Interim Results for 6 months ended 30 June 2020

RNS Number : 8800X
Wentworth Resources PLC
03 September 2020
 

 

 

 

PRESS RELEASE    3 September 2020

WENTWORTH RESOURCES PLC
("Wentworth" or the "Company")

Interim Results for the six months ended 30 June 2020

Wentworth Resources (AIM: WEN), the independent, Tanzania-focused natural gas production company , is pleased to announce its interim financial results for the six months ended 30 June 2020. All dollar values are expressed in US dollars unless stated otherwise.

HIGHLIGHTS

2020 Outlook

· The health and safety of our employees is our priority and robust precautionary measures remain in place to ensure the continued safety of our staff; there have been zero reported cases of COVID-19 at Mnazi Bay

· Mnazi Bay remains fully operational, with no adverse impact on supply from the pandemic

· Marginal decline in industrial demand due to weakened activity as a result of COVID-19 with 2020 production guidance slightly adjusted to 60-70 MMscf/day (gross)

· Tanzania's economy has remained resilient with recent data from the African Development Bank suggesting Tanzania's projected GDP growth in 2020 is set to be the highest in the East Africa region at 5.2%

· Production volumes are expected to be typically higher in H2 2020 than H1 2020 due to the end of the rainy season and the lifting of COVID-19 restrictions in Tanzania

· Mnazi Bay is well-positioned to supply increased gas volumes and support demand growth in H2 2020 and into 2021 with the capacity to supply volumes of 100 MMscf/day (gross)

Financial

· Interim dividend of $1.2 million declared, an increase of 20% from H1 2019 ($1.0 million), bringing the total dividend distribution declared in the last 12 months to $4.2 million

· Revenues of $8.3 million, underpinned by long-term fixed price contracts with the Government of the United Republic of Tanzania

· Adjusted EBITDAX of $4.1 million (H1 2019: $3.3 million)

· Debt free with $16.7 million cash on hand at 2 September 2020 

· Tanzania Petroleum Development Corporation ("TPDC") now fully current with payments

· Continued commitment from Tanzania Electric Supply Company ("TANESCO") to settle all remaining arrears with payments resuming in August

Operational

· Adjusted production guidance range of 60-70 MMscf/day (gross)

· 58.28 MMscf/day (H1 2019: 66.17 MMscf/day) for the period to 30 June 2020 following weakened demand due to COVID-19 related restrictions in March and April and an extended rainy season in January and June (normally March to late May)

· Industrial demand now recovering after the lifting of COVID-19 restrictions and natural gas-fired electricity generation displacing hydro-electric power due to the onset of the dry season. Proportion of supply to Tanzania's national grid provided by natural gas increased from 47% to currently 60%. Production averaged 68.48 MMscf/day for the period 1 July 2020 to 31 August 2020 and 71.77 MMscf/day for the period 1 August 2020 to 31 August 2020

· Low operational cost of production of $1.72/Mscf (2019: $1.88/Mscf)

· 2P Reserves of 95 Bscf, valued at $118.6 million (post-tax NPV10) as at 31 December 2019 as per published RPS Reserves Assessment Report

Sustainable Growth

·Wentworth remains focused on identifying sustainable and responsible growth opportunities that create value for Tanzania, Wentworth and all its stakeholders 

· With an energy access rate of only 37% according to the IEA, population growth set to double by 2050 and an economy shifting from an agricultural to an industrial base, there is a real need for transformational growth in Tanzania's domestic energy supply to deliver universal access by 2030

·  Wentworth's robust gas-to-power production platform is well-positioned to service this future demand growth and we are committed to growing our platform responsibly to support demand growth in Tanzania and protect returns for shareholders  

Dividend

A dividend is declared of GBP 0.48 pence per share (US$1.2 million), payable by the end of October 2020.   A final dividend for the year ending 31 December 2020 will be determined by the Board with the full year results and is expected to be approximately $2.4 million in line with the Company's stated policy of 1/3 : 2/3 split between the interim and final dividend.  Assuming a final dividend is declared, subject to shareholder approval, this would equate to a total distribution of $3.6 million which represents a full year dividend of 1.43 pence per share, a yield of approximately 8.2% at the current share price. Shareholders who hold their shares on the VPS Register on the Record Date shall receive the dividend in NOK.  The exchange rate shall be determined on the UK Payment Date and the Company shall inform VPS Shareholders as soon as practicable thereafter of the NOK sum per share they will receive which shall be settled on the VPS Payment Date.

