PRESS
RELEASE
25 April 2019
WENTWORTH
RESOURCES PLC
("Wentworth" or the "Company")
Final Results for
the year ended 31 December 2018
Wentworth (AIM: WEN), the AIM
listed independent, East Africa-focused oil & gas company, is
pleased to announce its audited results for year ended 31 December
2018.
HIGHLIGHTS
Corporate
-
Mnazi Bay, core producing gas asset in Tanzania,
produced at an average 2018 rate of 4,425 boepd net W.I.
-
2P Reserves of 99.7 Bscf (16.6 MMboe), valued at
$106 million (after-tax NPV15)
-
Completed corporate transition to the UK -
completed Oslo Børs delisting, resulting in a simpler transactional
platform, driving efficiencies into the business model
-
UK based management team in place from June 2018
following relocation of corporate headquarters from Canada, with
Calgary office closed at the end of 2018 and Maputo office closed
in March 2019
-
Refreshed UK based Board as of November
2018
-
Strong and supportive institutional shareholder
register
Financial
-
Milestone Mnazi Bay gas sales revenue of $16.2
million (2017: $13.4 million)
-
Adjusted earnings ("EBITDAX") of $8.3 million
(2017: $5.3 million) excluding non-recurring expenses of $76.6
million. Non-recurring expenditures include: Mozambican exploration
impairment provision $41.6 million; one-off re-structuring and
redomicile costs of $2.3 million comprising recruitment, severance,
travel, legal and professional charges; Tanzanian tax assessments
of $1.0 million for the years 2013 to 2016, provision against
Tanzania Government receivables $5.0 million; and deferred tax
write-downs of $26.7 million
-
Net loss of $75.2 million (2017: $0.7
million)
-
Net cash at year-end of $0.8 million, compared
to net debt of $13.9 million at 31 December 2017
-
Cash and cash equivalents on hand at year-end of
$11.9 million (2017: $3.75 million)
-
Reduced outstanding long-term loans by $7.3
million to $8.6 million (2017: $15.3 million)
Operational
-
Average gross daily gas production for the
period increased 70% to 83.2 MMscf/d from 49.1 MMscf/d in 2017;
above annual 2018 guidance of 65-75 MMscf/d
-
Exited 2018 with an average daily production
rate 92.5 MMscf/d in December, a new Company record
-
Continued operating cost reduction to $0.44 /
Mscf (2017: $0.84 / Mscf), leveraging increased production
volumes
-
Total cash receipts of $36.2 million from gas
sales and recovery of long-term government receivables during
2018
-
On track to relinquish Tembo block in Northern
Mozambique ahead of the end of the current appraisal term on 15
June 2019
Eskil Jersing, CEO, commented:
"2018 saw us make
material progress in simplifying our business and portfolio. On our
core Mnazi Bay asset, we achieved record average production levels
of 4,425 boepd and associated gas revenue of US$16.2mm, ending the
year with a 56.8% improvement in our EBITDAX of US$8.3mm and cash
of US$11.9mm.
We continue to
work diligently with all our Tanzanian stakeholders in unlocking
the latent value of the Mnazi Bay. Wentworth will continue
to improve its fundamentals through 2019; and the Board of
Wentworth remains focused on its stated strategy of revenue stream
diversification and maximising returns for shareholders."
Enquiries:
Wentworth |
Eskil Jersing,
Chief Executive Officer
Katherine Roe,
Chief Financial Officer |
eskil.jersing@wentplc.com
+44 (0)118 2065427
katherine.roe@wentplc.com
+44 (0)118 2065428 |
Stifel Nicolaus Europe Limited |
AIM Nominated Adviser and Joint
Broker
Callum Stewart
Ashton Clanfield
Simon Mensley |
+44 (0) 20 7710 7600 |
Peel Hunt LLP |
Joint Broker
Richard Crichton
James Bavister |
+44 (0) 20 7418 8900 |
Vigo |
Investor Relations Adviser
Patrick d'Ancona
Chris McMahon |
+44 (0) 20 7390 0230 |
CHAIRMAN'S STATEMENT
2018 saw the successful completion
of the strategic restructuring initiative which began in
2017. The Company has now been legally redomiciled from the
Province of Alberta in Canada to the Isle of Jersey, incorporated
as Wentworth Resources plc and is trading under the new ticker,
WEN, on the AIM Market of the London Stock Exchange (AIM).
The Company's Head Office in Calgary, Alberta has been closed and
is now headquartered in Reading, Berkshire in the UK. In
addition, Wentworth successfully delisted from the Oslo Børs with
an effective date of 13 February 2019. These substantive
changes to the corporate structure have resulted in an enhanced and
more efficient management platform, allowing the Company to
evaluate and ultimately transact on, growth opportunities.
This restructuring also resulted
in a complete change in the Senior Executive Management and in the
structure of the Board of Directors. In line with UK
Corporate Governance norms and in keeping with the QCA Corporate
Governance Code, which the Company has now adopted, the make-up of
the Board now constitutes an appropriate balance between Executive
Directors and Non-executive Directors. We have made changes to the
Non-executive Director composition to ensure continued
effectiveness of the Board appropriate for the Company after its
move from Canadian domicile to Jersey domicile and with a sole
listing in London. The Board appointed two new Non-executive
Directors, Tim Bushell and Iain McLaren, bringing new and relevant
skills to replace Canadian resident directors, Neil Kelly and
Cameron Barton, who agreed to step down from the Board. Neil and
Cameron provided the Board with strong contributions which have
helped take the Company to where it is today: a refreshed and
simpler corporate platform, poised for growth. I wish to thank all
the previous Wentworth management and directors for the
professionalism and diligence they have demonstrated over the past
year in ensuring that these changes took place. I wish them
all the good fortune that they deserve in the future.
Wentworth today is financially
sound and even healthier than this time last year with an
increasingly positive outlook: we expect 2019 to be a year of
increasing balance sheet strength. Mnazi Bay production has grown
materially in the last several years and is more predictable thanks
to growing demand in Tanzania. Tanzanian Petroleum Development
Company ("TPDC") and Tanzania Electric Supply Company ("TANESCO"),
the Company's two primary off takers of Mnazi Bay gas, continue to
fulfil their respective payment obligations whilst significantly
improving on previous payment arrears. With future demand for
domestic gas in Tanzania taking off and pipeline infrastructure in
place with substantial spare capacity available, Wentworth and its
partners can expand and meet this growing demand over the next few
years.
Wentworth is now perfectly poised
for growth, both by adding to its current Tanzanian production base
and by seeking accretive growth opportunities outside of
Tanzania. The Company's strong, loyal institutional
shareholder base, combined with its strengthening balance sheet and
simplified corporate structure, is creating many new opportunities
for management to pursue.
I would like to thank all
shareholders for their continued support, and I would also like to
thank the entire Wentworth team for their hard work and loyalty
that they have demonstrated through the past year.
Robert
McBean
Chairman
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
|
|
Year ended 31 December |
|
Note |
2018
$000 |
2017
$000 |
|
|
|
|
|
|
|
|
Total
revenue |
5 |
16,224 |
13,440 |
|
|
|
|
Production and operating costs |
|
(2,290) |
(3,484) |
Depletion |
13 |
(7,803) |
(4,079) |
Total cost of sales |
|
(10,093) |
(7,563) |
|
|
|
|
Gross
profit |
|
6,131 |
5,877 |
|
|
|
|
Recurring administrative costs |
6 |
(6,289) |
(6,196) |
Amounts capitalised to E&E assets |
|
664 |
1,582 |
Impairment loss on E&E assets |
12 |
(41,598) |
- |
Provision for Tanzania Government receivables |
11 |
(4,959) |
- |
Management restructuring costs |
7 |
(940) |
- |
Redomicile costs |
|
(1,393) |
- |
Share-based payment charges |
21 |
(98) |
(215) |
Depreciation and depletion |
13 |
(12) |
(12) |
Loss on sale of PPE |
|
(3) |
- |
Tanzanian withholding tax costs |
24 |
(993) |
- |
Total
costs |
|
(55,621) |
(4,841) |
|
|
|
|
(Loss)/profit from
operations |
|
(49,490) |
1,036 |
|
|
|
|
Finance income |
8 |
2,659 |
2,386 |
Finance costs |
8 |
(1,616) |
(3,737) |
Loss before
tax |
|
(48,447) |
(315) |
|
|
|
|
Current tax expense |
24 |
(63) |
- |
Deferred tax expense |
24 |
(26,714) |
(394) |
|
|
(26,777) |
(394) |
Net loss and comprehensive loss |
|
(75,224) |
(709) |
|
|
|
|
Net loss per
ordinary share |
|
|
|
Basic and diluted (US$/share) |
23 |
(0.40) |
- |
|
|
|
|
1 Adjusted
earnings before interest, taxation, depreciation, depletion and
amortisation, impairment, management restructuring costs,
redomicile costs, share-based payments provisions and pre-licence
expenditures
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
|
Note |
31
December
2018
$000 |
31 December
2017
$000 |
|
|
|
|
ASSETS |
|
|
|
Current
assets |
|
|
|
Cash and cash equivalents |
|
11,903 |
3,750 |
Trade and other receivables |
9 |
7,553 |
13,513 |
TPDC receivables |
10 |
5,238 |
15,550 |
|
|
24,694 |
32,813 |
Non-current
assets |
|
|
|
Tanzania Government receivables |
11 |
- |
4,959 |
Exploration and evaluation
assets |
12 |
8,129 |
47,921 |
Property, plant and equipment |
13 |
83,777 |
90,336 |
Deferred tax asset |
24 |
4,036 |
30,751 |
|
|
95,942 |
173,967 |
Total assets |
|
120,636 |
206,780 |
|
|
|
|
LIABILITIES |
|
|
|
Current
liabilities |
|
|
|
Trade and other payables |
15 |
3,207 |
5,726 |
Overdraft credit facility |
16 |
2,500 |
2,500 |
Current portion of long-term
loans |
17 |
6,946 |
7,260 |
Contingent PTTEP liability |
18 |
848 |
2,189 |
|
|
13,501 |
17,675 |
Non-current
liabilities |
|
|
|
Long-term loans |
17 |
1,688 |
8,636 |
Decommissioning provision |
19 |
969 |
865 |
|
|
2,657 |
9,501 |
Equity |
|
|
|
Share capital |
22 |
416,426 |
416,426 |
Equity reserve |
|
26,588 |
26,490 |
Accumulated deficit |
|
(338,536) |
(263,312) |
|
|
104,478 |
179,604 |
Total liabilities and equity |
|
120,636 |
206,780 |
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
|
Note |
Number of shares |
Share capital |
Equity reserve |
Accumulated
deficit |
Total
equity |
|
|
|
$000 |
$000 |
$000 |
$000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 31 December 2016 |
|
169,534,969 |
411,493 |
26,275 |
(261,857) |
175,911 |
Net loss and comprehensive loss |
|
- |
- |
- |
(709) |
(709) |
Share based compensation |
21 |
- |
- |
215 |
- |
215 |
Issued of share capital |
|
16,953,496 |
5,527 |
- |
- |
5,527 |
Share issue costs, net of tax |
|
- |
(594) |
- |
- |
(594) |
Balance at 31 December 2017 as
previously reported |
|
186,488,465 |
416,426 |
26,490 |
(262,566) |
180,350 |
IFRS 9 transitional adjustment |
2 |
- |
- |
- |
(746) |
(746) |
Restated balance at 31 December
2017 |
|
186,488,465 |
416,426 |
26,490 |
(263,312) |
179,604 |
Net loss and comprehensive loss |
|
- |
- |
- |
(75,224) |
(75,224) |
Share based compensation |
21 |
- |
- |
98 |
- |
98 |
Balance at 31 December 2018 |
|
186,488,465 |
416,426 |
26,588 |
(338,536) |
104,478 |
|
|
|
|
|
|
|
CONSOLIDATED STATEMENT OF CASH FLOWS
|
|
|
Year ended 31 December |
|
Note |
|
|
2018
$000 |
2017
$000 |
|
|
|
|
|
|
Operating
activities |
|
|
|
|
|
Net loss for the year |
|
|
|
(75,224) |
(709) |
Adjustments for: |
|
|
|
|
|
Depreciation and depletion |
13 |
|
|
7,815 |
4,091 |
Impairment loss on E&E
assets |
12 |
|
|
41,598 |
- |
Provision for Tanzania Government
receivables |
11 |
|
|
4,959 |
- |
Finance (income)/costs, net |
|
|
|
(1,043) |
1,351 |
Deferred tax expense |
24 |
|
|
26,714 |
394 |
Share based compensation |
21 |
|
|
98 |
215 |
Loss on sale of PPE |
|
|
|
3 |
- |
|
|
|
|
4,920 |
5,342 |
Change in non-cash working capital |
27 |
|
|
1,576 |
(5,363) |
Net cash generated from/(utilized in)
operating activities |
|
|
|
6,496 |
(21) |
|
|
|
|
|
|
Investing
activities |
|
|
|
|
|
Additions to exploration and
evaluation assets |
27 |
|
|
(1,806) |
(2,383) |
Additions to property, plant and
equipment |
27 |
|
|
(1,968) |
(1,728) |
Reduction of long-term
receivable |
27 |
|
|
15,377 |
7,030 |
Proceeds from sale of office assets |
13 |
|
|
3 |
- |
Net cash from investing activities |
|
|
|
11,606 |
2,919 |
|
|
|
|
|
|
Financing
activities |
|
|
|
|
|
Issue of share capital, net of issue
costs |
|
|
|
- |
4,933 |
Principal term-loan repayments |
17 |
|
|
(6,996) |
(5,346) |
Debt restructuring fee |
17 |
|
|
- |
(83) |
Drawn on overdraft credit
facility |
|
|
|
- |
2,500 |
Interest paid |
16/17 |
|
|
(1,612) |
(1,809) |
Payment of contingent PTTEP liability |
18 |
|
|
(1,341) |
(322) |
Net cash used in financing
activities |
|
|
|
(9,949) |
(127) |
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash
equivalents |
|
|
|
8,153 |
2,771 |
Cash and cash equivalents, beginning of the period |
|
|
|
3,750 |
979 |
Cash and cash equivalents, end of the
period |
|
|
|
11,903 |
3,750 |
1. Incorporation and basis of preparation
Wentworth Resources Plc ("Wentworth" or the
"Company") is an East Africa-focused upstream oil and natural gas
company. These audited consolidated financial statements include
the accounts of the Company and its subsidiaries (collectively
referred to as "Wentworth Group of Companies" or the "Group"). The
Company is actively involved in oil and gas exploration,
development and production operations. Wentworth is incorporated in
Jersey, having completed its re-domicile from Canada effective 26
October 2018. Shares of the Company as at 31 December 2018 were
widely held and listed on the AIM part of the London Stock Exchange
(ticker: WEN). Full details of both the re-domicile and the Oslo
Børs de-listing which became effective on 13 February 2019 are
available in the Directors' Report.
