TIDMWEN
RNS Number : 8428X
Wentworth Resources PLC
01 September 2022
1 September 2022
WENTWORTH RESOURCES PLC
("Wentworth" or the "Company")
lnterim Results for the six months ended 30 June 2022
Wentworth achieves record financial results due to a continued
increase in demand in H1; declaring an interim dividend of
$1.45m
Wentworth Resources ( : WEN), the independent, Tanzania-focused
natural gas production company, announces its interim financial
results for the six months ended 30 June 2022. AII dollar values
are expressed in US dollars unless stated otherwise.
Katherine Roe, CEO, commented:
"We are pleased to have announced another strong set of results.
A robust balance sheet, record H1 production and a 10% increase in
our interim dividend demonstrates our focus on delivering
responsible growth whilst simultaneously increasing our
considerable shareholder returns though our dividend policy and
buyback programme. We are upbeat about the outlook for the
remainder of 2022 and beyond, as we look to create value for
Tanzania, shareholders and our wider stakeholders.
"We were delighted to be able to demonstrate our commitment to
engaging with our stakeholders in-country at the Tanzania Energy
Congress in August, which illustrated Tanzania's commitment to
encouraging investment and growth in its energy sector - synonymous
with the Government's business-friendly approach.
"As we look to increase scale and drive growth, we will continue
to consider high quality opportunities on accretive terms, both
within Tanzania and the broader region. Whilst disappointed that
the acquisition of an interest in Ruvuma has been disrupted, having
agreed terms that reflected the current risk reward balance of the
asset, we have demonstrated our ability to identify value and
negotiate favourable transactions in Tanzania."
HIGHLIGHTS
Dividend Declaration and Financial
-- lnterim dividend of $1.45 million declared, an increase of
10% from H1 2021 ($1.32 million) or 15% on a per share basis,
bringing the total distribution to shareholders to $7.9 million in
the last 12 months
o dividend distribution of $5.5 million
o share buyback of $2.4 million representing approximately five
per cent of the issued share capital (8.3 million shares)
o expected FY dividend distribution for 2022 would equate to a
yield of approximately 9.0% based on the current share price
-- Revenues grew 32% to $15.45 million (H1 2021: $11.7 million),
due to sustained high levels of production at Mnazi Bay and higher
gas price due to inflationary price mechanism
o low operational cost of production maintained at $0.45/Mscf
(H1 2021: $0.49 Mscf); largely fixed insulating the Company from
cost inflation
-- Adjusted earnings before interest, taxes, depreciation,
amortization, and exploration (EBITDAX) increased by 43% to $9.6
million (H1 2021: $6.7 million)
-- Strong financial position with $27.4 million cash (H1 2021: $22.8 million) and zero debt
-- Tanzania Petroleum Development Corporation ("TPDC") continues
to remain fully current with all invoices for gas sales
-- Tanzania Electric Supply Company ("TANESCO") continue to settle arears
Operational
-- Health and safety of employees, partners and local
communities continues to be a top priority for Wentworth. On 2
August 2022, the Company celebrated six years without a Lost Time
lncident (LTI)
-- Average daily production of 92.3 MMscf/day (gross) during the
first six months of 2022, represents a record performance; a 14.9%
increase from the same period in 2021
-- Average daily production for Q2 2022 was 86.3 MMscf/day
(gross), above the high end of guidance; demonstrating the
increased demand even across the traditional rainy season
-- Wentworth's share of Gross 2P Reserves estimated to be 135.2
Bcf, with a post-tax NPV10 of $108.9m as at 31 December 2021
-- The gas compression project is advancing with a contractor
selected to perform the pre-FEED studies
-- Upcoming slickline and perforation operations during H2 2022
have the potential to support and add field production volumes
Corporate
-- Growth within Tanzania, to capitalise on Wentworth's
in-country track record, continues to be a key focus as the Company
seeks to leverage improving demand dynamics and strong operational
performance
-- In June 2022, the Company reached an agreement with Scirocco
Energy plc ("Scirocco") to acquire its 25% non-operated working
interest in the Ruvuma Production Sharing Agreement in Tanzania. On
12 July 2022, the Company announced that Scirocco was informed by
its partner ARA Petroleum Tanzania Ltd ("APT") of its intention to
exercise its pre-emption rights in relation to the Proposed
Acquisition under the terms of the Joint Operating Agreement. On 31
August 2022, Scirocco announced it had entered into binding
agreements with APT with a view to completing the disposal by 31
December 2022. This pre-emption remains subject to approval by the
Government of Tanzania
-- The proposed pre-emption clearly demonstrates the potential
of the Ruvuma asset alongside Wentworth's ability to identify value
and negotiate favourable transactions in Tanzania
-- Wentworth remains committed to identifying and pursuing
further opportunities within the country and the region
-- Wentworth proudly sponsored the fourth Tanzania Energy
Congress in Dar es Salaam in early August. The congress aimed to
accelerate and stimulate market demand and drive new investment
opportunities, through local, regional and international
partnerships
Sustainability
-- A robust ESG framework underpins Wentworth's operations as evidenced in the Company's second Sustainability Report, published in April 2022 in accordance with the Sustainability Accounting Standards Board
-- This Sustainability Report was formally presented to key