Interim Dividend Payment Timetable:

· Ex-dividend date: 10 September 2020

· Record Date: 11 September 2020

· UK Payment Date (for shareholders who hold shares on the UK Register): 9 October 2020

· VPS Payment Date (for shareholders who hold shares on the VPS Register): 23 October 2020

Interim Results Analyst Conference Call

The Company is holding a conference call for analysts at 9:30am BST today, Thursday 3 September 2020 and an updated presentation will be available at that time on the Company's website: wentplc.com .

To register for the call, please click on the following link:

https://secure.emincote.com/client/wentworth/wentworth005/vip_connect

To view the presentation during the call, please click on the following link:

https://secure.emincote.com/client/wentworth/wentworth005

Katherine Roe, CEO, commented:

"Despite a challenging macroeconomic environment due to the ongoing impacts of the COVID-19 pandemic, Wentworth has continued to demonstrate business resilience, robust financial and operational performance which has underpinned our decision to increase our interim dividend.

Having only launched our sustainable dividend policy in Q3 2019, we're delighted to have now declared three dividend payments within the last twelve months returning $4.2m in total to shareholders. This latest interim dividend also represents a 20% increase year-on-year from our inaugural dividend in September last year and demonstrates how our sustainable business model can withstand these global economic shocks.

Looking ahead to the second half of 2020, with Tanzania now returning gradually to business-as-usual and following unprecedentedly high levels of rainfall in the H1 2020, we expect to see an increase in demand for natural gas during the remaining part of this year.  

Responsible and sustainable growth that creates value for all our stakeholders remains our priority. We are proud to be a Tanzanian business that is committed to playing a leading role in closing the country's energy access gap through low-carbon solutions as it seeks to deliver universal access by 2030. Through the provision of reliable, affordable and low-carbon power we have a significant opportunity to deliver transformational change for the people of Tanzania and to support the ongoing socio-economic development of the country. "  

Enquiries: 


Wentworth

 

 

Katherine Roe,
Chief Executive Officer

 

 

 

katherine.roe@wentplc.com
+44 (0) 7841 087 230
 

 
Stifel Nicolaus Europe Limited

 
AIM Nominated Adviser and Joint Broker 
Callum Stewart
Ashton Clanfield
Simon Mensley

 
+44 (0) 20 7710 7600

 

Peel Hunt LLP

 

Joint Broker 
Richard Crichton
Alexander Allen

 

+44 (0) 20 7418 8900

 

FTI

 

Communications Adviser 
Sara Powell 

Ben Brewerton

 

+44 (0) 20 3727 1000

 

 

 

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.
 

CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME

 

 

 

Six months ended 30 June

 

 

 

Note

2020

(unaudited)

$000

2019

(unaudited)

$000

 

 

 

 

 

 

 

 

Total revenue

 

8,313

8,018

 

 

 

 

Production and operating costs

 

(1,734)

(1,772)

Depletion

8

(2,616)

(2,843)

Total cost of sales

 

(4,350)

(4,615)

 

 

 

 

Gross profit

 

3,963

3,403

 

 

 

 

Recurring administrative costs

4

(2,527)

(2,963)

New venture and pre-licence costs

 

(94)

(498)

Share-based payment charges

15

(137)

(243)

Depreciation

8

(2)

(8)

Total costs

 

(2,760)

(3,712)

 

 

 

 

Profit/(loss) from operations

 

1,203

(309)

 

 

 

 

Finance income

5

91

134

Finance costs

5

(78)

(559)

Profit/(loss) before tax

 

1,216

(734)

 

 

 

 

Current tax expense

 

(15)

(11)

Deferred tax expense

 

(187)

587

 

 

 

(202)

576

Net and comprehensive profit/(loss) after tax

 

 

1,014

(158)

Net profit per ordinary share

 

 

 

Basic and diluted (US$/share)

17

0.005

-

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION

 

 

 

 

 

Note

30 June

2020

(unaudited)

$000

31 December

2019

(audited)

$000

 

 

 

 

ASSETS

 

 

 

Current assets

 

 

 

Cash and cash equivalents

 

14,182

13,487

Trade and other receivables

6

4,483

6,075

 

 

18,665

19,562

 

Non-current assets

 

 

 

Exploration and evaluation assets

7

8,129

8,129

Property, plant and equipment

8

74,970

77,559

Deferred tax asset

 

5,361

5,548

 

 

88,460

91,236

Total assets

 

107,125

110,798

 

 

 

 

LIABILITIES

 

 

 

Current liabilities

 

 

 

Trade and other payables

10

1,069

2,125

Current portion of term loans

12

-

1,714

 

 

1,069

3,839

 

Non-current liabilities

 

 

 

Decommissioning provision

13

1,150

1,085

 

 

1,150

1,085

 

Equity

 

 

 

Share capital

16

416,426

416,426

Equity reserve

 

26,788

26,651

Accumulated deficit

 

(338,308)

(337,203)

 

 

104,906

105,874

Total liabilities and equity

 

107,125

110,798

 

 

 

 

 

 

 

 

The condensed consolidated financial statements of Wentworth Resources plc, registered number 127571 were approved by the Board of Directors and authorised for issue on 2 September 2020.