The Company's principal place of business is
located at Thames Tower, 2nd Floor,
Station Road, Reading RG1 1LX after being relocated from 3210, 715
- 5 Avenue, SW Calgary, Canada.
The Company maintain offices in Dar es Salaam,
Tanzania and Reading, UK.
Basis of presentation and
statement of compliance
These consolidated financial statements have been
prepared on a historical cost basis and have been prepared using
the accrual basis of accounting. The consolidated financial
statements are prepared in accordance with International Financial
Reporting Standard ("IFRS") as issued by the International
Accounting Standards Board ("IASB").
The consolidated financial statements were
approved by the Board of Directors on 24 April 2019.
Functional and presentation
currency
These consolidated financial statements are
presented in US dollars which is the functional currency the
majority of its subsidiaries.
Basis of consolidation
These consolidated financial statements include
the accounts of the Company and its subsidiaries.
Subsidiaries are entities that the Company controls. An investor
controls an investee when it is exposed, or has rights, to variable
returns from its involvement with the investee and can affect those
returns through its authority over the investee. The
existence and effect of potential voting rights are considered when
assessing whether a company controls another entity. Subsidiaries
are fully consolidated from the date on which control is
transferred to the Company. They are deconsolidated from the date
that control ceases. The following legal entities are within the
Wentworth Group of Companies:
Legal entity |
Registered |
Holdings at December 31, 2018 |
Functional currency |
Wentworth Resources plc |
Jersey |
Ultimate Parent |
US dollar |
Wentworth Resources (UK) Limited |
United Kingdom |
100% |
GBP |
Wentworth Holdings (Jersey) Limited |
Jersey |
100% |
US dollar |
Wentworth Tanzania (Jersey) Limited |
Jersey |
100% |
US dollar |
Wentworth Gas (Jersey) Limited |
Jersey |
100% |
US dollar |
Wentworth Gas Limited |
Tanzania |
100% |
US dollar |
Cyprus Mnazi Bay Limited |
Cyprus |
39.925% |
US dollar |
Wentworth Mozambique (Mauritius) Limited |
Mauritius |
100% |
US dollar |
Wentworth Mocambique Petroleos,
Limitada |
Mozambique |
100% |
US dollar |
All inter-company transactions, balances and
unrealized gains on transactions between the parent and subsidiary
companies are eliminated on consolidation.
Future accounting
pronouncements
The following amended standards and interpretation
are effective for financial years commencing on or after 1 January
2019. The Group does not intend to adopt the standards below before
their mandatory application date.
New and amended standards
Standard
|
Description |
Effective date |
EU Endorsement Status |
IFRS 16 |
Leases |
1 January 2019 |
Endorsed |
IFRS 13 (amendments) |
Business combinations |
1 January 2019 |
Endorsed |
IAS 12 (amendments) |
Income taxes |
1 January 2019 |
Endorsed |
IFRIC 23 |
Uncertainties over income tax treatments |
1 January 2019 |
Endorsed |
The Company intends to adopt above listed
standards and interpretation in its financial statements for the
annual period beginning on 1 January 2019. The Company does not
expect the interpretation to have a material impact on the
financial statements.
2. Summary of accounting policies
The principal accounting policies applied in the preparation of
these Company
and Group consolidate financial statements are set below. These
policies have
been consistently applied to all the years presented, unless
otherwise stated.
Joint arrangements
The analysis of joint arrangements requires
management to analyse numerous agreements and the requirements of
IFRS 10 and IFRS 11. Several judgements and estimates are made by
management including whether joint control exists and the extent of
exposure to the underlying assets and liabilities of the joint
arrangement. The Company has a joint arrangement through its
39.925% ownership in Cyprus Mnazi Bay Limited, which is classified
as a joint operation.
Financial instruments
Financial assets and liabilities are recognized
when the Company becomes a party to the contractual provisions of
the instrument. Financial assets are derecognized when the rights
to receive cash flows from the assets have expired or have been
transferred to an independent third party and the Company has
transferred substantially all risks and rewards of ownership.
Financial assets and liabilities are offset and the net amount is
reported on the consolidated statement of financial position when
there is a legally enforceable right to offset the recognized
amounts and there is an intent to settle on a net basis or realize
the asset and settle the liability simultaneously.
All financial instruments are
initially recognized at fair value on the consolidated statement of
financial position depending on the purpose for which the
instruments were acquired. The Company has classified each
financial instrument into one of the following categories: i)
fair value through profit and loss, ii) loans and receivables, and
iii) other financial liabilities.
Subsequent measurement of
financial instruments is based on their classification.
(i) Financial
assets and liabilities at fair value through profit and
loss
A financial asset or liability classified in this
category is recognized at each period at fair value with gains and
losses from revaluation being recognized in profit or loss.
Additionally, a financial asset or liability is classified in this
category if acquired principally for the purpose of selling or
repurchasing in the short-term. Derivatives are included in this
category unless they are designated as hedges.
(ii) Loans and
receivables
Loans and receivables are initially measured at
fair value plus directly attributable transaction costs and are
subsequently recorded at amortized cost using the effective
interest method.
Long-term receivables are non-derivative financial
assets with fixed or determinable payments that are not quoted in
an active market. Long-term receivables are initially recognized at
fair value based on the discounted cash flows. The discount
rate is based on the credit quality and term of the financial
instrument. The financial instrument is subsequently valued at
amortized costs by accreting the instrument over the expected life
of the assets. The accretion associated with instruments valued at
amortized cost is reported in profit/(loss) each reporting
period. The fair value of the Company's trade and other
receivables approximates their carrying values due to the
short-term nature of these instruments.
(iii) Other
financial liabilities
Other financial liabilities are initially measured
at fair value less directly attributable transaction costs and are
subsequently recorded at amortized cost using the effective
interest method.
Long-term loans and other long-term liabilities
are non-derivative financial assets with either fixed or
determinable payments or no payment terms and which are not quoted
in an active market.
Long-term loans are initially recognized at fair
value based on the amounts received.
Cash and cash equivalents
Cash and cash equivalents include cash on hand,
term deposits and short-term highly liquid investments with the
original term to maturity of three months or less, which are
convertible to known amounts of cash and which, in the opinion of
management, are subject to an insignificant risk of changes in
value.
Long-term receivables
Long-term receivables plus applicable accrued
interest are initially recognized at their fair value based on the
discounted cash flows. The discounted cash flows are reviewed
at least every year to adjust for variations in the estimated
future cash flows with the change in estimate reported in profit or
loss. The discount rate is based on the credit quality and term of
the financial instrument. The financial instrument is
subsequently valued at amortized costs by accreting the instrument
over the life of the asset. The accretion is reported in
profit or loss.
E&E exploration
assets
E&E costs, including costs of licence
acquisition, technical services and studies, exploratory drilling,
whether successful or unsuccessful, and testing and directly
attributable overhead, are capitalized as E&E assets according
to the nature of the assets acquired. These costs are accumulated
in cost centres by well, field or exploration area pending
determination of technical feasibility and commercial
viability.
E&E assets are assessed for impairment if (i)
sufficient data exists to determine technical feasibility and
commercial viability, and (ii) facts and circumstances suggest that
the carrying amount exceeds the recoverable amount.
The technical feasibility and commercial viability
of extracting a resource is generally considered to be determinable
when proven and/or probable reserves are determined to exist. A
review of each exploration licence or field is carried out, at
least annually, to ascertain whether it is technically feasible and
commercially viable. Upon determination of technical feasibility
and commercial viability, intangible E&E assets attributable to
those reserves are first tested for impairment with the unimpaired
amounts reclassified from E&E assets to a separate category
within tangible assets within PP&E referred to as oil and gas
interests.
Costs incurred prior to the legal awarding of
petroleum and natural gas licences, concessions and other
exploration rights are recognized in profit or loss as
incurred.
PP&E - oil and natural gas
properties
Items of PP&E, which include oil and gas
development and production assets, are measured at cost less
accumulated depletion and depreciation and accumulated impairment
losses. PP&E assets include costs incurred in developing
commercial reserves and bringing them into production, such as
drilling of development wells, tangible costs of facilities and
infrastructure construction, together with the E&E expenditures
incurred in finding the commercial reserves that have been
reclassified from E&E assets as outlined above, the projected
cost of retiring the assets and any directly attributable general
and administrative expenses. Expenditures on developed oil and
natural gas properties are capitalized to PP&E when it is
probable that a future economic benefit will flow to the Company as
a result of the expenditure and the cost can be reliably measured.
The initial cost of an asset is comprised of its purchase price or
construction cost, any costs directly attributable to bringing the
asset into operation, the initial estimate of any decommissioning
obligations associated with the asset and borrowing costs on
qualifying assets. When significant parts of an asset with
PP&E, including oil and gas interests, have different useful
lives, they are accounted for as separate items (major components).
Costs incurred subsequent to the determination of technical
feasibility and commercial viability and the costs of replacing
parts of PP&E are recognized as capitalized oil and gas
interests only when they increase the future economic benefits
embodied in the specific asset to which they relate.
Subsequent changes in estimated decommissioning obligation due to
changes in timing, amounts and discount rates are included in the
cost of the asset. Such capitalized oil and gas interests
generally represent costs incurred in developing proved and/or
probable reserves and bringing in or enhancing production from such
reserves and are accumulated on a field or geotechnical area basis.
The carrying amount of any replaced or sold component is
derecognized. The costs of the day-to-day operating of PP&E are
recognized in profit or loss as incurred.
Depletion
The net carrying amount of PP&E is depleted on
a field by field unit of production method by reference to the
ratio of production in the year to the related proven and probable
reserves. If the useful life of the asset is less than the reserve
life, the asset is depreciated over its estimated useful life using
the straight-line method. Future development costs are
estimated considering the level of development required to produce
the proven and probable reserves. These estimates are reviewed by
third party independent reserves engineers. Changes in factors such
as estimates of reserves that affect unit-of-production
calculations are dealt with on a prospective basis. Capital costs
for assets under construction included in development and
production assets are excluded from depletion until the asset is
available for use, that is, when it is in the location and
condition necessary for it to be capable of operating in the manner
intended by management.
