Wentworth Resources Limited : Q2 2017 and Half Year Financial Statements and MD&A
PRESS RELEASE
10 August 2017
Wentworth Resources Limited
("Wentworth" or the "Company")
Q2 2017 and Half Year 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 and six months ended 30 June 2017.
The following should be read in conjunction with the Q2 2017 Management
Discussion and Analysis and Financial Statements which are available on the
Company's updated website at http://www.wentworthresources.com.
Corporate
* On 23 May 2017, the Company completed a private placement and issued
16,953,496 new common shares, for cash consideration of $0.326 (GBP 0.25 or
NOK 2.73) per share for total gross proceeds of $5.53 million (GBP4.2
million or NOK46.3 million).
Financial
* Gas sales revenue of $2.15 million for the quarter, compared to $2.94
million in Q1 2017 and $3.43 million in Q2 2016. For the Half-year 2017
revenue was $5.10 million compared to $6.64 million in 2016.
* Net loss of $1.25 million and $1.66 million in Q2 and Half-year 2017
compared to net losses of $0.17 million and $1.08 in 2016 respectively.
* Capital expenditures of $0.61 million during Q2 and $1.3 million during
Half-year 2017 which compares to $2.16 million and $2.82 million in 2016
respectively.
* Cash and cash equivalents on hand of $3.83 million compared with $0.98
million on hand at December 31, 2016.
* Working capital of $9.08 million compared to $4.96 million at December
31, 2016.
* Drew $0.56 million on new overdraft credit facility for working capital
purposes during Q2 2017.
Operational
Tanzania
* Following 2016, a year in which gas demand varied significantly on a month
to month basis as existing government owned gas infrastructure was upgraded,
new infrastructure was commissioned and industry participation in the gas
supply and electrical power generation was established, gas demand started
to stabilise in the first half of 2017.
* Since the end of the wet season during Q2 2017 when hydro power generation
is at its annual peak, gas production volumes have increased substantially.
* The Mnazi Bay field achieved average gross daily gas production during the
quarter of 30.7 MMscf/d and 36.9 MMscf/d during the first half of 2017, with
June 2017 production averaging 44.3 MMscf/d. Gross gas sales for Q2 to date
have reached over 60 MMscf/d with management's forecast for the full year
2017 remaining within the guided range of 40 to 50 MMscf/d.
* Managed working capital with focus on petitioning purchasers of gas to
improve the timeliness of settling amounts owing and working with our two
main creditors, local banks and the operator of the Manzi Bay Concession, to
pay obligations upon settlement of receivables.
Mozambique
* Proceeding with plan to commence the drilling of an appraisal well on the
Tembo discovery next year, before acquiring additional seismic if necessary.
Consideration to acquiring additional seismic will be contingent upon the
results of the appraisal well.
* Continued work on reprocessing existing 2-D vibroseis seismic data,
completed Tembo-1 well analysis and continued mapping and interpretation of
all existing data with a view to selecting a well location.
* Continued the process of securing an industry partner to participate in the
appraisal programme in advance of drilling an appraisal well.
Geoff Bury, Managing Director, commented:
"Second quarter production was impacted by the rainy season during which hydro
power generation is used as a substitute for gas-fired power generation but
production rebounded to an average for July of 61 MMscf/d and we continue to
maintain an average production guidance for the year of between 40 and 50
MMscf/d.
The Company is effectively managing working capital through a period of slower
payments from its government agency customers TPDC and TANESCO. These efforts
include being fully engaged with Maurel & Prom and our local Tanzania based
banking institutions to effectively settle obligations as cash flows improve
through higher production volumes.
We continue to advance the process of securing a farm-in partner for the
drilling of an appraisal well in Mozambique and have received very positive
initial interest from industry. The Mozambique government has expressed their
support for the drilling of an appraisal well in 2018 in advance of the need to
acquire new seismic data over the gas discovery area. The Company is currently
determining a well location and expects to secure a farm-in partner before the
commencement of drilling operations."
A conference call for investors, analysts and other interested parties will be
held this morning at 01.30 MDT (Calgary) / 08.30 BST (London) / 09.30 CEST
(Oslo).
Call in numbers:
Please dial in 5-10 minutes prior to the start time and join the call by
referencing "Wentworth Q2
Results".