Signed on behalf of the Board of Directors

Katherine Roe

Chief Executive Officer

 

 

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY

 

 

 

 

Note

 

Number of shares

 

Share capital

 

Equity reserve

 

Accumulated

deficit

 

Total

 equity

 

 

 

$000

$000

$000

$000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

186,488,465

416,426

26,588

(338,536)

104,478

 

 

 

 

 

 

18

 -

-

  -

  -

-

-

(1,033)

2,366

(1,033)

2,366

Share based compensation

15

-

-

63

-

63

Balance at 31 December 2019 (audited)

 

 

186,488,465

416,426

26,651

(337,203)

105,874

18

-

-

-

(2,119)

(2,119)

 

 -

 -

-

1,014

1,014

Share based compensation

15

-

-

137

-

137

Balance at 30 June 2020 (unaudited)

 

186,488,465

416,426

26,788

(338,308)

104,906

 

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS

 

 

 

Six months ended 30 June

 

 

 

Note

2020

(unaudited)

$000

2019

(unaudited)

$000

 

 

 

 

Operating activities

 

 

 

Net profit/(loss) for the year

 

1,014

(158)

Adjustments for:

 

 

 

Depreciation and depletion

8

2,618

2,851

Net finance (income)/costs

5

(13)

425

  Deferred tax

 

187

(587)

Share based compensation

15

137

243

 

 

3,943

2,774

Change in non-cash working capital:

 

 

 

Trade and other receivables

 

1,593

(5,038)

Trade and other payables

 

(1,056)

(125)

Net cash generated from/(utilised in) operating activities

 

4,480

(2,389)

 

 

 

 

Investing activities

 

 

 

Interest received

 

65

-

Additions to property, plant and equipment

8

(29)

(21)

Reduction of long-term receivable

 

-

4,737

 

Change in non-cash working capital

 

36

-

4,716

311

Net cash from investing activities

 

36

5,027

 

 

 

 

Financing activities

 

 

 

Principal term loan repayments

12

(1,663)

(3,330)

Interest on term loan

12

(39)

(387)

Interest/renewal fee on overdraft facility

11

-

(18)

Payment of contingent PTTEP liability

 

-

(848)

Dividends paid

18

(2,119)

-

Net cash used in financing activities

 

(3,821)

(4,583)

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

695

(1,945)

 

 

 

 

Cash and cash equivalents, beginning of the period

 

13,487

11,903

 

 

 

 

Cash and cash equivalents, end of the period

 

14,182

9,958

 

 

 

 

 

 

1.  Incorporation and basis of preparation

 

Wentworth Resources PLC ("Wentworth" or the "Company") is an East Africa-focused upstream oil and natural gas company. These unaudited condensed consolidated interim financial statements include the accounts of the Company and its subsidiaries (collectively referred to as "Wentworth Group of Companies" or the "Group"). The Company is actively involved in oil and gas exploration, development and production operations. Wentworth is incorporated in Jersey and shares of the Company as at 30 June 2020 were listed on the AIM Market of the London Stock Exchange (ticker: WEN).

 

The Company's principal place of business is located at 4th Floor, St Paul's Gate, 22-24 New Street, Jersey JE1 4TR.

The Company maintains offices in Dar es Salaam, United Republic of Tanzania and London, United Kingdom.

2.  Summary of significant accounting policies

Use of judgements and estimates

In preparing these interim financial statements, management has made judgements and estimates that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.

The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those described in the 2019 annual report and financial statements.

Going concern

With the world currently struggling to come to terms with the unprecedented events of the Covid-19 pandemic and the risk presented to the continued health and well-being of our workforce alongside the disruption that preventative measures have had on the global supply chain in placing restrictions on the transportation of goods, services and personnel set to continue for some time to come, considerable time and resource have been allocated by Directors and senior management in ensuring that Wentworth is best placed to be able to continue to safely produce gas from Mnazi Bay alongside the Operator, Maurel et Prom.  Given the essential nature of services provided and the forecasted impact of the virus in the country, the Group notes that an interruption of production and unavailability of key workforce is remote.  The Directors however are mindful of the speed with which circumstances may change, both for the better or for the worse, and all modelling is based on information that we currently have available to us.

