Operational Update and 2022 Production Guidance

RNS Number : 6259Z

Wentworth Resources PLC

26 January 2022

 

  26 January 2022

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

Operational Update and 2022 Production Guidance

Wentworth achieves highest ever quarterly production and raises production guidance for 2022

Wentworth Resources plc (AIM: WEN), the independent, Tanzania-focused natural gas production company, is pleased to announce an operational update and its production guidance for 2022.

Wentworth (holding 31.94%) and its joint venture partners achieved record quarterly production of 91.5 MMScf/d from the Mnazi Bay gas field in the fourth quarter of 2021. This supported the steadily increasing demand for natural gas in Tanzania, which remained strong throughout the second half of last year.

Positive economic indicators continue to support natural gas demand and comparatively lower hydroelectric generation has further increased Tanzania's reliance on natural gas for baseload electricity. This has enabled Wentworth to set production guidance for 2022 at 75 - 85 MMScf/d. This is significantly higher than initial guidance for 2021 and reflects the Company's confidence in Tanzania's demand fundamentals and Mnazi Bay's ability to fulfil demand at these levels.

The Company is proud of its continuing role, through its partnership in the Mnazi Bay Joint Venture, to provide low-carbon natural gas, a safe and reliable source of energy for the people and industries of Tanzania.

2021 Operational Highlights

•	The health and safety of our employees remains our top priority and robust precautionary measures remain in place to ensure the ongoing safety of our staff
•	Daily average gross production in 2021 was 24% higher year-on-year at 81.6 MMscf/d (2020: 65.5 MMscf/d)
•	Daily average production was higher than guidance for 2021, which was set at 65 - 75 MMscf/d and later revised upwards in June 2021 to 70 - 80 MMscf/d
•	Daily average production from the Mnazi Bay field in Q4 2021 was 20% higher year-on-year at 91.5 MMscf/d (Q4 2020: 76.4 MMscf/d), the strongest quarterly performance in the Company's history

2022 Outlook

•	Production guidance for 2022 has been set at 75 - 85 MMscf/d, raising the guidance band by 5 MMScf/d across the board
•	The contracted price for gas produced at Mnazi Bay production has increased from $3.35/MMbtu to $3.44/MMbtu in line with growth in the United States Consumer Prices Index ("CPI"); effective from 1 January 2022
•	Operational costs of production remain low at $0.54/Mscf
•	The Company continues to explore and evaluate growth opportunities both within the Mnazi Bay licence and the greater geographical region to support increasing in-country demand for natural gas

Financial

•	Total capital returns to shareholders of $5.9 million in 2021
•	2021 interim dividend of $1.32 million declared in August 2021, an increase of 10% from 2020, raising total distributions to shareholders to $3.9 million during 2021
•	Further capital returns via share buy-backs of $2.0 million (£1.5 million) in December 2021
•	Wentworth expects a 2021 final dividend of US$2.64 million in line with the Company's policy of a 1/3 : 2/3 split between the interim and the final dividend
•	Wentworth remains debt free with $22.8 million cash on hand at 31 December 2021 (unaudited) following 2021 share buy back programme
•	2022 proposed Mnazi Bay work programme and budget totalling $20.1 million (gross joint venture), comprising $12.8 million field operating costs ($4.3 million net to Wentworth) and $7.3 million field development costs ($2.3 million net to Wentworth)
•	Strong working partnership with Tanzania Petroleum Development Corporation ("TPDC") which continues to settle all gas sales invoices in full as they fall due and remains fully current with payments

Sustainability

•	In line with its strategic focus on climate action and its commitment to maintaining a robust ESG framework, Wentworth expects to publish its 2021 Sustainability Report in April 2022
•	As announced in November 2021, Wentworth aims to offset all Mnazi Bay Scope 1 and Scope 2 emissions and partially offset Scope 3 emissions from 2022 by working in partnership with Vitol SA to develop new community-focused carbon credit programmes in Tanzania

Katherine Roe, CEO, commented:

"Wentworth continues to go from strength to strength and we are proud and delighted to have achieved an all-time quarterly production record at Mnazi Bay in the final quarter of last year. This continues to indicate that demand has recovered from the lower levels of 2020 associated with COVID-19 and means Wentworth will continue to have a leading role in providing low-carbon energy as Tanzania rapidly grows and industrialises.

"Our strong balance sheet means that 2022 presents an opportunity to optimise and expand our operations at Mnazi Bay to continue to grow production over time. We are looking forward to working with our partners, TPDC and Maurel et Prom, on this work programme to ensure the long-term sustainability of our operations.

"Financially we are in the strongest position in our corporate history enabling our commitment to sustaining our progressive dividend policy as well as instituting a share buy-back programme at the end of 2021. We remain debt-free with significant cash on hand and continue to evaluate growth opportunities to underpin our capital returns policy for the long-term.

"As Wentworth's contributions to Tanzania grow, we remain focused on ensuring that we are a responsible, transparent, and sustainable business. Part of that approach includes taking accountability for the emissions impacts of our business. We come from a strong starting position with one of the lowest carbon intensity figures in the UK-listed E&P sector. However, we know that isn't enough. In partnership with Vitol, work is already underway on our community-focused carbon credit programme and we look forward to providing updates on our progress over the coming months as we identify opportunities to deliver tangible impacts to our communities across Tanzania."

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    [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.

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.

 

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