TOWER RESOURCES PLC — Management Reports 2018

Mar 28, 2018

2017 HIGHLIGHTS

Operations

Tanzania (Mnazi Bay)

• Increased average gross daily gas production of 49.1 MMscf/d (2016: 43.0 MMscf/d). Gross gas sales volumes increased by 14 percent in 2017.
• Exit daily gas production rate of 73.4 MMscf/d
• The Company received total cash payments of \$18.57 million relating to gas sales and recovery of the long-term government receivable during 2017.
• During the course of 2017, gas sales receivables from the main purchaser of gas increased from two to four months in arrears. Regular payments have been received since Q2 2017. The Company continues to proactively manage working capital, by matching settlement obligations with gas sales payment timing.

Mozambique (Tembo)

• Completed an integrated technical evaluation of the Wentworth operated Rovuma Onshore Appraisal Block, post the Tembo-1 well (2014), including reprocessing existing 2-D seismic data.
• Commenced well planning for a Tembo gas discovery appraisal, including optimising well design and costs, selecting a location, obtaining necessary environmental permits and initiating long lead time equipment procurement activities.
• Launched a farm-out process to secure an industry partner to participate in the joint venture, in advance of planned drilling.
• The Company has formally requested a one-year extension of the Appraisal License and continues to advance pre-drilling planning activities.

Corporate

• Wentworth's share of Tanzanian Proved + Probable (2P) reserves are \$159.6 million NPV (10%) after tax at December 31, 2017, as independently valued by RPS Canada. Mnazi Bay gas fields net 2P reserves were 115.1 Bscf (19.2 Mmboe) at December 31, 2017.
• Completed a private placement on May 23, 2017 issuing 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).
• Improved principal payment timing on existing \$20.0 million credit facility and secured new \$2.5 million overdraft facility for working capital purposes.
• Initiated relocation of executive management and head office from Calgary, Canada to London, UK.

Financial

• Increased Mnazi Bay gas sales revenue to \$13.44 million, up 14 percent from 2016, due to gas-fired Kinyerezi-1 and Ubungo-II power stations operating at near full capacity during the second half of 2017, Kinyerezi-2 gas-fired power station commencing commissioning during Q4 2017 and lower quantities of gas supplied by industry competitors.
• Net loss of \$0.71 million (2016: \$5.09 million net loss).
• Incurred exploration capital expenditures of \$2.38 million to advance the appraisal of the Tembo Appraisal License and development capital expenditures of \$1.06 million on field infrastructure (tie-in) improvements in the Mnazi Bay Concession in Tanzania.
• Cash and cash equivalents on hand of \$3.75 million (2016: \$0.98 million) as at December 31, 2017.

Year Ended December 31, 2017

• Working capital1 of \$15.48 million (2016: \$4.96 million).
• Ongoing focus on capital discipline with 15% reduction in G&A expenses to \$4.61 million. Reduced outstanding long-term loans by \$5.35 million of principal repayments during 2017. Carrying value of long-term loans at year-end was \$15.15 million.

-------- ¹ Working Capital is a non-IFRS measure which is calculated as current assets less current liabilities. For 2017, working capital is \$32.81 million less \$17.33 million. For 2016, working capital was \$20.15 million less \$15.19 million. --------

Financial and Operating Results

	Year ended
Financial	December 31,	December 31,	%
(Figures \$000's except per share data)	2017	2016	Change
Gas revenue	13,440	11,750	14
Adjusted EBITDA(1)	5,342	2,982	79
Profit/(loss) from operations before tax	1,036	(1,474)	170
Net loss and comprehensive loss	(709)	(5,092)	(86)
Basic and diluted net loss per share (\$ per share)	-	(0.03)	100
Net cash generated (used in)/from operating activities	(21)	476	(104)
Capital expenditures (accrual basis)	3,444	4,459	(23)

(1) "Adjusted EBITDA", being a non-IFRS measure, is calculated on page 3 and represents revenue less production and operating expense and general and administrative expenses

		Year ended
	December 31,	December 31,	%
Operating (Mnazi Bay Concession)	2017	2016	Change
Sales to TPDC(2)
(Transnational pipeline)
Price per MMBtu (US\$)	3.04	3.01	1
Gas sales - MMBtu (net to Wentworth)	4,063,124	3,551,575	14
Sales to TANESCO(2)
(Mtwara 18MW Power Plant)
Price per MMBtu (US\$)	5.36	5.36	-
Gas sales - MMBtu (net to Wentworth)	199,868	200,259	-
Production(2)
Production volumes (Mscf) – net to Wentworth	4,167,148	3,667,482	14
Production and operating cost per Mscf (US\$)	0.84	0.92	(9)
Gross average daily production (MMscf/d)	49.1	43.0	14

(2) Gas sales are contracted in MMBtu while gas production is measured in Mscf. The conversion rate used is 1.023 MMBtu to 1 Mscf.

Year Ended December 31, 2017

	As at
	December 31,	December 31,	%
Statement of Financial Position (Figures 000's)	2017	2016	Change
Total assets	\$206,780	\$208,231	(1)
Shareholders' equity	\$180,350	\$175,911	3
Cash and cash equivalents	\$3,750	\$979	283
Long-term receivables (including current portion)	\$20,509	\$30,317	(32)
Credit facilities (carrying amount)	\$17,650	\$20,512	(14)
Outstanding number of shares and options (Figures 000's)
Common shares	186,489	169,535	10
Options	10,600	10,600	-

	Year ended
Reconciliation of Adjusted EBITDA	December	December
(Figures \$000's)	2017	2016
Net profit/(loss)	(709)	(5,092)
Add/deduct:
Deferred tax (recovery)/expense	394	3,196
Finance Income	(2,386)	(4,693)
Finance expense	3,737	5,115
Share based compensation	215	592
Depreciation and depletion	4,091	3,864
Adjusted EBITDA	5,342	2,982

	As at
Reconciliation of Working Capital	December 31	December 31,	%
(Figures \$000's)	2017	2016	Change
Total current assets	32,813	20,148	63
Total current liabilities	(17,330)	(15,193)	14
Working Capital	15,483	4,955	212

Management Discussion and Analysis

This Management's Discussion and Analysis ("MD&A") is provided by management of Wentworth Resources Limited ("Wentworth", the "Company" or "WRL") and is based on information available as at March 27, 2018. This MD&A should be read in conjunction with the Company's audited consolidated financial statements, and notes thereto, for the year ended December 31, 2017. The audited annual consolidated financial statements have been prepared by management, presented in United States (US) dollars, and prepared in accordance with International Accounting Standards (IFRS).

Additional information related to the Company is available on the Company's website at www.wentworthresources.com. Unless otherwise stated, all dollar amounts are expressed in United States dollars, which is the Company's functional and presentation currency.

Operations Overview

Corporate

During Q4 2017, the Company initiated a restructuring process to better align its corporate and management governance model with its shareholders and African asset base, to increase management efficiencies and reduce certain operational and overhead costs.

As part of this process the Company is relocating its executive management team and head office from Calgary to London. Managing Director Geoff Bury is unable to relocate to London and will therefore be leaving the Company. In January 2018, the Company announced that Mr. Eskil Jersing has agreed to join Wentworth as Chief Executive Officer ("CEO"). Mr. Jersing will join the Company and Board of Directors in Q2 2018 following an orderly transition from his current role as CEO of Sterling Energy Plc. Mr. Bury has agreed to remain in his current role for a period of time to allow a smooth transition of responsibilities to Mr. Jersing.

Mrs. Katherine Roe has been promoted to Chief Financial Officer ("CFO") based in London effective April 1, 2018. Mrs. Roe has been Vice President Corporate Development & Investor Relations for the Company since 2014 and has nearly 20 years of senior corporate and capital markets experience. Mr. Lance Mierendorf is unable to relocate to London and will remain in the CFO role until March 31, 2018 and coordinate an efficient and orderly handover to Mrs. Roe.

In line with the head office relocation and given that the Company has few Canadian registered shareholders and very limited operational connections to Canada, the Board is planning to re-domicile the public Canadian legal entity listed on the Oslo Stock Exchange (ticker: WRL) and the AIM market of the London Stock Exchange (ticker: WRL) from Canada to the British Isles. Following implementation, this initiative is primarily expected to optimise and further build shareholder engagement, reduce costs and decrease corporate complexity. The Company will consult and update shareholders, when appropriate, as to the progress on the corporate redomicile process.

In compliance with both reporting obligations as a public company, commencing in 2018, the Company will release a Half Yearly Financial Report and an Annual Financial Report. The Company will no longer publish first quarter and third quarter financial statements and management discussion and analyses as these are no longer mandatory filing obligations.

Mnazi Bay Concession, Tanzania

Production Operations

Mnazi Bay gas sold to Tanzania Petroleum Development Corporation ("TPDC") is primarily utilized by Tanzania Electricity Supply Company Limited ("TANESCO") as a fuel source to power its electrical generation plants serving the National Electricity Grid in Tanzania. During year 2017, Mnazi Bay gas was used to fuel three TANESCO-owned power stations located within the city of Dar es Salaam: Kinyerezi-I, Kinyerezi-II and Ubungo-II.

