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Thursday, 10 August 2017

Wentworth Resources Limited : Q2 2017 and Half Year Financial Statements and MD&A

Wentworth Resources Limited    

Published: 08:00 CEST 10-08-2017 /GlobeNewswire /Source: Wentworth Resources Limited / : WRL /ISIN: CA9506771042

Wentworth Resources Limited : Q2 2017 and Half Year Financial Statements and MD&A

 

 

 

PRESS RELEASE

10 August 2017

 

Wentworth Resources Limited

("Wentworth" or the "Company")

Q2 2017 and Half Year Financial Statements and MD&A

 

Wentworth Resources Limited, the Oslo Stock Exchange (OSE: WRL) and London Stock Exchange (AIM: WRL) listed independent, East Africa-focused oil & gas company, today announces its results for the quarter and six months ended 30 June 2017.

 

The following should be read in conjunction with the Q2 2017 Management Discussion and Analysis and Financial Statements which are available on the Company's updated website at http://www.wentworthresources.com.

 

Corporate

 

  • On 23 May 2017, the Company completed a private placement and issued 16,953,496 new common shares, for cash consideration of $0.326 (GBP 0.25 or NOK 2.73) per share for total gross proceeds of $5.53 million (GBP4.2 million or NOK46.3 million).

 

Financial

 

  • Gas sales revenue of $2.15 million for the quarter, compared to $2.94 million in Q1 2017 and $3.43 million in Q2 2016.    For the Half-year 2017 revenue was $5.10 million compared to $6.64 million in 2016. 
  • Net loss of $1.25 million and $1.66 million in Q2 and Half-year 2017 compared to net losses of $0.17 million and $1.08 in 2016 respectively.
  • Capital expenditures of $0.61 million during Q2 and $1.3 million during Half-year 2017 which compares to $2.16 million and $2.82 million in 2016 respectively.
  • Cash and cash equivalents on hand of $3.83 million compared with $0.98 million on hand at December 31, 2016.
  • Working capital of $9.08 million compared to $4.96 million at December 31, 2016.
  • Drew $0.56 million on new overdraft credit facility for working capital purposes during Q2 2017.

 

Operational

 

Tanzania

  • Following 2016, a year in which gas demand varied significantly on a month to month basis as existing government owned gas infrastructure was upgraded, new infrastructure was commissioned and industry participation in the gas supply and electrical power generation was established, gas demand started to stabilise in the first half of 2017. 
  • Since the end of the wet season during Q2 2017 when hydro power generation is at its annual peak, gas production volumes have increased substantially.
  • The Mnazi Bay field achieved average gross daily gas production during the quarter of 30.7 MMscf/d and 36.9 MMscf/d during the first half of 2017, with June 2017 production averaging 44.3 MMscf/d.  Gross gas sales for Q2 to date have reached over 60 MMscf/d with management's forecast for the full year 2017 remaining within the guided range of 40 to 50 MMscf/d. 
  • Managed working capital with focus on petitioning purchasers of gas to improve the timeliness of settling amounts owing and working with our two main creditors, local banks and the operator of the Manzi Bay Concession, to pay obligations upon settlement of receivables.

 

Mozambique

  • Proceeding with plan to commence the drilling of an appraisal well on the Tembo discovery next year, before acquiring additional seismic if necessary. Consideration to acquiring additional seismic will be contingent upon the results of the appraisal well.
  • Continued work on reprocessing existing 2-D vibroseis seismic data, completed Tembo-1 well analysis and continued mapping and interpretation of all existing data with a view to selecting a well location.
  • Continued the process of securing an industry partner to participate in the appraisal programme in advance of drilling an appraisal well.

 

Geoff Bury, Managing Director, commented:

 

"Second quarter production was impacted by the rainy season during which hydro power generation is used as a substitute for gas-fired power generation but production rebounded to an average for July of 61 MMscf/d and we continue to maintain an average production guidance for the year of between 40 and 50 MMscf/d.

 

The Company is effectively managing working capital through a period of slower payments from its government agency customers TPDC and TANESCO. These efforts include being fully engaged with Maurel & Prom and our local Tanzania based banking institutions to effectively settle obligations as cash flows improve through higher production volumes.

 

We continue to advance the process of securing a farm-in partner for the drilling of an appraisal well in Mozambique and have received very positive initial interest from industry. The Mozambique government has expressed their support for the drilling of an appraisal well in 2018 in advance of the need to acquire new seismic data over the gas discovery area. The Company is currently determining a well location and expects to secure a farm-in partner before the commencement of drilling operations."

 

A conference call for investors, analysts and other interested parties will be held this morning at 01.30 MDT (Calgary) / 08.30 BST (London) / 09.30 CEST (Oslo). 

 

Call in numbers:

Please dial in 5-10 minutes prior to the start time and join the call by referencing "Wentworth Q2

Results".

