Wentworth Resources, 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."
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
· 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
· 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
· 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
· 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
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 £ 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 £.