in-country stakeholders in August 2022 to complement Tanzania's
wider sustainability ambitions
-- Wentworth continues to play a crucial role in increasing
energy access to communities across the country and acting as a key
partner for the Government of Tanzania to deliver on its ambition
to provide universal energy access in Tanzania by 2030, in line
with the UN Sustainable Development Goals
-- Continued progress on our community-focused carbon credit
programmes with Vitol SA, aimed at offsetting all Mnazi Bay Scope 1
and Scope 2 emissions and partially offsetting Scope 3
emissions
-- Developing a climate strategy to ensure effective measurement
and mitigation of climate-related impacts is a key focus for
2022
-- An active member of the United Nations Global Compact (UNGC):
underlining Wentworth's commitment to operating responsibly
-- Independently, and together with in-country stakeholders and
partners, Wentworth's Corporate Social Responsibility (CSR)
projects aim to address issues impacting communities close to Mnazi
Bay and the wider Mtwara region
Outlook
-- Strong Tanzanian demand for power is anticipated throughout H2 2022, primarily driven by:
o An increase in overall power demand nationwide;
o Stable demand from existing, and the connection of new,
industrial customers; and
o Below average rainfall within the catchment area serving
hydroelectric dams, consequently reducing hydro generation
-- Current average daily production at or slightly above the
high end of production guidance is expected to continue during
H2
Dividend
An interim dividend is declared of $0.8 cents per share ($1.45
million), payable by mid-October 2022. A final dividend for the
year ending 31 December 2022 will be determined by the Board with
the full year results and is expected to be approximately $2.9
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 $4.4 million, representing a full year
dividend of $2.4 cents per share, a yield of approximately 9.0% at
the current share price.
The Company has introduced the option for shareholders to invest
their dividend in a Dividend Reinvestment Plan ("DRIP"). The DRIP
is administered by Link Market Services Trustees Limited and
provides shareholders with the opportunity to reinvest dividend
payments to purchase additional ordinary shares in the Company, in
the market. For shareholders who wish to receive their dividend in
the form of shares, the deadline to elect for the DRIP is 16
September 2022.
Detail about the DRIP, including the terms and conditions and
how to join or exit the DRIP are available at www.signalshare.com
or by calling Link on +44 (0)371 664 0300. Calls are charged at the
standard geographic rate and will vary by provider. Calls outside
the United Kingdom will be charged at the applicable international
rate. Lines are open between 9.00am and 5.30pm, Monday to Friday,
excluding public holidays in England and Wales.
lnterim Dividend Payment Timetable:
-- Ex-dividend date: 8 September 2022
-- Record Date: 9 September 2022
-- Latest date to make DRIP election: 16 September 2022
-- US dollar to GBP GBP calculation date: 16 September 2022
-- Payment Date: 7 October 2022
Following the closure of the VPS Register all dividends are paid
on the same date in GBP GBP.
lnterim Results Conference Calls
Analyst call
The Company is holding a conference call for analysts at 9:00am
BST today, Thursday 1 September. 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/wentworth010/vip_connect
You can view the presentation during the call via the following
link:
https://secure.emincote.com/client/wentworth/wentworth010
Shareholder Presentation
The Company is holding a live presentation and Q&A webinar
for investors at 1.00pm BST today, Thursday 1 September, via
lnvestor Meet Company.
register for the call, please click on the following link:
https://www.investormeetcompany.com/wentworth-resources-plc/register-investor
Ends
Enquiries:
Wentworth Resources Katherine Roe katherine.roe@wentplc.com
Chief Executive Officer +44 (0) 7841 087 230
AIM Nominated Adviser and Joint Broker
Callum Stewart
Ashton Clanfield
Stifel Nicolaus Europe Limited Simon Mensley +44 (0) 20 7710 7600
Joint Broker
Richard Crichton
Peel Hunt LLP Alexander Allen +44 (0) 20 7418 8900
Communications Advisor
Sara Powell
Ben Brewerton
FTI Consulting Ollie Mills +44 (0) 20 3727 1000
About Wentworth Resources
Wentworth Resources plc (AIM: 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.
NOTES
Cameron Snow, Head of Subsurface and Business Development, is a
geologist with 15 years' experience across North America, South
America, Africa, and Europe. He holds a BS in Geology from North
Carolina State University, an MS in Geology from Utah State
University, a PhD in Geological and Environmental Science from
Stanford University, and an MBA from Imperial College London. Mr.
Snow has read and approved the technical disclosure in this
regulatory announcement.
RESERVE DEFINITIONS
These definitions are based on the Petroleum Resources
Management System, published in 2007, and revised in June 2018, and
sponsored by the Society of Petroleum Engineers (SPE), World
Petroleum Council (WPC), American Association of Petroleum
Geologists (AAPG), Society of Petroleum Evaluation Engineers
(SPEE), Society of Exploration Geophysicists (SEG), Society of
Petrophysicists and Well Log Analysts (SPWLA), and the European
Association of Geoscientists & Engineers (EAGE).
Reserves
Reserves are those quantities of petroleum anticipated to be
commercially recoverable by application of development projects to
known accumulations from a given date forward under defined
conditions. Reserves must satisfy four criteria: discovered,
recoverable, commercial, and remaining (as of the evaluation's
effective date) based on the development project(s) applied.
