25th Feb 2016 10:58
LONDON (Alliance News) - Wentworth Resources Ltd on Thursday said 2015 was a "turning point" for the company as it started to produce material amounts of gas in the second half of the year to provide the company with a base to significantly build production further this year.
The oil and gas company focused on East-Africa reported a pretax loss of USD7.3 million in 2015, swinging from a USD15.3 million profit the year before.
That healthy profit booked in 2014 was not generated from the company's operations, but was the result of the reversal of a USD23.8 million worth of impairments, which was not repeated in 2015.
However, Wentworth reported a rise in revenue in 2015 to USD4.6 million from only USD1.1 million in 2014, and its operations appeared to be significantly more economic this year as production and operating costs were lower than revenue at USD3.2 million compared to USD2.6 million last year.
Wentworth's other costs are still significantly above its revenue, with general and administrative costs amounting to USD6.4 million in 2015, a slight drop from last year.
The step up in revenue in 2015 was driven by the start of gas sales to the new Mtwara to Dar es Salaam gas pipeline in the third quarter of the year. Wentworth delivers gas to the government-owned pipeline from the Mnazi Bay block, the company's sole producing asset.
To put the impact of the pipeline into perspective, average gross production over the whole of 2015 was only 16.0 million standard cubic feet of gas per day, but in the fourth quarter this averaged 46.0 million standard cubic feet per day as the pipeline came into play.
Wentworth is expecting that to rise to 70.0 to 80.0 million standard cubic feet a day before the end of the first quarter, as Wentworth enters a new era of production this year.
"2015 was a turning point year for our business. With gas from Mnazi Bay flowing into the new pipeline and the start of meaningful revenue generation, Wentworth exited 2015 in a strong financial position," said Managing Director Geoff Bury.
In a separate statement Thursday, Wentworth said its gas reserves in Tanzania have increased following an independent evaluation carried out by Canadian-firm RPS Energy Canada Ltd, showing the company's net proven and probable reserves are worth around USD179.2 million.
"We have also announced an increase of 20% in 2P reserves in our Tanzanian concession, which is testament to the prospectivity of the Mnazi Bay acreage," said Bury.
Proven reserves, also known as 1P, now stand at 76.4 billion standard cubic feet of gas and are equivalent to 12.7 million barrels of oil equivalent. Proven plus probable reserves, also known as 2P, stands at 114.5 billion standard cubic feet of gas, or 19.1 million barrels of oil equivalent.
Proven, probable plus possible reserves, or 3P, stand at 156.0 billion standard cubic feet of gas, the equivalent to 26.0 million barrels of oil.
Wentworth shares were up 0.2% to 32.55 pence per share on Thursday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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