Disposals
Oil and natural gas properties are
derecognized upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset. Any gain or
loss on derecognition of the asset, including farm out transactions
or asset sales or asset swaps, is calculated as the difference
between the proceeds on disposal, if any, and the carrying value of
the asset, is recognized in profit or loss in the period of
derecognition.
PP&E - office and other
equipment
Office and other equipment are carried at cost
less accumulated depreciation and impairment losses.
Depreciation of the cost of these assets less residual value is
charged to profit and loss on a straight-line basis over their
estimated useful economic lives of between three and five
years.
Decommissioning
obligation
Decommissioning obligations are recognized for
legal obligations related to the decommissioning of long-lived
tangible assets that arise from the acquisition, construction,
development or normal operation of such assets. A liability
for decommissioning is recognized in the period in which it is
incurred and when a reasonable estimate of the liability can be
made with the corresponding decommissioning provision recognized by
increasing the carrying amount of the related long-lived
asset. The recognized decommissioning provision is
subsequently allocated in a rational and systematic method over the
underlying asset's useful life. The initial amount of the
liability is accreted by charges to the profit or loss to its
estimated future value.
Impairment
Non-financial
assets
The carrying amounts of the Company's
non-financial assets are reviewed at each reporting date to
determine whether there is any indication of impairment.
E&E assets are assessed for impairment when
facts and circumstances suggest that the carrying amount exceeds
the recoverable amount and when they are reclassified to PP&E.
For the purpose of impairment testing, E&E assets are grouped
by concession or field with other E&E and PP&E belonging to
the same CGU. The impairment loss will be calculated as the excess
of the carrying value over recoverable amount of the E&E
impairment grouping and any resulting impairment loss is recognized
in profit or loss. The recoverable amount of a CGU is the
greater of its value in use and its fair value less costs to sell.
In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money
and the risks specific to the asset. In assessing fair value
less costs to sell, the estimated future cash flows are discounted
to their present value using an after-tax discount rate that
reflects current market assessments of the time value of money and
the risk specific to the asset. Fair value less costs to sell
is generally computed by reference to the present value of the
future cash flows expected to be derived from production of proved
and probable reserves.
PP&E will be tested for impairment whenever
events and circumstances arising during the development and
production phase indicate that the carrying amount of a PP&E
may exceed its recoverable amount. For the purpose of impairment
testing, PP&E will be grouped into the smallest group of assets
that generate cash inflows that are largely independent of cash
inflows from other assets or groups of assets; the CGU. The
aggregate carrying value will be compared against the expected
recoverable amount of the CGU. The recoverable amount of a CGU is
the greater of its value in use and its fair value less costs to
sell. In assessing value in use, the estimated future cash
flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset. In
assessing fair value less costs to sell, the estimated future cash
flows are discounted to their present value using an after-tax
discount rate that reflects current market assessments of the time
value of money and the risk specific to the asset. Fair value
less costs to sell is generally computed by reference to the
present value of the future cash flows expected to be derived from
production of proved and probable reserves. CGU's are generally
defined by field except where a number of field interests can be
grouped because the cash inflows generated by the fields are
interdependent. Impairment losses recognized in respect of CGU's
are allocated first to reduce the carrying amount of goodwill, if
any, allocated to the units and then to reduce the carrying amounts
of the other assets in the unit (group of units) on a pro-rata
basis.
Impairment losses recognized in prior years are
assessed at each reporting date for any indication that the loss
has decreased or no longer exists. Impairments are reversed when
events or circumstances give rise to changes in the estimate of the
recoverable amount since the period the impairment was recorded. An
impairment loss is reversed only to the extent that the CGU's
carrying amount does not exceed the carrying amount that would have
been determined, net of depletion, if no impairment loss had been
recognized. An impairment loss in respect of goodwill is not
reversed.
Financial
assets
A financial asset is assessed at each reporting
date to determine whether there is any objective evidence that it
is impaired. A financial asset is considered to be impaired if
objective evidence indicates that one or more events have had a
negative effect on the estimated future cash flows of that
asset.
An impairment loss in respect of a financial asset
measured at amortized cost is calculated as the difference between
its carrying amount and the present value of the estimated future
cash flows discounted at the original effective interest rate.
Individually significant financial assets are tested for impairment
on an individual basis. The remaining financial assets are assessed
collectively in groups that share similar credit risk
characteristics.
All impairment losses are recognized in profit or
loss. An impairment loss is reversed if the reversal can be related
objectively to an event occurring after the impairment loss was
recognized. For financial assets measured at amortized cost the
reversal is recognized in profit or loss.
Share capital
The proceeds from the exercise of share options
and the issuance of shares from treasury are recorded as share
capital in the amount for which the option, warrant, or treasury
share enables the holder to purchase a share in the Company.
Share capital issued for non-monetary
consideration is recorded at an amount based on fair market value
of the shares issued.
Share issuance costs
Commissions paid to underwriters, and other
related share issue costs, such as legal, auditing and advisory, on
the issue of the Company's shares are charged directly to share
capital, net of tax.
Share based payments
The fair value of the options at the date of the
grant is determined using the Black-Scholes option pricing model
and share based compensation is accrued and charged to profit or
loss, with an offsetting credit to equity reserve over the vesting
periods. A forfeiture rate is estimated on the grant date and is
adjusted to reflect the actual number of options that vest.
Capitalization of
interest
The Company capitalizes interest expense incurred
during the construction phase of the projects, except E&E
assets which were funded by the related financing.
Revenue recognition
Natural gas revenues are recognized upon the
transfer of control over its gas to its customers, TPDC and
TANESCO, which is when delivery is made to them through the offtake
network.
Investment income is accrued on a time basis by
reference to the principal outstanding and at the effective
interest rate applicable, which is the rate that discounts
estimated future cash receipts through the expected life of the
financial asset to that asset's net carrying value.
Income taxes
Tax expense comprises current and deferred tax.
Tax is recognized in the profit or loss except to the extent it
relates to items recognized in other comprehensive income ("OCI")
or directly in equity.
Current income tax
Current tax expense is based on the results for
the period as adjusted for items that are not taxable or not
deductible. Current tax is calculated using tax rates and laws that
were enacted or substantively enacted at the end of the reporting
period. Management periodically evaluates positions taken in tax
returns with respect to situations in which applicable tax
regulation is subject to interpretation. Provisions are established
where appropriate on the basis of amounts expected to be paid to
the tax authorities.
Deferred income
tax
Deferred taxes are the taxes expected to be
payable or recoverable on differences between the carrying amounts
of assets and liabilities in the consolidated statement of
financial position and their corresponding tax basis. Deferred tax
liabilities are generally recognized for all taxable temporary
differences. Deferred tax assets are recognized to the extent that
it is probable that future taxable profits are expected to be
available against which deductible temporary differences to the tax
basis can be utilized. Deferred income tax assets and liabilities
are not recognized if the temporary difference arises from the
initial recognition of goodwill, if any, or from the initial
recognition (other than in a business combination) of other assets
in a transaction that affects neither the taxable profit nor the
accounting profit.
Deferred tax liabilities are recognized for
taxable temporary differences arising on investments in
subsidiaries and joint arrangements except where the reversal of
the temporary difference can be controlled, and it is probable that
the difference will not reverse in the foreseeable future.
Deferred tax assets are reviewed at each reporting
period and reduced to the extent that it is no longer probable that
sufficient future taxable profits are expected to be available to
allow all or part of the asset to be recovered. Deferred tax assets
are recognized for taxable temporary differences arising on
investments in subsidiaries to the extent that it is probable that
the temporary difference will reverse in the foreseeable future and
future taxable profits are expected to be available against which
the temporary difference can be utilized.
Foreign currency
translation
Items included in the financial statements of the
Company and its subsidiaries are measured using the currency of the
primary economic environment in which the legal entity operates
(the "functional currency"). Foreign currency transactions are
translated into the functional currency using the exchange rates
prevailing at the dates of the transaction. Foreign exchange
gains and losses resulting from the settlement of such transactions
and from the translation of monetary assets and liabilities not
denominated in the functional currency of an entity are recognized
in profit or loss.
The functional currency of all Wentworth
subsidiaries is US dollars except for Wentworth Resources (UK)
Limited which is Pound Sterling. The assets and liabilities
of this Company are translated into US dollars at the period-end
exchange rate. The income and expenses of the Company are
translated to US dollars at the average exchange rate for the
period.
Translation gains and losses are included in other
comprehensive income; however, this subsidiary has limited
operations so there is no significant amount of foreign exchange
gains and losses to include in other comprehensive income.
All other foreign exchange gains and losses are recognized in
profit or loss.
Changes in accounting
policies
On 1 January 2018, the Company adopted new
standards with respect to IFRS 9 - Financial Instruments and IFRS -
15 Revenue from Contracts with Customers.
IFRS 9 -
Effective 1 January 2018, the Company has adopted IFRS 9 "Financial
Instruments" ("IFRS 9"). IFRS 9 sets out requirements for
recognizing and measuring financial assets, financial liabilities
and some contracts to buy or sell non-financial items. This
standard replaces IAS 39 Financial Instruments: Recognition and
Measurement ("IAS 39").
On 1 January 2018, the Company:
-
Identified the business model used to manage its
financial assets and classified its financial instruments into the
appropriate IFRS 9 category;
-
Applied the 'expected credit loss' ("ECL") model
to financial assets classified as measured at amortized cost.
The following table shows the original measurement
categories under IAS 39 and the new measurement categories under
IFRS 9 as at 1 January 2018 for each class of the Company's
financial assets and financial liabilities.
|
Measurement category |
Financial Instrument |
IAS 39 |
IFRS 9 |
Cash and cash equivalents |
Loans and receivables |
Amortized cost |
Trade and other receivables |
Loans and receivables |
Amortized cost |
Trade and other payables |
Loans and receivables |
Amortized cost |
Long-term loans(1) |
Loans and receivables |
Amortized cost |
-
Carrying value was adjusted by
$0.75 million on adoption of IFRS 9.
The classification and measurement of financial
instruments under IFRS 9 did not result in any adjustments to the
Company's opening retained earnings as at 1 January 2018 except for
an adjustment for debt modifications as the Company renegotiated
the repayment terms on its long-term loan, effective 31 January
2017. Under IFRS 9, the amortized cost of the financial liability
must be recalculated as the present value of the estimated future
contractual cash flows that are discounted at the original
effective interest rate. The difference in the carrying amount and
the calculated amount is recognized in profit and loss
The Company calculated a modification loss of
$0.75 million on the $20 million TIB Loan. The impact on the
condensed consolidated interim statement of financial position is
shown below:
As at: |
31 December
2017
$000 |
Adjustments
$000 |
1 January
2018
$000 |
Long-term loans |
15,150 |
746 |
15,896 |
Accumulated deficit |
(262,566) |
(746) |
(263,312) |
The new standard also introduces ECL model for
evaluating impairment of financial assets. On 1 January 2018, the
Company applied the ECL model to financial assets classified as
measured at amortized cost. The new model will result in more
timely recognition of expected credit losses. The ECL model applies
to the Company's receivables. As at 31 December 2018, the Company's
trade accounts receivable included gas sales to TPDC and TANESCO,
and 51 percent were outstanding for less than 90 days. The average
ECL on the Company's trade accounts receivable was nil percent.
To effect the changes under IFRS 9, the following
revised policy has been applied to current period balances
effective 1 January 2018. The Company applied IFRS 9
retrospectively but elected not to restate comparative information.
As such the comparative information provided continues to be
accounted for in accordance with the Company's previous accounting
policy as disclosed in the annual consolidated financial statements
for the year ended 31 December 2017.
IFRS 15
- The Company adopted IFRS 15, Revenue from Contracts ("IFRS 15")
on 1 January 2018 using the modified retrospective approach. The
Company has completed the process of reviewing sales contracts with
its two customers (TPDC and TANESCO) using the IFRS 15 principles
based five step model and concluded that there is no impact on
opening retained earnings as of 1 January 2018 and on revenue
recognition for 2018.
Earnings or loss per share
("EPS")
Basic earnings or loss per share is calculated by
dividing profit or loss attributable to owners of the Company (the
numerator) by the weighted average number of ordinary shares
outstanding (the denominator) during the period. The denominator is
calculated by adjusting the shares outstanding at the beginning of
the period by the number of shares bought back or issued during the
period, multiplied by a time-weighting factor.
Diluted EPS is calculated by adjusting the
earnings and number of shares for the effects of all dilutive
potential ordinary shares deemed to have been converted at the
beginning of the period or if later, the date of issuance. The
effects of anti-dilutive potential ordinary shares are ignored in
calculating diluted EPS.