The Group has a long established and collaborative relationship with the Government of the United Republic of Tanzania, having operated in-country for many years, however the Directors do recognise that the Group is dependent upon the continued collection of gas sales invoices and ongoing operational support of the Government as its sole gas sales customer through its operating agencies TPDC and TANESCO.

The Directors have, therefore, judged that on a risk-weighted basis which takes into consideration both the probability of occurrence and an estimate of the financial impact, the continued timely settlement of gas-sales invoices by the Government of the United Republic of Tanzania continues to be the most significant risk currently faced by the Group. To this end, should no settlement of future gas sales invoices be received from the date of approval of these financial statements, we have assessed that the Group would be able to continue to operate for a period of up to 12-months without the need for a further injection of working capital. 

Further to this, based on the application of reasonable and foreseeable sensitivities, which include potential changes in demand, capital spend, operating costs, the Directors believe that the Group is well placed to manage its financial exposures. The Directors have judged that owing to a combination of the stability of this relationship which has seen payment terms continue to improve during H1 2020 and its much improved financial position having fully repaid all of its fixed-term debt in January 2020, the Group has sufficient cash resources for its working capital needs, committed capital and operational expenditure programmes for at least the next 12-months based on the Directors' worst case scenario of no settlement of future gas sales as noted above.

The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future and therefore continue to adopt the going concern basis of accounting in preparing the annual financial statements.

Basis of presentation and statement of compliance

These unaudited condensed consolidated interim financial statements have been prepared by management in accordance with International Accounting Standard 34, "Interim Financial Reporting".  The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.

These unaudited condensed consolidated interim financial statements have been prepared following the same accounting policies as the annual audited consolidated financial statements for the year ended 31 December 2019 and should be read in conjunction with the annual audited consolidated financial statements and the notes thereto. These unaudited condensed consolidated interim financial statements were approved by the Board of Directors on 2 September 2020. The disclosures provided below are incremental to those included in the 2019 annual consolidated financial statements.

The information for the year ended 31 December 2019 included in the report was derived from the statutory accounts for that year which were prepared in accordance with International Financial Reporting Standards ('IFRSs') issued by the International Accounting Standards Board and interpretations issued by the International Financial Reporting Interpretations committee ('IFRIC') of the IASB as adopted by the EU up to 31 December 2019, a copy of which has been delivered to the Registrar of Companies.  The auditor's opinion in relation to those accounts was unqualified, did not draw attention to any matters by way of emphasis and also did not contain a statement under section 498 (2) or 498 (3) if the Companies Act 2006.

Functional and presentation currency

These consolidated financial statements are presented in US dollars which is the functional currency the majority of the Group.

Basis of consolidation

These unaudited condensed consolidated interim financial statements include the accounts of the Company and its subsidiaries.  Subsidiaries are entities that the Company controls. An investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and can affect those returns through its authority over the investee.  The existence and effect of potential voting rights are considered when assessing whether a company controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are deconsolidated from the date that control ceases.

 

 

The following legal entities are within the Wentworth Group of companies:

 

Legal entity

Registered

Holdings at

30 June 2020

Functional currency

Wentworth Resources plc

Jersey

Ultimate Parent

US dollar

Wentworth Resources (UK) Limited

United Kingdom

100%

GBP

Wentworth Holdings (Jersey) Limited

Jersey

100%

US dollar

Wentworth Tanzania (Jersey) Limited

Jersey

100%

US dollar

Wentworth Gas (Jersey) Limited

Jersey

100%

US dollar

Wentworth Gas Limited

Tanzania

100%

US dollar

Cyprus Mnazi Bay Limited

Cyprus

39.925%

US dollar

Wentworth Mozambique (Mauritius) Limited

Mauritius

100%

US dollar

Wentworth Moçambique Petroleos, Limitada(1)

Mozambique

100%

US dollar

 

(1) The Wentworth Moçambique Petroleos, Limitada is in the process of voluntary liquidation after relinquishment of the Tembo Block Appraisal Licence. 

 

All inter-company transactions, balances and unrealized gains on transactions between the parent and subsidiary companies are eliminated on consolidation.

 

Changes in accounting policies

The following accounting standards, amendments and interpretations, which had no significant impact on these financial statements, became effective in the current reporting period on adoption by the EU through the European Financial Reporting Advisory Group ('EFRAG'):

 

IFRS 3 (amendments) 'Definition of a Business': The IASB effective date is 1 January 2020 and the amendment is yet to be endorsed by the EU. The amendment provides clearer application guidance to help companies distinguish between a business and a group of assets when applying IFRS 3 'Business Combinations'. The amendment also clarifies that applying the classification of a business would not be appropriate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. This amendment is not expected to have an impact on the Group's consolidated financial statements.