Participant Std International Dial-In: +44 (0) 1452 542303

Participant UK LocalCall Dial-In Number:

United Kingdom, LocalCall: 08448719456

Norway: 21033911

Participant FreeCall Dial in numbers:

Canada: 18669923610

France: 0805110467

Norway: 80016886

United States: 18663899778

 

-Ends-

 

Enquiries: 

 

 

 

 

 

Wentworth

Lance Mierendorf,

Chief Financial Officer

 

lance.mierendorf@wentworthresources.com

+1 403 680 8773

 

Katherine Roe

Vice President Corporate Development & Investor Relations

 

katherine.roe@wentworthresources.com

+44 7841 087 230

Crux Advisers

Investor Relations Adviser

(Norway)

+47 909 808 48

 

Carl Bachke

 

 

Stifel Nicolaus Europe Limited

AIM Nominated Adviser and Broker (UK)

+44 (0) 20 7710 7600

 

Callum Stewart

Nicholas Rhodes

 

 

Ashton Clanfield

 

 

GMP FirstEnergy

Broker (UK)

+44 (0) 20 7448 0200

 

Hugh Sanderson

 

 

FTI Consulting

Investor Relations Adviser (UK)

wentworth@fticonsulting.com

+44 (0) 20 3727 1000

 

Edward Westropp

 

 

 

 

 

Financial Statements

 

The following primary statements have been extracted from the Q2 2017 unaudited consolidated financial statements which are located on the Company's website at www.wentworthresources.com.

 

WENTWORTH RESOURCES LIMITED

Unaudited Condensed Consolidated Interim Statement of Financial Position

United States $000s, unless otherwise stated

 

 

June 30,

2017

December 31,

2016

ASSETS

 

 

Current assets

 

 

Cash and cash equivalents

3,833

979

Trade and other receivables

9,624

6,699

Prepayments and deposits

175

187

Current portion of long-term receivables

11,454

12,283

 

25,086

20,148

Non-current assets

 

 

Long-term receivables

14,608

18,034

Exploration and evaluation assets

46,455

45,538

Property, plant and equipment

92,196

93,366

Deferred tax asset

31,372

31,145

 

184,631

188,083

Total assets

209,717

208,231

 

 

 

LIABILITIES

 

 

Current liabilities

 

 

Overdraft credit facility

558

-

Trade and other payables

8,234

8,675

Current portion of long-term loans

5,924

5,258

Current portion of other liability

1,290

1,260

 

16,006

15,193

Non-current liabilities

 

 

Long-term loans

12,528

15,254

Other liability

1,030

1,100

Decommissioning provision

819

773

 

14,377

17,127

Equity

 

 

Share capital

416,426

411,493

Equity reserve

26,420

26,275

Accumulated deficit

(263,512)

(261,857)

 

179,334

175,911

Total liabilities and equity

209,717

208,231

 

 

 

 

 

WENTWORTH RESOURCES LIMITED

Unaudited Condensed Consolidated Interim Statement of Comprehensive Loss

United States $000s, unless otherwise stated

 

 

Three months ended June 30,

Six months ended June 30,

 

2017

2016

2017

2016

 

 

 

 

 

Total revenue

2,152

3,430

5,096

6,636

 

 

 

 

 

Operating expenses

 

 

 

 

Production and operating

(903)

(773)

(1,813)

(1,670)

General and administrative

(1,084)

(1,556)

(2,014)

(3,068)

Depreciation and depletion

(654)

(1,189)

(1,548)

(2,303)

Share based compensation

(37)

(136)

(145)

(364)

Loss from operating activities

(526)

(224)

(424)

(769)

 

 

 

 

 

Finance income

370

1,072

991

2,339

Finance costs

(597)

(1,062)

(2,449)

(2,270)

Loss before tax

(753)

(214)

(1,882)

(700)

 

 

 

 

 

Deferred tax recovery/(expense)

(493)

40

227

(379)

 

 

 

 

 

Net loss and comprehensive loss

(1,246)

(174)

(1,655)

(1,079)

 

 

 

 

 

Net loss per ordinary share

 

 

 

 

Basic and diluted (US$/share)

(0.01)

-

(0.01)

(0.01)

 

 

 

WENTWORTH RESOURCES LIMITED

Unaudited Condensed Consolidated Interim Statement of Changes in Equity

United States $000s, unless otherwise stated

 

 

 

Note

 

Number of shares

 

Share capital

 

Equity reserve

 

Accumulated

deficit

 

Total

 equity

 

 

 

$

$

$

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2015

 

169,534,969

411,493

25,683

(256,765)

180,411

Net loss and comprehensive loss

 

-

-

-

(1,079)

(1,079)

Share based compensation

10

-

-

364

-

364

Balance at June 30, 2016

 

169,534,969

411,493

26,047

(257,844)

179,696

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2016

 

169,534,969

411,493

26,275

(261,857)

175,911

Net loss and comprehensive loss

 