In December 2017, the first gas turbine (40MW) of the 240 MW Kinyerezi-II power station was commissioned taking up to 7 MMscf/d of gas during the month. As at March 27, 2018 four of the six gas turbines at Kinyerezi-II had been commissioned. Demand for Mnazi Bay gas in order to power this facility is expected to reach 36 MMscf/d when all six gas turbines become operational. Commissioning of the 185 MW Kinyerezi-I Extension is expected to commence during Q4 2018 and, once fully operational in 2019, is expected to utilize an additional 35 MMscf/d of gas to generate electrical power.

During Q4 2017, the Mnazi Bay gas fields delivered 62.2 MMscf/d compared to 39.4 MMscf/d during Q4 2016. Both the Kinyerezi-I and Ubungo-II power stations operated at near full capacity during the second half of 2017. Additionally, the Kinyerezi-II power station started the commissioning process during December 2017, a few months earlier than anticipated. During Q2 2017, TPDC commenced delivery of Mnazi Bay gas to its first industrial customer, a newly constructed \$100 million roofing tile factory, Goodwill Ceramics. During 2017, gas deliveries to Goodwill Ceramics ranged between 4 MMscf/d to 7 MMscf/d.

Full year 2017 production from the Mnazi Bay gas field in Tanzania averaged 49.1 MMscf/d, compared to 43.0 MMscf/d during 2016, which was at the high end of Management's 2017 guidance of between 40 – 50 MMscf/d.

Production from Mnazi Bay peaked at over 80 MMscf/d (13,300 boepd) in February 2018 and averaged 72.5 MMscf/d during the first two months of 2018. Additional gas demand in the industrial sector is expected to be realized in H1 2018. TPDC concluded a commercial arrangement to supply gas to the Mtwara Dangote cement plant, the largest in Tanzania; for power generation and firing its clinker kilns used in the production of cement. A new gas pipeline connecting the temporary power generation unit to the TPDC owned 36-inch transnational pipeline is currently in the process of being installed. The installation of a 35MW power generation unit and associated power supply to the Dangote plant is expected to be commissioned during April 2018. Dangote also announced a plan to eliminate coal and convert the entire plant to gas, including the kiln furnaces, envisaging a permanent combined cycle power plant being built on the premises of the factory. Initial gas demand for temporary power generation is expected to be between 5 and 7 MMscf/d. The kilns are expected to be fired by natural gas commencing in Q3 2018 and will require an additional 8 and 10 MMscf/d of natural gas, increasing to between 20 MMscf/d and 25 MMscf/d in 2019. The temporary 35MW gas fired plant is planned to be replaced by the combined cycle plant using steam turbines in Q1 2019.

On a smaller scale, Mnazi Bay gas is also currently sold directly to TANESCO for electrical power generation at an 18MW power plant at Mtwara. The power station provides electricity to an isolated grid serving the region and includes the towns of Mtwara, Madimba, Lindi, Msassi and Newala. Gas quantities of between 2 and 2.5 MMscf/d are being supplied to the power plant through an 8-inch pipeline, owned by the Mnazi Bay joint venture.

Development capital works

During 2017, engineering works were undertaken on the expansion of the Mnazi Bay Joint Venture owned processing facilities at Msimbati. Primary processing of Mnazi Bay produced gas is required at Msimbati to remove free liquids before the gas enters a sub-marine pipeline that connects into the Madimba Gas Processing Facility. Expansion of the processing facilities, together with tying-in of all 5 producing wells completes the necessary field infrastructure work to enable delivery of gas volumes in excess of 100 MMscf/d to the TPDC owned pipeline to Dar es Salaam. Commissioning of these facilities is expected in Q1 2018. With the completion of these works it is anticipated that there will not be a need for significant additional capital expenditure until the average daily demand from the Msimbati facility exceeds 100 MMscf/d.

Tanzania legislative changes

During July 2017, the Government of Tanzania enacted the following laws: the Natural Wealth and Resources (Permanent Sovereignty) Act, 2017, the Written Laws (Miscellaneous Amendments) Act, 2017, and the Natural Wealth and Resources Contracts (Review and Re-Negotiation of Unconscionable Terms) Act, 2017 which cover activities within the energy and mining sectors.

The first and second of these acts are forward looking and only apply to agreements entered into on or after the date of the legislative changes. These acts contain new regulations including but not limited to regulations that all arbitration processes must be heard within Tanzania and place restriction on the ability to move funds out of Tanzania. The third act covers existing agreements and provides, among other things, the right for the Government of Tanzania to renegotiate clauses within existing agreements that are deemed to have unconscionable terms. The Company has undertaken a review of these new laws to determine their implications on the Company's Tanzania operations. Based on our current understanding and given the existing terms and conditions of our relevant agreements, we do not anticipate any material impact on our existing operations in the short to medium term. It is unclear whether there will be any material impact in the long-term.

On 17 November 2017, the Speaker of the Tanzania National Assembly, via Speaker's Circular No. 6 of 2017, formed a Special Advisory Committee to probe any flaws in the law and policies governing the gas subsector and recommend how the nation can benefit from revenues accruing from the gas subsector. The Circular identified the challenges and flaws in the PSAs to include: the Cost sharing system between the Government and its partners; Partners having 'Redeemable Preference Shares' while the Government has only ordinary shares; Management of the Special Purpose Vehicle (SPV), Profit sharing formula between the Government and the partner; Restricted back-in-rights participation for the Government and Delays in evaluation and audits on projects implemented by the Governments.

According to the Circular, the Committee will have the following terms of reference:

• 1) to identify flaws in the policy and laws governing the implementation of agreements for production and exploration of gas;
• 2) to identify unconscionable terms in the agreements and contracts for exploration and production of gas in the country;
• 3) to recommend the best ways for management and regulation of the gas subsector in the country;
• 4) to recommend the best way for entering into contracts for extraction, exploration and gas business in the country; and
• 5) to deal with any other issues/matters related to gas subsector in the country.

Based on our current understanding of the Government initiative to review law and policies governing the gas subsector and given the existing terms and conditions of our relevant agreements, we do not anticipate any material impact on our existing Tanzania operations in the short to medium term. It is unclear whether there will be any material impact in the long-term.

Rovuma Onshore Block, Mozambique

Appraisal activities

An extension of the Rovuma Onshore Exploration Concession to conduct an appraisal of the Tembo-1 gas discovery was granted to Wentworth by the Government on June 15, 2016. On that same date, Wentworth was approved as the operator of the concession and now holds an 85 percent participation interest, with the Government holding the remaining 15 percent. Activities to date have included the reprocessing of existing 2D seismic data, re-evaluation of the Tembo-1 drilling results, 2D seismic survey program planning, obtaining environment permits and licenses, establishing both a field camp within the Concession and a field office in Maputo, Mozambique along with pre-drilling planning activities.

A 2D seismic acquisition program of approximately 500-700 kilometers was considered for the second half of 2017, with a tendering process completed in Q2 2017. Based on the reprocessing and re-interpretation of legacy seismic data, extensive analysis of the Tembo-1 drilling results and further subsurface studies, Wentworth has concluded that sufficient data and information exist, to support drilling an appraisal well confirming the commercial potential of Tembo, without the need to acquire new seismic and therefore this seismic acquisition program has been postponed. Wentworth's technical team is focused on identifying a suitable drilling location for a Tembo appraisal well and associated well planning activities. The government of Mozambique is supportive of postponing the acquisition of new seismic until after an appraisal well is drilled.

A planned Tembo-2 appraisal well will appraise the discovery made at Tembo-1 Well in December 2014. The appraisal well is designed to reach a total depth of 3,200 metres and planned as a vertical well to the Lower Cretaceous. Wentworth has started a process to procure the drilling rig and long lead items for the well. Expressions of interest (EOI) have been prepared for supply of the drilling rig and casing and tubing. The Company has identified several rigs currently located within the region which are capable of drilling the well. EOIs were published in the local Mozambican press in during Q4 2017. These have subsequently been evaluated and a short list of preferred bidders has been selected and will be invited to tender.

Surveying of the well location and associated civil works have been delayed due to a deteriorating security situation in and around the Macimboa da Praia region, adjacent to the Company's Concession area. Clashes between police and extremists which began in early October have continued into 2018, preventing safe access to the area for Wentworth staff and contractors. Wentworth is monitoring the security situation closely and is in close liaison with the Mozambican Authorities, the Canadian High Commission, and other companies operating in the region and local security and risk management companies.

Farm-out and license extension

In July 2017, a formal farm-out process was initiated in order to secure one or more industry partners for third party validation and help de-risk the appraisal drilling of the Tembo discovery. The farm-out exercise is ongoing, and Wentworth anticipates securing an industry partner prior to commencing drilling operations, pending successful extension discussions with the Government of Mozambique.

Subsequent to year end, as a result of the lack of a safe aboveground operating environment within the Concession area, certain pre-drill operations such as surveying, road construction, and well site preparation have been delayed until after the rainy season and improvements in the security situation for Wentworth personnel operating in the field. As a result, the Company has formally requested the Government grant an extension of the Appraisal License and is currently awaiting a response.

Financial Overview

Revenue

Gas sales to TPDC

The Company recorded 2017 net sales to TPDC of 4,063,124 MMBtu, an increase of 14% from 2016. A more stable level of gas demand from gas fired electrical power facilities was experienced in 2017 as many of the start-up, commissioning, repairs to power plants and problems with Government owned electrical power transmission and distribution infrastructure experienced during 2016 were resolved.