3. Critical accounting judgements and key sources of
estimation uncertainty
In applying the Company's accounting policies, the
preparation of consolidated financial statements requires
management to make estimates, judgments and assumptions that affect
the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities as at the date of the
consolidated 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. Significant estimates and judgments used
in the preparation of these consolidated financial statements
include the assessment of impairment triggers related to E&E
and PP&E, estimation of decommissioning obligations,
collectability of trade and other receivables and of long-term
receivables, and recognition of a deferred tax asset.
Accounting treatment of
CMBL
The Group holds a 31.94% participation interest in
the Mnazi Bay Concession through two subsidiaries. Wentworth
Gas Limited ("WGL"), which is a wholly owned subsidiary, owns a
25.40% participation interest and Cyprus Mnazi Bay Limited ("CMBL")
owns a 16.38% participation interest of which the Group's
proportionate share is 6.54% (i.e. Wentworth's interest of 39.925%
interest in CMBL multiplied by 16.38% participation interest). CMBL
is considered a jointly controlled entity and accounted for as a
joint operation rather than a joint venture. The Group
proportionately consolidates CMBL as related contractual agreements
establish that the parties to the joint arrangement have rights to
the assets and obligations for the liabilities of ownership in
proportion to their interest in the arrangement.
Recoverable value of Tembo
E&E and Mnazi Bay PP&E costs
E&E are inherently judgemental to value. The
amounts for E&E represent active exploration projects and
investments. These amounts are expensed to profit or loss as
exploration costs unless the determination process is not completed
and there are no indications of impairment at the reporting date or
commercial reserves are established. The outcome of ongoing
exploration and evaluation activities and whether the carrying
value of E&E will ultimately be recovered is inherently
uncertain and requires significant judgement and estimates.
Management performs impairment tests on the
Company's PP&E when indicators of impairment are present. The
assessment of impairment indicators is subjective and considers the
various internal and external factors such as the financial
performance of individual CGUs, market capitalization and industry
trends. In addition, the impairment assessment is impacted by how
management determines the composition of CGUs.
Reserve estimates
Oil and natural gas reserves, prepared by an
external independent reserve evaluator as at December 31, 2018, are
used in the calculation of depletion, impairment and impairment
reversal determinations and recognition of deferred tax asset.
Reserve estimates are based on engineering data, estimated future
prices and costs, expected future rates of production and the
timing of future capital expenditures; all of which are subject to
many uncertainties and estimations. The Company expects that, over
time, its reserve estimates will be revised upward or downward
based on updated information such as the results of future
drilling, oil and gas production levels and reservoir performance
and may also be affected by changes in commodity prices.
Supply of Gas from Mnazi
Bay
The gas sales price and cost base of production
operations are largely fixed in nature. The associated
sensitivities ensure that field production and supply volumes are
critical to the commerciality of the project. Whilst the benefits
of increased production volumes are clear, the opposite is equally
true during operational downtime, prolonged or permanent gas supply
outages which may in turn impact upon the commerciality of the
project. Mnazi Bay currently has 5 producing wells and is committed
to supplying a minimum quota of gas to TPDC and TANESCO of 82.5
MMscf/d, the daily committed quotient ("DCQ"). Any significant
adverse change to daily production operations may trigger an
impairment review under IFRS 6 and IAS 36 and a subsequent write
down in the book value of the Mnazi Bay asset which currently
totals $84.7 million.
Demand for gas from Mnazi
Bay
Gas sales in Tanzania are not only constrained by
the ability of the joint-venture to supply gas to TPDC and TANESCO
but are also contingent upon their ability to offtake gas from the
Mnazi Bay field. There are other domestic gas producers in Tanzania
that sell to both TPDC and TANESCO in addition to there being
alterative sources of supply such as year-round solar and seasonal
hydro-electric generation. The continued commerciality of the
project is contingent upon the continued demand for Mnazi Bay
gas.
Foreign currency exposure
Foreign exchange rate risk is the risk that the
Company suffers financial loss as a result of changes in the value
of an asset or liability or in the value of future cash flows due
to movements in foreign currency exchange rates. Wentworth
operates internationally and is exposed to foreign exchange risk
arising from various currency exposures, primarily with respect to
the Tanzanian Shilling and Pound Sterling against the presentation
currency of US dollars. All group revenue is generated from gas
sales in Tanzania in which the Production Sharing Agreement is
currently in the Gas Testing and Commissioning phase. Upon
declaration of COD, which is contingent upon the establishment of
certain administrative and financial milestones by the Government
of Tanzania, the Production Sharing Agreement will enter the
Commercial Development phase under which both TPDC and TANESCO may
elect to pay the operator in either US Dollars or Tanzanian
Shillings for the gas that is produced and sold. Additionally,
while some costs are denominated in Tanzanian Shillings most of the
operating expenditures are denominated in US Dollars which would
lead to an increased currency exposure. The Company does not
currently undertake any currency hedges.
Payment for Mnazi Gas
Payment terms for Mnazi Bay gas have improved
during 2018, however there remains an arrears of approximately
three months gas sales for Mnazi Bay gas. The continued receipt and
settlement of gas sales invoices to TPDC and TANESCO is critical to
the cash-flows of the group to enable it to meet its liabilities as
they fall due.
Abandonment provision
Decommissioning and Abandonment obligations have
been estimated using technology at current prices inflated and
discounted using discount rates that reflect current market
assessments of the time value of money and the risks specific to
each liability. These assessments are subjective by nature and may
be significantly more or less than management's current discounted
cost estimations.
Taxes
The Group operates in countries where the legal
and tax systems are less developed, which increases the requirement
for management to make estimates and assumptions as to whether
certain payments will be required related to matters such as income
taxes, value added taxes, and other indirect taxes. A provision is
recognized in the financial statements for such matters if it is
considered probable that a future outflow of cash resources will be
required. The provision, if any, is subject to management estimates
and judgments with respect to the outcome of the event, the costs
to defend, the quantum of the exposure and past practice in the
country.
The commencement of commercial production and gas
sales under the Gas Sales Agreement, currently in the Gas Testing
and Commissioning phase, allowed for the recognition of a deferred
tax asset within the financial statements. The amount that the
company recognizes is subject to the following judgements and
uncertainties:
-
The timing and discounting of the utilization of
tax losses from the current tax pools which are based on management
assessments and forecasts of future performance;
-
The effective tax rate at which the losses will
be utilized at throughout the Group which is currently the
prevailing tax rate of the ultimate parent company;
-
The status of any current tax assessments and
disputes and their impact on the deferred tax pool on a
probabilistic basis;
-
Any material changes in legislation that may
impact upon the fiscal regime on which the deferred tax asset is
computed.
Recoverability of trade and other
receivables
Recoverability of the long-term receivable from
TPDC and the Tanzanian Government receivable involves estimating
the volume and timing of future gas production from the Mnazi Bay
Concession and estimating a discount rate in addition to assessing
credit risk. Timing of collection of the long-term receivables is
impacted by the rate of production and the timing of the increase
of production volumes. The assessment of collectability of amounts
owed fromTANESCO and TPDC for past gas sales is subject to
significant estimates. Payment cycles from TANESCO and TPDC
vary and are not generally consistent with traditional industry
terms of payment of between 30 and 90 days. Management is required
to estimate the bad debt provision for this balance based on
current and historical payment patterns. Prolonged periods of
non-payment will be provided against in the balance sheet with a
corresponding expense being recognised in the income statement.
Umoja receivable
The Company has an agreement with TANESCO, TPDC
and the Ministry of Energy and Mines ("MEM") in Tanzania to be
reimbursed, at cost, for past project development costs associated
with transmission and distribution ("T&D") expenditures. The
undiscounted face value of the receivable is $6.51 million, however
there remain ongoing discussions and uncertainties with respect to
final audited amount to be recovered and the timing of the ultimate
recovery of this debt and it is for this reason that the Directors
have taken the decision to provide in-full against the recovery of
this debt in the 2018 accounts without prejudice to the ongoing
commercial discussions with the Government.
Dissenting shareholders equity
buyback
On 26 October 2018 the Company completed its
redomicile from Canada to Jersey, full details of which are
disclosed within the Directors' Report. As part of the redomicile
process and under Canadian law, certain shareholders exercised
their rights to dissent to the Continuance thereby exercising their
rights to sell their shares back to the company at the fair market
value on 26 October 2018. The Company has received notifications
over approximately 2.3 million shares and estimates the contingent
liability to be £0.7 million. Some uncertainty remains over the
final share price valuation and ultimate timing of the share
buy-back, albeit this is not considered to be material to these
financial statements.
4. Segment information
The Company conducts its business through two
major operating business segments. Gas operations include the
exploration, development, and production of natural gas and other
hydrocarbons. These activities are carried out in two
operating segments - Tanzania ("Mnazi Bay Concession") and
Mozambique ("Rovuma Onshore Block"). The Company is on track to
relinquish the Tembo block in Northern Mozambique ahead of the end
of the current appraisal term on 15 June 2019. The Corporate
segment activities include investment income, interest expense,
financing related expenses, share based compensation relating to
corporate activities and general corporate expenditures.
Inter-segment transfers of products, which are accounted for at
market value, are eliminated on consolidation.
Net income/(loss) for the year
ended 31 December 2018
|
Tanzania Operations
$000 |
Mozambique Operations
$000 |
Corporate
$000 |
Consolidated
$000 |
|
|
|
|
|
Total revenue |
16,224 |
- |
- |
16,224 |
|
|
|
|
|
Production and operating costs |
(2,290) |
- |
- |
(2,290) |
Depletion |
(7,803) |
- |
- |
(7,803) |
Total cost of sales |
(10,093) |
- |
- |
(10,093) |
|
|
|
|
|
Gross
profit |
6,131 |
- |
- |
6,131 |
|
|
|
|
|
Recurring administrative costs |
(3,151) |
(19) |
(3,119) |
(6,289) |
Amounts capitalized as E&E assets |
449 |
- |
215 |
664 |
Impairment loss on E&E assets |
- |
(41,598) |
- |
(41,598) |
Provision for Tanzania Government receivables |
(4,959) |
- |
- |
(4,959) |
Management re-structuring costs |
- |
- |
(940) |
(940) |
Redomicile costs |
- |
- |
(1,393) |
(1,393) |
Share-based payment charges |
(5) |
- |
(93) |
(98) |
Depreciation and depletion |
- |
- |
(12) |
(12) |
Loss of sale of PPE |
(3) |
- |
- |
(3) |
Tanzanian withholding tax costs |
(993) |
- |
- |
(993) |
Total
costs |
(8,662) |
(41,617) |
(5,342) |
(55,621) |
|
|
|
|
|
Loss from
operations |
(2,531) |
(41,617) |
(5,342) |
(49,490) |
|
|
|
|
|
Finance income |
2,659 |
- |
- |
2,659 |
Finance costs |
(1,592) |
- |
(24) |
(1,616) |
Loss before
tax |
(1,464) |
(41,617) |
(5,366) |
(48,447) |
|
|
|
|
|
Current tax expense |
(33) |
- |
(30) |
(63) |
Deferred tax expense |
(26,714) |
- |
- |
(26,714) |
|
(26,747) |
- |
(30) |
(26,777) |
Net loss and comprehensive loss |
(28,211) |
(41,617) |
(5,396) |
(75,224) |
Selected balances at 31 December
2018
|
|
|
|
|
Current assets |
23,891 |
392 |
411 |
24,694 |
Exploration and evaluation
assets |
8,129 |
- |
- |
8,129 |
Property, plant and equipment |
83,773 |
- |
4 |
83,777 |
Deferred tax asset |
4,036 |
- |
- |
4,036 |
Total assets |
119,829 |
392 |
415 |
120,636 |
|
|
|
|
|
Current liabilities |
12,370 |
428 |
703 |
13,501 |
Non-current liabilities |
2,657 |
- |
- |
2,657 |
Total Liabilities |
15,027 |
428 |
703 |
16,158 |
Capital additions for the year
ended 31 December 2018
|
|
|
|
|
Additions to exploration
and
evaluation assets |
- |
1,806 |
- |
1,806 |
Additions to property, plant
and equipment |
1,256 |
- |
6 |
1,262 |
Net income/(loss) for the year
ended 31 December 2017
|
Tanzania Operations
$000 |
Mozambique Operations
$000 |
Corporate
$000 |
Consolidated
$000 |
|
|
|
|
|
Total revenue |
13,440 |
- |
- |
13,440 |
|
|
|
|
|
Production and operating costs |
(3,484) |
- |
- |
(3,484) |
Depletion |
(4,079) |
- |
- |
(4,079) |
Total cost of sales |
(7,563) |
- |
- |
(7,563) |
|
|
|
|
|
Gross
profit |
5,877 |
- |
- |
5,877 |
|
|
|
|
|
Recurring administrative costs |
(2,717) |
(27) |
(3,452) |
(6,196) |
Amounts capitalized as E&E assets |
590 |
- |
992 |
1,582 |
Share-based payment charges |
(191) |
- |
(24) |
(215) |
Depreciation and depletion |
- |
- |
(12) |
(12) |
Total
costs |
(2,318) |
(27) |
(2,496) |
(4,841) |
|
|
|
|
|
Profit/(loss)/from
operations |
3,559 |
(27) |
(2,496) |
1,036 |
|
|
|
|
|
Finance income |
2,386 |
- |
- |
2,386 |
Finance costs |
(3,622) |
- |
(115) |
(3,737) |
Profit/(loss)
before tax |
2,323 |
(27) |
(2,611) |
(315) |
|
|
|
|
|
Deferred tax expense |
(394) |
- |
- |
(394) |
|
(394) |
- |
- |
(394) |
Net profit/(loss) and comprehensive
profit/(loss) |
1,927 |
(27) |
(2,609) |
(709) |
Selected balances at 31 December
2017
|
|
|
|
|
Current assets |
30,994 |
169 |
1,650 |
32,813 |
Tanzania Government receivables |
4,959 |
- |
- |
4,959 |
Exploration and evaluation
assets |
8,129 |
39,792 |
- |
47,921 |
Property, plant and equipment |
90,327 |
- |
9 |
90,336 |
Deferred tax assets |
30,751 |
- |
- |
30,751 |
Total assets |
165,160 |
39,961 |
1,659 |
206,780 |
|
|
|
|
|
Current liabilities |
17,009 |
84 |
582 |
17,675 |
Non-current liabilities |
9,501 |
- |
- |
9,501 |
Total Liabilities |
26,510 |
84 |
582 |
27,176 |
|
|
|
|
|
Capital additions for year ended
31 December 2017
|
|
|
|
|
Additions to exploration
and
evaluation assets |
- |
2,383 |
- |
2,383 |
Additions to property, plant
and equipment |
1,057 |
- |
4 |
1,061 |
5. Revenue
|
2018
$000 |
2017
$000 |
Revenue from gas sales |
16,169 |
13,440 |
Revenue from condensate sales |
55 |
- |
|
16,224 |
13,440 |
6. General and administrative costs
|
2018
$000 |
2017
$000 |
Employee salaries and benefits |
2,685 |
2,723 |
Contractors and consultants |
775 |
686 |
Travel and accommodation |
347 |
443 |
Professional, legal and advisory |
1,257 |
958 |
Office and administration |
696 |
730 |
Corporate and public company costs |
529 |
656 |
Total general and administrative costs |
6,289 |
6,196 |
7. Management re-structuring costs
Management re-structuring costs total $940k (2017:
$nil) and comprise Calgary employee severance and travel expenses
related to the re-structuring of the senior management team, which
is now based in Reading, United Kingdom in alignment with the
redomicile of Wentworth Resources Plc (see Directors' Report).
