Wentworth Resources Limited


Wentworth Resources Limited : Q1 2014 Financial Statements and MD&A

                                                                                                                                                  21 May 2014

Wentworth Resources Limited

("Wentworth" or the "Company")

Q1 2014 Financial Statements and MD&A

Wentworth Resources Limited, the Oslo Stock Exchange (OSE: WRL) and London Stock Exchange (AIM: WRL) listed independent, East Africa-focused oil & gas company, today announces its results for the first quarter and three months ended 31 March 2014.

The following should be read in conjunction with the Q1 2014 Management Discussion and Analysis and Financial Statements which are available on the Company's updated website at http://www.wentworthresources.com.

Q1 2014 Highlights

·   Completed the acquisition of new high resolution 2D seismic data over the two discovered gas fields within the Mnazi Bay Concession, Tanzania.
·   Continued with pre-drilling activities in advance of a June spud date for the Tembo prospect within the Rovuma Onshore Concession, Mozambique.
·   Continued consultations with the Government of Tanzania to conclude a Gas Sales Agreement ("GSA") to supply Mnazi Bay Concession natural gas to the Mtwara to Dar es Salaam pipeline that is under construction and expected to be completed and commissioned during Q1 2015. No significant issues remain unresolved and the Company expects GSA to be signed in Q2 2014.
·   First quarter exploration capital expenditures of $4.8 million compared to $2.6 million during the same period in 2013.
·   Revenues for the quarter of $0.2 million which is consistent with Q1 2013.
·   Loss from operating activities for the quarter of $2.2 million compared to a similar loss during Q1 2013.
·   Cash and cash equivalents and short-term investments totalled $30.5 million at March 31, 2014 compared to $37.7 million on hand at December 31, 2013.
·   Working capital at March 31, 2014 was $31.2 million compared to $38.4 million at December 31, 2013.

·       In June 2014 drilling operations for the first exploration well, Tembo-1, of a two well program in Mozambique are expected to start.  The second well, Kifaru-1, will be drilled immediately following completion of Tembo-1. 
·       The construction of the Mtwara to Dar es Salaam pipeline is progressing well and the Company expects to begin selling natural gas into the pipeline in Q1 2015.  The Company and the Mnazi Bay Concession partners continue to work towards the signing of the GSA with the Tanzanian government.
·       Acquisition of 2D onshore seismic data over the prospective areas of the Mnazi Bay Concession Tanzania is expected to be completed during Q2.   Processing and interpretation of this new seismic data during 2014 is expected to support future appraisal/development and exploration drilling which is anticipated to commence in Q4 2014 or Q1 2015.

Geoff Bury, Managing Director, commented:

"The drilling of two high impact exploration wells in Mozambique will commence in the very near future.  These wells have the potential to significantly impact the Company's valuation.  In Tanzania, pipeline construction is on schedule with no indication of delay of the Q1 2015 expected commissioning and first gas delivery timing.  Although it has taken much longer than initially anticipated, all signs point toward an imminent conclusion of a gas sales agreement covering initial gas supplies from the Mnazi Bay Concession.  The Company will update shareholders when an agreement has been signed.  We are excited about the near term catalysts and wish to thank shareholders for their ongoing support."        

Wentworth Lance Mierendorf,
Chief Financial Officer
lance mierendorf@wentworthresources.com
+1 403 680 8773
Swedbank First Securities Broker(Norway) +47 23 23 80 00
Ove Gusevik
Jarand Lønne
Crux Kommunikasjon Investor Relations Adviser
+47 995 138 91
Jan Petter Stiff
Fredrik Eeg
Panmure Gordon AIM Nominated Adviser and Broker (UK) +44 (0) 20 7886 2500
Callum Stewart
Adam James
Tom Salvesen
FirstEnergy Capital Broker (UK) +44 (0) 20 7448 0200
Majid Shafiq
Travis Inlow
Investec Broker (UK) +44 (0) 20 7597 4000
Chris Sim   
Instinctif Partners Investor Relations Adviser (UK) +44 (0) 20 7457 2020
David Simonson
Catherine Wickman
Harry Cameron

Financial Statements

The following primary statements have been extracted from the Q1 2014 unaudited consolidated financial statements which are located on the Company's website at www.wentworthresources.com.

Unaudited Condensed Consolidated Interim Statement of Financial Position
United States $000s, unless otherwise stated

March 31,
December 31,
Current assets
Cash and cash equivalents 17,676 14,501
Short-term investments - term deposits 12,851 23,176
Trade and other receivables 2,292 1,845
Prepayments, deposits and advances to partners 1,926 1,674
Current portion of long-term receivables 657 658
35,402 41,854
Non-current assets
Long-term receivables 30,157 28,661
Exploration and evaluation assets 55,417 50,636
Property, plant and equipment 18,844 18,498
104,418 97,795
Total assets 139,820 139,649
Current liabilities
Trade and other payables 4,161 3,487
4,161 3,487
Non-current liabilities
Long-term loans 3,924 3,816
Other long-term liabilities 2,892 2,836
Decommissioning provision 709 685
7,525 7,337
Share capital 403,998 403,998
Equity reserve 24,057 23,903
Accumulated deficit (299,921) (299,076)
128,134 128,825
Total liabilities and equity 139,820 139,649

