TANZANIA: Wentworth Resources Final Results for the year ended 31 December 2020
Financial
· Declaring a final dividend in respect of FY 2020 of 1.0 pence per share ($2.6 million); a total dividend distribution in respect of 2020 of $3.8 million (1.5 pence per share) representing an increase of 27% from 2019 ($3.0 million) and a yield of approximately 6.7% (calculated on an annualised basis)
· Strong and resilient financial performance against a challenging macro-economic backdrop
· Revenues of $18.9 million (2019: $18.6 million), underpinned by long-term fixed gas price contracts
· Adjusted earnings before interest, taxes, depreciation, amortization and exploration (EBITDAX) of $9.7 million (2018: $8.8 million)
· Debt free with cash on hand of $17.8 million at 31 December 2020
· TPDC continues to remain fully current with all invoices for gas sales
Operational
· Production averaged 65.5 MMscf/day (2019: 70.3 MMscf/day), lower due to fluctuating demand but in line with guidance of 60-70 MMscf/day
· Capacity from existing wells and production facilities increased to in excess of 100 MMscf/day
· Low operational cost of production of $0.69 / Mscf
· Wentworth’s share of Gross 2P Reserves as at 31 December 2020 estimated by RPS to be 90.8 Bcf with a post-tax NPV10 of $116.6 million
Sustainability
· Ongoing ESG strategy remains a priority with a focus on measurement and mitigation strategies for climate-related impacts in 2021
Sustainability Report
· Published inaugural Sustainability Report for 2020; it addresses how we manage the impacts of our business by upholding relevant international standards and how we take our responsibility to our stakeholders, society and the environment seriously
· Announced membership of the United Nations Global Compact, underlining our commitment to operating responsibly in line with the UN’s Ten Principles on human rights, labour, environment and anti-corruption and to take strategic action to the support the UN’s Sustainable Development Goals
Social and Environmental Impact
· The power access gap in Tanzania is growing despite domestic energy supply increasing; transformational growth is needed in domestic energy supply to deliver the Government’s target of universal access by 2030 through low-cost, low carbon solutions that will secure a just transition for Tanzania
· Natural gas will play a critical role in meeting this target to support cheaper and more reliable electricity as well as facilitating an enabling environment to supplement carbon-free renewable energy systems, such as hydro and solar
· Natural gas constitutes 50% of Tanzania’s energy mix:
o Production from Mnazi Bay constitutes 50% of the gas produced into the grid
o 30% of Tanzania’s electricity customers rely on Mnazi Bay gas
· Wentworth and its partners play an important role in delivering on UN Sustainable Development Goal 7, ensuring universal access to affordable, reliable and modern energy services
2021 Outlook
· Record quarter performance to date with average production volumes for Q1 2021 of 84.74 MMscf/day (gross) compared with Q1 2020 average of 63.60 MMscf/day (gross)
· All-time production volume highs at Mnazi Bay of 110.65 MMscf/day including monthly average production of 101.85 MMscf/day (gross) during March 2021, demonstrating the ability to supply greater than 100 MMscf/day (gross) consistently during periods of high demand
· 2021 Mnazi Bay production guidance remains unchanged at 65-75 MMscf/day (gross), considering the seasonal rainy season typically impacts demand for natural gas during Q2