Reserves are classified according to a range of uncertainty
according to the following categories:
Proved Reserves (P1)
Proved Reserves are those quantities of Petroleum that, by
analysis of geoscience and engineering data, can be estimated with
reasonable certainty to be commercially recoverable from known
reservoirs and under defined technical and commercial conditions.
If deterministic methods are used, the term "reasonable certainty"
is intended to express a high degree of confidence that the
quantities will be recovered. If probabilistic methods are used,
there should be at least a 90% probability that the quantities
actually recovered will equal or exceed the estimate.
Probable Reserves (P2)
Probable Reserves are those additional Reserves which analysis
of geoscience and engineering data indicate are less likely to be
recovered than Proved Reserves but more certain to be recovered
than Possible Reserves. It is equally likely that actual remaining
quantities recovered will be greater than or less than the sum of
the estimated Proved plus Probable Reserves (2P). In this context,
when probabilistic methods are used, there should be at least a 50%
probability that the actual quantities recovered will equal or
exceed the 2P estimate.
Glossary
Bcf/Bscf Billion standard cubic
feet
Mscf Thousand standard
cubic feet
----------------------
MMscf Million standard cubic
feet
----------------------
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.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE
INCOME
Six months ended 30
June
2022 2021
(unaudited) (unaudited)
Note $000 $000
-------------- -------------
Total revenue 4 15,447 11,663
Production and operating costs (1,922) (1,655)
Depletion 10 (3,945) (3,324)
----------------------------------- ------- -------------- -------------
Total cost of sales (5,867) (4,979)
Gross profit 9,580 6,684
Recurring administrative costs 5 (3,028) (2,974)
New venture and pre-licence costs (232) (263)
Share-based payment charges 15 (472) (167)
Depreciation 10 (49) (1)
Total costs (3,781) (3,405)
Profit from operations 5,799 3,279
Finance income 6 45 30
Finance costs 6 (290) (590)
----------------------------------- ------- -------------- -------------
Profit before tax 5,554 2,719
Current tax expense (223) (118)
Deferred tax expense 841 759
----------------------------------- ------- -------------- -------------
618 641
Net and comprehensive profit
after tax 6,172 3,360
Net profit per ordinary share
Basic and diluted (US$/share) 18 0.03 0.018
----------------------------------- ------- -------------- -------------
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL
POSITION
30 June 31 December
2022 2021
(unaudited) (audited)
Note $000 $000
----------------------------------- -------
ASSETS
Current assets
Cash and cash equivalents 27,382 22,820
Trade and other receivables 7 9,345 5,550
36,727 28,370
----------------------------------- ------- --------------
Non-current assets
Exploration and evaluation assets 9 8,129 8,129
Property, plant and equipment 10 62,884 66,465
Deferred tax asset 9,080 8,239
----------------------------------- ------- -------------- ------------
80,093 82,833
----------------------------------- ------- -------------- ------------
Total assets 116,820 111,203
----------------------------------- ------- -------------- ------------
LIABILITIES
Current liabilities
Trade and other payables 12 1,660 2,503
Dividend payable 19 2,680 -
4,340 2,503
----------------------------------- ------- --------------
Non-current liabilities
Decommissioning provision 13 2,009 1,929
Lease liability 14 14 36
----------------------------------- -------
2,023 1,965
----------------------------------- ------- -------------- ------------
Equity
Share capital 17 414,828 414,919
Equity reserve 27,016 26,695
Accumulated deficit (331,387) (334,879)
----------------------------------- ------- -------------- ------------
110,457 106,735
----------------------------------- ------- ------------
Total liabilities and equity 116,820 111,203
----------------------------------- ------- -------------- ------------
The condensed consolidated financial statements of Wentworth
Resources plc, registered number 127571, were approved by the Board
of Directors and authorised for issue on 1 September 2022.
Signed on behalf of the Board of Directors.
