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ER - Wentworth Resources Limited : Q2 2016 Financial Statements and MD&A

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 Wentworth Resources Limited : Q2 2016 Financial Statements and MD&A

# Wentworth Resources Limited : Q2 2016 Financial Statements and MD&A

  

  

  

  

  

  

PRESS RELEASE  

16 August 2016  

  

Wentworth Resources Limited  

  

("Wentworth" or the "Company")  

  

Q2 2016 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 ended 30 June 2016.  

  

The following should be read in conjunction with the Q2 2016 Management  

Discussion and Analysis and Financial Statements which are available on the  

Company's updated website at http://www.wentworthresources.com.  

  

Q2 2016 HIGHLIGHTS  

  

Financial  

  

\* Gas sales revenue of $3.43 million for the quarter, compared to $0.29  

million in Q2 2015.  

\* Net loss for the quarter of $0.17 million, compared to a net loss of $1.81  

million in Q2 2015.  

\* Exploration and development capital expenditures of $2.16 million compared  

to $9.35 million during Q2 2015.  

\* Commenced repayment of existing debt facility with $1.0m principal repayment  

during Q2 2016.  

\* Increase in cash and cash equivalents to $6.29 million at June 30, 2016 from  

$2.75 million on hand at December 31, 2015.  

\* June 30, 2016 working capital was $7.28 million compared to $11.98 million  

at December 31, 2015.  

  

Operational  

  

Tanzania  

\* Achieved average gross daily gas production for the second quarter of 51  

MMscf/d compared to first quarter production of 48 MMscf/d.  

\* Installation of remaining components of permanent field infrastructure was  

ongoing during Q2 2016 and is expected to be completed by the end of Q4  

2016.  

  

Mozambique  

\* Received Mozambique Government approval of a two-year appraisal program for  

the Tembo gas discovery and increasing Wentworth's participation interest in  

the Tembo appraisal area of the Rovuma Onshore Block from 11.59 per cent to  

85 per cent.  Wentworth has been appointed Operator.  

\* Commenced reprocessing existing 2D seismic data over the Tembo appraisal  

area as the first step in appraising the discovery.  

\* Preliminary evaluation of the Tembo-1 well results and the regional seismic  

evaluation suggests the possibility of a substantial hydrocarbon  

accumulation.  

  

  

Geoff Bury, Managing Director, commented:  

"In Tanzania, Wentworth has seen significant growth in gas sales since the start  

of operation of the new pipeline in August 2015. This provides the Company with  

consistent cash flow to fund our ongoing activities, service our debt facility  

and to build cash reserves.  As we continue to strengthen our balance sheet, we  

look forward to growing the Company without having to rely on the equity markets  

to do so.  

  

We are extremely pleased to have reached an agreement with the Government of  

Mozambique to increase our participating interest to 85% in the Onshore Rovuma  

Block, to be appointed Operator of the block and to have agreed an appraisal  

plan for the Tembo discovery. This expands our portfolio in the Rovuma Basin, a  

region that has recently seen significant interest from super-majors and  

national oil companies. As operator of this concession we have the ability to  

match the timing of the appraisal activities to our available cashflow and with  

our increased interest we have the flexibility to seek industry partners to  

participate in this appraisal plan."  

  

  

  

Enquiries:  

  

  

  

Wentworth Lance Mierendorf, lance.mierendorf@wentworthresources.com  

Chief Financial +1 403 680 8773  

Officer  

  

  

  Katherine Roe katherine.roe@wentworthresources.com  

Vice President +44 7841 087 230  

Corporate  

Development &  

Investor Relations  

  

  

Swedbank First Broker (Norway) +47 23 23 80 00  

Securities  

  

  Ove Gusevik  

  

  Jarand Lønne  

  

  

Crux Advisers Investor Relations +47 909 808 48  

Adviser  

(Norway)  

  

  Jan Petter Stiff  

  

  Carl Bachke  

  

  

Stifel Nicolaus AIM Nominated +44 (0) 20 7710 7600  

Europe Limited Adviser and Broker  

(UK)  

  

  Callum Stewart  

  

  Ashton Clanfield  

  

  

FirstEnergy Capital Broker (UK) +44 (0) 20 7448 0200  

  

  Hugh Sanderson  

  

  

FTI Consulting Investor Relations wentworth@fticonsulting.com  

Adviser (UK) +44 (0) 20 3727 1000  

  

  Edward Westropp  

Tom Hufton  

  

  

  

  

Financial Statements  

  

The following primary statements have been extracted from the Q2 2016 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, December 31,  

2016 2015  

\---------------------------  

ASSETS  

  

Current assets  

  

Cash and cash equivalents 6,285 2,746  

  

Trade and other receivables 5,205 3,253  

  

Prepayments, deposits and advances to partners 257 841  

  

Current portion of long-term receivables 15,024 18,190  

\---------------------------  

  26,771 25,030  

\---------------------------  

Non-current assets  

  

Long-term receivables 18,423 18,897  

  

Exploration and evaluation assets 44,253 43,141  

  

Property, plant and equipment 94,576 95,168  

  

Deferred tax asset 33,962 34,341  

\---------------------------  

  191,214 191,547  

\---------------------------  

Total assets 217,985 216,577  

\---------------------------  

  

  

LIABILITIES  

  

Current liabilities  

  

Trade and other payables 9,790 6,269  

  

Current portion of long-term loans 8,595 5,270  

  

