RNS this morning & all looks good with regard to cash flow & future fundability. Major oil companies also sniffing around the potential.
Geoff Bury, Managing Director, commented:
"In Tanzania, Wentworth has seen significant growth in gas sales since the start of operation of the new pipeline in August 2015. This provides the Company with consistent cash flow to fund our ongoing activities, service our debt facility and to build cash reserves. As we continue to strengthen our balance sheet, we look forward to growing the Company without having to rely on the equity markets to do so.
We are extremely pleased to have reached an agreement with the Government of Mozambique to increase our participating interest to 85% in the Onshore Rovuma Block, to be appointed Operator of the block and to have agreed an appraisal plan for the Tembo discovery. This expands our portfolio in the Rovuma Basin, a region that has recently seen significant interest from super-majors and national oil companies. As operator of this concession we have the ability to match the timing of the appraisal activities to our available cashflow and with our increased interest we have the flexibility to seek industry partners to participate in this appraisal plan."
I suggest you look at the Wentworth Resources website which has all the details of the GSA with the Tanzanian Government including the take or pay details. The gas flows are at a good level and Solo Oil in the next field have also just started feeding the pipeline to the capital.
Local Tanzanian papers are today reporting that all hydro generation plants in Tanzania are being switched off because water levels are at historically low levels. There will continue to be blackouts until the gas generators are all fully operational, which is estimated to be Oct 20th.
Clearly gas is now being sold by the Mnazi Bay partners, but it has taken longer to increase the pressure in the new pipeline than had been identified.
The reliance on gas for electricity generation is only going to increase as time goes by.
"From its Mnazi Bay concession in southern Tanzania, LSE:WRL:Wentworth Resources has made its first gas deliveries to the transnational pipeline. Targeting production rates of 80 million cubic feet each day (mmscf/d) by the end of this year and ..."
Wentworth, the Oslo Stock Exchange (OSE: WRL) and AIM (AIM: WRL) listed independent, East Africa-focused oil & gas company, is pleased to announce the completion of drilling operations at the MB-4 development well in the Mnazi Bay Concession, southern Tanzania.
The MB-4 development well, drilled to a total depth of 2,788 meters (True Vertical Depth Sub Sea) and is located approximately 800 meters from the MB-2 and MB-3 wells in the Mnazi Bay gas field, has crossed Miocene gas reservoirs with net pay of 24 meters (Upper Mnazi Bay) and 43 meters (Lower Mnazi Bay) respectively, both ranked among the best of the five wells drilled in this field to date. Pressure measurements have confirmed the lateral and the vertical connectivity of each reservoir.
Within this well two reservoirs have been selectively tested at different two-hour stabilised flows with the Upper Mnazi Bay achieving a constrained flow-rate of up to 18.8 mmscf/day and the Lower Mnazi Bay of up to 22.2 mmscf/day. The table below shows the test results:
The well will be connected to the production facilities which are currently being installed in the field, for start-up in Q3 2015. These results confirm the Mnazi Bay gas field's ability to produce output over and above the initial 80 mmscf/day, possibly up to 130 mmscf/day.
MB-4 well was deepened to the Oligocene where it encountered high-pressure intervals of unknown origin.
Wentworth has a 31.94% net interest in this well, which was operated by Maurel et Prom.
Geoff Bury, Managing Director, commented:
"We are extremely pleased with the outcome of the MB-4 well as the result confirms our reservoir model for the Mnazi Bay gas field. The success of the well not only provides further confirmation of the value of our discovered reserves in Mnazi Bay, but also provides additional flexibility for meeting gas delivery obligations agreed in our Gas Sales Agreement. We look forward to the start of production in the third quarter as a transformational step for the Company."
Details Published on Wednesday, 25 March 2015 00:49 Written by NELLY MTEMA Hits: 1376
Ministry of Energy and Minerals spokesperson, Ms Badra MasoudMinistry of Energy and Minerals spokesperson, Ms Badra Masoud
AS the construction of the 542-kilometre natural gas pipeline from Mtwara to Dar es Salaam is completed by 100 per cent, the government will be saving 1.6tril/- annually from purchase of heavy oil for electricity generation.
Speaking to reporters in Dar es Salaam on Tuesday, the Ministry of Energy and Minerals spokesperson, Ms Badra Masoud, said the construction of natural gas processing plants at Madimba - Mtwara and SongoSongo Island - Kilwa are completed by 96 per cent.
She said the natural gas processing plants will be done by November, this year and the delays are a result of rising tides which are threatening to wash away sections of the pipeline.
Ms Masoud added that the project will help the country to fulfil some of the goals that are stipulated in the Tanzania Development Vision 2025 including the availability of a reliable electric power supply, expansion and increase of the industrial spectrum, cleaner environment, employment creation, extended natural gas usage, availability of clean water and the use of petrochemicals in Tanzania's industries.
This is contrary to earlier predictions by the ministry that the 1.2 billion US dollars project was to be completed by the end of 2014.
She added that completion of the project will catalyse the increase and expansion of industries which have already indicated dire need of the use of natural gas as energy substitute in running production plants and that reliable power supply will greatly reduce production costs, hence allow Tanzanian products become competitive and penetrate the world markets.
Moreover, she outlined other benefits as promote cleaner production and environmental conservation as a result of the application of natural gas as source of energy to replace charcoal and firewood which have been the major sources of energy.
Ms Masoud said people who reside where the gas pipeline passes will also benefit as they will pay only 27,000/- for electricity installation.
Wentworth Resources commences drilling of MB-4 development well, provides update on transnational pipeline
TUESDAY, MARCH 31, 2015
The MB-4 development well is designed to penetrate the Mnazi Bay Upper and Mnazi Bay Lower gas bearing sands of the discovered Mnazi Bay gas fields.
Construction of the Government owned and operated Mtwara to Dar es Salaam pipeline is now 100% complete and the two associated processing facilities are approximately 96% complete.
Wentworth, the Oslo Stock Exchange (OSE: WRL) and AIM (AIM: WRL) listed independent, East Africa-focused oil & gas company, today provides an operational update in the lead up to the first delivery of gas to the new transnational pipeline from its assets in Tanzania and announces that drilling operations of the MB-4 development well in the Mnazi Bay Development License Area has commenced.
Construction of the Government owned and operated Mtwara to Dar es Salaam pipeline is now 100% complete and the two associated processing facilities are approximately 96% complete. Regarding the Company's assets, construction has commenced on tying-in the existing four development wells and installing flow lines in order to supply gas to the new pipeline and two of these wells are now fully tied-in. The Mnazi Bay Partners have been advised by Tanzania Petroleum Development Corporation that some delays have been experienced in commissioning and startup of the gas pipeline project and, as a result, delivery of first gas into the pipeline is now expected to take place in July 2015.
Drilling operations of the MB-4 development well are expected to commence in the next few days and the well is designed to penetrate the Mnazi Bay Upper and Mnazi Bay Lower gas bearing sands of the discovered Mnazi Bay gas fields. The MB-4 development well has a planned depth of 2,089 meters True Vertical Depth Sub Sea and, based on the current drilling program, is expected to take approximately two months to drill and complete. The Company will provide an update after drilling operations have been completed. Wentworth has a 31.94% net interest in this well, which is being operated by Maurel et Prom and drilled with the Caroil #2 drilling rig.
Wentworth's shares now trade at a 63 per cent discount to Cantor Fitzgerald's risked sum-of-the-parts valuation of 77p a share. While the company still has to prove that it can ramp up production successfully - and Tanzania does not have the best track record for paying its bills - there is enough underpinning the expected cash flows to make these shares look very cheap. Buy.
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