26th Feb 2015 09:57
LONDON (Alliance News) - Wentworth Resources Ltd saw its shares rise Thursday after it swung back to a profit as it reversed a previous impairment ahead of the start of production and free cash flow in 2015.
The company reported a net profit of USD15.3 million, or USD0.10 a share, for 2014, compared with a loss of USD10.0 million, or USD0.11 a share, in 2013. That was down to the USD23.8 million reversal of assets in its Mnazi Bay Concession that it had previously impaired.
The reversal was possible because Wentowrth has now signed a gas sales and purchase agreement with the government of Tanzania, meaning its set to deliver the first gas into the pipeline this year and is also set to earn "substantial" free cash flow.
It said the new, government-owned Mtwara to Dar es Salaam pipeline and gas processing facilities are nearly complete with delivery of first gas for commissioning is expected to occur in April. Sales of Mnazi Bay gas to the new pipeline are expected to ramp up to 80 million standard cubic feet a day by the end of June.
"As a result, the company expects to reclassify the majority of its contingent gas resources in
Mnazi Bay into reserves in the near future. As the company ramps up production it expects to generate substantial free cash flow to fund future growth," Managing Director Geoff Bury said in a statement.
Wentworth Resources shares were up 10.7% at 29.90 pence Thursday morning, making it one of the best-performing stocks in the AIM All-Share index on the day.
By Steve McGrath; [email protected]; @stevemcgrath1
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