Participant Std International Dial-In: +44 (0) 1452 542303
Participant UK LocalCall Dial-In Number:
United Kingdom, LocalCall: 08448719456
Norway: 21033911
Participant FreeCall Dial in numbers:
Canada: 18669923610
France: 0805110467
Norway: 80016886
United States: 18663899778
-Ends-
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
Crux Advisers Investor Relations +47 909 808 48
Adviser
(Norway)
Carl Bachke
Stifel Nicolaus AIM Nominated +44 (0) 20 7710 7600
Europe Limited Adviser and Broker
(UK)
Callum Stewart
Nicholas Rhodes
Ashton Clanfield
GMP FirstEnergy 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
Financial Statements
The following primary statements have been extracted from the Q2 2017 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
June 30, December 31,
2017 2016
---------------------------
ASSETS
Current assets
Cash and cash equivalents 3,833 979
Trade and other receivables 9,624 6,699
Prepayments and deposits 175 187
Current portion of long-term receivables 11,454 12,283
---------------------------
25,086 20,148
---------------------------
Non-current assets
Long-term receivables 14,608 18,034
Exploration and evaluation assets 46,455 45,538
Property, plant and equipment 92,196 93,366
Deferred tax asset 31,372 31,145
---------------------------
184,631 188,083
---------------------------
Total assets 209,717 208,231
---------------------------
LIABILITIES
Current liabilities
Overdraft credit facility 558 -
Trade and other payables 8,234 8,675
Current portion of long-term loans 5,924 5,258
Current portion of other liability 1,290 1,260
---------------------------
16,006 15,193
---------------------------
Non-current liabilities
Long-term loans 12,528 15,254
Other liability 1,030 1,100
Decommissioning provision 819 773
---------------------------
14,377 17,127
---------------------------
Equity
Share capital 416,426 411,493
Equity reserve 26,420 26,275
Accumulated deficit (263,512) (261,857)
---------------------------
179,334 175,911
---------------------------
Total liabilities and equity 209,717 208,231
---------------------------
WENTWORTH RESOURCES LIMITED
Unaudited Condensed Consolidated Interim Statement of Comprehensive Loss
United States $000s, unless otherwise stated
Three months ended June Six months ended June
30, 30,
2017 2016 2017 2016
--------------------------------------------------
Total revenue 2,152 3,430 5,096 6,636
Operating expenses
Production and operating (903) (773) (1,813) (1,670)
General and administrative (1,084) (1,556) (2,014) (3,068)
Depreciation and depletion (654) (1,189) (1,548) (2,303)
Share based compensation (37) (136) (145) (364)
--------------------------------------------------
Loss from operating (526) (224) (424) (769)
activities
Finance income 370 1,072 991 2,339
Finance costs (597) (1,062) (2,449) (2,270)
--------------------------------------------------
Loss before tax (753) (214) (1,882) (700)
Deferred tax (493) 40 227 (379)
recovery/(expense)
--------------------------------------------------
Net loss and comprehensive (1,246) (174) (1,655) (1,079)
loss
--------------------------------------------------
Net loss per ordinary share
Basic and diluted (0.01) - (0.01) (0.01)
(US$/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
Note shares capital reserve deficit equity
$ $ $ $
--------------------------------------------------------------
Balance at 169,534,969 411,493 25,683 (256,765) 180,411
December
31, 2015
Net loss and - - - (1,079) (1,079)
comprehensive
loss
Share based 10 - - 364 - 364
compensation
---------------------------------------------------------
Balance at June 169,534,969 411,493 26,047 (257,844) 179,696
30, 2016
---------------------------------------------------------
Balance at 169,534,969 411,493 26,275 (261,857) 175,911
December
31, 2016
Net loss and - - - (1,655) (1,655)
comprehensive
loss
Share based 10 - - 145 - 145
compensation
Issue of share 11 16,953,496 5,527 - - 5,527
capital
Share issue 11 - (594) - - (594)
costs, net of
tax
---------------------------------------------------------
Balance at June 186,488,465 416,426 26,420 (263,512) 179,334
30, 2017
---------------------------------------------------------
WENTWORTH RESOURCES LIMITED
Unaudited Condensed Consolidated Interim Statement of Cash Flows
United States $000s, unless otherwise stated
Three months Six months
ended ended
June 30 June 30,
2017 2016 2017 2016
---------------------------------
Operating activities
Net loss for the period (1,246) (174) (1,655) (1,079)
Adjustments for:
Depreciation and depletion 654 1,189 1,548 2,303
Finance costs/(income), net 227 (10) 1,458 (69)
Deferred tax expense/(recovery) 493 (40) (227) 379
Share based compensation 37 136 145 364
Change in non-cash working capital (827) (88) (1,851) (1,027)
---------------------------------
Net cash (utilized in)/generated from
operating activities (662) 1,013 (582) 871
---------------------------------
Investing activities
Additions to evaluation and exploration (506) - (950) -
assets
Additions to property, plant and equipment (174) (9) (391) (9)
Reductions of long-term receivable 1,411 2,699 2,400 5,295
---------------------------------
Net cash from investing activities 731 2,690 1,059 5,286
---------------------------------
Financing activities
Issue of share capital, net of issue costs 4,933 - 4,933 -
Principal payments (2,000) (1,000) (2,014) (1,000)
Debt restructuring fee - - (83) -
Draw on overdraft credit facility 558 - 558 -
Interest paid (182) (251) (966) (1,024)
Payment of other liability - (221) (51) (594)
---------------------------------
Net cash from/ (used in) financing activities 3,309 (1,472) 2,377 (2,618)
---------------------------------
Net change in cash and cash equivalents 3,378 2,231 2,854 3,539
Cash and cash equivalents, beginning of the 455 4,054 979 2,746
period
---------------------------------
Cash and cash equivalents, end of the period 3,833 6,285 3,833 6,285
---------------------------------
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, 2014,
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 information is subject to the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.