Katherine Roe
Chief Executive Officer
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN
EQUITY
Number Share Equity Accumulated Total
Note of shares capital reserve deficit equity
$000 $000 $000 $000
------------------------- ------- ------------------------- ---------------- ---------- -------------- ---------
Balance at 31 December
2020 (audited) 186,488,465 416,426 26,656 (337,049) 106,033
Dividends 19 - - - (3,920) (3,920)
Net profit and
comprehensive
profit - - - 6,067 6,067
Share based compensation 15 - - 537 - 537
Cancellation of own
shares 16 (939,326) (318) 295 23 -
Repurchase of own shares 16 (4,500,000) (1,189) (793) - (1,982)
------------------------- ------- -------------------------
Balance at 31 December
2021 (audited) 181,049,139 414,919 26,695 (334,879) 106,735
Dividends 19 - - - (2,680) (2,680)
Repurchase of own shares 16 (866,572) (91) (151) - (242)
Net profit and
comprehensive
profit - - - 6,172 6,172
Share based compensation 15 - - 472 - 472
------------------------- ------- ------------------------- ---------------- ---------- -------------- ---------
Balance at 30 June 2022
(unaudited) 180,182,567 414,828 27,016 (331,387) 110,457
------------------------- ------- ------------------------- ---------------- ---------- -------------- ---------
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
Six months ended
30 June
2022 2021
(unaudited) (unaudited)
Note $000 $000
---------------------------------------------- -------
Operating activities
Net profit for the year 6,172 3,360
Adjustments for:
Depreciation and depletion 10 3,994 3,325
Net finance costs 6 220 560
Income tax expense (618) (641)
Share based compensation 15 472 167
10,240 6,771
Change in non-cash working capital:
Trade and other receivables (3,794) (2,041)
Trade and other payables (1,019) 545
---------------------------------------------- -------
Cash generated from operating activities 5,427 5,275
Current tax paid (223) (118)
Withholding tax paid - (440)
Net cash generated from operating activities 5,204 4,717
---------------------------------------------- ------- -------------- -------------
Investing activities
Additions to property, plant and equipment 10 (402) (29)
Interest income 36 19
Proceeds from disposal 9 -
Net cash used in investing activities (357) (10)
Financing activities
Repurchase of own shares 16 (242) -
Lease payment 14 (28) -
Bank charges 6 (15) (11)
Net cash used in financing activities (285) (11)
---------------------------------------------- ------- -------------- -------------
Net change in cash and cash equivalents 4,562 4,696
Cash and cash equivalents, beginning
of the period 22,820 17,787
Cash and cash equivalents, end of the
period 27,382 22,483
---------------------------------------------- ------- -------------- -------------
1. Incorporation and basis of preparation
Wentworth Resources plc ("Wentworth" or the "Company") is a
domestic natural gas producer in Tanzania. These unaudited
condensed consolidated interim financial statements include the
accounts of the Company and its subsidiaries (collectively referred
to as the "Wentworth Group" or simply the "Group"). Wentworth is a
gas exploration, development and production company incorporated in
Jersey and 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, St Hellier, Jersey JE1
4TR.
The Company maintains offices in Dar es Salaam in the United
Republic of Tanzania and Jersey.
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 2021 annual
report and financial statements.
Going concern
Directors and senior management continue to allocate
considerable resources to ensuring that Wentworth is well placed 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 recent world events to both
international capital markets and production operations in the
United Republic of Tanzania, the Group notes that an interruption
to production 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 the most current
information available.
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 Tanzania Petroleum Development Corporation ("TPDC") and
Tanzania Electric Supply Company Limited ("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 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 23 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 and operating costs, the Directors believe
that the Group is well placed to manage its financial exposures.
The Directors have judged that owing to the stability of this
relationship, the Group has sufficient cash resources for its
working capital needs, committed capital and operational
expenditure programmes for at least the next 23 months based on the
Directors worst case scenario of no settlement of future gas sales
as noted above.
Consequently, the Directors are confident that the Group will
have sufficient funds to continue to meet its liabilities as they
fall due for at least 12 months from the date of approval of the
financial statements and therefore have prepared the financial
statements on a going concern basis.
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 2021 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 31 August 2022. The disclosures provided
below are incremental to those included in the 2021 annual
consolidated financial statements.
The information for the year ended 31 December 2021 included in
the report was derived from the statutory accounts for that year
which were prepared in accordance with Jersey Company Law. Under
that law the Directors have elected to prepare the Group financial
statement in accordance with UK-adopted international accounting
standards, in conformity with the requirements of the Companies
(Jersey) Law 1991. The auditor's opinion in relation to those
accounts was unqualified, did not draw attention to any matters by
way of emphasis or any other matters as may be required under The
Companies (Jersey) Law 1991.
Functional and presentation currency
These consolidated financial statements are presented in US
dollars which is the functional currency 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 legal entities within the Wentworth Group are noted in note
11 of this report.
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 in the United Kingdom of Great Britain through the newly
established UK Endorsement Board ("UKEB"):
IAS 37 (amendments) 'Onerous Contracts - Cost of Fulfilling a
Contract': The IASB effective date is 1 January 2022 and the UKEB
adopted the amendment on 12 April 2022. The amendments specify that
the 'cost of fulfilling' a contract comprises the 'costs that
relate directly to the contract'. Costs that relate directly to a
contract can either be incremental costs of fulfilling that
contract (examples would be direct labour, materials) or an
allocation of other costs that relate directly to fulfilling
contracts (an example would be the allocation of the depreciation
charge for an item of property, plant and equipment used in
fulfilling the contract). This amendment is not expected to have
impact on the Group's consolidated financial statements.
IAS 16 (amendments) 'Property, Plant and Equipment - Proceeds
before Intended Use': The IASB effective date is 1 January 2022 and
the UKEB adopted the amendment on 12 April 2022 . The amendments
prohibit deducting from the cost of an item of property, plant and
equipment any proceeds from selling items produced while bringing
that asset to the location and condition necessary for it to be
capable of operating in the manner intended by management. Instead,
an entity recognises the proceeds from selling such items, and the
cost of producing those items, in profit or loss. This amendment is
not expected to have impact on the Group's consolidated financial
statements.
Future accounting pronouncements
At the date of these interim 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:
Standard Description IASB Issue IASB Effective Secretary
Date Date of State
Adoption
Date
IAS 1 (amendments) Classification 23 January 1 January 2023 Endorsed
of Liabilities 2020
as Current or
Non-current.