 

IAS 1 and IAS 8 (amendments) 'Definition of Material': The IASB effective date is 1 January 2020 and the amendment has been endorsed by the EU. The amendment revises the definition of material stating that 'information is material if omitting, misstating or obscuring it could reasonably be expected to influence the decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity'. This amendment is not expected to have an impact on the Group's consolidated financial statements.

 

IFRS 9, IAS 39 and IFRS 7 (amendments) 'Interest Rate Benchmark Reform': The IASB effective date is 1 January 2020 and the amendment has been endorsed by the EU. The amendment requires that for interest rate hedges affected by Interbank Offered Rate ('IBOR') reform, the interest rate benchmark is not altered when considering whether a forecast transaction is highly probable, or whether there is an economic relationship between the hedged cash flow and the hedging instrument. This would apply for a limited period until there is no longer uncertainty relating to IBOR reform. This amendment is not expected to have an impact on the Group's consolidated financial statements.

Future accounting pronouncements

At the date of these financial statements the standards and interpretations listed below were issued but not yet effective. The adoption of these standards may result in future changes to existing accounting policies and disclosures. The Company is currently evaluating the impact that these standards will have on results of operations and financial position:

 

IFRS 17 'Insurance Contracts': The IASB effective date is 1 January 2021 and the standard is yet to be endorsed by the EU. IFRS 17 will replace IFRS 4 'Insurance Contracts' and applies to all types of insurance contracts as well as to certain guarantees and financial instruments with discretionary participation features. This standard is not expected to have an impact on the Group's consolidated financial statements.

3.  Segment information

 

Net income/(loss) for the six months ended 30 June 2020

 

 

Tanzania Operations

(unaudited)

$000

 

Corporate

(unaudited)

$000

 

Consolidated

(unaudited)

$000

 

 

 

 

Total revenue

8,313

-

8,313

 

 

 

 

Production and operating costs

(1,734)

-

(1,734)

Depletion

(2,616)

-

(2,616)

Total cost of sales

(4,350)

-

(4,350)

 

 

 

 

Gross profit

3,963

-

3,963

 

 

 

 

Recurring administrative costs

(1,033)

(1,494)

(2,527)

New venture and pre - licence costs

-

(94)

(94)

Share-based payment charges

(36)

(101)

(137)

Depreciation

(2)

-

(2)

Total costs

(1,071)

(1,689)

(2,760)

 

 

 

 

Profit/(loss) from operations

2,892

(1,689)

1,203

 

 

 

 

Finance (costs)/income

(55)

68

13

Profit/(loss) before tax

2,837

(1,621)

1,216

 

 

 

 

Current tax expense

(15)

-

(15)

Deferred tax expense

(187)

-

(187)

 

Net and comprehensive Profit/(loss) from continued operations

 

2,635

 

(1,621)

 

1,014

 

 

 

Net income/(loss) for the six months ended 30 June 2019

 

 

Tanzania Operations

(unaudited)

$000

 

Corporate

(unaudited)

$000

 

Consolidated

(unaudited)

$000

 

 

 

 

Total revenue

8,018

-

8,018

 

 

 

 

Production and operating costs

(1,772)

-

(1,772)

Depletion

(2,843)

-

(2,843)

Total cost of sales

(4,615)

-

(4,615)

 

 

 

 

Gross profit

3,403

-

3,403

 

 

 

 

Recurring administrative costs

(980)

(1,983)

(2,963)

New venture and pre - licence costs

-

(498)

(498)

Share-based payment charges

(4)

(239)

(243)

Depreciation

(7)

(1)

(8)

Total costs

(991)

(2,721)

(3,712)

 

 

 

 

Profit/(loss) from operations

2,412

(2,721)

(309)

 

 

 

 

Finance costs

(271)

(154)

(425)

Profit/(loss) before tax

2,141

(2,875)

(734)

 

 

 

 

Current tax expense

-

(11)

(11)

Deferred tax expense

587

-

587

 

-

(11)

576

 

Net and comprehensive Profit/(loss) from continued operations

 

2,728

 

(2,886)

 

(158)

  

 

Selected balances at 30 June 2020

 

 

 

 

 

 

 

Tanzania Operations

(unaudited)

$000

Mozambique Operations

(Discontinued)

(unaudited)

$000 

 

 

Corporate

(unaudited)

