | |
| Reductions of/(additions to) long-term receivable | 1,905 | (168) | 8,294 | (1,672) | |
| Net cash from/(used in) investing activities | 1,364 | (8,836) | 6,650 | (24,892) | |
| Financing activities | |||||
| Issue of share capital, net of issue costs | - | 7,268 | - | 7,268 | |
| Repayment of long-term loan | (3,333) | - | (4,333) | - | |
| Proceeds from long-term loan | - | 5,161 | - | 20,000 | |
| Interest paid | (835) | (421) | (1,859) | (663) | |
| Payment of other liability | (186) | - | (780) | - | |
| Net cash (used in)/from financing activities | (4,354) | 12,008 | (6,972) | 26,605 | |
| Net change in cash and cash equivalents | (2,557) | 58 | 982 | (3,205) | |
| Cash and cash equivalents, beginning of the period | 6,285 | 2,224 | 2,746 | 5,487 | |
| Cash and cash equivalents, end of the period | 3,728 | 2,282 | 3,728 | 2,282 | |
About Wentworth Resources
Wentworth Resources is a publicly traded (OSE:WRL, AIM:WRL), independent oil & gas company with: natural gas production; exploration and appraisal opportunities; and large-scale gas monetisation initiatives, all in the Rovuma Delta Basin of coastal southern Tanzania and northern Mozambique.
Cautionary note regarding forward-looking statements
This press release may contain certain forward-looking information. The words "expect", "anticipate", believe", "estimate", "may", "will", "should", "intend", "forecast", "plan", and similar expressions are used to identify forward looking information.
The forward-looking statements contained in this press release are based on management's beliefs, estimates and opinions on the date the statements are made in light of management's experience, current conditions and expected future development in the areas in which Wentworth is currently active and other factors management believes are appropriate in the circumstances. Wentworth undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless required by applicable law.
Readers are cautioned not to place undue reliance on forward-looking information. By their nature, forward-looking statements are subject to numerous assumptions, risks and uncertainties that contribute to the possibility that the predicted outcome will not occur, including some of which are beyond Wentworth's control. These assumptions and risks include, but are not limited to: the risks associated with the oil and gas industry in general such as operational risks in exploration, development and production, delays or changes in plans with respect to exploration or development projects or capital expenditures, the imprecision of resource and reserve estimates, assumptions regarding the timing and costs relating to production and development as well as the availability and price of labour and equipment, volatility of and assumptions regarding commodity prices and exchange rates, marketing and transportation risks, environmental risks, competition, the ability to access sufficient capital from internal and external sources and changes in applicable law. Additionally, there are economic, political, social and other risks inherent in carrying on business in Tanzania and Mozambique. There can be no assurance that forward-looking statements will prove to be accurate as actual results and future events could vary or differ materially from those anticipated in such statements. See Wentworth's Management's Discussion and Analysis for the year ended December 31, 2015, available on Wentworth's website, for further description of the risks and uncertainties associated with Wentworth's business.
Notice
Neither the Oslo Stock Exchange nor the AIM Market of the London Stock Exchange has reviewed this press release and neither accepts responsibility for the adequacy or accuracy of this press release.
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
This announcement contains inside information as defined in EU Regulation No. 596/2014 and is in accordance with the Company's obligations under Article 17 of that Regulation.