----------------------- ------------- --------------- ----------
IFRS 17 Insurance contracts. 25 June 2020 1 January 2023 Endorsed
----------------------- ------------- --------------- ----------
IAS 12 (Amendments) Deferred tax 7 May 2021 1 January 2023 Endorsed
related to assets
and liabilities
arising from
a single transaction.
----------------------- ------------- --------------- ----------
IAS 8 (amendments) Definition of 12 February 1 January 2023 Endorsed
accounting estimates. 2021
----------------------- ------------- --------------- ----------
IAS 1 and Disclosure of 12 February 1 January 2023 Endorsed
IFRS Practice accounting policies. 2021
Statement
2 (amendments)
----------------------- ------------- --------------- ----------
3. Segment information
Net income/(loss) for the six months ended 30 June 2022
Tanzania Operations
(unaudited) Corporate Consolidated
$000 (unaudited) (unaudited)
$000 $000
-------------------------------- -------------------- ----------------- --------------
Total revenue 15,447 - 15,447
Production and operating
costs (1,922) - (1,922)
Depletion (3,945) - (3,945)
-------------------------------- -------------------- ----------------- --------------
Total cost of sales (5,867) - (5,867)
Gross profit 9,580 - 9,580
Recurring administrative
costs (1,968) (1,060) (3,028)
New venture and pre -
licence costs - (232) (232)
Share-based payment charges (77) (395) (472)
Depreciation (49) - (49)
Total costs (2,094) (1,687) (3,781)
Profit/(loss) from operations 7,486 (1,687) 5,799
Net finance costs (104) (141) (245)
-------------------------------- -------------------- ----------------- --------------
Profit/(loss) before
tax 7,382 (1,828) 5,554
Current tax expense (223) - (223)
Deferred tax expense 841 - 841
-------------------------------- -------------------- ----------------- --------------
Net and comprehensive
Profit/(loss) from continued
operations 8,000 (1,828) 6,172
-------------------------------- -------------------- ----------------- --------------
Net income/(loss) for the six months ended 30 June 2021
Tanzania Operations
(unaudited) Corporate Consolidated
$000 (unaudited) (unaudited)
$000 $000
-------------------------------- -------------------- ----------------- --------------
Total revenue 11,663 - 11,663
Production and operating
costs (1,655) - (1,655)
Depletion (3,324) - (3,324)
-------------------------------- -------------------- ----------------- --------------
Total cost of sales (4,979) - (4,979)
Gross profit 6,684 - 6,684
Recurring administrative
costs (767) (2,207) (2,974)
New venture and pre -
licence costs - (263) (263)
Share-based payment charges (36) (131) (167)
Depreciation (1) - (1)
Total costs (804) (2,601) (3,405)
Profit/(loss) from operations 5,880 (2,601) 3,279
Net finance costs (44) (516) (560)
-------------------------------- -------------------- ----------------- --------------
Profit/(loss) before
tax 5,836 (3,117) 2,719
Current tax expense (118) - (118)
Deferred tax expense 759 - 759
-------------------------------- -------------------- ----------------- --------------
Net and comprehensive
Profit/(loss) from continued
operations 6,477 (3,117) 3,360
-------------------------------- -------------------- ----------------- --------------
Selected balances as at 30 June 2022
Mozambique
Operations
Tanzania (Discontinued)
Operations
(unaudited) (unaudited) Corporate Consolidated
$000 $000 (unaudited) (unaudited)
$000 $000
---------------------------- ---------------- ---------------- -------------- ----------------
Current assets 18,831 101 17,795 36,727
Exploration and evaluation
assets 8,129 - - 8,129
Property, plant and
equipment 62,884 - - 62,884
Deferred tax asset 9,080 - - 9,080
---------------------------- ---------------- ---------------- -------------- ----------------
Total assets 98,924 101 17,795 116,820
---------------------------- ---------------- ---------------- -------------- ----------------
Current liabilities 1,160 - 3,180 4,340
Non-current liabilities 2,023 - - 2,023
---------------------------- ---------------- ---------------- -------------- ----------------
Total Liabilities 3,183 - 3,180 6,363
---------------------------- ---------------- ---------------- -------------- ----------------
Capital additions for the six months ended 30 June 2022
Additions to property,
plant
and equipment 413 - - 413
------------------------ -------- ---- ------ ------
Selected balances as at 30 June 2021
Mozambique
Operations
Tanzania (Discontinued)
Operations
(unaudited) (unaudited) Corporate Consolidated
$000 $000 (unaudited) (unaudited)
$000 $000
---------------------------- ---------------- ---------------- -------------- ----------------
Current assets 19,764 101 8,505 28,370
Exploration and evaluation
assets 8,129 - - 8,129
Property, plant and
equipment 66,464 - 1 66,465
Deferred tax asset 8,239 - - 8,239
---------------------------- ---------------- ---------------- -------------- ----------------
Total assets 102,596 101 8,506 111,203
---------------------------- ---------------- ---------------- -------------- ----------------
Current liabilities 1,704 - 799 2,503
Non-current liabilities 1,965 - - 1,965
---------------------------- ---------------- ---------------- -------------- ----------------
Total Liabilities 3,669 - 799 4,468
---------------------------- ---------------- ---------------- -------------- ----------------
Capital additions for the six months ended 30 June 2021
Additions to property,
plant
and equipment 29 - - 29
------------------------ --------------- ---- ---
4. Revenue
Six months ended 30 June
------------------------------
2022 2021
(unaudited) (unaudited)
$000 $000
-------------- --------------
Revenue from gas sales 15,224 11,530
Revenue from condensate sales - 12
Other revenue 223 121
15,447 11,663
-------------- --------------
Other revenue represents the recovery of corporate income taxes
incurred through adjustments to TPDC gas sales entitlements.
