16th Mar 2015 10:02
LONDON (Alliance News) - Wentworth Resources Ltd Monday said it swung to a pretax profit during 2014 after reversing impairments made against the Mnazi Bay concession after securing a gas sales agreement and nearly completing the sales pipeline as the company nears first production.
The East Africa-focused oil and gas company swung to a pretax profit of USD13.9 million in the year ended December 31, from a USD9.5 million loss in 2013 after reversing impairments.
Wentworth reversed impairment charges on exploration and evaluation activities totalling USD13.4 million and impairment charges related to plant, property and equipment worth USD10.4 million.
The impairments were originally made against the Mnazi Bay concession for a total of USD23.8 million, which have now been reversed as Wentworth has signed a gas sales agreement with the government of Tanzania and because the Mtwara to Dar es Salaam pipeline, which will transport gas from Mnazi Bay, is nearly complete, it said.
The pipeline and processing facilities are expected to be commissioned in April, with gas sales starting through the pipeline in the third quarter, transporting up to 80 million standard cubic feet per day, it said.
"We are very pleased that we now have reserves associated with our Mnazi Bay concession. This is a further step towards bringing our gas on stream and follows on from the signing of our gas sales agreement last year, and the ongoing implementation of the field infrastructure," said Managing Director Geoff Bury.
Revenue in 2014 rose slightly to USD1.1 million in 2014, from USD955,000 in 2013.
Wentworth spent significantly more in capital expenditure during 2014. Exploration expenditure rose to USD22.9 million, from USD6 million, whilst development expenditure increased to USD4 million from USD980,000.
Cash at the end of December totalled USD5.5 million.
"With the government pipeline project on track for a second quarter 2015 commissioning, Wentworth now has a defined market for its Mnazi Bay gas and is within a few months of commencing first production into the pipeline, which should generate significant free cash flow in 2015," said Bury.
Wentworth shares were down 1.1% to 32.40 pence per share on Monday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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