8. Finance income and finance costs
|
2018
$000 |
2017
$000 |
Finance
income |
|
|
Accretion - TPDC receivable (Note
10) |
2,188 |
2,080 |
Accretion - Tanzanian Government
receivable (Note 11) |
471 |
306 |
|
2,659 |
2,386 |
|
|
|
Finance
costs |
|
|
Accretion - decommissioning
provision |
(104) |
(92) |
Accretion - other liability |
- |
(142) |
Change in estimates - TPDC
receivable (Note 10) |
- |
(872) |
Change in estimates - Tanzanian
Government receivable (Note 11) |
(471) |
(828) |
Change in estimates - other
liability (Note 18) |
- |
(9) |
Interest expense and other finance
costs |
(980) |
(1,656) |
Foreign exchange loss |
(61) |
(138) |
|
(1,616) |
(3,737) |
9. Trade and other receivables
|
2018
$000 |
2017
$000 |
|
|
|
Trade receivable from TPDC
Other receivable from TPDC
Trade receivable from TANESCO |
5,760
513
491 |
12,008
-
1,140 |
Other receivables |
789 |
365 |
|
7,553 |
13,513 |
Other receivables from TPDC represent income tax
$513k (2017 - $nil) paid by Wentworth Gas Limited, a wholly
owned subsidiary of the Company. The income tax will be recovered
from TPDC profit gas (security revenue).
10. TPDC receivables
On 30 June 2009, the Company and TPDC entered into
a Joint Operating Agreement ("JOA") related to the Mnazi Bay
Concession in Tanzania. Under the terms of the JOA, TPDC has
a 20% participating interest share in the Mnazi Bay Development
Area production and will pay the Company for 20% of past costs
incurred in respect of the Mnazi Bay Concession from TPDC's share
of future production. This receivable from TPDC is considered
a financial instrument and initially recorded at fair value based
on discounted cash flows and up to 30 June 2019 its carrying amount
has been adjusted for accretion and changes in the estimated timing
of cash flows.
As at 31 December 2018, the undiscounted
receivable from TPDC is $5.2 million ($17.3 million at 31 December
2017).
|
$000 |
Balance at 31 December 2016 |
24,836 |
|
|
Accretion |
2,080 |
Change in estimated timing of
receipt |
(872) |
Retained gas revenue to offset
receivable |
(11,629) |
Share of TPDC Mnazi Bay Concession
costs paid by the Company |
1,135 |
Balance at 31 December 2017 |
15,550 |
|
|
Accretion |
2,188 |
Retained gas revenue to offset
receivable |
(13,585) |
Share of TPDC Mnazi Bay Concession
costs paid by the Company |
1,085 |
Balance at 31
December 2018 |
5,238 |
11. Tanzania Government receivables
As at 31 December 2018, the undiscounted Tanzanian
Government receivable is $6.5 million (2017 - $6.5
million).
|
$000 |
Balance at 31 December 2016 |
5,481 |
Accretion |
306 |
Change in estimated timing of
receipt |
(828) |
Balance of
amortized cost at 31 December 2017 |
4,959 |
Accretion |
471 |
Change in estimated timing of
receipt |
(471) |
Provision against amortized
balance |
(4,959) |
Balance of
amortized cost at 31 December 2018 |
- |
|
|
The fair value of the Tanzanian
Government receivable at 31 December 2018, calculated using 10.01%
discount rate (2017 - 8.25%) was $5.0 million (31 December 2017 -
$5.0 million). The discount rate is variable and is pegged to the
$20.0 million credit facility interest rate.
The Company has an agreement with
the Government of Tanzania (TANESCO, TPDC and the MEM) to be
reimbursed for all the project development costs associated with
T&D expenditures at cost. An audit of the Mtwara Energy
Project ("MEP") development expenditures was completed in November
2012 and costs of approximately $8.1 million were verified to be
reimbursable. After deducting costs associated with the Tariff
Equalization Fund and VAT input credits associated with the MEP
totaling $1.6 million, the amount agreed to be reimbursed was $6.5
million.
During 2017, the Government
initiated its first review of the costs to verify the balance owing
by it. On February 8, 2018 the Government issued the results of
which differed from the previously audited and approved gross
receivable of $6.5 million, which the company maintains was
accurate and correct.
The Government is currently
conducting a second review and due to age and uncertainty
surrounding the receivable and its recoverability the Company has
made a provision in-full within the 2018 accounts against the
carrying amount without prejudice to the ongoing commercial
discussions with the Government.
12. Exploration and evaluation assets
|
Tanzania
$000 |
Mozambique
$000 |
Total
$000 |
Cost |
|
|
|
Balance at 31 December 2016 |
8,129 |
37,409 |
45,538 |
Additions |
- |
2,383 |
2,383 |
Balance at 31 December 2017 |
8,129 |
39,792 |
47,921 |
|
|
|
|
Additions |
- |
1,806 |
1,806 |
Impairment loss |
- |
(41,598) |
(41,598) |
Balance at 31
December 2018 |
8,129 |
- |
8,129 |
|
|
|
|
The Company performed a technical and commercial
review of the Mozambique E&E asset portfolio and determined
that Tembo licence did not provide the Company with suitable
monetisation solutions in keeping with Company material growth
mandate. At 31 December 2017, all Mozambique E&E assets of
$41.6 million were impaired.
Tanzania E&E assets were $8.1 million (31
December 2017 - $8.1 million). The Mnazi Bay Concession
agreement expires in 2031. The Mnazi Bay joint venture
partners have identified several prospects within the concession
area but outside of the area covering discovered gas reserves and
therefore has concluded that an impairment test is not required for
the Tanzanian asset.
13. Property, plant and equipment
|
Natural gas properties |
Office and other equipment |
|
|
$000 |
$000 |
Total
$000 |
Cost |
|
|
|
Balance at 31 December 2016 |
101,797 |
596 |
102,393 |
Additions |
1,057 |
4 |
1,061 |
Balance at 31 December 2017 |
102,854 |
600 |
103,454 |
|
|
|
|
Additions |
1,256 |
6 |
1,262 |
Disposal of assets |
(82) |
- |
(82) |
Balance at 31
December 2018 |
104,028 |
606 |
104,634 |
Accumulated depreciation and depletion |
|
|
Balance at 31 December 2016 |
(8,448) |
(579) |
(9,027) |
Depreciation and depletion |
(4,079) |
(12) |
(4,091) |
Balance at 31 December 2017 |
(12,527) |
(591) |
(13,118) |
|
|
|
|
Depreciation and depletion |
(7,803) |
(12) |
(7,815) |
Disposal of assets |
76 |
- |
76 |
Balance at 31
December 2018 |
(20,254) |
(603) |
(20,857) |
Carrying
amounts |
|
|
|
31 December 2017 |
90,327 |
9 |
90,336 |
31 December
2018 |
83,774 |
3 |
83,777 |
The Company assessed triggers for impairment on
the natural gas properties and determined that there were no
triggers and accordingly an impairment test was not required.
Most of the Company's natural gas is sold under long-term, fixed
price gas sales and purchase agreements, eliminating the current
volatility in the commodity market. In addition, the
independent valuation of the Company's reserves of $106 million is
in excess of the net book value of the Company's PP&E.
14. Subsidiary undertakings
The subsidiary undertakings at 31 December 2018
are:
Name of Company |
Country of incorporation |
Class of shares held |
Types of ownership |
Percentage holding |
Nature of business |
Wentworth Resources (UK)
Limited |
United Kingdom |
Ordinary |
Direct |
100% |
Investment holding
company |
Wentworth Holding (Jersey)
Limited |
Jersey |
Ordinary |
Direct |
100% |
Investment holding
company |
Wentworth Tanzania (Jersey)
Limited |
Jersey |
Ordinary |
Indirect |
100% |
Investment holding
company |
Wentworth Gas (Jersey) Limited |
Jersey |
Ordinary |
Indirect |
100% |
Investment holding
company |
Wentworth Gas Limited |
Tanzania |
Ordinary |
Indirect |
100% |
Exploration production
company |
Cyprus Mnazi Bay Limited |
Cyprus |
Ordinary |
Indirect |
39.925% |
Exploration production
company |
Wentworth Mozambique (Mauritius)
Limited |
Mauritius |
Ordinary |
Indirect |
100% |
Investment holding
company |
Wentworth Moçambique Petroleos,
Limitada |
Mozambique |
Ordinary |
Indirect |
100% |
Exploration
company |
15. Trade and other payables
|
2018
$000 |
2017
$000 |
Payable to Maurel & Prom
(Operator) |
1,710 |
4,344 |
Trade payables |
413 |
223 |
Interest |
145 |
511 |
Other payables and accrued
expenses |
939 |
648 |
|
3,207 |
5,726 |
Interest represents accrued interest $145k (2017 -
$502k) for the $20.0 million credit facility and nil (2017 - $9k)
for the $6 million credit facility.
16. Overdraft credit facility
The Company has a one-year, $2.5 million overdraft
credit facility with a Tanzanian Government owned bank which is due
and repayable on 5 April 2019. The facility can be extended for a
further one year at the mutual agreement of the bank and the
Company. The overdraft facility has an interest rate of the
lender's base lending rate, minus 1% per annum to be paid
monthly. At 31 December 2018, the lender's base lending rate
was 9% and the overdraft credit facility was fully drawn.