5. General and administrative costs
Six months ended 30 June
2022 2021
(unaudited) (unaudited)
$000 $000
-------------- --------------
Employee salaries and benefits 1,096 1,054
Contractors and consultants 536 476
Travel and accommodation 157 58
Professional, legal and advisory 325 326
Office and administration 211 225
Corporate and public company costs 703 835
-------------- --------------
Total general and administrative costs 3,028 2,974
6. Finance income and finance costs
Six months ended 30 June
2022 2021
(unaudited) (unaudited)
$000 $000
-------------- --------------
Finance income
Interest income 36 19
Gain on disposal of office and other equipment (note 10) 9 -
Reversal of credit losses on TANESCO receivable - 11
45 30
-------------- --------------
Finance costs
Foreign exchange loss (167) (76)
Accretion - decommissioning provision (80) (63)
Intercompany loan withholding tax costs (25) -
Bank Fees & Service Charge (15) (11)
Lease interest expenses (note 14) (3) -
Dividend withholding tax costs - (440)
(290) (590)
-------------- --------------
Net finance costs (245) (560)
-------------- --------------
7. Trade and other receivables
Balance at Balance at
30 June 2022 31 December 2021
(unaudited) (audited)
Receivable from the Operator 3,976 1,087
Trade receivables from TPDC 2,471 1,917
Trade receivables from TANESCO 898 351
Other receivables from TPDC 136 378
Other receivables 1,864 1,817
--------------- -------------------
9,345 5,550
--------------- -------------------
Receivable from the Operator: At 30 June 2022, $4.0 million was
receivable from the Operator, Maurel et Prom, which includes
amounts received from TPDC of $3.9 million (December 2021: $1.0
million) and TANESCO of $108k (December 2021: $62k) on behalf of
Wentworth. With the mutual consent of both parties, these amounts
were retained by the Operator pending the clarification of
repatriation terms with the Government of Tanzania. This
clarification was received in August 2022, at which point all
previously retained amounts were paid to Wentworth.
Receivable from TPDC: Comprise trade receivables of $2.5 million
(December 2021: $1.9 million) were due from TPDC, representing
one-month of gas sales. This was settled in full in July 2022.
Receivable from TANESCO: Comprise trade receivables of $898k
(December 2021: $351k) were due from TANESCO, representing
seven-months of gas sales (December 2021: three months). Subsequent
to 30 June 2022, TANESCO have paid two of these invoices, totalling
$193k.
Other receivables from TPDC : Comprise income tax of $136k
(December 2021: $378k) paid by WGL, a wholly owned subsidiary of
the Company. The income tax is anticipated to be recovered from
TPDC's share of profit gas within the next 12-months under the
terms of the Mnazi Bay PSA, which provides such a mechanism for the
recovery of all corporate taxes.
Other receivables: Comprise VAT recoverable of $969k (December
2021: $886k), gas condensate sales of $80k (December 2021: $80k),
corporate tax prepayments of $508k (December 2021: $483k), prepaid
insurance $79k (December 2021: $88k) and other prepayments of $228k
(December 2021: $280). In accordance with IFRS 9, the Company notes
no material expected credit losses. Tanzania Government
receivables.
8. Government of Tanzania receivables
The Group has an agreement with the Government of the United
Republic of Tanzania (TANESCO, TPDC and the Ministry of Energy and
Minerals) to be reimbursed for all the project development costs
associated with Umoja transmission and distribution expenditures at
cost, which was divested on 7 February 2012.
The Government is conducting an ongoing review and due to the
age and uncertainty surrounding the receivable and its
recoverability, the Group made a provision in-full during 2018
against the carrying amount without prejudice to the ongoing
commercial discussions with the Government, the Group has reviewed
this at the year-end and continues to feel the provision is
appropriate.
9. Exploration and evaluation assets
$000
------
Balance at 31 December 2021 (audited)
and 30 June 2022 (unaudited) 8,129
------
Exploration costs comprise the acquisition and interpretation of
3D Seismic 225 Km(2) and 2D High Resolution Seismic 281 Km(2) at
Mnazi Bay.
There have been no indicators of impairment during the period
and as such no full impairment review has been undertaken.