$000 

 

 

Consolidated

(unaudited)

$000

Current assets

6,613

118

11,934

18,665

Exploration and evaluation assets

8,129

-

-

8,129

Property, plant and equipment

74,968

-

2

74,970

Deferred tax asset

5,361

-

-

5,361

 

Total assets

 

95,071

 

118

 

11,936

 

107,125

 

 

 

 

 

Current liabilities

462

-

607

1,069

Non-current liabilities

1,150

-

-

1,150

 

Total Liabilities

 

1,612

 

-

 

607

 

2,219

Capital additions for the six months ended 30 June 2019

 

 

 

 

 

Additions to property, plant

  and equipment

  29

-

-

29

 

Selected balances at 30 June 2019

 

 

 

 

 

 

 

 

Tanzania Operations

(unaudited)

$000

Mozambique Operations

(Discontinued)

(unaudited)

$000 

 

 

Corporate

(unaudited)

$000 

 

 

Consolidated

(unaudited)

$000

Current assets

18,315

233

4,192

22,740

 

Exploration and evaluation assets

8,129

-

-

8,129

 

Property, plant and equipment

80,943

-

4

80,947

 

Deferred tax asset

4,623

-

-

4,623

 

 

Total assets

 

112,010

 

233

 

4,196

 

116,439

 

 

 

 

 

 

 

Current liabilities

10,173

211

465

10,849

 

Non-current liabilities

1,027

-

-

1,027

 

 

Total Liabilities

 

11,200

 

211

 

465

 

11,876

 

       

Capital additions for the six months ended 30 June 2019

 

 

 

 

 

Additions to property, plant

  and equipment

  19

-

2

21

 

 

4.  General and administrative costs

 

Six months ended 30 June

 

2020

(unaudited)

$000

2019

(unaudited)

$000

Employee salaries and benefits

903

986

Contractors and consultants

524

535

Travel and accommodation

71

123

Professional, legal and advisory

232

530

Office and administration

255

323

Corporate and public company costs

542

466

Total general and administrative costs

2,527

2,963

 

5.  Finance income and finance costs

 

Six months ended 30 June

 

2020

(unaudited)

$000

2019

(unaudited)

$000

Finance income

 

 

Interest received

66

-

Finance costs amortization

25

134

 

 

91

 

134

 

 

 

Finance costs

 

 

Accretion - decommissioning provision

(65)

(58)

Interest expense

(13)

(343)

Foreign exchange loss

-

(158)

 

 

(78)

 

(559)

 

 

 

Net finance income/(costs)

13

(425)

 

 

6.  Trade and other receivables

 

Balance at

30 June 2020

(unaudited)

Balance at

31 December 2019

(audited)

 

 

 

Trade receivable from TPDC

Other receivable from TPDC 

Trade receivable from TANESCO

2,347

73

922

4,014

513

789

Dissenting Shareholders

282

-

Other receivables

859

759

 

 

  4,483

 

6,075

 

The other receivable from TPDC represents income tax $73k (2019: $513k) paid by Wentworth Gas Limited, a wholly owned subsidiary of the Company. The income tax will be recovered from TPDC profit gas (security revenue) through future gas sales.

Subsequent to 30 June 2020, the Group has received total payments of $3.85 million from TPDC and $147k from TANESCO, significantly reducing the receivables balance at 2 September 2020.

Other receivables include $360k of VAT receivable and $437k of prepayments and accrued income.

Amounts receivable with respect to dissenting shareholder rights represent the agreed buy-back of shares from certain Norwegian shareholders on the 2018 corporate transition to UK and Oslo Børs delisting, further details of which are disclosed in notes 10 and 16.

7.  Exploration and evaluation assets

 

$000

 

 

Balance at 31 December 2019 (audited)

and 30 June 2020 (unaudited)

8,129

 

Exploration costs comprise the acquisition and interpretation of 3D Seismic 225 Km² and 2D High Resolution Seismic 281 Km² at Mnazi Bay.

There have been no indicators of impairment during the period and as such no full impairment review has been undertaken.