Current portion of other liability 1,108 1,508  

\---------------------------  

  19,493 13,047  

\---------------------------  

Non-current liabilities  

  

Long-term loans 16,225 20,512  

  

Other liability 1,504 1,634  

  

Decommissioning provision 1,067 973  

\---------------------------  

  18,796 23,119  

\---------------------------  

Equity  

  

Share capital 411,493 411,493  

  

Equity reserve 26,047 25,683  

  

Accumulated deficit (257,844) (256,765)  

\---------------------------  

  179,696 180,411  

\---------------------------  

Total liabilities and equity 217,985 216,577  

\---------------------------  

  

  

  

  

WENTWORTH RESOURCES LIMITED  

Unaudited Condensed Consolidated Interim Statement of Comprehensive Loss  

United States $000s, unless otherwise stated  

  

  Three months ended June Six months ended June  

30, 30,  

  

  2016 2015 2016 2015  

\--------------------------------------------------  

  

  

Total revenue 3,430 292 6,636 564  

  

  

  

Operating expenses  

  

Production and operating (773) (1,389) (1,670) (1,893)  

  

General and administrative (1,556) (1,356) (3,068) (2,853)  

  

Depreciation and depletion (1,189) (122) (2,303) (228)  

  

Share based compensation (136) (152) (364) (458)  

\--------------------------------------------------  

Loss from operating (224) (2,727) (769) (4,868)  

activities  

  

  

  

Finance income 1,072 1,387 2,339 2,694  

  

Finance costs (1,062) (472) (2,270) (2,354)  

\--------------------------------------------------  

  

  

Loss before tax (214) (1,812) (700) (4,528)  

  

  

  

Deferred tax 40 - (379) -  

recovery/(expense)  

\--------------------------------------------------  

  

  

Net loss and comprehensive (174) (1,812) (1,079) (4,528)  

loss  

\--------------------------------------------------  

  

  

Net loss per ordinary share  

  

Basic and diluted (0.00) (0.01) (0.01) (0.03)  

(US$/share)  

\--------------------------------------------------  

  

  

  

WENTWORTH RESOURCES LIMITED  

Unaudited Condensed Consolidated Interim Statement of Changes in Equity  

United States $000s, unless otherwise stated  

  

  Number of Share Equity Accumulated Total  

shares capital reserve deficit equity  

  

    $ $ $ $  

\--------------------------------------------------------------  

  

  

Balance at 154,122,700 404,225 24,916 (283,799) 145,342  

December  

31, 2014  

  

Net loss and - - - (4,528) (4,528)  

comprehensive  

loss  

  

Share based - - 458 - 458  

compensation  

\--------------------------------------------------------------  

Balance at June 154,122,700 404,225 25,374 (288,327) 141,272  

30, 2015  

\--------------------------------------------------------------  

  

  

  

  

  

  

Balance at 169,534,969 411,493 25,683 (256,765) 180,411  

December  

31, 2015  

  

Net loss and - - - (1,079) (1,079)  

comprehensive  

loss  

  

Share based - - 364 - 364  

compensation  

\--------------------------------------------------------------  

Balance at June 169,534,969 411,493 26,047 (257,844) 179,696  

30, 2016  

\--------------------------------------------------------------  

  

  

  

  

  

  

WENTWORTH RESOURCES LIMITED  

Unaudited Condensed Consolidated Interim Statement of Cash Flows  

United States $000s, unless otherwise stated  

  Three months ended June Six months ended June  

30, 30,  

  

  2016 2015 2016 2015  

\--------------------------------------------------  

Operating activities  

  

Net loss for the period (174) (1,812) (1,079) (4,528)  

  

Adjustments for:  

  

Depreciation and depletion 1,189 122 2,303 228  

  

Finance income, net (10) (915) (69) (340)  

  

Deferred tax (40) - 379 -  

(recovery)/expense  

  

Share based compensation 136 152 364 458  

  

Change in non-cash working (88) 2,448 (1,027) 2,378  

capital  

\--------------------------------------------------  

Net cash generated 1,013 (5) 871 (1,804)  

from/(utilized in) operating  

activities  

\--------------------------------------------------  

  

  

Investing activities  

  

Acquisitions of evaluation - (1,355) - (7,152)  

and exploration assets  

  

Acquisitions of property, (9) (4,138) (9) (7,400)  

plant and equipment  

  

Reductions of/(additions to) 2,699 (829) 5,295 (1,504)  

long-term receivable  

\--------------------------------------------------  

Net cash from/(used in) 2,690 (6,322) 5,286 (16,056)  

investing activities  

\--------------------------------------------------  

  

  

Financing activities  

  

Repayment of long-term loan (1,000) - (1,000) -  

  

Proceeds from long-term loan - 4,359 - 14,839  

  

Interest paid (251) (242) (1,024) (242)  

  

Payment of other liability (221) - (594) -  

\--------------------------------------------------  

Net cash (used in)/from (1,472) 4,117 (2,618) 14,597  

financing activities  

\--------------------------------------------------  

  

  

  

  

Net change in cash and cash 2,231 (2,210) 3,539 (3,263)  

equivalents  

  

Cash and cash equivalents, 4,054 4,434 2,746 5,487  

beginning of the period  

\--------------------------------------------------  

Cash and cash equivalents, 6,285 2,224 6,285 2,224  

end of the period  

\--------------------------------------------------  

  

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, 2015,  

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.  

  

  

  

\[HUG#2035376\]