10. Property, plant and equipment
Natural gas properties Office and other equipment Right of use
Total
$000 $000 $000 $000
----------------------- ----------------------------------- ------------- --------
Cost
Balance at 31 December 2021
(audited) 104,717 630 124 105,471
Additions 219 183 11 413
Disposals - (183) - (183)
Balance at 30 June 2022
(unaudited) 104,936 630 135 105,701
----------------------- ----------------------------------- ------------- --------
Accumulated depreciation and depletion
Balance at 31 December 2021 (audited) (38,364) (597) (45) (39,006)
Depletion and depreciation (3,945) (23) (26) (3,994)
Disposals - 183 - 183
Balance at 30 June 2022 (unaudited) (42,309) (437) (71) (42,817)
--------- ------ ------- ---------
Carrying amounts
31 December 2021 (audited) 66,353 33 79 66,465
30 June 2022 (unaudited) 62,627 193 64 62,884
There have been no indicators of impairment during the period
and as such no full impairment review has been undertaken.
During the six months, the Group made cash additions to PPE
totaling $402k (2021: $29k). Right of use asset addition of $11k
(2020: nil) relates to office space leased in Tanzania.
During the period the Group sold a number of motor vehicles
which were carried at a cost of $183k and were fully depreciated at
the date of disposal. A gain on disposal of $9k was recognised
within finance income (note 6).
11. Subsidiary undertakings
The principal subsidiary undertakings as at 30 June 2022
are:
Name of Company Country Class Types Percentage Nature
of incorporation of shares of ownership holding of business
held
-------------------------- ------------------ ----------- -------------- ----------- -------------
Wentworth Resources United Kingdom Ordinary Direct 100% Investment
(UK) Limited holding
company
Wentworth Holdings Jersey Ordinary Direct 100% Investment
(Jersey) Limited holding
company
Wentworth Tanzania Jersey Ordinary Indirect 100% Investment
(Jersey) Limited holding
company
Wentworth Gas (Jersey) Jersey Ordinary Indirect 100% Investment
Limited holding
company
Wentworth Gas Limited Tanzania Ordinary Indirect 100% Exploration
production
company
Cyprus Mnazi Bay Cyprus Ordinary Indirect 39.925% Exploration
Limited production
company
Wentworth Mozambique Mauritius Ordinary Indirect 100% Investment
(Mauritius) Limited holding
company
Wentworth Moçambique Mozambique Ordinary Indirect 100% Exploration
Petroleos, Limitada company
(1)
(1) Wentworth Moçambique Petroleos, Limitada is in the process
of liquidation after relinquishment of the Tembo Block Appraisal
Licence
12. Trade and other payables
Balance at Balance at
30 June 2022 31 December 2021
(unaudited) (audited)
$000 $000
Payable to Mnazi Bay Operator 894 1,222
Trade payables 404 250
Other payables and accrued expenses 362 1,031
1,660 2,503
--------------- -------------------
The payable to Mnazi Bay Operator represents the accrued cash
call for the second quarter of 2022 for field costs between 1 April
and 30 June 2021 totaling $894k (December 2022: 1.2 million). The
cash call was settled in July 2022.
Other payables and accrued expenses include audit fees accrual
$248k (December 2021: $320k), Other third-party services of $39k
(December 2021: $59K), payroll taxes $21k (December 2021: nil) and
current lease liability $54k (December 2021: $46k).
13. Decommissioning and Abandonment provision
A reconciliation of the decommissioning obligations is provided
below:
Balance at Balance at
30 June 2022 31 December
2021
(unaudited) (audited)
$000 $000
--------------- --------------
Balance at 1 January 1,929 1,514
Change in accounting estimates - 289
Accretion 80 126
Balance at 30 June and 31 December 2,009 1,929
--------------- --------------
14. Lease liability
The Group recognised a lease liability of $68k (December 2021:
$82k), $54k of which is current (December 2021: $46k) and is
presented in trade and other payables:
Balance at Balance at
30 June 2022 31 December
2021
(unaudited) (audited)
$000 $000
-------------- -------------
Balance at 1 January 82 -
Additions 11 124
Lease interest expenses 3 8
Lease payment (28) (50)
Balance at 31 December 68 82
-------------- -------------
Current 54 46
Non-current 14 36
-------------- -------------
15. Share-based payments
Six months ended 30 June
2022 2021
(unaudited) (audited)
$000 $000
------------------------------------------------------------------------------ ---------------
Share based compensation recognized in the statement of Comprehensive income 472 167
------------------------------------------------------------------------------ --------------- ------------
Movement in the total number of share options outstanding and
their related weighted average exercise prices are summarized as
follows:
Number of Weighted average exercise price (US$))
options
------------ ---------------------------------------
Outstanding at 1 January 2022 10,749,451 0.17
Granted 4,031,020 -
Lapsed (495,422) -
Outstanding at 30 June 2022 14,285,049 0.13
------------ ---------------------------------------
The following table summarizes share options outstanding and
exercisable at 30 June 2022:
Outstanding Exercisable
Exercise Exercise Number of options Weighted average Number of
price (NOK) price (US$)(1) remaining life options
(years)
------------- ---------------- ------------------ ----------------- ------------
- - 1,016,430 10 -
- - 3,014,590 9.8 -
- - 957,447 9.4 -
- - 3,368,368 9.0 -
- - 942,593 8.1 -
- - 2,485,621 7.5 -
3.85 0.39 750,000 3.5 750,000
5.18 0.53 1,500,000 1.9 1,500,000
4.08 0.41 250,000 0.8 250,000
14,285,049 2,500,000
------------------ ----------------- ------------
(1) The US Dollar to Norwegian Kroner exchange rate used for
determining the exercise price at 30 June 2022 is 0.10149
16. Repurchase of own shares
2022 2021
unaudited audited
$000 $000
---------------------------------------- ---------- --------
Settlement of 866,572 ordinary shares 242 -
at total cost GBP184k
Settlement of 7,500,000 ordinary shares
at total cost GBP1.5 million - 1,982
242 1,982
---------------------------------------- ---------- --------
During the six months, the Company incurred $242k to repurchase
866,572 ordinary shares, 330,078 repurchased at cost of $91k were
cancelled and removed from the register during the period, the
balance of 536,494 repurchased at cost of $151k were cancelled and
removed from the register in July 2022. At 30 June 2022, the
Company held 3,536,494 shares in treasury (2021: nil).
