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Wentworth Resources Limited : Q2 2014 Financial Statements and MD&A

August 19, 2014 - London


19 August 2014

Wentworth Resources Limited

("Wentworth" or the "Company")

Q2 2014 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 second quarter and six months ended 30 June 2014.

The following should be read in conjunction with the Q2 2014 Management Discussion and Analysis and Financial Statements which are available on the Company's updated website at

Q2 2014 Highlights

·       Commenced Tembo-1 exploration drilling operations onshore Mozambique.
·       Re-mobilized seismic crew to complete acquisition of conventional 2D seismic over prospective areas of the Mnazi Bay concession in Tanzania, expected to be completed in Q3 2014.
·       Continued to make progress with the Mnazi Bay Concession partners and Attorney General's office of the Tanzanian government towards finalisation of a gas sales agreement ("GSA").
·       Construction of the gas pipeline and processing facilities by a third party contractor on behalf of the Tanzanian government remains on schedule for completion and commissioning during Q1 2015.
·       Conditionally secured $26 million in credit facility to fund development operations in Tanzania and to repay the existing loan. Access to funds subject to a customary conditions precedent and the finalisation of the GSA.
·       Second quarter and six months capital expenditures of $4.0 million and $9.2 million respectively compared to $1.0 million and $3.7 million respectively during the same period in 2013.
·       Loss from operating activities for the quarter of $2.5 million compared with a similar loss of $2.5 during the same period in 2013.
·       General and administrative expenses are 24.2% lower compared to same period of 2013 due to implementation of cost-saving measures during 2014.
·       Cash and cash equivalents and short-term investments totalled $20.8 million at June 30, 2014 compared to $37.7 million on hand at December 31, 2013.
·       Working capital at June 30, 2014 was $29.9 million compared to $38.4 million at December 31, 2013.

·       On June 19, 2014 drilling operations commenced on the Tembo-1 exploration well in the Rovuma Onshore Concession in northern Mozambique. The Tembo-1 well is targeting Cretaceous and Jurassic sands which, if successful, could open up a significant play fairway in the Rovuma Onshore Block.Drilling operations have encountered start-up and equipment challenges resulting in a delay of approximately 45 days in drilling the Tembo-1 well.The Company plans to update shareholders on the drilling results once drilling operations are complete.
·       Following completion of drilling the Tembo-1 exploration well, plan to mobilize the drilling rig to the second well, Kifaru-1, located in the northern section of the Onshore Rovuma Block, adjacent to and 12 kilometres south of the Company's Mnazi Bay Concession in Tanzania.
·       The Company and the Mnazi Bay Concession partners continue to work towards finalizing and signing the GSA with the Tanzanian government.
·       Acquisition of 315km of conventional 2D onshore seismic data over the prospective areas of the Mnazi Bay Concession Tanzania expected to be completed in Q3. Processing and interpretation of this new seismic data during 2014 is expected to support future appraisal, development and exploration drilling which is anticipated to commence in 2015.
·       Wentworth is fully funded for the 2014 high impact exploration drilling program in Mozambique, completion of 2D seismic acquisition in Tanzania and administrative activities. Additional field infrastructure and a planned development well in Mnazi Bay to be financed from $26 million credit facility.

Geoff Bury, Managing Director, commented:
"We are very pleased with the progress being made with construction of the government sponsored pipeline project which is on track to be completed and commissioned during Q1 2015 as planned.

We continue to work with our Mnazi Bay partners and representatives of the government of Tanzania to finalize the GSA covering natural gas deliveries to the new pipeline, and while this process has taken much longer than envisioned, we believe we have made significant progress towards reaching a conclusion in the best interests of all parties involved. We are unable to say exactly when the GSA will be finalized and signed, and thank our shareholders for their continued patience.

Securing the $26 million credit facility is another positive step towards the future developments at Mnazi Bay, where the funds will be used primarily for field infrastructure and drilling of one development well.Pre-planning of these projects has commenced with full implementation taking place following signing the GSA to enable us to deliver first gas in Q1 2015".

Wentworth Lance Mierendorf,
Chief Financial Officer
+1 403 680 8773
Katherine Roe, Head of Investor Relations and Corporate Communications
+44 7841 087 230
Swedbank First Securities Broker(Norway) +47 23 23 80 00
Ove Gusevik
Jarand Lønne
Crux Kommunikasjon Investor Relations Adviser
+47 995 138 91
Jan Petter Stiff
Fredrik Eeg
Panmure Gordon AIM Nominated Adviser and Broker (UK) +44 (0) 20 7886 2500
Callum Stewart
Adam James
Tom Salvesen
FirstEnergy Capital Broker (UK) +44 (0) 20 7448 0200
Majid Shafiq
Travis Inlow
Investec Broker (UK) +44 (0) 20 7597 4000
Chris Sim  
Instinctif Partners Investor Relations Adviser (UK) +44 (0) 20 7457 2020
David Simonson
Catherine Wickman
Harry Cameron

Financial Statements

The following primary statements have been extracted from the Q2 2014 unaudited consolidated financial statements which are located on the Company's website at

Unaudited Condensed Consolidated Interim Statement of Financial Position
United States $000s, unless otherwise stated