The gas sales price was \$3.04/MMBtu (2016: \$3.01/MMBtu) for revenue of \$12.35 million (2016: \$10.68 million) for the year ended December 31, 2017.

Gas sales to TANESCO

Gas sales to an 18 MW gas-fired power plant in Mtwara, Tanzania, during 2017 were 199,868 MMBtu (2016: 200,259 MMBtu) while the gas price remained fixed and unchanged at \$5.36/MMBtu. The Mtwara power plant generally operates below capacity and consumes on average between 2.0 and 2.5 MMscf/d. Total revenue earned during 2017 was \$1.09 million (2016: \$1.07 million).

Production and operating expense

Production costs within the Mnazi Bay Concession comprise the Company's share of field operating costs, Operator's administration and Operator's overhead required to manage production operations. Management expects that, on a per Mscf basis, production costs will generally reduce as gas volumes increase, due to most operating costs being fixed in nature. For 2017, production averaged 49.1 MMscf/d in 2017 compared to 43.0 MMscf/d during 2016. Production and operating expenses were \$3.48 million (2016: \$3.37 million). For 2017, operating expenses were \$0.84 per Mcf compared to \$0.92 per Mcf for the same period in 2016.

Year Ended December 31, 2017

General and administrative ("G&A") expense

During 2017, G&A expenses were \$4.61 million compared to \$5.40 million, a reduction of 15%. Cost saving initiatives and capitalization of costs for Mozambique operations, following the Company becoming the operator in Q3 2016 have contributed to a reduction in ongoing expenses. A continued focus on optimizing G&A will be undertaken in 2018, through corporate structure simplification and re-domicile activities. The table below shows the breakdown of G&A expenses:

	Year ended December 31,
(Figures in \$000's)	2017	2016
Employee salaries and benefits	2,026	2,392
Contractors and consultants	510	705
Travel and accommodation	329	515
Professional, legal and advisory	713	582
Office and administration	529	684
Corporate and public company costs	507	519
	4,614	5,397

The Company maintains offices in Calgary, Canada, Dar es Salaam, Tanzania and Maputo, Mozambique and is listed on the public stock exchanges in both Oslo, Norway (Oslo Stock Exchange) and London, UK (AIM). Many G&A expenditures are fixed in nature and include such items as corporate and public company costs (exchange listing, transfer agent and directors' fees), legal fees supporting the compliance with corporate and public obligations (Canada, UK and Norway) and professional advisory (external audit, resources engineering and Nomad for our AIM listing). The Company has undertaken to relocate its head office and executive team from Calgary, Canada to London, UK to streamline operations and reduce costs.

The redomicile process commenced during 2017 with \$0.19 million (2016: \$nil) of professional, legal and advisory having been incurred. Additional one-time costs associated with the redomicile process are expected to be incurred during 2018.

In June 2016, following the appointment as Operator of the Rovuma Onshore Block in Mozambique, the Company established an operational presence in Mozambique; directly attributable costs relating to all operational activities within the Rovuma Onshore Block are being capitalized. Directly attributable costs during 2017 totaling \$0.97 million (2016: \$1.08 million) were capitalized.

Share based compensation

For 2017, \$0.22 million was recognised compared to \$0.59 million during the same period in year 2016.

During 2017, no options were granted, exercised or forfeited (during 2016: 1,350,000 options were forfeited, and no options were granted or exercised). A total of 10,600,000 stock options were outstanding at December 31, 2017 with 9,333,338 vested and exercisable with an average exercise price per share of NOK 4.33 (\$0.53).

Depreciation and depletion

Depreciation and depletion of gas producing assets for 2017 totalled \$4.09 million (2016:- \$3.86 million) or \$0.98/Mscf (2016: \$0.99/Mscf). At December 31, 2017, the net book value of natural gas property, plant and equipment was \$90.34 million (December 31, 2016: \$93.37 million).

Finance income and costs

Finance income and costs that are settled in cash are interest income, interest expense and realized foreign exchange gain/ (loss) on current transactions. All other finance income and costs are non-cash in nature.

For 2017, interest expense was \$1.66 million (2016: \$2.19 million). During 2017, non-cash accretion of the TPDC receivable of \$2.08 million (2016: \$4.17 million) was recorded in finance income. The Company revised the accounting estimates used to determine the expected amounts and timing of future revenue streams to determine collection of the TPDC receivable resulting from revised gas demand estimates for future periods obtained from industry sources. This resulted in \$0.87 million being charged to finance costs during the year (2016: \$2.57 million).

Non-cash accretion of the Tanzanian Government receivable (Umoja/power) of \$0.31 million (2016: \$0.47 million) was recorded in finance income during 2017. Similar to the determination of the TPDC receivable, the Company revised the accounting estimates resulting in an amount of \$0.83 million being charged to finance cost (2016: \$0.05 million finance income).

Deferred tax expense/recovery

At December 31, 2017, the deferred tax asset of \$30.75 million reflects the estimated future tax benefit of accumulated tax losses within the Tanzanian operations. The commencement of commercial production and sales of gas under the long-term Gas Sales Agreement ("GSA") allowed for the recognition of deferred tax asset on the accumulated tax losses estimated to be utilized in the future. A non-cash deferred tax expense of \$0.39 million (2016: expense of \$3.20 million) has been recorded in 2017.

Contingencies

On March 16, 2018 the Company received correspondence from the Tanzania Revenue Authority ("TRA") regarding their preliminary findings for Wentworth Gas Limited ("WGL"), the Company's Tanzanian subsidiary, for taxation years 2013 to 2016. The preliminary findings do not constitute a formal tax assessment or demand notice but do require a formal response from the Company. The TRA has indicated that the 2014 tax filing of WGL should have included in taxable income an impairment reversal in the amount of \$23.81 million, the impact of which would result in a non-cash deferred income tax expense of \$7.14 million and a corresponding reduction of the Company's deferred income tax asset. The TRA has also indicated that \$3.49 million of withholding taxes, including interest and penalties, are due on account of imputed interest on intercompany loans provided by WGL during the years 2013 to 2015.

Management is not in agreement with TRA's preliminary findings on the above items and has concluded that no provision is required with respect to these matters. Provision, if any, will be made in the period of determination.

Receivables from gas delivered to TANESCO

The Company's ongoing exposure to receivables from TANESCO is associated with gas sales from the Mnazi Bay Concession to the 18 MW gas-fired power plant, located in Mtwara, Tanzania. At December 31, 2017, the Mnazi Bay joint venture partners were owed seven months of gas sales, with \$1.14 million owed to Wentworth. Subsequent to year-end, TANESCO has paid two months of invoices relating to the outstanding balance at December 31, 2017 totaling \$0.33 million (inclusive of the Company's share of the TPDC receivable amount relating to this gas sale).

Receivables from gas delivered to TPDC

An amount of \$12.01 million is owed to Wentworth at December 31, 2017, of which approximately 4 months were past due. Subsequent to year-end, TPDC has paid \$4.12 million net to Wentworth (inclusive of the Company's share of the TPDC receivable amount relating to this gas sale) for the November and December 2017 gas sales invoices. At December 31, 2016, two months' worth of invoices were outstanding. TPDC's ability to settle gas sales invoices to the Mnazi Bay joint venture in a timely manner is directly impacted by the timeliness of TPDC receiving payment for gas it sales to the TANESCO owned electrical power generation plants. Recently, TANESCO has been inconsistent with paying TPDC in a timely manner for the gas that TANESCO purchases. This has a direct impact on cash flow from operating activities of the Mnazi Bay joint venture partners. Wentworth and Maurel and Prom, the operator of the Mnazi Bay Concession, continue to engage with both TPDC and TANESCO to find ways to improve the timeliness of the settlement of its obligations.

Year Ended December 31, 2017

Long-term receivable - TPDC

In terms of the Joint Operating Agreement entered into between TPDC, Wentworth and Maurel et Prom, entered into in 2006, TPDC is a 20 percent participating interest partner in the Mnazi Bay Concession. The Company has a receivable from TPDC, for their (TPDC's) share of past development and operating costs that were paid by the Company prior to June 30, 2009. In addition, the Company has been paying its proportionate share of TPDC's share of development and operating costs incurred subsequent to June 30, 2009, the value of which has been added to the TPDC receivable balance. The Company will recover this receivable from an agreed percentage of TPDC's share of current and future revenue from the Mnazi Bay Concession. The undiscounted face value of the TPDC receivable at December 31, 2017 is \$17.33 million (December 31, 2016: \$27.15 million). The TPDC receivable has been discounted to \$15.55 million (December 31, 2016: \$24.84 million). With the passage of time and as gas sales are realized, the carried amount of the TPDC receivable is accreted up to the face value with a corresponding credit to finance income.

Based on the Company's internal estimates of potential gas sales volumes, the \$17.33 million receivable as at December 31, 2017 is expected to be fully recovered by the end of 2018. The recovery of the TPDC receivable is expected to provide a significant source of cash flow to the Company during 2018. As gas sales are realized, the current portion of the long-term receivable is transferred to accounts receivable and settled at the time cash payments are received from purchasers of Manzi Bay gas.

