PROPOSED ACQUISITION OF 25% WORKING INTEREST IN TANZANIAN GAS DEVELOPMENT PROJECT CREATING TANZANIA’S MULTI-ASSET GAS PRODUCTION LEADER
Wentworth Resources (AIM: WEN), the independent, Tanzania-focused natural gas production company, announces that it has reached agreement with Scirocco Energy ple (“Scirocco”) to acquire its 25% non-operated working interest in the Ruvuma Production Sharing Agreement (“Ruvuma Asset”), in Tanzania (the “Transaction).
The 1.9 Tscf {mean GIIP) Ntorya gas discovery located within Ruvuma, Tanzania is operated by ARA Petroleum Tanzania (50% working interest, Aminex plc 25%) and is adjacent to Wentworth’s Mnazi Bay gas producing asset.
The consideration is comprised of an initial cash payment of $3 million due upon Completion, with further deferred and contingent cash payments of up to $13 million dependent on certain development and production milestones representing only a portion of past costs.
The consideration will be funded through Wentworth’s cash resources whilst allowing the Company to maintain its commitment to a long-term, sustainable and progressive dividend for shareholders.
Katherine Roe, Chief Executive of Wentworth, sold:
‘This is a transformational transaction for Wentworth establishing us as a dual-asset, full-cycle E&P with a significantly enhanced resource base and production profile.
“This compelling growth opportunity is fully aligned with our commitment to support the Government to reach its goal of providing universal energy access by 2030 in accordance with our purpose to empower people with energy and deliver value for Tanzania, Wentworth and all our stakeholders.”
Strategic Rationale
- Value accretive transaction represents an attractively priced, low risk entry into a high growth opportunity with the majority of the consideration only payable upon meeting development and production milestones
- The Ruvuma development is expected to deliver a transformational increase in Wentworth’s production and resources alongside Mnazi
Bay enabling Wentworth to support both the growing energy needs and industrialization of Tanzania Progresses Wentworth’s stated strategy of increasing scale and driving growth through a focus on natural gas projects in Tanzania Positions Wentworth as the leading domestic gas player in Tanzania with a diversified production, appraisal and development portfolio Ruvuma will become the third producer of domestic gas in Tanzania alongside Mnazi Bay (Wentworth 32% working interest} and Songo Songo Enables Wentworth to continue to support the Government of Tanzania’s ambition to increase energy access through lower-carbon solutions and reach universal energy access by 2030
Underscores Wentworth’s position as a key partner for the Government of Tanzania Transforms Wentworth into a multi-asset domestic gas producer in Tanzania and represents a first step into asset diversification and towards a full-cycle portfolio
Wentworth’s in-country expertise and track record of delivery will support the Ruvuma JV to maximize the potential of a world class asset
Wentworth remains committed to offset all existing Scope 1 and 2 emissions and partially offset Scope 3 emissions in 2022 and will work with the Ruvuma JV partners to ensure the development of the project is aligned with these aspirations to enable the Company to continue to have one of the lowest carbon intensities per boe in the UK plc market
The Ruvuma Asset
The Ruvuma asset contains the Ntorya-1 discovery well, drilled in 2012, and the Ntorya-2 appraisal well, drilled in 2017, and is estimated by RPS (2018) to have a mean estimated GIIP of c.1.9 Tscf. The Ntorya-1 gas discovery well is located approximately 30 km from the Madimba gas plant which is within the Mnazi Bay concession. 2022 or early 2023. The Chikumbi-1 well aims to confirm 2C resources of 763 Bscf. The cost of the seismic survey and appraisal well net to Wentworth is estimated at $6.25 million.
Final Investment Decision (“FID”) is targeted for 2023 with first gas expected in late 2024 and an ultimate target production rate of up to 140 MMscf/d. The project will require construction of a pipeline from the gas field to the government operated Madimba gas facility, located approximately 30 km eastward, which is capable of handling 210 MMscf/d and is currently receiving most of the production volumes from the Mnazi Bay gas field. Gas from the Madimba gas facility will then be distributed via existing gas infrastructure to end users.
A commercialization study performed by “io oil and gas” consultancy {a Joint venture between Baker Hughes and McDermott) in 2017 showed that a 140 MMscf/d Full Field development project would require approximately $143 million (gross) of capital expenditures. Actual costs and project scope will be dependent on a development plan agreed to by the Ruvuma JV partners and the government. Timetable and Conditions
The proposed Acquisition is subject to formal shareholder approval from Scirocco’s shareholders at a General Meeting to be held in due course, as well as certain regulatory approvals plus the non-exercise or waiving of pre-emption rights by the other Ruvuma Asset JOA partners.
The Transaction will not result in any changes to the Board of Wentworth.
The Company currently expects the Transaction to complete ahead of the Longstop Date of 30 June 2023. So 92)
About Wentworth Resources
Wentworth Resources plc (AIM: WEN) is a leading, domestic natural gas producer in Tanzania with a core producing asset at Mnazi Bay in the onshore Rovuma Basin in Southern Tanzania.
Enquiries: Richard Tainton, [email protected]
Country Manager +255 222 164139