June 30,
December 31,
Current assets
Cash and cash equivalents 16,813 14,501
Short-term investments - term deposits 4,013 23,176
Trade and other receivables 2,634 1,845
Prepayments, deposits and advances to partners 2,450 1,674
Current portion of long-term receivables 5,459 658
31,369 41,854
Non-current assets
Long-term receivables 26,640 28,661
Exploration and evaluation assets 59,107 50,636
Property, plant and equipment 18,983 18,498
104,730 97,795
Total assets 136,099 139,649
Current liabilities
Trade and other payables 1,485 3,487
1,485 3,487
Non-current liabilities
Long-term loans 4,034 3,816
Other long-term liabilities 2,594 2,836
Decommissioning provision 734 685
7,362 7,337
Share capital 404,225 403,998
Equity reserve 24,303 23,903
Accumulated deficit (301,276) (299,076)
127,252 128,825
Total liabilities and equity 136,099 139,649

Unaudited Condensed Consolidated Interim Statement of Comprehensive Loss
United States $000s, unless otherwise stated

Three months ended June 30, Six months ended June 30,
2014 2013 2014 2013
Total revenue 253 235 489 451
Operating expenses
Production and operating (800) (601) (1,172) (754)
General and administrative (1,490) (1,965) (3,299) (3,939)
Share based compensation (323) (32) (477) (154)
Depreciation and depletion (156) (128) (291) (262)
Gain from sale of office assets 32 - 55 -
Loss from operating activities (2,484) (2,491) (4,695) (4,658)
Finance income 1,411 1,548 3,051 2,762
Finance costs (282) (249) (556) (443)
Gain on derivative financial liability - 393 - 393
Net loss and comprehensive loss (1,355) (799) (2,200) (1,946)
Net loss per ordinary share
Basic and diluted (US$/share) (0.01) (0.01) (0.01) (0.02)

Unaudited Condensed Consolidated Interim Statement of Changes in Equity
United States $000s, unless otherwise stated

Number of shares Share capital Equity reserve Accumulated deficit Total  equity
$ $ $ $
Balance at December 31, 2012 82,503,940 361,675 21,996 (289,087) 94,584
Net loss and comprehensive loss - - - (1,946) (1,946)
Share based compensation - - 154 - 154
Issue of share capital 85,000 108 (37) - 71
Balance at June 30, 2013 82,588,940 361,783 22,113 (291,033) 92,863
Balance at December 31, 2013 153,872,700 403,998 23,903 (299,076) 128,825
Net loss and comprehensive loss - - - (2,200) (2,200)
Share based compensation - - 477 - 477
Issue of share capital 250,000 227 (77) 150
Balance at June 30, 2014 153,122,700 404,225 24,303 (301,276) 127,252

Unaudited Condensed Consolidated Interim Statement of Cash Flows
United States $000s, unless otherwise stated

Three months ended June 30, Six months ended June 30,
2014 2013 2014 2013
Operating activities
Net loss for the period (1,355) (799) (2,200) (1,946)
Adjustments for:
Share based compensation 323 32 477 154
Depreciation and depletion 156 128 291 262
Finance income, net (1,129) (1,299) (2,495) (2,319)
Gain from sale of assets (32) - (55) -
Gain on derivative financial liability - (393) - (393)
Change in non-cash working capital (3,898) 95 (3,916) (1,247)
Cash used in operating activities (5,935) (2,236) (7,898) (5,489)
Investing activities
Additions to evaluation and exploration assets (3,690) (620) (8,471) (3,255)
Additions to property, plant and equipment (295) (400) (776) (421)
Conversion of term deposits to cash 8,838 - 19,163 -
Interest income 35 1 75 19
Net reduction/(increase) of long-term receivable 91 328 192 127
Change in non-cash working capital - 723 - 1,375
Cash provided by/(used in) investing activities 4,979 32 10,183 (2,155)
Financing activities
Issue of share capital 150 71 150 71
Net proceeds from long-term loan - 3,922 - 3,922
Repayment of long-term loan - (299) - (599)
Interest paid (89) (133) (178) (270)
Proceeds from sale of office assets 32 - 55 -
Decrease of other long-term liabilities - (169) - (326)
Cash provided by financing activities 93 3,392 27 2,798
Net change in cash and cash equivalents 3,175 (6,034) 2,312 (4,846)
Cash and cash equivalents, beginning of the period 14,501 9,352 14,501 9,352
Cash and cash equivalents, end of the period 17,676 3,318 16,813 4,506

About Wentworth Resources

Wentworth Resources is a publicly traded (OSE:WRL, AIM:WRL), independent oil & gas company with: natural gas production; midstream assets; a committed exploration and appraisal drilling programme; and large-scale gas monetisation opportunities, all in the Rovuma Delta Basin of coastal southern Tanzania and northern Mozambique.

Gerold Fong, Vice President of Exploration (BSC Geophysics, 1982) who has 31 years of experience in the exploration and production industry, has read and approved the technical disclosure in this regulatory announcement.

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, 2013, available on Wentworth's website, for further description of the risks and uncertainties associated with Wentworth's business.

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.
Q2 2014 MDA
2014 08 19 Press Release
Q2 2014 Financial Statements

This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Wentworth Resources Limited via Globenewswire



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