At December 31, 2017, the current portion of the TPDC receivable is \$15.55 million compared to \$12.28 million at December 31, 2016. During 2017, \$11.63 million was recovered from TPDC's share of gas sales. The receivable is updated at each reporting period and is calculated taking into consideration the estimated timing and amounts of future gas sales.

Long-term receivable - Tanzanian Government (Umoja/power)

The Company has an agreement with the Government of Tanzania (TANESCO, TPDC and the Ministry of Energy and Mines ("MEM")) to be reimbursed, at cost, for past project development costs associated with transmission and distribution ("T&D") expenditures. An audit of the Mtwara Energy Project ("MEP") development expenditures was completed in November 2012 and costs of approximately \$8.12 million were verified to be reimbursable. After deducting costs associated with the Tariff Equalization Fund and VAT input credits associated with the MEP totaling \$1.61 million, the amount agreed to be reimbursed was \$6.51 million. The receivable is considered long-term in nature and has been discounted to reflect the anticipated timing of collection. The undiscounted face value of the Tanzanian Government receivable (Umoja/power) at December 31, 2017 is \$6.51 million (December 31, 2016: \$6.51 million) while the discounted value, taking into consideration the anticipated time of collection, is \$4.96 million (December 31, 2016: \$5.48 million). Management continues to work with the Government of Tanzania on agreeing a mechanism to settle the outstanding balance and anticipates recovering the amounts from the Government's share of revenue generated from the Mnazi Bay Concession. Timing of reaching an agreement on the reimbursement procedure is uncertain. The Government initiated a second audit of the costs to verify the balance owing, the results of which are expected to be communicated to the Company during 2018.

Year Ended December 31, 2017

Capital expenditures

During 2017, capital activities were focused on field infrastructure and development capital activities within the Mnazi Bay gas field location and Tembo appraisal activities in Mozambique.

(Figures in \$000's)	Year ended December 31, 2017	2016
Exploration and evaluation assets
Mozambique
Seismic reprocessing and interpretation and analysis of Tembo-1 well results	696	109
Drilling preparation and planning	525	-
Exploration drilling	-	951
Operator and indirect overhead	1,162	1,310
	2,383	2,370
Tanzania Seismic acquisition, processing and interpretation	-	27
Property, plant and equipment
Tanzania
Field infrastructure	549	2,019
Asset retirement obligation	-	(388)
Other field development capital	508	404
	1,057	2,035
Canada and United Kingdom
IT and office assets	4	27
	3,444	4,459

External debt facilities

Medium term \$20 million credit facility

The principal balance outstanding on the \$20.0 million credit facility at December 31, 2017 was \$13.32 million. During 2017, principal payments of \$3.35 million were made.

During the second quarter of 2017, the Company executed amendments to the credit facility agreement which include the restructuring of principal loan payments and the addition of the following new provisions:

• the interest rate changed six-month LIBOR rate plus 750 basis points subject to a minimum (floor) of 8.5% p.a. and no maximum (ceiling);
• the addition of a Debt Service Coverage Ratio and Loan Life Coverage Ratio as financial covenants;
• a requirement to maintain a minimum cash balance;
• a cash flow waterfall procedure to ensure certain cash proceeds from gas sales are used in settling obligations in priority; and
• in the event the Company decides to accelerate principal payments using funds not generated internally, a prepayment fee of 25 percent of interest forgone is required.

The Company and the lender are in ongoing discussions on agreeing the details and processes relating to implementing and monitoring the new provisions.

Principal repayment date	Repayment amount (Figures in \$000's)
April 30, 2018	1,665
July 30, 2018	1,665
October 30, 2018	1,665
January 30, 2019	1,666
April 30, 2019	1,665
July 30, 2019	1,666
October 30, 2019	1,665
January 30, 2020	1,664
	13,321

Principal repayments on the credit facility are set out in the following table.

Medium term \$6 million credit facility

At December 31, 2017, the principal amount outstanding on this facility was \$2.0 million. During 2017, principal payments of \$2.0 million were made.

All provisions of the \$6.0 million credit facility remain unchanged from the original loan agreement executed in December 2014. Interest is paid on a semi-annual basis, in arrears, on the principal repayment date. The 2018 principal repayment dates are as follows:

Principal repayment date	Repayment amount (Figures in \$000's)
June 8, 2018	1,000
December 8, 2018	1,000
	2,000

Overdraft \$2.5 million credit facility

During 2017, the Company secured \$2.5 million overdraft credit facility with a TIB Corporate Bank ("TIB Corp"). The overdraft facility has an interest rate of the lender's base lending rate minus 1% per annum to be paid monthly. At December 31, 2017, the lender's base lending rate was 9%. The full amount of the overdraft credit facility was drawn during the fourth quarter of 2017.

Security provided to the lender includes a debenture over the fixed and floating assets of the Company's Tanzanian assets and a deed of assignment equivalent to approximately 20% of the revenue/cash flow from sales of natural gas from the Tanzanian assets. During the second half of 2017, the Company drew on the full amount of the facility and used the funds for short-term working capital purposes.

On March 26, 2018, the Company received approval from the lender of the \$2.5 million overdraft credit facility for one year extension up to April 5, 2019 with the other existing terms of the overdraft credit facility remaining in effect for the extended period. The overdraft credit facility was set to expire on April 6, 2018.

Related party transactions

There were no related party transactions during 2017.

Shares, share capital and dividends

On May 23, 2017, the Company completed a private placement and issued 16,953,496 new common shares, for cash consideration of \$0.326 (GBP0.25 or NOK2.73) per share for total gross proceeds of \$5.53 million (GBP4.2 million or NOK46.3 million).

Following the private placement offering the Company had 186,488,465 common shares issued and outstanding. All outstanding shares at December 31, 2017 are of the same class and with equal voting and dividend rights. The Company's ordinary shares are listed on the Oslo Stock Exchange (ticker: WRL) and denominated in Norwegian Kroner. The Company's shares are also traded on the Alternative Investment Market of the London Stock Exchange (ticker: WRL) and denominated in British Pounds.

As the Company is in the early stage of its production and revenue generating operations, it does not have a formal dividend policy. No dividends have ever been declared or paid by the Company. There are no restrictions on dividend distributions. At the Annual General Meeting in 2017, the Board of Directors did not propose dividends to be paid for the year ended December 31, 2017. Proposals for dividend distribution in future years will be subject to assessment of business performance, operating environment, and growth opportunities in determining the appropriate level in any specific year.

Financial Condition and Liquidity

At December 31, 2017, Wentworth had cash and cash equivalents of \$3.75 million and trade and other receivables, prepayments and deposits, and a current portion of the long-term receivable from TPDC of \$29.06 million. At current gas sales volumes, the Company is collecting substantial amounts of this longterm receivable from TPDC. Outstanding receivable for gas sales sold to TPDC and TANESCO total \$13.15 million at December 31, 2017. A total of \$4.45 million of the outstanding gas sales receivables has been settled subsequent to December 31, 2017.

During May of 2017, the Company raised gross proceeds of \$5.53 million through the issuance of 10% of the Company's share capital. These additional funds provide the Company with required funding for working capital and the ongoing Mozambique appraisal activities.

Current liabilities include outstanding cash calls issued by the Operator of the Mnazi Bay Concession for 2017 operating costs of \$3.55 million. Subsequent to year-end, the Company has settled \$2.35 and expects to settle the remainder during Q1 2018.

Current liabilities also include the principal repayment obligations on external credit facilities and the anticipated settlement of other liabilities also due within the next 12 months. During Q1 2017, the Company reached agreement with its main corporate lender to enhance short-term liquidity by deferring payment of the January 28, 2017 principal payment of \$3.33 million to Q2/Q3 2017, deferring the July 28, 2017 and January 28, 2018 principal payments and extending the term of the credit facility by one year. Principal payments totaling \$6.99 million are scheduled to be made within the next 12 months.

The Company is working closely with the Operator of the Mnazi Bay Concession and external lenders to match settlement of obligations with the receipt of cash from gas purchasers for settlement of gas sales invoices. To date, the cooperation amongst all parties has allowed the company to effectively manage working capital. Existing gas sales receivables at December 31, 2017 of \$13.15 million exceed the immediate obligations to the Operator of the Mnazi Bay Concession and to external lenders, allowing for certain flexibility in the precise timing of settling obligations.

During 2018, the Company expects to have no significant capital commitments relating to exploration and development activities in Tanzania. Anticipated development capital spending is limited to approximately \$0.8 million for general field development maintenance activities. In Mozambique, spending on appraisal activities is expected to be limited to completing the necessary work to support drilling of an appraisal well, costs associated with securing a farm-in partner and administrative and support costs for managing operations under the Rovuma Onshore Block in country.

Outlook

Realized gas sales during Q4 2017 were the highest quarterly sales volumes in the Company's history and the Company expects gas demand to continue to grow in the coming months with the ongoing commissioning and start-up of the Kinyerezi-II power station and imminent commencement of delivery of gas to the Dangote cement plant in southern Tanzania. Wentworth is well positioned to meet this growing demand with sufficient gas reserves and in place infrastructure allowing for immediate delivery of up to approximately 100 MMscf/d (16,660 boepd). The Company expects gross gas sales from the Mnazi Bay asset to average between 65 and 75 MMscf/d throughout 2018 and anticipates nominal capital spending in Tanzania during this period.

