Wentworth Resources Limited : Q3 2016 Financial Statements and MD&A
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, lance.mierendorf@wentworthresources.com
Chief Financial +1 403 680 8773
Officer
Katherine Roe katherine.roe@wentworthresources.com
Vice President +44 7841 087 230
Corporate
Development &
Investor Relations
Swedbank First Broker (Norway) +47 23 23 80 00
Securities
Ove Gusevik
Jarand Lønne
Crux Advisers Investor Relations +47 909 808 48
Adviser
(Norway)
Jan Petter Stiff
Carl Bachke
Stifel Nicolaus AIM Nominated +44 (0) 20 7710 7600
Europe Limited Adviser and Broker
(UK)
Callum Stewart
Nicholas Rhodes
Ashton Clanfield
FirstEnergy Capital Broker (UK) +44 (0) 20 7448 0200
Hugh Sanderson
FTI Consulting Investor Relations wentworth@fticonsulting.com
Adviser (UK) +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, December 31,
2016 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 $000s, unless otherwise stated
Three months ended Nine months ended
September 30, September 30,
2016 2015 2016 2015
-----------------------------------------------------
Total revenue 2,384 972 9,020 1,536
Operating expenses
Production and operating (778) (752) (2,448) (2,645)
General and (1,065) (1,479) (4,133) (4,332)
administrative
Depreciation and (832) (434) (3,135) (662)
depletion
Share based compensation (107) (136) (471) (594)
-----------------------------------------------------
Loss from operating (398) (1829) (1,167) (6,697)
activities
Finance income 1,463 1,205 3,802 3,899
Finance costs (1,960) (625) (4,230) (2,979)
-----------------------------------------------------
Loss before tax (895) (1,249) (1,595) (5,777)
Deferred tax expense (2,696) - (3,075) -
-----------------------------------------------------
Net loss and (3,591) (1,249) (4,670) (5,777)
comprehensive loss
-----------------------------------------------------
Net loss per ordinary
share
Basic and diluted (0.02) (0.01) (0.03) (0.04)
(US$/share)
-----------------------------------------------------
WENTWORTH RESOURCES LIMITED
Unaudited Condensed Consolidated Interim Statement of Changes in Equity
United States $000s, unless otherwise stated
Number of Share Equity Accumulated Total
shares capital reserve deficit equity
$ $ $ $
--------------------------------------------------------------
Balance at 154,122,700 404,225 24,916 (283,799) 145,342
December
31, 2014
Net loss and - - - (5,777) (5,777)
comprehensive
loss
Share based - - 594 - 594
compensation
Issue of share 15,412,269 7,639 - - 7,639
capital
Share issue - (371) - - (371)
costs
--------------------------------------------------------------
Balance at 169,534,969 411,493 25,510 (289,576) 147,427
September
30, 2015
--------------------------------------------------------------
Balance at 169,534,969 411,493 25,683 (256,765) 180,411
December
31, 2015
Net loss and - - - (4,670) (4,670)
comprehensive
loss
Share based - - 471 - 471
compensation
--------------------------------------------------------------
Balance at 169,534,969 411,493 26,154 (261,435) 176,212
September
30, 2016
--------------------------------------------------------------
WENTWORTH RESOURCES LIMITED
Unaudited Condensed Consolidated Interim Statement of Cash Flows
United States $000s, unless otherwise stated
Three months ended Nine months ended
September 30, 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 832 434 3,135 662
depletion
Finance costs/(income), 497 (580) 428 (920)
net
Deferred tax expense 2,696 - 3,075 -
Share based compensation 107 136 471 594
Change in non-cash (108) (1,855) (1,135) 523
working capital
-----------------------------------------------------
Net cash generated 433 (3,114) 1,304 (4,918)
from/(utilized in)
operating activities
-----------------------------------------------------
Investing activities
Acquisitions of (541) (3,834) (1,635) (10,986)
evaluation and
exploration assets
Acquisitions of property, - (4,834) (9) (12,234)
plant and equipment
Reductions of/(additions 1,905 (168) 8,294 (1,672)
to) long-term receivable
-----------------------------------------------------
Net cash from/(used in) 1,364 (8,836) 6,650 (24,892)
investing activities
-----------------------------------------------------
Financing activities
Issue of share capital, - 7,268 - 7,268
net of issue costs
Repayment of long-term (3,333) - (4,333) -
loan
Proceeds from long-term - 5,161 - 20,000
loan
Interest paid (835) (421) (1,859) (663)
Payment of other (186) - (780) -
liability
-----------------------------------------------------
Net cash (used in)/from (4,354) 12,008 (6,972) 26,605
financing activities
-----------------------------------------------------
Net change in cash and (2,557) 58 982 (3,205)
cash equivalents
Cash and cash 6,285 2,224 2,746 5,487
equivalents, beginning of
the period
-----------------------------------------------------
Cash and cash 3,728 2,282 3,728 2,282
equivalents, end of the
period
-----------------------------------------------------
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.