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 of 20% of the revenue and
cash flow from sales of natural gas from the Tanzanian
assets.
During the year ended 31 December 2018, the
Company paid interest expense $68k (2017 - $75k) on the overdraft
credit facility.
17. Long-term loans
Credit facilities from Tanzania
based banks
On 8 December 2014, Wentworth Gas Limited, a
wholly owned subsidiary of the Company, entered into two long-term
credit facilities: i) a $20.0 million loan to finance field
infrastructure development within the Mnazi Bay Concession in
Tanzania and ii) a $6.0 million loan to repay a medium-term loan.
The term of each loan was initially forty-eight
months in duration commencing on the first draw-down date and each
loan bears interest at six-month LIBOR rate plus 750 basis points
subject to a minimum (floor) of 8% p.a. and a maximum (ceiling) of
9.5% p.a. Security is in the form of a debenture creating
first ranking charge over all the assets of the WGL (assets of WGL
include a 25.4% participation interest in the Mnazi Bay
Concession), assignment over the TPDC long-term receivable and
assignment of revenues generated from the Mnazi Bay Concession.
During the year ended 31 December 2018, the
Company incurred interest expense on long-term loans, inclusive of
accretion of financing costs, of $0.91 million (2017 - $1.6
million). A total of $1.5 million was settled in cash during
2018 (2017 - $1.7 million).
The carrying amount of the long-term
loans include transaction costs of $310k (net of accretion).
At December 31, 2018, the carrying amount of the credit facilities
approximates its fair value as the loan's effective interest rate
approximates market rates.
|
$000 |
Credit facilities
balance |
|
Principal balance as at 31 December
2016 |
20,667 |
Loan repayments during the year |
(5,346) |
|
|
Principal balance as at 31 December
2017 |
15,321 |
|
|
Loan repayments during the year |
(6,996) |
Principal balance as at 31 December 2018 |
8,325 |
|
|
Net financing costs at 31 December
2017 |
(171) |
Transitional adjustment (None - 2) |
746 |
Net financing costs at 01 January
2018 |
575 |
Accretion during the year |
(266) |
Net financing costs at 31 December 2018 |
309 |
|
|
Carrying amount of long-term loans at 31 December
2018 |
8,634 |
|
|
Current |
6,946 |
Non-current |
1,688 |
|
8,634 |
The $20 million credit
facility
During 2017, the Company executed amendments to
the credit facility agreement, which included the restructuring of
principal loan payments and added new provisions. The new
provisions were not finalized at the time of the execution of the
amendment to the credit facility agreement. On 06 June 2018, the
Company formalised the new provisions, which became effective 6
June 2018.
The new provisions contain a requirement for the
Company to maintain two financial covenants both calculated
semi-annually beginning on 30 June and 31 December. The Debt
Service Coverage Ratio provides that the Company has adequate cover
to meet it's loan interest and principal repayment obligations for
the next twelve months, while the Loan Life Coverage Ratio
provides that adequate free discounted cash flow coverage is
maintained for all future loan repayments over the full life of the
loan.
The $20.0 million credit facility is subject to
interest rate of six-month LIBOR rate plus 750 basis points subject
to a minimum (floor) of 8.5% p.a. and no maximum (ceiling). As at
31 December, the six-month interest rate was 10.30%.
Principal repayments on the credit facility are
set out in the following table.
Principal repayment
date |
Repayment
amount
$000
|
30 January 2019 |
1,666 |
30 April 2019 |
1,665 |
30 July 2019 |
1,666 |
30 October 2019 |
1,665 |
30 January 2020 |
1,663 |
|
8,325 |
Medium term $6 million credit
facility
At 31 December 2018, the Medium term $6 million
credit facility was fully paid with $2 million paid during the
year.
18. Contingent PTTEP liability
|
2018
$000 |
2017
$000 |
|
|
|
Balance at 1 January |
2,189 |
2,360 |
Accretion |
- |
142 |
Change in accounting estimate |
- |
9 |
Payments to reduce liability |
(1,341) |
(322) |
Balance at 31 December |
848 |
2,189 |
|
|
|
As a result of an asset purchase and sale
transaction in 2012, the Company has been obliged to make payments
with a face value of $3.4 million should certain natural gas
production thresholds from Mnazi Bay Concession be reached.
The payable as at 31 December 2018 is $850k (31 December 2017 -
$2.2 million).
19. Decommissioning and Abandonment provisions
The Company's decommissioning provisions result
from net ownership interests in petroleum and natural gas assets
including well sites, pipeline gathering systems, and processing
facilities in Tanzania. The operator of the Mnazi Bay Concession
estimated the Company's share of the undiscounted
inflation-adjusted amount of cash flow required to settle
decommissioning obligations for the infrastructure within the Mnazi
Bay Concession have to be $4.23 million. The costs are expected to
be incurred around 2030. The obligations have been estimated using
existing technology at current prices inflated and discounted using
discount rates that reflect current market assessments of the time
value of money and the risks specific to each liability. The
discount and inflation rates used in determining the value of the
decommission provision at 31 December 2018 were 12.0% and 2.03%,
respectively (2017 - 12.0% and 2.03%, respectively).
A reconciliation of the decommissioning
obligations is provided below:
|
2018
$000 |
2017
$000 |
Balance at 1 January |
865 |
773 |
Accretion |
104 |
92 |
Balance at 31 December |
969 |
865 |
20. Contingent liabilities
Following the completion of the corporate
transition to UK and Oslo Børs delisting, a number of shareholders
exercised certain Dissent Rights under Canadian law which would
require the Company to buy back their equity holdings at fair
value. The Company received Dissent Rights notices over a total of
2,329,326 shares with an anticipated fair value of $710k. As the
process has yet to be finalised and fair values agreed, the buy
back remains contingent at the balance sheet date.
21. Share-based payments
|
2018
$000 |
2017
$000 |
|
|
|
Share based compensation recognized in the statement of
Comprehensive loss |
98 |
215 |
Movement in the total number of share options
outstanding and their related weighted average exercise prices are
summarized as follows:
|
2018 |
2017 |
|
Number of
options |
Weighted average exercise price (US$) (i) |
Number of
options |
Weighted average exercise price (US$) |
|
|
|
|
|
Outstanding at January 1 |
10,600,000 |
0.52 |
10,600,000 |
0.50 |
Granted |
3,560,301 |
0.49 |
- |
- |
Forfeited |
(1,600,000) |
0.49 |
- |
- |
Outstanding at 31
December |
12,560,301 |
0.49 |
10,600,000 |
0.52 |
|
|
|
|
|
|
The following table summarizes share options
outstanding and exercisable at 31 December 2018:
|
|
Outstanding |
Exercisable |
Exercise price (NOK) |
Exercise price (US$)1 |
Number of options |
Weighted average remaining life (years) |
Number of options |
|
|
|
|
|
3.15 |
0.36 |
1,000,000 |
1.8 |
1,000,000 |
3.52 |
0.40 |
500,000 |
3.0 |
500,000 |
3.60 |
0.41 |
1,800,000 |
1.8 |
1,800,000 |
3.85 |
0.44 |
1,850,000 |
7.0 |
1,850,000 |
4.08 |
0.47 |
250,000 |
4.3 |
250,000 |
4.70 |
0.54 |
200,000 |
5.4 |
200,000 |
4.90 |
0.56 |
100,000 |
3.3 |
100,000 |
5.18 |
0.59 |
2,800,000 |
4.8 |
2,800,000 |
5.75 |
0.66 |
500,000 |
2.3 |
500,000 |
- |
- |
3,560,301 |
9.9 |
- |
|
|
12,560,301 |
|
9,000,000 |
1 The US Dollar
to Norwegian Kroner exchange rate used for determining the exercise
price at 31 December 2018 is 0.11456.
The following table summarizes share options
outstanding and exercisable at 31 December 2017:
|
|
Outstanding |
Exercisable |
Exercise price (NOK) |
Exercise price (US$) (i) |
Number of options |
Weighted average remaining life (years) |
Number of options |
|
|
|
|
|
3.15 |
0.38 |
1,000,000 |
2.7 |
1,000,000 |
3.52 |
0.43 |
500,000 |
4.0 |
500,000 |
3.60 |
0.44 |
2,300,000 |
2.8 |
2,300,000 |
3.85 |
0.47 |
2,000,000 |
8.0 |
1,333,338 |
4.08 |
0.50 |
250,000 |
5.3 |
250,000 |
4.70 |
0.57 |
200,000 |
6.4 |
200,000 |
4.90 |
0.60 |
350,000 |
4.3 |
350,000 |
5.18 |
0.63 |
3,500,000 |
5.8 |
3,500,000 |
5.75 |
0.70 |
500,000 |
3.3 |
500,000 |
|
|
10,600,000 |
5.2 |
9,933,338 |
-
The US Dollar to Norwegian Kroner exchange rate
used for determining the exercise price at 31 December 2017 is
0.12166.
22. Share capital
|
2018
$000 |
2017
$000 |
Authorised, called up, allotted and fully
paid |
|
|
186,488,465 (2017 - 186,488,465) ordinary
shares |
416,426 |
416,426 |
23. Earnings per share
Basic and diluted eps
|
2018
$000 |
2017
$000 |
|
|
|
Net loss for the period |
(75,224) |
(709) |
|
|
|
Weighted average
number of ordinary shares outstanding |
186,488,465 |
179,846,410 |
Dilutive weighted
average number of ordinary shares outstanding |
186,488,465 |
179,846,410 |
Net profit/(loss)
per ordinary share |
(0.40) |
- |
During the year ended 31 December 2018 and 2017,
12,560,301 (2017: 10,600,000) options were excluded from the
dilutive weighted average number of shares outstanding because they
were anti-dilutive.
24. Tax assessments and income taxes
Tax assessments
On 16 March 2018 the Company received
correspondence from the Tanzania Revenue Authority ("TRA")
regarding their preliminary findings for WGL (the Company's
Tanzanian subsidiary) for taxation years 2013 to 2016. On 26 June
2018, following further discussion with the TRA and exchange of
information between the Company and the TRA, the TRA issued notice
of adjusted assessments in respect of these taxation
years. The following two matters were raised in the adjusted
assessments:
(a) Impairment Reversal of Mnazi Bay Costs and other denied
deductions
The TRA has reassessed the 2014 income tax filing
of WGL and included in taxable income an impairment reversal of
$23.81 million. The impact of this reassessment is a non-cash
reduction of the Company's deferred income tax asset by $7.1
million.
The TRA has also denied $6.6 million of deductions
in the 2014 and 2015 income tax filings of WGL in respect of
interest and other costs. The impact of this reassessment is a
non-cash reduction of the Company's deferred income tax asset of
$2.0 million.
(b) Withholding Taxes on Loan Interest, Employment and Other
Taxes
The TRA issued an adjusted assessment certificate
which included the principal taxes of $1.0 million (Tsh 2.3
billion), the principal taxes have been included in the statement
of net loss and comprehensive loss.
WGL was granted with TRA an interest and penalties
waiver of the $740k (Tshs 1.69 billion) and made payment by
instalments of principle taxes of $1.0 million (Tshs 2.3
billion).
Changes on Income Tax Act, 2004
(ITA) relating to petroleum operations.
Effective 2018 the TRA has introduced significant
changes in respect to the computation of taxable income in
Tanzania. The Miscellaneous Amendment Act, 2017 amended sections
65M and 65N of the Income Tax Act, 2004 (ITA). The Company is still
evaluating the complete tax effects of the these changes, however,
it has determined a reasonable estimate of the impact of them on
its existing current and deferred tax balances. Based on this
estimate, the Company has determined that while previously a
contractor's share of cost and profit gas alongside their allowable
deductions would be taxable, under the new legislation no tax would
be levied or allowances recognised on the cost gas element of its
revenues. Profit gas would continue to be taxed in the usual
way.
Furthermore, and more significantly this new
legislation would only allow up to 70% tax relief of current year
profits from historic tax loss pools. The Company has calculated an
estimated deferred tax asset write-down of $19.0 million with
respect to these changes alone predominately with respect to timing
differences and the under-utilization of tax losses at the current
licence expiry date of 2031.
Whilst the Company is still evaluating the
complete tax effects of the enactment of the legislation, there are
a number of uncertainties and ambiguities as to the specific
interpretation and application of many of the provisions. In the
absence of precedence on these matters and until the 2018 tax
returns are finalized, which the Company expects to occur in 2019,
the Company expects to use what it believes are reasonable
interpretations and assumptions in applying the legislative changes
for purposes of determining its cash tax liabilities and results of
operations, which may change as it receives additional
clarification and implementation guidance.