The Company continues to carry significant receivables from TPDC and TANESCO but regular monthly payments have been made during the past several months into 2018. With each monthly cash settlement, the Company continues to strengthen its balance sheet by deleveraging of its credit facilities and settling accumulated working capital obligations.

With the support of the Government of Mozambique, the Company plans to secure an industry partner to participate in appraisal drilling of the Tembo discovery on the Rovuma Onshore Block. The Company expects a positive response from the Government on the Company's request to obtain an extension of the appraisal license beyond the June 16, 2018 expiry date.

With a new London based executive management team expected to be in place in the near future, the Company will examine various strategic alternatives to grow the Company, reduce overheads and drive value throughout the Company and through to shareholders.

Year Ended December 31, 2017

Other

Risk factors

The Company emphasizes that the information included herein contains certain forward-looking statements that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future. These statements are based on various assumptions made by the Company, many of which are beyond its control and all of which are subject to risks and uncertainties. Wentworth is subject to many risk factors including but not limited to normal market risks inherent in the oil and gas business such as: operational and technical risks, reserve estimates, risks of operating in a foreign country (including economic, political, social and environmental risks), commodity price fluctuations, and available resources. Wentworth recognizes these risks and manages operations to minimize exposure to the extent practical. Because of these and other risk factors, actual events and actual results may differ materially from those indicated or implied in such forward-looking statements.

Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk is comprised of foreign currency risk, interest rate risk and other price risk, for example, commodity price risk. The objective of market risk management is to manage and control market price exposures within acceptable limits, while maximizing returns.

Credit risk

Wentworth's credit exposure risk is equal to the carrying value of its trade, other and long-term receivables. Trade and other receivables are comprised predominantly of amounts due from government departments in Tanzania, tax input credits for Goods and Services Tax (GST) in Canada and Value Added Tax (VAT) in Tanzania and Mozambique. The Company's ongoing exposure to receivables from TANESCO, the state power company, relates to the gas sales from the Mnazi Bay Concession to the 18 MW gas-fired power plant located in Mtwara, Tanzania. At December 31, 2017, the Mnazi Bay joint venture partners were owed twelve months of gas sales, with \$1.14 million owing to Wentworth of which \$0.33 million representing one month of gas sales has been collected subsequently to year end. In addition, TPDC's primary source of funds is generated from gas sales to TANESCO. TANESCO has been slow in paying its obligations to TPDC thereby negatively impacting TPDC's ability to pay for gas purchase from the Mnazi Bay joint venture partners. At December 31, 2017, the Mnazi Bay joint venture partners were owed five months gas sales, with \$12.01 million owing to Wentworth. Subsequent to year end, TPDC has paid \$4.12 million for the November and December 2017 gas sales invoices.

A long-term undiscounted receivable of \$17.33 million is due from TPDC, which is a partner in the Mnazi Bay Concession. The Company receives a significant portion of TPDC's share of gas production from the Mnazi Bay Concession directly from the operator of the Mnazi Bay Concession before TPDC receives cash from its share of revenue. There is a risk that future production from the Mnazi Bay Concession may not be sufficient to settle the receivable and should such a determination be made, a provision against the receivable will be recorded.

At December 31, 2017, the Company has a receivable from the Government of Tanzania of \$6.51 million related to the Company's disposal of transmission and distribution assets and the costs associated with the Mtwara Energy Project incurred by a wholly owned subsidiary of Wentworth. On February 6, 2012, the Company, TANESCO, TPDC and MEM reached an agreement that the Company's cost of historical operations in respect of the Mtwara Energy Project should be reimbursed. Wentworth is currently in discussions with TANESCO, TPDC and MEM on agreeing a method of reimbursement. There is a risk that the cost reimbursement method may not be in cash, but rather in a long-term recovery from other sources. The Government initiated a second audit of the costs to verify the balance owing, the results of which are expected to be communicated to the Company during 2018.

Liquidity risk

Liquidity risk is the risk that the Company will not have sufficient funds to meet its liabilities. Other than routine trade and other payables, incurred in the normal course of business, the Company also has two medium term loans with principal repayments obligations totalling \$6.99 million during the next twelve months and an overdraft facility of \$2.5 million.

With no material firm capital expenditures expected during the next twelve months and ongoing operating costs being generally fixed in nature, the cash flow generated from gas sale and the resulting ability to receive payment for gas sales in a timely manner has a significant impact on the liquidity of the Company. An increase or decline in gas production and/or accelerated payments of current and outstanding gas sales invoices or delays in collections of receivables from TPDC and/or TANESCO would have a material impact on the Company's working capital position. The Company is mitigating issues with respect to liquidity by maintaining open and transparent dialogue with key creditors and external lenders while working with debtors to arrange payments for gas sales in a timely manner. Should production volumes decline or a delay in receiving payment for gas sales be experienced, the Company would seek additional forms of financing to meet its obligations such as extending payment terms on current liabilities, discussing alternatives with existing lenders and seeking additional debt or equity financing if deemed appropriate.

The Company has working capital surplus at December 31, 2017 and positive adjusted EBITDA for 2016 and 2017. The Company is dependent upon the buyers of natural gas, TPDC and TANESCO, to meet their payment obligations in a timely manner and failure to obtain payment for an extended period of time could negatively impact the Company's ability to meet it ongoing obligations.

Taxation

The Company operates in multiple jurisdictions with complex tax laws and regulations, which are evolving over time. The Company has taken certain tax positions in its tax filings and these filings are subject to audit and potential reassessment after the lapse of considerable time. Accordingly, the actual income tax impact may differ significantly from that estimated and recorded by management. Taxation years 2013 to 2016 of the Company's Tanzanian subsidiary are currently being audited by the Tanzania Revenue Authority.

Measurement uncertainty and use of estimates and judgments

The preparation of financial statements requires management to make estimates, judgements and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts may differ materially from these estimates due to changes in general economic conditions, changes in laws and regulations, changes in future operating plans and the inherent imprecision associated with estimates.

Workplace

Wentworth is committed to providing a workplace free of discrimination where all employees are afforded equal opportunities and are rewarded on merit and ability. In terms of gender equality within the Company, no Board Members are currently female, though 22 percent of the executive & senior management team, including the corporate secretary, are women. The Corporation promotes a productive working environment and does not tolerate disrespectful behavior. Wentworth is committed to achieving the highest possible standards of conduct, accountability and propriety and to a culture of openness in which employees can report legitimate concerns without fear of penalty or punishment.

Director compensation table

The following table sets out all amounts of compensation provided to the current Directors for the Corporation's most recently completed financial year.

Name	Fees Earned (US\$)	Share Based Awards (US\$)	Option Based Awards (US\$)	Non-Equity Incentive Plan Compensation (US\$)	Pension Value (US\$)	All Other Compensation (US\$)	Total (US\$)
Robert P. McBean	80,000	Nil	Nil	Nil	Nil	Nil	80,000
John W. S. Bentley	80,000	Nil	Nil	Nil	Nil	Nil	80,000
Cameron Barton	80,000	Nil	Nil	Nil	Nil	Nil	80,000
Neil B. Kelly	80,000	Nil	Nil	Nil	Nil	Nil	80,000

Environmental impact

Exploration, development and production of oil and gas may cause emissions to the sea and air. Wentworth's operations are in accordance with all regulatory requirements, and there were no breaches of these requirements in 2017. Wentworth did not operate any wells in 2017.

Research and development

Wentworth, in coordination with the operating companies for its investments in Tanzania and Mozambique, collaborates with external research institutions to increase the understanding of several complex challenges within the oil and gas industry's upstream segment. The Company has no particular plans to participate in the commercialization of these efforts.

Exemption

The Company has received an exemption from the requirement to present parent company financial statements on an annual basis.

Future accounting pronouncements

At the date of these financial statements, the standards and interpretations listed below were issued but not yet effective. The adoption of these standards may result in future changes to existing accounting policies and disclosures. The Company is currently evaluating the impact that these standards will have on results of operations and financial position.

IFRS 9 - In July 2014, the IASB issued the last version of IFRS 9 "Financial Instruments" ("IFRS 9") to replace IAS 39 "Financial Instruments: Recognition and Measurement" ("IAS 39"). The new standard replaces the current multiple classification and measurement models for financial assets and liabilities with a single approach to determine whether a financial asset is measured at amortized cost or fair value. The approach is based on how an entity manages it financial instruments in the context of its business model and the contractual cash flow characteristics of the financial assets. The IAS 39 measurement categories for financial assets will be replaced by fair value through profit or loss, fair value through other comprehensive income ("FVOCI") and amortized cost. The standard eliminates the existing IAS 39 categories of held-tomaturity, loans and receivable and available for sale.

IFRS 9 retains most of the IAS 39 requirements for financial liabilities. However, where fair value option is applied to financial liabilities, the change in fair value resulting from an entity's own credit risk is recorded through other comprehensive income rather than net earnings. Wentworth currently does not designate any financial liabilities as fair value through profit or loss; therefore, there will be no impact on the accounting for financial liabilities.