-

-

-

(1,655)

(1,655)

Share based compensation

10

-

-

145

-

145

Issue of share capital

11

16,953,496

5,527

-

-

5,527

Share issue costs, net of tax

11

-

(594)

-

-

(594)

Balance at June 30, 2017

 

186,488,465

416,426

26,420

(263,512)

179,334

 

 

 

 

 

 

 

 

 

WENTWORTH RESOURCES LIMITED

Unaudited Condensed Consolidated Interim Statement of Cash Flows

United States $000s, unless otherwise stated

 

Three months ended

 June 30

Six months ended

 June 30,

 

2017

2016

2017

2016

 

 

 

 

 

Operating activities

 

 

 

 

Net loss for the period

(1,246)

(174)

 

(1,655)

(1,079)

Adjustments for:

 

 

 

 

Depreciation and depletion

654

1,189

1,548

2,303

Finance costs/(income), net

227

(10)

1,458

(69)

  Deferred tax expense/(recovery)

493

(40)

(227)

379

Share based compensation

37

136

145

364

Change in non-cash working capital

(827)

(88)

(1,851)

(1,027)

Net cash (utilized in)/generated from operating activities

 

(662)

 

1,013

 

(582)

 

871

 

 

 

 

 

Investing activities

 

 

 

 

Additions to evaluation and exploration assets

(506)

-

(950)

-

Additions to property, plant and equipment

(174)

(9)

(391)

(9)

Reductions of long-term receivable

1,411

2,699

2,400

5,295

Net cash from investing activities

731

2,690

1,059

5,286

 

 

 

 

 

Financing activities

 

 

 

 

Issue of share capital, net of issue costs

4,933

-

4,933

-

Principal payments

(2,000)

(1,000)

(2,014)

(1,000)

Debt restructuring fee

-

-

(83)

-

Draw on overdraft credit facility

558

-

558

-

Interest paid

(182)

(251)

(966)

(1,024)

Payment of other liability

-

(221)

(51)

(594)

Net cash from/ (used in) financing activities

3,309

(1,472)

2,377

(2,618)

 

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

3,378

2,231

2,854

3,539

Cash and cash equivalents, beginning of the period

455

4,054

979

2,746

Cash and cash equivalents, end of the period

3,833

6,285

3,833

6,285

               

About Wentworth Resources

Wentworth Resources is a publicly traded (OSE:WRL, AIM:WRL), independent oil & gas company with: natural gas production; exploration and appraisal opportunities; and large-scale gas monetisation initiatives, all in the Rovuma Delta Basin of coastal southern Tanzania and northern Mozambique.

Cautionary note regarding forward-looking statements

This press release may contain certain forward-looking information.  The words "expect", "anticipate", believe", "estimate", "may", "will", "should", "intend", "forecast", "plan", and similar expressions are used to identify forward looking information.

The forward-looking statements contained in this press release are based on management's beliefs, estimates and opinions on the date the statements are made in light of management's experience, current conditions and expected future development in the areas in which Wentworth is currently active and other factors management believes are appropriate in the circumstances. Wentworth undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless required by applicable law.

Readers are cautioned not to place undue reliance on forward-looking information. By their nature, forward-looking statements are subject to numerous assumptions, risks and uncertainties that contribute to the possibility that the predicted outcome will not occur, including some of which are beyond Wentworth's control.  These assumptions and risks include, but are not limited to: the risks associated with the oil and gas industry in general such as operational risks in exploration, development and production, delays or changes in plans with respect to exploration or development projects or capital expenditures, the imprecision of resource and reserve estimates, assumptions regarding the timing and costs relating to production and development as well as the availability and price of labour and equipment, volatility of and assumptions regarding commodity prices and exchange rates, marketing and transportation risks, environmental risks, competition, the ability to access sufficient capital from internal and external sources and changes in applicable law.  Additionally, there are economic, political, social and other risks inherent in carrying on business in Tanzania and Mozambique. There can be no assurance that forward-looking statements will prove to be accurate as actual results and future events could vary or differ materially from those anticipated in such statements. See Wentworth's Management's Discussion and Analysis for the year ended December 31, 2014, available on Wentworth's website, for further description of the risks and uncertainties associated with Wentworth's business.

Notice

Neither the Oslo Stock Exchange nor the AIM Market of the London Stock Exchange has reviewed this press release and neither accepts responsibility for the adequacy or accuracy of this press release.

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

 

This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.


Q2 2017 Financial Statements
Q2 2017 MDA
170810 Press Release



This announcement is distributed by Nasdaq Corporate Solutions (One Liberty Plaza, 165 Broadway, New York, NY 10006. Tel: +1 212 401 8700. www.nasdaqomx.com) on behalf of NASDAQ OMX Corporate Solutions clients. Source: Wentworth Resources Limited, 630, 715 – 5th Avenue SW, Calgary, Alberta T2P 2X6, Canada
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