Tanzania Ramp-Up 'Slow' Admits Wentworth
East Africa-focused gas producer and explorer Wentworth Resources admitted that the ramp-up from the Mnazi Bay field in Tanzania has been slower than expected.
The company reported a net 2Q 2016 loss of $0.17mn on August 16, down from a year-ago Q2 loss of $1.81mn.
Gas sales revenues though grew to $3.43mn (from $0.29mn in April-June 2015) reflecting the August 2015 start of gas deliveries from Mnazi Bay in Tanzania, operated by France’s Maurel & Prom (M&P).
Wentworth finance chief Lance Mierendorf said ramp-up of Mnazi Bay production has been slower than expected, due to a dispute between owners of the Symbion power plant and the government, but that his understanding is that such talks to resolve the impasse are now taking place. The 120-MW Symbion-owned plant at Ubungo tested its turbines on Mnazi Bay gas as long ago as September last year, before which it had been idle for over a year as there was a gas shortage.
Wentworth CFO Lance Mierendorf (Photo credit: Wentworth Resources)
Mnazi Bay's average gross production in 2Q was 51mn ft³/d, compared to 48mn ft³/d in 1Q 2016, and is currently 50mn ft³/d. Mierendorf still expected this to reach 70-80mn ft³/d once the dispute is resolved.
CEO Geoff Bury said that extra gas demand would come from the Kinyerezi 1 & 2 power plants, and some industrial customers. He acknowledged that Wentworth’s share price had languished but hoped that, over time, the market would realise that the firm is a low-risk investment with upside.
From a one-year peak of £34.63 in August 2015 – almost repeated this April – the stock slipped to £26.70 August 16. The company began repaying its existing debt facility, with $1mn in June and a further $3.3mn in July.
In contrast 15 months of invoices have been unpaid by state Tanesco, although three months of these (amounting to $0.5mn net to Wentworth) are expected to be paid this week, said Mierendorf. Bury said a more significant contract with Tanzanian state TPDC was being paid consistently.
Wentworth secured an extension in June of the largely onshore Ruvuma production sharing agreement (PSA) , as operator, in the far south of Tanzania.
Bury also said its onshore Mozambique exploration block's “potential size of the prize [was] world-class” and noted interest from majors in the offshore already, plus Indonesian state Pertamina's decision to buy a 25% interest in M&P, Wentworth’s operating partner at Tanzania’s Mnazi Bay. Asked by a private investor, however, if there had been any offers to take over Wentworth, Bury said: “I can’t answer that.”
Mark Smedley