The new standard also changes how debt modifications are treated. Under IAS 39, debt modifications did not have an impact on profit and loss. However, under IFRS 9, the difference between the carrying amount of the financial liability, and the present value of the estimated future contractual cash flows discounted at the original effective interest rate, must be recognized in profit and loss. As the Company renegotiated the repayment terms on its long-term debt, effective January 31, 2017, the impact of IFRS 9 will be to recognize a modification loss of \$0.7 million on the \$20 million TIB loan, which is a loss as it increases the present value of the \$20 million debt and would decrease the opening retained earnings as at January 1, 2018.

The new standard also introduces an expected credit loss model for evaluating impairment of financial assets. The new model will result in more timely recognition of expected credit losses. The Company does not expect the change in the impairment model to have a material impact on the consolidated financial statements.

In addition, IFRS 9 provides a simplified hedge accounting model, aligning hedge accounting more closely with risk management activities. The Company currently does not apply hedge accounting. IFRS 9 is effective for years beginning on or after January 1, 2018 with early adoption permitted.

The Company will apply the new standard retrospectively and elect to use the practical expedient of a provision matrix when calculating expected credit losses on trade receivables. Comparative periods will not be restated.

IFRS 15 - Revenue from Contracts with Customers, which replaces IAS 18 "Revenue," IAS 11 "Construction Contracts," and related interpretations, was issued in May 2014 with effective date January 1, 2018. The standard establishes a new five-step model that will apply to revenue arising from contracts with customers. Under IFRS 15, revenue is recognized at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. An entity recognizes revenue when a performance obligation is satisfied, i.e. when control over the goods or services underlying the particular performance obligation is transferred to the customer. Disclosures have also been expanded to include the nature, amount, timing and uncertainty of revenues and cash flows arising from contracts with customers. The Company has completed the process of reviewing sales contracts with its two customers (TPDC and TANESCO) and determined that there is no impact on the accounting and reporting of the Company. The Company will expand the disclosure in the notes to the consolidated financial statements as required by the standard in its half-year report for the period ending June 30, 2018.

IFRS 16 - Leases, which replaces IAS 17 Leases, was issued in January 2016 with effective date January 1, 2019. IFRS 16 requires lessees to recognize most leases on the statement of financial position. The standard provides using a single recognition and measurement model for leases with required recognition of assets and liabilities for most leases. Certain short-term leases (less than 12 months) and leases of lowvalue assets are exempt from the requirements and may continue to be treated as operating leases. Lessors will continue with a dual lease classification model. Classification will determine how and when a lessor will recognize lease revenue and what assets would be recorded.

IFRS 16 is effective for years beginning on or after January 1, 2019 with early adoption permitted if IFRS 15 Revenue From Contracts With Customers has been adopted. The standard shall be applied retrospectively to each period presented or using a modified retrospective approach where the Company recognizes the cumulative effect as an adjustment to the opening retained earnings and applies the standard prospectively. The Company is currently in the process of identifying, gathering, and analyzing contracts that fall into the scope of the standard. The extent of the impact of the adoption of the standard has not yet been determined. The Company plans to apply IFRS 16 effective January 1, 2019. The Company intends to adopt the standard using the modified retrospective approach recognizing the cumulative impact of adoption in retained earnings as of January 1, 2019 and apply several of the practical expedients available such as lowvalue and short-term exemptions.

There are no other standards and interpretations in issue but not yet adopted that are expected to have a material effect on the reported earnings or net assets of the Company.

Annual Statement of Reserves 2017

Wentworth Resources Limited's ("Wentworth") classification of reserves follows the SPE/WPC/AAPG/SPEE Petroleum Resources Management System (SPE-PRMS) published in 2007. The system is a recognized resource classification system in accordance with the Oslo Stock Exchange Circular 1/2013 "Revised listing and disclosure requirements for oil and natural gas companies".

The SPE-PRMS uses "reserves", "contingent resources" and "prospective resources" to classify hydrocarbon resources of varying technical maturity and commercial viability. The maturity within each class is also described to help guide classification of a given asset.

Details of SPE-PRMS can be found at:http://www.spe.org/industry/reserves/prms.php

RESERVES

In this annual statement of reserves (the "ASR"), Wentworth reports the company's reserves, estimated by Wentworth in accordance with the SPE-PRMS standard. Economic limit tests have been performed based on a market forward oil price as at December 31, 2017 as well as the company's best assumptions of future operating costs.

In addition, Wentworth uses an external company (RPS Energy Consultants Limited) to perform an independent reserves analysis. Both the in-house and the independent reserves estimation follow SPE-PRMS.

As at December 31, 2017, Wentworth has reserves in the Mnazi Bay and Msimbati gas fields in Tanzania. Further information about the reserves, including the independent reserves analysis prepared by RPS, is available on Wentworth's website www.wentworthresources.com.

Wentworth's reserves overview is shown in Tables 1 and 2. The division is as suggested in Oslo Børs Circular 1/2013 Annex III, and the SPE PRMS reserves categories used is shown in brackets.

Year Ended December 31, 2017

Table 1: Wentworth gross reserves by asset

			Developed Assets (On Production) as at December 31, 2017

GT0 SS INESERVES (TOO %0 F IEIG)
			1P			2P
	Liquids	Gas		Interest	Net	Liquids	Gas		Interest	Net
	(MM stb )	(Bscf)	MMboe	$\frac{0}{0}$		MMBoe (MMstb)	(B sc )	Mmboe	$\frac{0}{6}$	MM Boe
Mnazi Bav		86.01	د.+	31.94%	4.58		223.16	37.19	31.94%	11.88
Total		86.01	14.3		4.58		223.16	37.19	31.94%	11.88

Gross Reserves (100% Field)
							2Р.
	Liquids	Gas		Interest	Net	Liquid s	Gas		Interest
	(MM stb )	(B sc )	MMb oe	$\frac{0}{6}$		MMBoe (MMstb)	(Bscf)	Mmboe	$\frac{0}{0}$	$\mathbf{M}$
Mnazi Bav		$\overline{\phantom{a}}$	$\overline{\phantom{a}}$	1.94%	$\overline{\phantom{a}}$		$\overline{\phantom{a}}$	$\overline{\phantom{a}}$	31.94%
$T - 1 - 1$									$-21.0404$

	1P							2P
	Liquids	Gas		Interest	Net	Liquids	Gas		Interest	Net
	(MMstb)	(B sc )	MMboe	$\frac{0}{0}$	MMBoe (MMstb)		(Bscf)	/ Mmboe	$\frac{0}{0}$	MM Boe
Mnazi Bav		218.72	36.5	31.94%	11.64		329.16	54.86	31.94%
Total		218.72	36.5		11.64		329.16		54.86 31.94%	17.52

Gross Reserves (100%) Field)
		1P				2P
	Liquids	Gas		Interest	Net	Liquids	Gas		Interest	Net
	(MM stb )	(Bscf)	MMb oe	$\frac{0}{0}$	MMBoe	(MMstb)	(Bscf)	Mmboe	$\frac{0}{0}$	MM Boe
Mnazi Bav		304.73	50.8	31.94%	16.22		552.32	92.05	31.94%	29.40
Total		304.73	50.8		16.22		552.32	92.05	31.94%	29.40

Table 2: Wentworth reserves development

			Net Reserves (Company Working Interest)
Year End 2017 Norwegian Report Statement Reserve Reconciliation
Wentworth Net Reserves
Net attributable MMBoe		Dev On Prod	Under Development (Approved for Dev)		Non-Developed (Justified for Dev)		T otal
	1P Net (MMBoe)	2P Net (MMBoe)	1P Net (MMBoe)	2P Net (MMBoe)	1P Net (MMBoe)	2P Net (MMBoe)	1P Net (MMBoe)	2P Net (MMBoe)
Mnazi Bay
Opening Balance (Dec. 31, 2016)	4.54	6.19	۰	$\overline{\phantom{a}}$	8.76	13.13	13.30	19.32
Production	(0.72)	(0.72)	$\overline{\phantom{0}}$	$\overline{\phantom{0}}$			(0.72)	(0.72)
Acquisitions / disposals Extension & Discoveries New Developments
Technical Revisions	(0.13)	4.41			(0.32)	(3.82)	(0.46)	0.59
Closing Balance (Dec. 31, 2017)	3.68	9.88	۰	$\overline{\phantom{a}}$	8.44	9.31	12.12	19.19

For conversion between gas volumes (scf) and oil equivalents (boe), Wentworth has used 6,000 scf equals 1 boe.

Mnazi Bay, operated by Maurel et Prom, Wentworth 31.94%

The reserves for Mnazi Bay and Msimbati are based on detailed reservoir modelling.

CONTINGENT AND PROSPECTIVE RESOURCES

Wentworth's contingent resources are from discoveries in various stages of maturation towards development in the Mnazi Bay concession in Tanzania.

In accordance with guidelines from Oslo Stock Exchange, Wentworth does not quantify contingent resources in this ASR.

For a description and overview of our contingent resources, reference is made to Wentworth's homepage www.wentworthresources.com.

