In its annual report the company said as a result of the good performance, it had net cash of U$ 0.8m by December 2018 compared to net debt of U$ 13.9m in December 2017 although overall, it posted a net loss of U$ 75.2m compared to U$ 0.7m during the same period.
Among other things, the loss was caused by a Mozambican exploration impairment provision of U$41.6m; one-off re-structuring and re-domicile costs of U$2.3 million comprising recruitment, severance, travel, legal and professional charges; Tanzanian tax assessments of U$1.0 million for the years 2013 to 2016, provision against Tanzania government receivables U$5.0 million; and deferred tax write-downs of U$26.7m.
"2018 saw us make material progress in simplifying our business and portfolio. On our core Mnazi Bay asset, we achieved record average production levels of 4,425 barrels of oil equivalent and associated gas revenue of U$16.2mm, ending the year with a 56.8 percent improvement,” said Wentworth CEO, Eskil Jersing.
“We continue to work diligently with all our Tanzanian stakeholders in unlocking the latent value of the Mnazi Bay. Wentworth will continue to improve its fundamentals through 2019; and the board of Wentworth remains focused on its stated strategy of revenue stream diversification and maximising returns for shareholders," Jersing added.
During the year under review, the company completed corporate transition to the UK and also delisting from Oslo Børs resulting in a simpler transactional platform, driving efficiencies into the business model.
It also shifted all of its management to UK by June 2018 because its corporate headquarters relocated to UK from Canada while closing down its Maputo office in Mozambique where it said it also on, “On track to relinquish Tembo block in Northern Mozambique ahead of the end of the current appraisal term on 15 June 2019.”
The company has now been legally re-domiciled from the Province of Alberta in Canada to the Isle of Jersey, incorporated as Wentworth Resources Plc and is trading under the new ticker, WEN, on the Alternative Investment Market of the London Stock Exchange.
“These substantive changes to the corporate structure have resulted in an enhanced and more efficient management platform, allowing the company to evaluate and ultimately transact on, growth opportunities,” the report noted.
This restructuring also resulted in a complete change in the senior executive management and in the structure of the board of directors. In line with UK Corporate Governance norms and in keeping with the QCA Corporate Governance Code, which the company has now adopted, the make-up of the board now constitutes an appropriate balance between executive directors and non-executive directors.
“Wentworth today is financially sound and even healthier than this time last year with an increasingly positive outlook: we expect 2019 to be a year of increasing balance sheet strength. Mnazi Bay production has grown materially in the last several years and is more predictable thanks to growing demand in Tanzania. Tanzanian Petroleum Development Company and Tanzania Electric Supply Company, the company's two primary off takers of Mnazi Bay gas, continue to fulfil their respective payment obligations whilst significantly improving on previous payment arrears,” said Wentworth’s Board Chairman, Robert McBean.
McBean said with future demand for domestic gas in Tanzania taking off and pipeline infrastructure in place with substantial spare capacity available, Wentworth and its partners can expand and meet this growing demand over the next few years, the report added.
“Wentworth is now perfectly poised for growth, both by adding to its current Tanzanian production base and by seeking accretive growth opportunities outside of Tanzania. The company's strong, loyal institutional shareholder base, combined with its strengthening balance sheet and simplified corporate structure, is creating many new opportunities for management to pursue,” he added.