Income taxes
The Company's income tax expense for the year end
31 December is as follows:
|
2018
$000 |
2017
$000 |
Loss before income
taxes |
(48,447) |
(315) |
|
|
|
Expected income tax (recovery)
expense at combined Tanzanian rate of 30% (2017 - Canadian federal
and provincial rate of 27.0%) |
(14,236) |
(85) |
Rate differentials |
1,396 |
137 |
Share based compensation |
29 |
58 |
2014- 2015 Tanzania tax
reassessments |
8,096 |
- |
Tanzania cost gas excluded from
taxable income |
(2,015) |
- |
Derecognition of Mozambique and
Canada tax pools |
13,236 |
- |
Movement in deferred tax assets not
previously recognized and other |
21,264 |
284 |
Income tax
expense/(recovery) |
27,770 |
394 |
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.
The Company has unrecognized deductible temporary
differences that results in unrecognized deferred income tax assets
of:
|
2018
$000 |
2017
$000 |
Non-capital losses |
19,675 |
22,691 |
Property and equipment |
- |
487 |
Share issue costs |
- |
168 |
Accounts receivables |
1,470 |
- |
|
21,145 |
23,346 |
The total non-capital losses of the Company are
$164.4 million (2017 - $273.4 million) of which nil (2017 - $83.3
million) are in Canada, $163.6 million (2017 - $189.5 million) are
in Tanzania, nil (2016 - $590k) are in Mozambique and $800k are in
the UK.
The unrecognized non-capital losses in Canada
expired in the year 2018 due to Company redomiciling to Jersey and
becoming tax resident in the UK. The unrecognized non-capital
losses in Mozambique they also expired due to relinquishment of the
Tembo block and shutdown activities in the country.
A deferred tax asset is recognized to the extent
that it is probable that taxable profit will be available against
which deductible temporary differences and the loss carry forwards
can be utilized. A deferred tax asset of $4.0 million as at
31 December 2018 (2017 - $30.8 million) is attributable to the
accumulated tax loss carry-forward of the Company's Tanzanian
subsidiary, which are expected to be offset against future taxable
income. Recognition of the tax asset is supported by the
proven and probable reserves as determined by a third-party
external reserves engineer, RPS Canada.
|
2018
$000 |
2017
$000 |
Balance at 1 January |
30,751 |
31,145 |
Deferred income tax assets
recognized in profit or loss: |
|
|
Non-capital losses |
(27,300) |
(130) |
Asset retirement obligations |
124 |
28 |
|
|
|
Deferred income tax liabilities
recognized in profit or loss: |
|
|
PP&E |
1,002 |
(259) |
Receivables |
(541) |
(33) |
|
|
|
Balance at 31 December |
4,036 |
30,751 |
25. Financial
instruments
The Company's activities expose it to a variety of
financial risks: credit risk, liquidity risk and market risk
(currency fluctuations, interest rates and commodity prices). The
Company's overall risk management program focuses on the
unpredictability of financial markets and seeks to minimise
potential adverse effects on the Company's financial performance. A
full description of the risks and key risks affecting the business
is noted in the Business Risks section of the Strategic Report.
Credit
risk
Wentworth's credit risk exposure is equal to the
carrying value of its cash and cash equivalents, trade, other and
long-term receivables.
Trade and other receivables are comprised
predominantly of amounts due from government owned entities in
Tanzania and Value Added Tax ("VAT") in Tanzania and
Mozambique.
The Company's ongoing exposure to trade
receivables from TANESCO, the state power company, relates to the
gas sales from the Mnazi Bay Concession to a TANESCO owned
18-megawatt gas-fired power plant located in Mtwara, Tanzania. At
31 December 2018, the Mnazi Bay Concession partners were owed four
months of invoices for gas sales made to TANESCO, with $491k owing
to Wentworth which includes sales revenue of $251k and the
Company's share of TPDC sales revenue to recover a long-term
receivable of $240k (2017 - $1.1 million representing sales revenue
of $613k and the Company's share of TPDC sales revenue to recover a
long-term receivable of $527k). Subsequent to year end,
TANESCO has paid $427 net to Wentworth. The receivable from TANESCO
was not discounted at year end (2017 - $nil) as the receivable
consisted of less than twelve months of invoices. The Company
continues to be engaged in ongoing discussions with TANESCO to
accelerate payment of amounts past due.
During 2015, the Company commenced gas sales to
TPDC under a long-term gas sales agreement, the operator of the new
transnational gas pipeline in Tanzania. Credit risk relating to
sales to TPDC is substantially mitigated through a two-part payment
guarantee structure. The first part relates to a prepayment amount
of approximately three to four months of gas deliveries at current
sales volumes which has been received and is held by the operator
of the Mnazi Bay Concession. The second part is a one-month
replenishable letter of credit which is not yet executed but
expected to be executed during 2019. At 31 December 2018, the
Mnazi Bay Concession partners were owed four months gas sales
invoices, with $5.7 million owing to Wentworth which includes sales
revenue of $2.5 million and the Company's share of TPDC sales
revenue to recover a long-term receivable of $3.2 million (2017 -
$12.0 million representing sales revenue of $6.4 million and the
Company's share of TPDC sales revenue to recover a long-term
receivable of $5.6 million). Subsequent to year end, TPDC has
paid $5.7 million net to Wentworth. The Company continues to be
engaged in ongoing discussions with TPDC to accelerate payment of
amounts past due.
In addition to the receivable for current gas
sales to TPDC, at 31 December 2018, an undiscounted long-term
receivable of $5.2 million net to Wentworth (2017 - $17.3 million)
is due from TPDC, a partner in the Mnazi Bay Concession (see note
10). The Company currently receives, directly from the operator of
the Mnazi Bay Concession, a significant portion of TPDC's and the
Government's share of gas sales from the Mnazi Bay Concession to
reduce the long-term receivable from TPDC. The risk that
future production from the Mnazi Bay Concession may not be
sufficient to settle the receivable is very low.
At 31 December 2018, an undiscounted long-term
receivable of $6.5 million (2016 - $6.5 million) related to the
Company's disposal of transmission and distribution assets, and the
costs associated with the MEP incurred in prior years by a wholly
owned subsidiary of Wentworth (see note 11). 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 on 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. Timing of reaching an agreement on the reimbursement
procedure is uncertain.
The Company's cash and cash equivalents are held
at recognized international financial institutions.
The exposure to credit risk as at:
|
2018
$000 |
2017
$000 |
Trade and other
receivables |
7,553 |
13,513 |
TPDC receivable (Note
10) |
5,238 |
15,550 |
Tanzania Government
receivable (Note 11) |
4,959 |
4,959 |
Cash and cash
equivalents |
11,903 |
3,750 |
|
29,653 |
37,772 |
Aged trade and
other receivables
|
Current
1-30 days
$000 |
31-60
days
$000 |
61-90
days
$000 |
>90
days
$000 |
Total
$000 |
Balance at 31 December 2018 |
|
|
|
|
|
Trade receivables |
3,007 |
1,507 |
1,420 |
243 |
6,177 |
Other receivables |
1,376 |
- |
- |
- |
1,376 |
|
4,384 |
1,507 |
1,420 |
243 |
7,553 |
Balance at 31 December
2017 |
|
|
|
|
|
Trade receivables |
2,692 |
2,483 |
- |
7,973 |
13,148 |
Other receivables |
365 |
- |
- |
- |
365 |
|
3,057 |
2,483 |
- |
7,973 |
13,513 |
Liquidity
risk
Liquidity risk is the risk that the Company will
not have sufficient funds to meet its liabilities as they become
payable. Other than routine trade and other payables, incurred in
the normal course of business, the Company also has long-term loans
and an overdraft credit facility.
The table below summarizes the maturity profile of
the Company's financial liabilities based on contractual
undiscounted payments including future interest payments on
long-term loans.
|
Less than 1 year
$000 |
1 to 2 years
$000 |
2 to 5 years
$000 |
Total
$000 |
Balance at December
31, 2018 |
|
|
|
|
Trade and other payables |
3,207 |
- |
- |
3,207 |
Contingent PTTEP liability |
848 |
- |
- |
848 |
Overdraft facility |
2,500 |
- |
- |
2,500 |
Long-term loans, including interest
(1) |
7,548 |
1,732 |
- |
9,280 |
|
14,103 |
1,732 |
- |
15,835 |
|
|
|
|
|
Balance at December 31, 2017 |
|
|
|
|
Trade and other payables |
5,726 |
- |
- |
5,726 |
Contingent PTTEP
liability |
2,189 |
- |
- |
2,189 |
Overdraft facility |
2,500 |
- |
- |
2,500 |
Long-term loans, including interest
(1) |
7,940 |
7,099 |
1,701 |
16,740 |
|
18,355 |
7,099 |
1,701 |
27,155 |
-
Includes future interest expense at the rate in
effect at December 31.
The fair value of the Company's
trade and other payables approximates their carrying values due to
the short-term nature of these instruments. The fair value of
the long-term loans approximates their carrying amounts as they
bear market rates of interest. The fair value of the other
liability approximates its carrying amount.
The Company has working capital surplus at 31
December 2018 and generated positive cash flow from operations in
2018. The Company plans to pay its financial liabilities in the
normal course of operations and fund future operating and capital
requirements through operating cash flows, bank debt, bank
overdraft and equity raises, when deemed appropriate.
Operating cash flow of the Company is dependent upon the purchasers
of natural gas, TPDC and TANESCO, continuing to meet their payment
obligations on a timely manner. Any delays in collecting funds from
these purchasers for an extended period of time could negatively
impact the Company's ability to pay its financial liabilities on a
timely manner in the normal course of business (see also Capital
management section).
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 (e.g.
commodity price risk). The objective of market risk management is
to manage and control market price exposures within acceptable
limits, while maximizing returns.
Commodity price
risk
Commodity price risk is the risk that the Company
suffers financial loss as a result of fluctuations in oil or
natural gas prices. The Company's exposure to commodity price
risk is mitigated as the sale prices for gas sold by the Company is
fixed under the existing gas sale and purchase agreements. An
increase of 1% in the gas production would result in an increase of
$57k (2017 - $34k) in revenue.
Interest
rate risk
Interest rate risk is the risk that future cash
flows of a financial instrument will fluctuate because of changes
in market interest rates. The Company has a $20.0 million
credit facility with a floating interest rate of six-month LIBOR
plus 7.5 percentage points with a minimum 8.5% and with no maximum
interest rate per annum. The $6.0 million credit facility which was
fully paid in December 2018 had a floating interest rate of
six-month LIBOR plus 7.5 percentage points with a minimum 8.0% and
maximum 9.5% interest rate per annum. The Company's objective is to
minimize its interest rate risk on its cash balances by investing
for short periods of time (less than 1 year) and only in term
deposits. An increase of 1% in the six-month LIBOR rate would
result in an increase of $102k (2017 - $159k) in interest expense
on an annualized basis.
Foreign exchange
risk
Foreign exchange rate risk is the risk that the
Company suffers financial loss as a result of changes in the value
of an asset or liability or in the value of future cash flows due
to movements in foreign currency exchange rates. Wentworth
operates internationally and is exposed to foreign exchange risk
arising from various currency exposures, primarily with respect to
the Tanzanian shilling, Pound Sterling and Canadian dollar against
its functional currency of its operating entities, the US dollar.
The Company's objective is to minimize its risk by borrowing funds
in US dollars as revenues are paid (or indexed) to the US dollar.
In addition, the Company holds substantially all its cash and cash
equivalents in US dollars and converts to other currencies only
when cash requirements demand such conversion.
Current receivables and
liabilities denominated in various currency:
|
Canadian
Dollar
$000 |
Tanzanian Shilling
$000 |
Other Currency
$000 |
United States
Dollar
$000 |
Total
$000 |
Balance at 31
December 2018 |
|
|
|
|
|
Cash and cash equivalents |
14 |
37 |
15 |
11,837 |
11,903 |
Trade and other receivables |
21 |
106 |
174 |
7,252 |
7,553 |
Trade and other payables |
(42) |
(246) |
(248) |
(2,671) |
(3,207) |
|
(7) |
(103) |
(59) |
(16,418) |
(16,249) |
|
|
|
|
|
|
|
Canadian
Dollar
$000 |
Tanzanian Shilling
$000 |
Other
Currency
$000 |
United States
Dollar
$000 |
Total
$000 |
Balance at 31 December 2017 |
|
|
|
|
|
Cash and cash equivalents |
70 |
102 |
3 |
3,575 |
3,750 |
Trade and other receivables |
27 |
103 |
44 |
13,339 |
13,513 |
Trade and other payables |
(72) |
(129) |
(65) |
(5,460) |
(5,726) |
|
25 |
76 |
(18) |
(11,454) |
(11,537) |
A 10% increase/decrease of the GBP against US
dollar would result in a change in profit or loss before tax of
$11k (2017: $3k). In addition, a 10% increase/decrease of the
Tanzanian shilling against the US dollar would result in a change
in profit or loss before tax of approximately $5k (2017: $8k).