Unaudited Condensed Consolidated Interim Statement of Comprehensive Loss
United States $000s, unless otherwise stated

Three months ended March 31,
2014 2013
Total revenue 236 216
Operating expenses
Production and operating (372) (153)
General and administrative (1,809) (1,974)
Share based compensation (154) (122)
Depreciation and depletion (135) (134)
Gain from sale of office assets 23 -
Loss from operating activities (2,211) (2,167)
Finance income 1,643 1,232
Finance costs (277) (212)
Net loss and comprehensive loss (845) (1,147)
Net loss per ordinary share
Basic and diluted (US$/share) (0.01) (0.01)

Unaudited Condensed Consolidated Interim Statement of Changes in Equity
United States $000s, unless otherwise stated

Number of shares Share capital Equity reserve Accumulated deficit Total  equity
$ $ $ $
Balance at December 31, 2012 82,503,940 361,675 21,996 (289,087) 94,584
Net loss and comprehensive loss - - - (1,147) (1,147)
Share based compensation - - 122 - 122
Balance at March 31, 2013 82,503,940 361,675 22,118 (290,234) 93,559
Balance at December 31, 2013 153,872,700 403,998 23,903 (299,076) 128,825
Net loss and comprehensive loss - - - (845) (845)
Share based compensation - - 154 - 154
Balance at March 31, 2014 153,872,700 403,998 24,057 (299,921) 128,134

Unaudited Condensed Consolidated Interim Statement of Cash Flows
United States $000s, unless otherwise stated

Three months ended March 31,
2014 2013
Operating activities
Net loss for the period (845) (1,147)
Adjustments for:
Share based compensation 154 122
Depreciation and depletion 135 134
Finance income, net (1,366) (1,020)
Gain from sale of assets (23) -
Change in non-cash working capital (18) (1,342)
Cash used in operating activities (1,963) (3,253)
Investing activities
Additions to evaluation and exploration assets (4,781) (2,635)
Additions to property, plant and equipment (481) (21)
Conversion of term deposits to cash 10,325 -
Interest income 40 18
Net reduction/(increase) of long-term receivable 101 (201)
Change in non-cash working capital - 652
Cash provided by/(used in) investing activities 5,204 (2,187)
Financing activities
Repayment of long-term loan - (300)
Interest paid (89) (137)
Proceeds from sale of office assets 23 -
Decrease of other long-term liabilities - (157)
Cash used in financing activities (66) (594)
Net change in cash and cash equivalents 3,175 (6,034)
Cash and cash equivalents, beginning of the period 14,501 9,352
Cash and cash equivalents, end of the period 17,676 3,318

About Wentworth Resources

Wentworth Resources is a publicly traded (OSE:WRL, AIM:WRL), independent oil & gas company with: natural gas production; midstream assets; a committed exploration and appraisal drilling programme; and large-scale gas monetisation opportunities, all in the Rovuma Delta Basin of coastal southern Tanzania and northern Mozambique.

Gerold Fong, Vice President of Exploration (BSC Geophysics, 1982) who has 31 years of experience in the exploration and production industry, has read and approved the technical disclosure in this regulatory announcement.

Cautionary note regarding forward-looking statements
This press release may contain certain forward-looking information.  The words "expect", "anticipate", believe", "estimate", "may", "will", "should", "intend", "forecast", "plan", and similar expressions are used to identify forward looking information.

The forward-looking statements contained in this press release are based on management's beliefs, estimates and opinions on the date the statements are made in light of management's experience, current conditions and expected future development in the areas in which Wentworth is currently active and other factors management believes are appropriate in the circumstances. Wentworth undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless required by applicable law.

Readers are cautioned not to place undue reliance on forward-looking information. By their nature, forward-looking statements are subject to numerous assumptions, risks and uncertainties that contribute to the possibility that the predicted outcome will not occur, including some of which are beyond Wentworth's control.  These assumptions and risks include, but are not limited to: the risks associated with the oil and gas industry in general such as operational risks in exploration, development and production, delays or changes in plans with respect to exploration or development projects or capital expenditures, the imprecision of resource and reserve estimates, assumptions regarding the timing and costs relating to production and development as well as the availability and price of labour and equipment, volatility of and assumptions regarding commodity prices and exchange rates, marketing and transportation risks, environmental risks, competition, the ability to access sufficient capital from internal and external sources and changes in applicable law.  Additionally, there are economic, political, social and other risks inherent in carrying on business in Tanzania and Mozambique. There can be no assurance that forward-looking statements will prove to be accurate as actual results and future events could vary or differ materially from those anticipated in such statements. See Wentworth's Management's Discussion and Analysis for the year ended December 31, 2013, available on Wentworth's website, for further description of the risks and uncertainties associated with Wentworth's business.

Neither the Oslo Stock Exchange nor the AIM Market of the London Stock Exchange has reviewed this press release and neither accepts responsibility for the adequacy or accuracy of this press release.

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

Q1 2014 Financial Statements
Q1 2014 MDA
2014 05 21 Press Release