Wentworth Boosts Tanzanian Output

Tanzanian power-station and industrial demand for the Wentworth-operated joint-venture gas output from Mnazi Bay continued to grow in Q4 2018, the Oslo-listed explorer said January 11.

Wentworth said that with the intended relinquishment of the Mozambique Tembo appraisal licence in Q2 2019, its efforts "this year will be primarily focused on maintaining efficient operations at our Mnazi Bay asset, strengthening our financial position and executing on our merger and acquisition-led growth mandate."

The Kinyerezi-1, Kinyerezi-2 and Ubungo II power stations and Dangote Cement and Goodwill Ceramics were all taking more, boosting average output to 87.3mn ft³/d for the quarter and to 92.5mn ft³/d for December. 

Average production for the full year 2018 was 83.2mn ft³/d compared with guidance range of 65-75mn ft³/d and greater than daily contract quantity of 80.0mn ft³/d, which the partners must supply under agreements with state upstream company TPDC and the state power company Tanesco-owned Mtwara Power Station (about 2.5mn ft³/d). Both customers had been paying steadily, reducing arrears to three months, it said January 11.

This has allowed Wentworth to pay down its debt commitments from free cash-flow in 2018 and it expects to be substantially debt-free within the next twelve months. As at 31 December 2018, outstanding debt was $8.3mn (excluding the $2.5mn corporate overdraft facility), with cash of $11.8mn.

As of January 7, Mnazi Bay was delivering about 89.6mn ft³/d, of which 86.8mn ft³/d went to TPDC and the remainder to Tanesco. Current demand for Mnazi Bay gas is estimated to be in excess of 95mn ft³/d.

Further demand growth will come from the Kinyerezi-1 power plant in Q4 2019. It will initially require 5mn ft³/d and will build up to 30mn ft³/d when fully commissioned over a six-month period. Continued gas demand growth in 2019 is also expected, primarily from the Dangote Cement Plant and other smaller industrial consumers; adding an additional 10-15mn ft³/d to national demand needs by Q2 2019.

For 2019 average daily production, is expected in the range of 75-85mn ft³/d in order to sustain the current plateau rate from the existing five producing wells. The company will continue to update the market as new sources of demand materialise, in addition to operational updates on the asset, it said.