Notes & Glossary

1P	Proved Reserves, those quantities of petroleum, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under defined economic conditions, operating methods, and government regulations.
2P	Proved + Probable Reserves, those additional Reserves which analysis of geoscience and engineering data indicate are less likely to be recovered than Proved Reserves but more certain to be recovered than Possible Reserves. It is equally likely that actual remaining quantities recovered will be greater than or less than the sum of the estimated Proved plus Probable Reserves
Bscf	Billion standard cubic feet
Mmboe	Million barrels of oil equivalent
MMscf/d	Million standard cubic feet per day
MW	Megawatt
NPV	Net present value (at a specified discount rate and specified discount date)
Reserves	Quantities of petroleum anticipated to be commercially recoverable by application of development projects to known accumulations from a given date forward under defined conditions
TPDC	Tanzania Petroleum Development Corporation
WI	Working interest attributable to Wentworth

MANAGEMENT'S DISCUSSION AND ANALYSIS

The reported reserve estimates are based on standard industry practices and methodology such as decline analysis, reservoir modelling and geological and geophysical analysis. The evaluations and assessments have been performed by engineers with extensive industry experience, and the methodology and results have been quality controlled as part of the company's internal reserves estimation procedures. The 2P reserves estimate represents the expected outcome for the fields based on the performance observed to date, the Company's understanding of the fields, and planned activities in the licenses.

A third party independent assessment has been performed by RPS Energy Consultants Limited on all of Wentworth's fields categorized as reserves. The assessment is based on input data provided by Wentworth, as well as full access to subsurface data and licence documentation. RPS Energy Consultants Limited performed an independent review of reserves on this basis. The independent review concludes with a reserves estimate that is consistent with Wentworth's overall 2P estimate and hence serves as a verification of the Wentworth reserves estimate.

The information included herein may contain certain forward-looking statements that address activities, events or developments that Wentworth expects, projects, believes or anticipates will or may occur in the future. These statements are based on various assumptions made by Wentworth, which are beyond its control and are subject to certain additional risks and uncertainties. As a result of these factors, actual events may differ materially from those indicated in or implied by such forward-looking statements. These expectations, estimates and projections are generally identifiable by statements containing words such as "expects", "believes", "estimates" or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, technical, geological and geotechnical conditions, economic and market conditions in the geographical areas and industries that are or will be major markets for Wentworth, oil and natural gas prices, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time in the ASR. Although Wentworth believes that its expectations and this ASR are based upon reasonable assumptions, the company cannot give any assurance that the expectations will be achieved or that the actual results will be as set out in the ASR. None of Wentworth's directors, employees or advisors makes any representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of any information contained in the ASR, and no such persons shall have any liability whatsoever arising directly or indirectly from the use of this ASR.

Total net Proved Reserves (1P) as of December 31, 2017 for Wentworth are estimated at 12.1 million (2016: 13.3 million) barrels of oil equivalents (boe) and the 2P net reserve estimate for Wentworth's portfolio is 19.2 million (2016: 19.3 million) barrels of oil equivalents (boe). Slight decrease due to higher production levels in 2017.

Geoffrey Bury Managing Director Wentworth Resources Limited

Board of Directors and Corporate Governance

The Company's Board of Directors are Robert 'Bob' McBean (Executive Chairman), John Bentley (Deputy Chairman), Cameron Barton, and Neil Kelly. The Board has established four subcommittees: An Audit Committee, Compensation Committee, Governance & Nomination Committee and Reserves Committee. The committees act as preparatory bodies for the Board of Directors and assist the Directors in exercising their responsibilities.

The Company is committed to maintaining high standards of corporate governance and believes that effective corporate governance is essential to the success of Wentworth. As a Canadian corporation registered under Alberta corporate law, with its primary listing on the Oslo Børs (the "OSE"), the Company is subject to the rules of the OSE, including its continuing obligations for listed companies. As such, the Company has adopted the Norwegian Code of Practice for Corporate Governance. Wentworth also implements corporate governance guidelines beneficial to the business and which add value to the shareholders. Corporate governance principles are adopted by the Board of Directors and are periodically reviewed. The Corporate Governance Report is prepared and approved by the board on an annual basis. The Company's articles of association, in addition to full versions of the Board of Directors Mandate and Terms of Reference, the board subcommittees' Charters, Corporate Governance Report and Code of Ethics and Business Conduct are available on the Company website at www.wentworthresources.com.

The Company maintains a compliance hotline operated by an external service provider to facilitate reporting of any concerns regarding inappropriate business conduct. Wentworth encourages the use of the hotline by anyone who has concerns relating to compliance with laws and regulations, breaches of the code of conduct, fair treatment, or any other matter. Concerns can also be raised directly with the corporate secretary or any Board member.

Approved by the Board March 27, 2018

Directors

Cameron Barton Neil B. Kelly

Non-Executive Director Non-Executive Director

Robert P. McBean John W.S. Bentley Executive Chairman Deputy Chairman

Executive Management Geoffrey Bury Lance Mierendorf

Managing Director Chief Financial Officer

Responsibility Statement

We confirm that, to the best of our knowledge, the consolidated financial statements for the year ended December 31, 2017, which are prepared in accordance with IFRS give a true and fair view of the Company's consolidated assets, liabilities, financial position and results of operations for the issuer and the group taken as a whole and the MD&A includes a fair review of the development and performance of the business and the position of the issuer and the group taken as a whole, together with a description of the principal risks and uncertainties that they face under Norwegian Securities Trading Act paragraph 5.5.

Approved by the Board March 27, 2018

Directors Robert P. McBean John W.S. Bentley Executive Chairman Deputy Chairman

Cameron Barton Neil B. Kelly Non-Executive Director Non-Executive Director

Executive Management Geoffrey Bury Lance Mierendorf Managing Director Chief Financial Officer

Reporting – Payments to Governments Statement

This country-by-country report has been developed to comply with the legal requirements in the Norwegian Accounting Act ("Regnskapsloven") §3-3d and the Norwegian Security Trading Act ("Verdipapirhandelloven") §5-5a, valid from 2014. The detailed regulation can be found in the regulation "Forskrift om land-for-land rapportering".

In 2017, the Company was engaged in extracting activities encompassed by the legislation above in Tanzania and Mozambique which is unchanged from the prior year. This report discloses relevant payments to governments for extractive activities in the countries above, in addition to some contextual information as required by the regulation in the "Forskrift om land-for-land rapportering". In preparing this information the following principles were applied:

Definitions

Government

In the context of this report, a government means any national, regional or local authority of a country. It includes a department, agency or undertaking (i.e. corporation) controlled by that governmental authority.

Basis for preparation

This report includes payments to governments from all entities in the consolidated group that engage directly in extractive industry. It excludes payments to governments made by holding companies and other entities in the group that have limited to no active operations except for payments made, if any, by the holding company on behalf of its operating subsidiary to governments in the operating jurisdiction.

This report includes all payments made (on a cash basis of accounting and hence it excludes accruals that are made in the preparation of our 2017 annual consolidated financial statements) regardless of whether the Company is the operator or not. The report includes the Company's proportionate share of payments made to governments.

A considerable amount of the payments made to governments is in the form of gas production entitlements. Under the terms of the Company's production sharing contracts, the local government is entitled to a portion of the production from the concession. This report includes the Company's proportionate share of these production payments. The production payments have been valued based on the volumes allocated to the government at the same commodity price that was realized on the Company's share of production.

Project definition

The Company conducts its oil and gas operations in Tanzania and Mozambique under a single production sharing contract in each jurisdiction. As such, this report is based on two projects, which are aligned to the geographic areas of operation. Payments that are not directly linked to a specific project but are levied at an entity level are reported at the country level.

Reporting currency

The payments to governments are reported in US dollars, the Company's functional and reporting currency. Payments made in local currencies have been translated to US dollars in accordance with the policies applied in preparation of the Company's consolidated financial statements.

Host government entitlements

The entitlements to the host government in terms of mmscf and US dollar value of hydrocarbon produced from the respective concession.

Taxes

Includes Withholding tax and payroll tax.

Fees and other payments

Includes municipal and regulator levies.

Consolidated overview

The consolidated overview below discloses the sum of the Company's payments to governments during the year in each individual country where extractive activities are performed, per payment type.

	Host government		Fees and other	Host government
	entitlements	Taxes	payments	entitlements	Total
2017	(mmscf)	\$000's	\$000's	\$000's	\$000's
Tanzania Mozambique	7,488 -	398 -	291 -	24,124 -	24,813 -
Total	7,488	398	291	24,124	24,813

The consolidated overview below discloses the sum of the Company's payments to governments during year 2016 in each individual country where extractive activities are performed, per payment type.

	Host government		Fees and other	Host government
2016	entitlements	Taxes	payments	entitlements	Total
	(mmscf)	\$000's	\$000's	\$000's	\$000's
Tanzania	6,565	436	264	21,012	21,712
Mozambique	-	-	-	-	-
Total	6,565	436	264	21,012	21,712

There were no payments to governments in respect to bonuses, dividends, transfer of shares or infrastructure improvements.

Payments by country

Tanzania - Operations

The Company's operations in Tanzania are conducted under a single production sharing agreement in the coastal (onshore and offshore), south-eastern Tanzania area bordering the Ruvuma River to the south and extending east into the Indian Ocean. At December 31, 2017, the Company held a 31.94 percent nonoperated participation interest in the concession in the production stage (39.925 percent in the exploration stage). In 2017, gross gas production from the Mnazi Bay field averaged 49.1 MMscf/d (2016: 43.0 MMscf/d).

As the Company's operations in the country consist of a single project the amounts reported in the consolidated overview represent all payments by project during year.

