Tanzania Ops Holds Steady for Wentworth During Covid

Friday, September 4, 2020

Wentworth Resources announced its interim financial results for the six months ended 30 June 2020. Within the results the company reported the following highlights on its Tanzania operations.

• Adjusted production guidance range of 60-70 MMscf/day (gross)
• 58.28 MMscf/day (H1 2019: 66.17 MMscf/day) for the period to 30 June 2020 following weakened demand due to COVID-19 related restrictions in March and April and an extended rainy season in January and June (normally March to late May)
• Industrial demand now recovering after the lifting of COVID-19 restrictions and natural gas-fired electricity generation displacing hydro-electric power due to the onset of the dry season. Proportion of supply to Tanzania’s national grid provided by natural gas increased from 47% to currently 60%. Production averaged 68.48 MMscf/day for the period 1 July 2020 to 31 August 2020 and 71.77 MMscf/day for the period 1 August 2020 to 31 August 2020
• Low operational cost of production of $1.72/Mscf (2019: $1.88/Mscf)
• 2P Reserves of 95 Bscf, valued at $118.6 million (post-tax NPV10) as at 31 December 2019 as per published RPS Reserves Assessment Report
• Mnazi Bay remains fully operational, with no adverse impact on supply from the pandemic
• Marginal decline in industrial demand due to weakened activity as a result of COVID-19 with 2020 production guidance slightly adjusted to 60-70 MMscf/day (gross)
• Tanzania’s economy has remained resilient with recent data from the African Development Bank suggesting Tanzania’s projected GDP growth in 2020 is set to be the highest in the East Africa region at 5.2%
• Production volumes are expected to be typically higher in H2 2020 than H1 2020 due to the end of the rainy season and the lifting of COVID-19 restrictions in Tanzania
• Mnazi Bay is well-positioned to supply increased gas volumes and support demand growth in H2 2020 and into 2021 with the capacity to supply volumes of 100 MMscf/day (gross)

Katherine Roe, CEO, commented: “Despite a challenging macroeconomic environment due to the ongoing impacts of the COVID-19 pandemic, Wentworth has continued to demonstrate business resilience, robust financial and operational performance which has underpinned our decision to increase our interim dividend.

“Having only launched our sustainable dividend policy in Q3 2019, we’re delighted to have now declared three dividend payments within the last twelve months returning $4.2m in total to shareholders. This latest interim dividend also represents a 20% increase year-on-year from our inaugural dividend in September last year and demonstrates how our sustainable business model can withstand these global economic shocks.

“Looking ahead to the second half of 2020, with Tanzania now returning gradually to business-as-usual and following unprecedentedly high levels of rainfall in the H1 2020, we expect to see an increase in demand for natural gas during the remaining part of this year.

“Responsible and sustainable growth that creates value for all our stakeholders remains our priority. We are proud to be a Tanzanian business that is committed to playing a leading role in closing the country’s energy access gap through low-carbon solutions as it seeks to deliver universal access by 2030. Through the provision of reliable, affordable and low-carbon power we have a significant opportunity to deliver transformational change for the people of Tanzania and to support the ongoing socio-economic development of the country.”

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