 

8.  Property, plant and equipment

 

Natural gas properties

Office and other equipment

 

 

 

$000

 

$000

Total

$000

Cost

 

 

 

Balance at 31 December 2019 (audited)

104,046

608

104,654

 

 

 

 

Additions

29

-

29

Balance at 30 June 2020 (unaudited)

104,075

608

104,683

 

Accumulated depreciation and depletion 

 

 

Balance at 31 December 2019 (audited)

(26,490)

(605)

(27,095)

 

 

 

 

Depletion

(2,616)

-

(2,616)

Depreciation

(2)

-

(2)

Balance at 30 June 2020 (unaudited)

(29,108)

(605)

(29,713)

 

Carrying amounts

 

 

 

31 December 2019 (audited)

77,556

3

77,559

30 June 2020 (unaudited)

74,967

3

74,970

 

There have been no indicators of impairment during the period and as such no full impairment review has been undertaken

 

9.  Subsidiary undertakings

The principal subsidiary undertakings at 30 June 2020 are:

 

Name of Company

Country of incorporation

Class of shares held

Types of ownership

Percentage holding

Nature of business

Wentworth Resources (UK) Limited

United Kingdom

Ordinary

Direct

100%

Investment holding company

Wentworth Holdings (Jersey) Limited

Jersey

Ordinary

Direct

100%

Investment holding company

Wentworth Tanzania (Jersey) Limited

Jersey

Ordinary

Indirect

100%

Investment holding company

Wentworth Gas (Jersey) Limited

Jersey

Ordinary

Indirect

100%

Investment holding company

Wentworth Gas Limited

Tanzania

Ordinary

Indirect

100%

Exploration production company

Cyprus Mnazi Bay Limited

Cyprus

Ordinary

Indirect

39.925%

Exploration production company

Wentworth Mozambique (Mauritius) Limited

Mauritius

Ordinary

Indirect

100%

Investment holding company

Wentworth Moçambique Petroleos, Limitada (1)

Mozambique

Ordinary

Indirect

100%

Exploration company

 

(1) The Wentworth Moçambique Petroleos, Limitada is in the process of liquidation after relinquishment of the Tembo Block Appraisal Licence. 

 

 

 

10.  Trade and other payables

 

Balance at

30 June 2020

(unaudited)

$000

Balance at

31 December 2019

(audited)

$000

Payable to      Mnazi Bay Operator 

291

1,303

Trade payables

186

150

Provision for Dissenting Shareholders

282

-

Other payables and accrued expenses

 310 

672 

 

 

1,069

 

2,125

 

The payable to Mnazi Bay Operator represents the accrued Q2 2020 joint-venture cash-call for field costs between 1 April and 30 June 2020 totalling $791k of which $500k was paid to the Operator in advance and $291k was settled on its due date of 24 July 2020.

 

Following the completion of the corporate transition to UK and Oslo Børs delisting, three shareholders exercised certain Dissent Rights under Canadian law which may require the Company to buy back their equity holdings at fair value. The Company received Dissent Rights notices over a total of 2,329,326 shares with an anticipated fair value of $696,519 after adjusting for dividends that had been paid to those shareholders.  $281,666 of the $696,519 has been agreed and will be settled. This amount has been provided for in full within these financial statements. The further $414,853 remains under dispute and subject to further negotiation and has therefore been classified as a contingent liability per note 14.

 

11.  Overdraft credit facility

The Company has a rolling one-year, $2.5 million overdraft credit facility with a United Republic of Tanzania Government owned bank which is in the process of being renewed for a further 12 months to 5 April 2021 subject to the mutual agreement of the bank and the Company.  The overdraft facility has an interest rate of the lender's base lending rate, minus 1% per annum to be paid monthly. 

 

The credit facility, which was fully repaid on 9 July 2018, was not drawn-down at the period ended 30 June 2020.

 

Security provided to the lender includes a debenture over the fixed and floating assets of the Company's United Republic of Tanzania assets and a deed of assignment of 20% of the revenue and cash flow from sales of natural gas from the United Republic of Tanzania assets.

 

 

 

12.  Long term loan

Credit facility from United Republic of Tanzania based banks

On 8 December 2014, Wentworth Gas Limited, a wholly owned subsidiary of the Company, entered into a $20.0 million loan to finance field infrastructure development within the Mnazi Bay Concession in the United Republic of Tanzania.

 

The term of the loan was initially forty-eight months in duration commencing on the first draw-down date with the loan bearing interest at six-month LIBOR rate plus 750 basis points, subject to a minimum (floor) of 8% p.a. and a maximum (ceiling) of 9.5% p.a.  Security was in the form of a debenture creating first ranking charge over all the assets of WGL (assets of WGL include a 25.4% participation interest in the Mnazi Bay Concession), assignment over any TPDC long-term receivable and assignment of revenues generated from the Mnazi Bay Concession.

During 2017, the Company executed amendments to the credit facility agreement, which included the restructuring of principal loan repayments and added provisions. The new provisions contained a requirement for the Company to maintain two financial covenants, the Debt Service Coverage Ratio and Loan Life Coverage Ratio, both calculated semi-annually beginning on 30 June and 31 December. The interest rate was amended to the interest rate of six-month LIBOR rate plus 750 basis points subject to a minimum (floor) of 8.5% p.a. and no maximum (ceiling).