Tanzania - payments per government
	Host government		Fees and other	Host government
	entitlements	Taxes	payments	entitlements	Total
2017	(mmscf)	\$000's	\$000's	\$000's	\$000's
Tanzania Revenue Authority	-	398	51	-	449
Mtwara/Mikindani Municipal	-	-	55	-	55
Tanzania Petroleum Development
Corporation	7,488	-	-	24,124	24,124
Energy and Water Utilities
Regulatory Authority	-	-	185	-	185
Total	7,488	398	291	24,124	24,813

Tanzania - payments per government

	Host government		Fees and other	Host government
	entitlements	Taxes	payments	entitlements	Total
2016	(mmscf)	\$000's	\$000's	\$000's	\$000's
Tanzania Revenue Authority	-	436	55	-	491
Mtwara/Mikindani Municipal	-	-	48	-	48
Tanzania Petroleum Development
Corporation	6,565	-	-	21,012	21,012
Energy and Water Utilities
Regulatory Authority	-	-	161	-	161
Total	6,565	436	264	21,012	21,712

Mozambique - Operations

The Company's operations in Mozambique are conducted under a single production sharing agreement in the onshore north-eastern area of Mozambique bordering the Ruvuma River to the north and extending east into the Indian Ocean. At December 31, 2017, the Company held an 85 percent Operated participating participation interest in the concession (100 percent in the exploration stage), prior to allocation of the participation interest held by certain partners that elected not to continue into the appraisal stage of the concession. The Company is currently working with the government to determine an appraisal program for the 2014 Tembo discovery and secure an extension on the Appraisal License.

As the Company's operations in the country consist of a single project the amounts reported in the consolidated overview represent all payments by project.

Year Ended December 31, 2017

Mozambique - payments per government
	Host government		Fees and other	Host government
	entitlements	Taxes	payments	entitlements	Total
2017	(mmscf)	\$000's	\$000's	\$000's	\$000's
Government 1 (Federal)	-	-	-	-	-
Government 2 (Municipality)	-	-	-	-	-
Government 3 (State owned
company)	-	-	-	-	-

Total - - - - -

Mozambique - payments per government

2016	Host government entitlements (mmscf)	Taxes \$000's	Fees and other payments \$000's	Host government entitlements \$000's	Total \$000's
Government 1 (Federal) Government 2 (Municipality) Government 3 (State owned	- -	- -	- -	- -	- -
company) Total	- -	- -	- -	- -	- -

Contextual information

As per the "Forskrift om land-for-land rapportering" the Company is required to report on certain contextual information at corporate level. The below tables provide the required information as at and for the year ended:

			Purchase of goods	Production
	Investments	Revenue	and services	volume
2017	\$000's(1)	\$000's	\$000's	(mmscf)
Tanzania	107,449	13,440	-	4,167
Mozambique	39,793	-	-	-
Total	147,242	13,440	-	4,167

(1) Investments have been reported in the above table based on total assets within the respective country

As per the "Forskrift om land-for-land rapportering" the Company is required to report on certain contextual information at corporate level. The below tables provide the required information as at the year ended:

2016	Investments \$000's(1)	Revenue \$000's	Purchase of goods and services \$000's	Production volume (mmscf)
Tanzania	106,391	11,750	-	3,667
Mozambique	37,410	-	-	-
Total	143,801	11,750	-	3,667

(1) Investments have been reported in the above table based on total assets within the respective country

The following contains information on the Company and its subsidiaries as required under "Forskrift om landfor-land rapportering":

2017	Country of incorporation	Country of operations	Employees	Net intercompany interest(1) \$000's
Wentworth Resources Limited	Canada	N/A	4	-
Wentworth Resources (UK) Limited	United Kingdom	N/A	1	-
Wentworth Holdings (Jersey) Limited	Jersey	N/A	0	-
Wentworth Tanzania (Jersey) Limited	Jersey	N/A	0	-
Wentworth Gas (Jersey) Limited	Jersey	N/A	0	(848)
Wentworth Gas Limited	Tanzania	Tanzania	15	848
Cyprus Mnazi Bay Limited	Cyprus	N/A	0	-
Wentworth Mozambique (Mauritius) Limited	Mauritius	N/A	0	-
Wentworth Mocambique Petroleos, Limitada	Mozambique	Mozambique	2	-

Total 22 -

(1) Net intercompany interest (income)/expense charged on the intercompany loans.

					Retained
					earnings/
					(deficit)
					(132,162)
					69
					20,896
					(18,228)
					(5,962)
					(119,305)
					1,543
					24,111
					(33,528)
UPS
	13,440	(709)	(394)	-	(262,566)
	Core business (*) ADM ADM ADM ADM ADM UPS UPS ADM	Revenues - - - - - 10,688 2,752 - -	Net income/ (loss) before tax (2,800) 43 (164) (7) (236) 1,410 1,070 (22) (3)	Current and deferred Income tax expense - - - - - (394) - - -	Income tax paid - - - - - - - - -

(*) ADM companies are administrative companies owning shares in subsidiaries and/or providing administrative services within the group. UPS are upstream companies with external sales of natural gas.

Responsibility statement

We confirm to the best of our knowledge that the country-by-country report for 2017 has been prepared in accordance with the Norwegian Security Trading Act §5-5a.

Directors

Executive Chairman Deputy Chairman

Cameron Barton Neil B. Kelly

Non-Executive Director Non-Executive Director

Robert P. McBean John W.S. Bentley

Executive Management Geoffrey Bury Lance Mierendorf

Managing Director Chief Financial Officer

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Wentworth Resources Limited is a publicly traded international oil and gas, exploration and production company with rights extending over the Rovuma Basin play in southern Tanzania and northern Mozambique. The Company is focused on the exploration and development of oil and natural gas reserves. The Company has producing Tanzania gas assets, oil and gas exploration activities in both Mozambique and Tanzania. The Company's strategy is centered on proving up additional gas resources in its Mnazi Bay Concession in Tanzania to satisfy third party demand for natural gas and to identify significant resources for consumption by industrial gas buyers. Competitive business environments in both Tanzania and Mozambique combined with the Tanzanian Government working to solve electricity shortages by way of planned large-scale gas to power projects utilizing the transnational NNGIP connecting Mtwara, Tanzania, the location of the Mnazi Bay Concession, to the commercial capital of Dar es Salaam, provides Wentworth with an opportunity to monetize its assets in a relatively short period of time.

Wentworth is incorporated in Canada and is listed on the Oslo Stock Exchange (ticker: WRL) and the AIM market of the London Stock Exchange (ticker: WRL). The Company has offices in Calgary, Canada, Dar es Salaam, Tanzania and Maputo, Mozambique.

For more information on Wentworth Resources Limited visit www.wentworthresources.com.

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Forward-Looking and Cautionary Statements

Certain statements made herein, other than statements of historical fact relating to Wentworth, are forwardlooking statements. These include, but are not limited to, statements with respect to anticipated business activities, planned expenditures, including those relating to the exploration, development and production of its petroleum assets, corporate strategies, participation in projects and financing operations, the outcome of development activities in the exploration for, appraisal of, and development and operations relating to oil and natural gas assets in Tanzania and Mozambique, technical risks and resource potential of the drilling prospects, and the financing and timing of construction and future field plans for the Mnazi Bay Concession, and other statements that are not historical facts. When used in this MD&A, the words such as "could", "plan", "estimate", "expect", "intend", "may", "potential", "should" and similar expressions, are forward-looking statements. Although the Company believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements include those described under the heading "Risk Factors" elsewhere in this MD&A. The reader is cautioned not to place undue reliance on forward-looking statements. The Company assumes no obligation to update forward looking statements except to the extent required by applicable securities laws.

All such forward-looking information is based on certain assumptions and analysis made by management in light of experience and perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. The risks, uncertainties, and assumptions are difficult to predict and may affect operations, including, without limitation: the risks associated with foreign operations, foreign exchange fluctuations, commodity prices; equipment and labour shortages and inflationary costs, general economic conditions, industry conditions, changes in applicable environmental, taxation and other laws and regulations as well as how such laws and regulations are interpreted and enforced, the ability of oil and natural gas companies to raise capital, the existence of operating risks, volatility of oil and natural gas prices, oil and natural gas product supply and demand, risks inherent in the ability to generate sufficient cash flow from operations to meet current and future obligations, increased competition, stock market volatility, opportunities available to or pursued by the Company and other factors, many of which are beyond the Company's control.

In addition to the foregoing, this MD&A contains forward looking information with respect to estimated resources, the potential size and distribution of fields and recovery factors. Such forward looking information is based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ from those anticipated. These risks include, but are not limited to risks associated with the oil and gas industry (e.g. operational risks in development, exploration and production delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of resource estimates; the uncertainty associated with geological interpretations, the uncertainty of estimates and projections in relation to production, costs and expenses and health, safety and environmental risks), the risk of commodity price and foreign exchange rate fluctuations, risks associated with the implementation of new technology, risks associated with obtaining, maintaining and the timing of receipt of regulatory approvals, permits, and licenses, uncertainties relating to access to capital markets and the risk of volatile global economic conditions. Statements relating to resources are deemed to be forward looking information, as they involve implied assessment, based on certain estimates and assumptions, that the resources exist in the quantities predicted or estimated. The actual resources discovered may be greater or less than those calculated.

The forward-looking information contained herein is expressly qualified by this cautionary statement.