Financial instrument
classification and measurement
The Company classifies the fair value of financial
instruments according to the following hierarchy based on the
amount of observable inputs used to value the instrument:
-
Level 1 - Quoted prices are available in active
markets for identical assets or liabilities as of the reporting
date. Active markets are those in which transactions occur in
sufficient frequency and volume to provide pricing information on
an ongoing basis.
-
Level 2 - Pricing inputs are other than quoted
prices in active markets included in Level 1. Prices in Level 2 are
either directly or indirectly observable as of the reporting date.
Level 2 valuations are based on inputs, including expected interest
rates, share prices, and volatility factors, which can be
substantially observed or corroborated in the
marketplace.
-
Level 3 - Valuation in this level are those with
inputs for the asset or liabilities that are not based on
observable market data.
The Company does not have any fair value
measurements considered as Level 1. The Company's long-term
receivables, long-term loans, and other liability are considered
Level 2 and Level 3 measurements.
Capital management
The Company's objectives when managing capital are
to safeguard the Company's ability to continue as a going concern,
in order to develop its oil and gas properties and maintain a
flexible capital structure for its projects for the benefit of its
stakeholders. In the management of capital, the Company includes
the components of shareholders' equity as well as cash and
long-term liabilities.
The Company manages the capital structure and
adjusts it in light of changes in economic conditions and the risk
characteristics of the underlying assets. As part of its capital
management process, the Company prepares budgets and forecasts,
which are used by management and the Board of Directors to direct
and monitor the strategy, ongoing operations and liquidity of the
Company. Budgets and forecasts are subject to judgement and
estimates such as those relating to future gas demand and ultimate
timing of collectability of trade receivables for gas sales.
These factors may not be within the control of the Company, which
may create near term risks that may impact the need to alter the
capital structure. The Company continues to effectively manage its
relationships with its gas purchasers to ensure timely collection
and with external lenders such that lending facilities are
available to the Company as and when needed. The Company may
attempt to issue new shares, enter into joint arrangements or
acquire or dispose of assets in order to maintain or adjust the
capital structure. Management reviews the capital structure on a
regular basis to ensure that the above-noted objectives are met.
The Company's overall strategy remains unchanged from the prior
year.
26. Related party transactions
Details of Directors' remuneration, which comprise
key management personnel, are provided below:
|
2018
$000 |
2017
$000 |
Short-term
employee benefits |
1,167 |
560 |
Share based
compensation |
52 |
67 |
|
1,219 |
627 |
27. Supplemental cash flow information
Change in non-cash working
capital:
|
2018
$000 |
2017
$000 |
Net change in
non-cash working capital related to operating activities: |
|
|
Trade and other
receivables |
3,381 |
(3,158) |
Prepayments and deposits |
(300) |
(4) |
Trade and other payables |
(1,505) |
(2,201) |
|
1,576 |
(5,363) |
Cash movements from investing activities in the
Statements of Cash Flows consists of the following:
|
Exploration and evaluation
$000 |
Property, plant and equipment
$000 |
Long-term receivable
$000 |
Year ended 31
December 2018
|
|
|
|
Total
additions/(reductions) |
1,806 |
1,262 |
(18,254) |
Change in non-cash
investing activities |
- |
- |
2,877 |
Change in non-cash
working capital |
- |
706 |
- |
Cash
additions/(reductions) |
1,806 |
1,968 |
(15,377) |
Year ended 31 December 2017
|
|
|
|
Total
additions/(reductions) |
2,383 |
1,061 |
(8,759) |
Change in non-cash
investing activities |
- |
- |
1,729 |
Change in non-cash
working capital |
- |
667 |
- |
Cash
additions/(reductions) |
2,383 |
1,728 |
(7,030) |
|
|
|
|
|
|
|
28. Commitments
Lease payments
The Company has office locations in Reading, UK
and Dar es Salaam Tanzania. The future minimum lease payments
associated with these office premises as at 31 December 2018 is
$152k committed for year 2019.
29. Subsequent events
On 6 February the Company announced confirmation
that from 14 February 2019, it's shares would be delisted from the
Oslo Børs Stock Exchange.
On 14 February the Company announced the
publication of its 2018 CPR Reserves Report.
GLOSSARY OF TERMS
$ or US Dollar |
United States Dollar |
£ |
UK Pound Sterling |
1P |
Proven Reserves (both proved developed reserves + proved
undeveloped reserves) |
2C |
Best estimate contingent resource |
2D |
Two Dimensional |
2P |
1P (proven reserves) + probable reserves, hence "proved AND
probable" |
3D |
Three Dimensional |
3P |
The sum of 2P (proven reserves + probable reserves) +
possible reserves, all 3Ps "proven AND probable AND possible" |
A&D |
Abandonment and Decommissioned |
AIM |
AIM, a SME Growth market of the London Stock Exchange |
AGM |
Annual General Meeting |
Articles |
The Articles of Association of the Company |
Bbl |
Barrel, equivalent to 42 US gallons of fluid |
Bcf |
Billion standard cubic feet |
Boe |
Barrel of oil equivalent, a measure of the gas component
converted into its equivalence in barrels of oil |
Bopd |
barrel of oil per day |
Board |
The Board of Directors of the Company |
Capex |
Capital expenditure |
CGU |
Cash Generating Units |
City Code |
The City Code on Takeovers and Mergers |
COD |
Commercial Operations Date |
Company |
Wentworth Resources PLC |
Companies (Jersey) Law |
The Companies (Jersey) Law 1991 |
CSR |
Corporate Social Responsibility |
DCQ |
Daily Committed Quotient |
Directors |
The Directors of the Company |
Dissent Rights |
Alberta Business Corporations Act Dissent Right in compliance
with Section 191 of that Act entitling shareholders compensation
for the fair value of the common shares determined as of the
close of business on the last business day (in Alberta) before the
day on which the Continuance is approved by the Shareholders. |
D&P |
Development and Production assets |
E&A |
Exploration and Appraisal |
E&E |
Exploration and Evaluation assets |
E&P |
Exploration and Production |
EBITDAX |
(Adjusted) earnings before interest, taxation, depreciation,
depletion and amortisation, impairment, share-based payments,
provisions, and pre-licence expenditure |
ECL |
Expected Credit Lose |
EITI |
Extractive Industries Transparency Initiative |
EPS |
Earnings Per Share |
EWURA |
Energy and Water Utilities Regulatory Authority |
FA |
Funding Agreement |
FCA |
Financial Conduct Authority of the United Kingdom |
G&A |
General and Administrative |
G&G |
Geological and Geophysical |
GAAP |
Generally Accepted Accounting Principles |
GBP |
UK Pounds Sterling |
GDP |
Gross Domestic Product |
GHG |
Greenhouse Gases |
GSA |
Gas Sales Agreement |
Group |
The Company and its subsidiary undertakings |
HMRC |
Her Majesty's Revenue and Customs |
HSSE |
Health, Safety, Security and Environment |
hydrocarbons |
Organic compounds of carbon and hydrogen |
IAS |
International Accounting Standards |
IASB |
International Accounting Standards Board |
INP |
Mozambique regulator |
IFRS |
International Financial Reporting Standards |
Index |
FTSE 350 Index |
JV |
Joint Venture |
K |
Thousands |
Km |
Kilometre(s) |
km2 |
Square kilometre(s) |
KPIs |
Key Performance Indicators |
Lead |
Indication of a potential exploration prospect |
LNG |
Liquid natural gas |
London Stock Exchange or LSE |
London Stock Exchange Plc |
LTI |
Lost Time Incident |
LTIP |
Long-Term Incentive Plan adopted in 2019?? |
M&A |
Merger and Acquisition |
M |
Metre(s) |
MEM |
Ministry of Energy & Minerals |
MEP |
Mtwara Energy Project |
Mcf |
Thousand cubic feet |
Mmboe |
Million barrels of oil equivalent |
Mscf |
Thousand standard cubic feet of gas |
MMscf/d |
Million standard cubic feet per day of gas |
MW |
Megawatt |
NPV |
Net Present Value (at a specified discount rate and specified
discount date) |
OECD |
Organisation for Economic Cooperation and Development |
OPEC |
Organisation of the Petroleum Exporting Countries |
Ordinary Shares |
Ordinary shares of 10 pence each |
P90 |
The value on a probabilistic distribution which is exceeded
by 90% of the outcomes |
P50 |
The value on a probabilistic distribution which is exceeded
by 50% of the outcomes. The P50 is also the median value of the
distribution |
P10 |
The value on a probabilistic distribution which is exceeded
by 10% of the outcomes |
Pmean |
The average of the values in the probabilistic distribution
between defined 'boundary conditions'. Universally regarded as the
best single value to quote or communicate for any uncertain
distribution of outcomes involved in repeated trial
investigations |
PAET |
Pan African Energy Tanzania |
Panel or Takeover Panel |
The Panel on Takeovers and Mergers |
Petroleum |
Oil, gas, condensate and natural gas liquids |
Petroleum system |
Geologic components and processes necessary to generate and
store hydrocarbons, including a mature source rock, migration
pathway, reservoir rock, trap and seal |
PPE |
Property Plant and Equipment |
Prospect |
An area of exploration in which hydrocarbons have been
predicted to exist in economic quantity. A group of prospects of a
similar nature constitutes a play |
PSA |
Production Sharing Agreement |
PSC |
Production Sharing Contract |
PT Pertamina |
An Indonesian state-owned oil and natural gas corporation
based in Jakarta |
PTTEP |
PTT Exploration and Production Public Company Limited is a
national petroleum exploration and production company based in
Thailand |
PURA |
Petroleum Upstream Regulatory Authority |
QCA Code |
Corporate Governance Code for Small and Mid-Size Quoted
Companies 2012 |
RA |
Royalty Agreement |
Reserves |
Reserves are those quantities of petroleum anticipated to be
commercially recoverable by application of development projects to
known accumulations from a given date forward under defined
conditions. Reserves must satisfy four criteria; they must be
discovered, recoverable, commercial and remaining based on the
development projects applied. Reserves are further categorised in
accordance with the level of certainty associated with the
estimates and may be sub-classified based on project maturity
and/or characterised by development and production status |
Reservoir |
A porous and permeable rock capable of containing fluids |
Seismic |
Data, obtained using a sound source and receiver, that is
processed to provide a representation of a vertical cross-section
through the subsurface layers |
Shares |
Ordinary shares |
Shareholders |
Ordinary shareholders of 10p each in the Company |
Subsidiary |
A subsidiary undertaking as defined in the 2006 Act |
TANESCO |
The Tanzania Electric Supply Company |
Tcf |
Trillion cubic feet |
TEITI |
Tanzania Extractive Industries Transparency Initiative |
TPDC |
Tanzania Petroleum Development Corporation |
TND |
Transmission and Distribution |
Tsh |
Tansanian Shillings |
TSR |
Total Shareholder Return (End Share Price - Opening Share
Price/Opening Share Price) plus (Sum of Dividends per Share/Opening
Share Price) |
VAT |
Value Added Tax |
WAF |
Wentworth Africa Foundation |
Working Interest or WI |
A Company's equity interest in a project before reduction for
royalties or production share owed to others under the applicable
fiscal terms Working interest attributable to Wentworth |
About Wentworth Resources
Wentworth Resources is a publicly traded (AIM:
WEN), independent oil & gas company with natural gas
production; exploration and appraisal opportunities in the Rovuma
Delta Basin of coastal southern Tanzania.
Inside
Information
This announcement does not contain inside
information.
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. 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.
Use of a
Standard
Reserve and resource assessments in this
announcement are made in accordance with the standard defined in
the SPE/WPC Petroleum Resources Management System (2007) and the
Canadian Oil and Gas Evaluation Handbook ("COGEH").
Notice
The AIM Market of the London Stock Exchange has not reviewed this
press release and does not accept responsibility for the adequacy
or accuracy of this press release.
-Ends-
Wentworth Resources PLC, Final
Results for the year ended 31 Dec 2019
This
announcement is distributed by West Corporation on behalf of West
Corporation 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 Plc via Globenewswire
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