On 30 January 2020 the final principal repayment of $1,663k was made.

 

$000

 

Balance as at 31 December 2019 (audited)

 

1,714

 

Proceeds from loan

 

-

Loan repayment

(1,663)

Total changes from financing cash flows

(1,663)

 

 

Interest expense

13

Interest paid

(39)

Finance cost accretion

(25)

Total other charges

(51)

 

Balance as at 30 June 2020 (unaudited)

 

-

 

 

During the six months period ended 30 June 2020, the Company incurred interest expense on long-term loan, inclusive of accretion of financing costs, of $(12k) (2019: $209k).  A total of $39k was settled in cash (2019: $387k).

 

13.  Decommissioning and Abandonment provision

A reconciliation of the decommissioning obligations is provided below:

 

Balance at

30 June 2020

(unaudited)

$000

Balance at

31 December 2019

(audited)

$000

Balance at 1 January

1,085

969

Accretion

65

116

Balance at 30 June and 31 December

1,150

1,085

14.  Contingent liabilities

Following the completion of the corporate transition to UK and Oslo Børs delisting, three shareholders exercised certain Dissent Rights under Canadian law which may require the Company to buy back their equity holdings at fair value. The Company received Dissent Rights notices over a total of 2,329,326 shares with an anticipated fair value of $696,519 after adjusting for dividends that had been paid to those shareholders.  $281,666 of the $696,519 has been agreed and will be settled. This amount has been provided for in full within these financial statements. The further $414,853 remains under dispute and subject to further negotiation and has therefore been classified as a contingent liability.

 

15.  Share-based payments

 

Six months ended 30 June

 

2020

(unaudited)

$000

2019

(unaudited)

$000

 

 

 

Share based compensation recognized in the statement of Comprehensive income

243

 

Movement in the total number of share options outstanding and their related weighted average exercise prices are summarized as follows:

 

 

Number of

options

Weighted average exercise price (US$))

 

 

 

Outstanding at 1 January 1 2020

6,385,497

0.57

 

Granted

 

2,485,621

 

-

Outstanding at 30 June 2020

8,871,118

0.41

 

The following table summarizes share options outstanding and exercisable at 30 June 2020:

 

 

 

  Outstanding

Exercisable

Exercise price (NOK)

Exercise price (US$)1

Number of options

Weighted average remaining life (years)

Number of options

 

 

 

 

 

3.60

0.37

1,600,00

0.3

1,600,000

3.85

0.40

750,000

5.5

750,000

4.08

0.42

250,000

2.8

250,000

5.18

0.53

1,900,000

3.9

1,900,000

5.57

0.57

500,000

0.8

500,000

-

-

3,871,118

9.5

-

 

 

8,871,118

 

5,000,000

 

1 The US Dollar to Norwegian Kroner exchange rate used for determining the exercise price at 30 June 2020 is 0.102621.

16.  Share capital

 

2020

(unaudited)

$000

2019

(audited)

$000

Authorised, called up, allotted and fully paid

 

 

186,488,465 (2019 - 186,488,465) ordinary shares 

416,426

416,426

 

17.  Earnings per share

Basic and diluted EPS

 

2020

(unaudited)

$000

2019

(unaudited)

$000

 

 

 

Net profit/(loss) for the period

1,014

(158)

 

 

 

Weighted average number of ordinary shares outstanding

186,488,465

186,488,465

Dilutive weighted average number of ordinary shares outstanding

186,488,465

186,488,465

Net profit per ordinary share

0.005

-

 

18.  Dividends

 The following dividends were declared and paid by the Company during the year.

 

2020

(unaudited)

$000

2019

(unaudited)

$000

0.9 pence (US$ 0.0114; NOK 0.10872) per ordinary share

(2019: 0.45 pence (US$ 0.00583; NOK 0.0514) per ordinary share)

2,119

1,033

 

On 24 April 2020, the Company declared a dividend of GBP 0.9 pence per share, being a total dividend distribution of $2.0 million. This second dividend  with respect to the audited results to 31 December 2019 follows the Company's maiden interim dividend of $1.0 million, which was declared in September 2019, bringing a total distribution in respect of 2019 to $3.0 million, which delivers an annual yield of approximately 7.2%, based on the closing share price at 20 April 2020, in line with previous guidance.

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.

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
END
 
 
IR DGGDCGBGDGGD
UK 100

Latest directors dealings