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Wentworth Resources (WEN)

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Wednesday 11 September, 2019

Wentworth Resources

Commercial Operations Date achieved

RNS Number : 8917L
Wentworth Resources PLC
11 September 2019
 

 

PRESS RELEASE                                                                                                                                  11 September 2019

 

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

Commercial Operations Date achieved

Wentworth (AIM: WEN), the AIM listed independent, East Africa-focused oil & gas company is pleased to announce the formal signing of the Commercial Operations Date agreement ("COD"), a key commercial milestone for Wentworth and the Mnazi Bay Joint Venture Partners.

Further to a signing ceremony held yesterday in Dar es Salaam, Tanzania Petroleum Development Corporation ("TPDC"), Etablissements Maurel et Prom S.A. ("M&P") and Wentworth, together, the Mnazi Bay Joint Venture Partners (" JV Partners"), approved the signing of the COD in relation to all terms of the Gas Sales Agreement ("GSA") signed by the JV Partners on 12 September 2014 and which are now in effect.

The agreement on declaration of COD also includes treatment of the outstanding invoices in accordance with GSA payment arrangements, such that any outstanding arrears are cleared by 30 June 2020.

The COD officially marks the end of the commissioning and testing phase of Mnazi Bay gas production into the National Natural Gas Infrastructure ("NNGI"), the transnational pipeline, which commenced in August 2015. It further demonstrates that all facilities in connection with this GSA have been fully tested and commissioned to ensure reliability and compliance with established commercial practices.

Reaching COD is a key operational and commercial milestone for Wentworth as it ensures the GSA is fully binding, including, but not limited to:

·    Certainty of tenure and off-take gas price tariff through to 2031;

·    Minimum daily committed quotient ("DCQ") of 80 MMscf/d, rising to 130 MMscf/d, for the entire remaining term of the GSA;

·    Enforceability of a "take or pay" provision at 85% of the DCQ; and

·    An improved framework for gas nominations procedures.

Wentworth has previously set out four key value catalysts for the joint venture, with a view to reaching a 130 MMscf/d production plateau and unlocking the material remaining prospective resources on the Mnazi Bay asset. Having successfully agreed an initial reduction of the NNGI inlet pressure to the Madimba gas receiving facility in April 2019, from 95bar to 85bar, achieving the COD secures a further key milestone for the Company.

Regarding field operational activities, the slickline and pressure monitoring campaigns continue and the Company is engaged in regular dialogue with M&P, the Operator, in relation to the optimal production strategies for the asset. Following the ongoing Production Sharing Agreement ("PSA") reviews, the Partners will look to secure a licence extension beyond 2031 to allow the joint venture to unlock the material prospective resources remaining in the concession.

 

Eskil Jersing, CEO, commented:

"This is a significant milestone for the Mnazi Bay asset that Maurel et Prom and Wentworth have been working towards for some time. Achieving the COD and securing the full GSA is further indication of the excellent collaboration between the Tanzanian Government and the Mnazi Bay partnership to secure gas supplies for a rapidly growing domestic market.

"We believe Wentworth is well placed to supply this market from an annuity-like asset which also has material remaining upside. This confidence in the Mnazi Bay gas fields and developing market has been shown by our recent introduction of a dividend policy.

"We would like to thank our partners, Maurel et Prom and TPDC, in particular; for their continued collaboration as we continue to supply domestic gas in a safe and reliable manner for the country of Tanzania."

 

Enquiries: 
Wentworth

Eskil Jersing,
Chief Executive Officer

 
Katherine Roe,
Chief Financial Officer

[email protected]
+44 (0)118 2065427

 
[email protected]
+44 (0)118 2065428

 

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
James Bavister

 +44 (0) 20 7418 8900

 
Vigo

 
Investor Relations Adviser 
Patrick d'Ancona
Chris McMahon

 
+44 (0) 20 7390 0230

About Wentworth Resources

Wentworth Resources is a publicly traded (AIM: WEN), independent oil & gas company with natural gas production, exploration and appraisal opportunities in the Rovuma Delta Basin of coastal southern Tanzania.

Inside Information

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.

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. 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.

-Ends-


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