London-listed natural gas production firm Wentworth Resources Plc has reported record profits for 2021 thanks to positive gains from its Mnazi Bay operation in southern Tanzania following a pick-up in domestic demand particularly in the industrial sector.
According to Wentworth’s interim results report for 2021, the company’s revenues for the first half of the year up to June 30 went up by 40 percent to a best-ever $11.7 million due to record levels of production at the Mnazi Bay gas field in Ruvuma region.
It said the figures placed the company in “the strongest financial position in its history” with record revenues, earning before tax, and cash-in-hand which stood at $24 million by November 30, an increase from $22.5 million on June 30, after payment of $2.6 million in final 2020 dividends and $1.32 million in interim dividends to its shareholders.
The company said it expected a 2021 final dividend of $2.64 million.
Production at the Mnazi Bay gas field averaged 80 million standard cubic feet a day (Mscf), above the 2021 target and the country’s overall gas demand for the year as production costs dropped 72 percent to $0.48 per Mscf “due to continued focus on cost efficiencies and high degree of operational leverage at Mnazi Bay,” it said.
Wentworth cited economic growth, continued demand in Tanzania’s industrial sector and a drop in hydroelectric generation caused by unusually low levels of rain as factors spurring the high level of gas consumption in the country.
It said average daily gas production for 2021 was about 23 percent higher than in 2020 (65 MMcf/day).
The company said it was eyeing further growth opportunities both within its Mnazi Bay licence and in the greater geographical region.
“The demand dynamics in Tanzania are becoming increasingly compelling with an ambitious economic growth plan set to accelerate energy demand further over the coming years,” chief executive officer Katherine Roe said in a statement.
The Tanzania Electric Supply Company (Tanesco) announced in November that natural gas would be used to fill a 345 megawatts shortage in the national power grid to compensate for declining capacity in its hydroelectric power stations caused by low water levels in catchment areas.
As part of its plan, Tanesco said it would fast-track maintenance of its natural gas plants at Ubungo in Dar es Salaam and completion of the Kinyerezi I Extension Generation Facility.
The Mnazi Bay gas project is 48 percent owned by Indonesian company Pertamina with Wentworth having a 32 percent and State-owned Tanzania Petroleum Development Corporation the remaining 20 percent.
According to Wentworth, in 2021 its partners in the venture delivered on pledges to improve slickline operations on three wells, refurbish project site superstructure and complete preliminary studies for installing a compressor station at the project site by 2023.
“Subject to regulatory approval of the 2022 budget, the joint venture partners expect to continue with standard slickline operations to optimise production capacity, progress the compression project that is due for completion in 2023, and further evaluate opportunities to deliver additional gas supplies,” the report added.
In November, Wentworth entered agreed with commodities trader Vitol SA on the supply of community-focused carbon credits to offset emissions from the Mnazi Bay project.
Written by Bob Karshani