lnterim Results

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 (Α: 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 [phone]. 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 £ 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 £. 

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.

Τ 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 Chief Executive Officer	[e-mail] [phone]
Stifel Nicolaus Europe Limited	AIM Nominated Adviser and Joint Broker  Callum Stewart Ashton Clanfield Simon Mensley	[phone]
Peel Hunt LLP	Joint Broker  Richard Crichton Alexander Allen	[phone]
FTI Consulting	Communications Advisor  Sara Powell  Ben Brewerton Ollie Mills	[phone]

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
	Note	2022 (unaudited) $000	2021 (unaudited) $000
Total revenue	4	15,447	11,663
Production and operating costs		(1,922)	(1,655)
Depletion	10	(3,945)	(3,324)
Total cost of sales		(5,867)	(4,979)
Gross profit		9,580	6,684
Recurring administrative costs	5	(3,028)	(2,974)
New venture and pre-licence costs		(232)	(263)
Share-based payment charges	15	(472)	(167)
Depreciation	10	(49)	(1)
Total costs		(3,781)	(3,405)
Profit from operations		5,799	3,279
Finance income	6	45	30
Finance costs	6	(290)	(590)
Profit before tax		5,554	2,719
Current tax expense		(223)	(118)
Deferred tax expense		841	759
		618	641
Net and comprehensive profit after tax		6,172	3,360
Net profit per ordinary share
Basic and diluted (US$/share)	18	0.03	0.018

CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION

	Note	30 June 2022 (unaudited) $000	31 December 2021 (audited) $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

	Note	Number of shares	Share capital	Equity reserve	Accumulated deficit	Total  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
	Note	2022 (unaudited) $000	2021 (unaudited) $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 Date	IASB Effective Date	Secretary of State Adoption Date
IAS 1 (amendments)	Classification of Liabilities as Current or Non-current.	23 January 2020	1 January 2023	Endorsed
IFRS 17	Insurance contracts.	25 June 2020	1 January 2023	Endorsed
IAS 12 (Amendments)	Deferred tax related to assets and liabilities arising from a single transaction.	7 May 2021	1 January 2023	Endorsed
IAS 8 (amendments)	Definition of accounting estimates.	12 February 2021	1 January 2023	Endorsed
IAS 1 and IFRS Practice Statement 2 (amendments)	Disclosure of accounting policies.	12 February 2021	1 January 2023	Endorsed

3.  Segment information

Net income/(loss) for the six months ended 30 June 2022

	Tanzania Operations (unaudited) $000	Corporate (unaudited) $000	Consolidated (unaudited) $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) $000	Corporate (unaudited) $000	Consolidated (unaudited) $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

	Tanzania Operations (unaudited) $000	Mozambique Operations (Discontinued) (unaudited) $000	Corporate (unaudited) $000	Consolidated (unaudited) $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

	Tanzania Operations (unaudited) $000	Mozambique Operations (Discontinued) (unaudited) $000	Corporate (unaudited) $000	Consolidated (unaudited) $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 (unaudited) $000	2021 (unaudited) $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 (unaudited) $000	2021 (unaudited) $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 (unaudited) $000	2021 (unaudited) $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 30 June 2022 (unaudited)	Balance at 31 December 2021 (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 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.

10.  Property, plant and equipment

	Natural gas properties	Office and other equipment	Right of use
	$000	$000	$000	Total $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 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 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 30 June 2022 (unaudited) $000	Balance at 31 December 2021 (audited) $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 30 June 2022 (unaudited) $000	Balance at 31 December 2021 (audited) $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 30 June 2022 (unaudited)   $000	Balance at 31 December 2021 (audited) $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 (unaudited) $000	2021 (audited) $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 options	Weighted average exercise price (US$))
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 price (NOK)	Exercise price (US$)1	Number of options	Weighted average remaining life (years)	Number of options
-	-	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 unaudited $000	2021 audited   $000
Settlement of 866,572 ordinary shares at total cost £184k	242	-
Settlement of 7,500,000 ordinary shares at total cost £1.5 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 30 June 2022 (unaudited)		Balance at 31 December 2021 (audited)
	Ordinary shares	$000	Ordinary 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 on 3 February 2021	-	-	( 939,326 )	(318)
Repurchase of own shares: Cancelled and removed from share registrar on 30 December 2021	-	-	( 4,500,000 )	( 1 , 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 (unaudited) $000	2021 (audited) $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 (unaudited) $000	2021 (audited) $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.

 

END

 

 

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