On 17 December 2021, the Company incurred $2.0 million to
repurchase 7,500,000 ordinary shares of which 4,500,000 ordinary
shares were cancelled and removed from the share register on 30
December 2021 and 3,000,000 ordinary shares were held in treasury
and recognised within equity reserves to satisfy upcoming
obligations in respect of an employee share plan.
17. Share capital
Authorised, called up, allotted
and fully paid 2022 2021
-------------------------------------
Balance at Balance at
30 June 2022 31 December 2021
(unaudited)
(audited)
------------------------------------- ---------------------- ------------------------
Ordinary Ordinary
shares $000 shares $000
------------------------------------- ------------ -------- -------------- --------
Balance at 1 January 181,049,139 414,919 186,488,465 416,426
------------------------------------- ------------ -------- -------------- --------
Repurchase of own shares: Cancelled
and removed from share registrar ( 939,326
on 3 February 2021 - - ) (318)
------------------------------------- ------------ -------- -------------- --------
Repurchase of own shares: Cancelled
and removed from share registrar ( 4,500,000 ( 1 ,
on 30 December 2021 - - ) 189 )
------------------------------------- ------------ -------- -------------- --------
Repurchase of own shares: Cancelled
and removed from share registrar
during the six months of 2022. (330,078) (91) - -
-------------------------------------
Balance at 30 June and 31 December 180,719,061 414,828 181,049,139 414,919
------------------------------------- ------------ -------- -------------- --------
The holders of ordinary shares are entitled to receive dividends
as declared from time to time and are entitled to one vote per
share at meetings of the Company.
18. Earnings per share
Basic and diluted EPS
2022 2021
(unaudited) (audited)
$000 $000
-------------- ------------
Net profit for the period 6,172 3,360
-------------- ------------
Weighted average number of ordinary shares outstanding 180,842,175 185,720,397
Dilutive weighted average number of ordinary shares outstanding 192,627,224 185,720,397
-------------- ------------
Net profit per ordinary share 0.03 0.018
-------------- ------------
19. Dividends
The following dividends were declared (2021: declared and paid)
by the Company during the year.
2022 2021
(unaudited) (audited)
$000 $000
------------------------------------------- -------------- ------------
1.16 pence (2021: 1.0 pence) per ordinary
share 2,680 2,600
------------------------------------------- -------------- ------------
On 23 July 2021, the Company paid shareholders who hold shares
on the UK Register the final year 2020 dividend of 1.0 pence per
ordinary share and on 6 August 2021, the Company paid shareholders
who hold shares on the VPS Register the final year 2020 dividend of
1.0 pence per ordinary share. The total final dividend distribution
was $2.6 million.
On 8 October 2021, the Company paid an interim dividend of 0.52
pence per ordinary share ; The total interim dividend distribution
being $1.3 million.
On 6 April 2022, the Company declared a final dividend of 1.16
pence per ordinary share which was paid on 29 July 2022, being a
total dividend distribution of $2.7 million. The declared and paid
final dividend bring distributions to shareholders with regard to
the financial year ended 31 December 2021 to $4.0 million.
20. Subsequent events
Potential Exercise of Ruvuma Pre-Emption Rights
In June 2022, the Company reached agreement with Scirocco Energy
plc ("Scirocco") to acquire its 25% non-operated working interest
in the Ruvuma Production Sharing Agreement ("Ruvuma Asset") in
Tanzania.
On 12 July 2022, the Company announced that, Scirocco was
informed by its partner ARA Petroleum Tanzania Ltd of its intention
to exercise its pre-emption rights in relation to the Proposed
Acquisition under the terms of the Joint Operating Agreement. This
pre-emption would be subject to approval by the Government of
Tanzania.
In addition, Scirocco confirmed that TPDC had indicated that it
was considering exercising its statutory right of first refusal in
relation to the Proposed Acquisition pursuant to Section 86(5) of
the Petroleum Act 2015. On 19 August 2022, Scirocco released an
update that TPDC had confirmed they would not be exercising this
right. On 31 August 2022, Scirocco announced it had entered into
binding agreements with APT with a view to completing the disposal
by 31 December 2022.
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END
IR FLFVDTTILVIF
(END) Dow Jones Newswires
September 01, 2022 02:02 ET (06:02 GMT)
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