Wentworth Resources raises $7.6 million to finance Tanzania’s Mnazi Bay developments

Wentworth Resources has announced that it has successfully raised gross proceeds of USD 7.6 million (GBP 4.9 million, NOK 59.7 million) with institutional investors and certain Directors and members of the Executive Management through a private placement of 15,412,269 new shares.

The private placement saw no discount to market price with the new funds set to provide the Company with sufficient working capital beyond its projected receipt of first cash flow for gas sales from its Mnazi Bay concession.

This comes at a time when construction of the Government owned and operated Mtwara to Dar es Salaam pipeline is complete and the accompanying processing facilities are nearing completion with pre-commissioning activities ongoing with delivery of first gas into the new pipeline continues to be on track to commence in Q3 2015.

According to Wentworth Resources significant progress has been made in recent weeks on advancing payment guarantee arrangements and the Company is confident these will be completed prior to the delivery of first gas to the pipeline.

The company said it had preferred the Private Placement as it represented a quick and cost-effective method of raising funds necessary to give the Company sufficient working capital until projected cash flow from gas sales at Mnazi Bay commences.

FirstEnergy Capital and Stifel have been appointed as Joint Bookrunners in respect of the Placement.

According to Wentworth executive Chairman Bob McBean the Company expects to start receiving cash flow from gas sales to the new pipeline in Q4 2015.

“We are very pleased with the successful outcome of this raise which provides the working capital we need prior to delivery of first gas. We are confident that, with the support of our Partners and the commitment shown by the Government, gas will be on stream in the coming months and will be fully supported by an agreed payment guarantee arrangement. I and the Board would like to thank our existing shareholders for their continued support and welcome our new shareholders at an exciting period ahead for Wentworth,” says McBean.

In March Wentworth Resources announced that the Company has subsequently drawn an amount of $5.6 million on an existing $20 million credit facility with a Tanzania-based bank, TIB Development Bank Limited to finance Mnazi bay concession developments including drilling of the MB-4 development well.

As per the last evaluation gas reserves within the Mnazi Bay Concession in Tanzania, carried out by RPS Energy Canada Ltd put the value at $152.9 million after tax.

Marel et Prom is the operator at the Concession with 60.075 percent interest through exploration and 48.06 percent through production while the Tanzania Petroleum Development Corporation holds the remaining 20 percent.