Wentworth Resources Limited

Update and Q4 2016 Financial Statements and MD&A

PRESS RELEASE
28 February 2017

Wentworth Resources Limited

("Wentworth" or the "Company")

Update and Q4 2016 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 an operational update along with its unaudited results for the fourth quarter and twelve months ended 31 December 2016.

The following should be read in conjunction with the Q4 2016 Management Discussion and Analysis ("MD&A") and Condensed Consolidated Interim Financial Statements which are available on the Company's updated website at http://www.wentworthresources.com.

Wentworth shall be issuing its audited 2016 Annual Consolidated Financial Statements and MD&A following publication of the results of an annual independent evaluation of the gas reserves at 31 December 2016 within the Mnazi Bay Concession in Tanzania, carried out by RPS Energy Canada Ltd. ("RPS"), Calgary, Canada which is expected during March 2017.

OPERATIONAL AND FINANCIAL UPDATE

• Mnazi Bay field production has averaged 44 MMscf/d year-to-date 2017, in line with guidance of 40 - 50 MMscf/d for 2017.
• In addition, increasing gas demand from industrial customers, including Goodwill Ceramics and Dangote Cement, is expected in 2017.
• Kinyerezi-I Expansion and Kinyerezi-II gas-fired power generation facilities are under construction and on schedule for completion and commission starting in 2018; anticipated additional demand from power sector of 70 - 80 MMscf/d once these new facilities are fully operational.
• All capital and operating expenditures incurred during 2016 expected to be fully settled during Q1 2017; minimal capital expenditure planned during 2017.
• Production facilities now fully invested with capacity of up to 130 MMscf/d and current well deliverability expected to support substantial increase in demand.
• Work underway to secure industry partners for the appraisal programme of the Tembo gas discovery in Mozambique; appraisal activities expected to commence once industry partners are secured.  
• Amended the timing of principal payments on the existing $20.0 million credit facility to better align with the current production profile and without further leveraging the Company at this time.
• Secured access to a new $2.5 million overdraft facility for working capital purposes.

Q4 2016 HIGHLIGHTS

Financial

• Gas sales revenue of $2.73 million for the quarter, compared to $3.10 million in Q4 2015.
• Net loss of $0.42 million during Q4 2016 compared to a profit after tax of $32.81 million in Q4 2015,which  includes a non-cash deferred tax recovery of $34.34 million.
• Capital expenditures of $0.67 million compared to $0.73 million during Q4 2015.
• Cash and cash equivalents on hand of $0.98 million compared with $2.75 million on hand at December 31, 2015.
• Working capital was $4.96 million compared to $11.98 million at December 31, 2015.
• Reduced outstanding debt to $20.67 million following a $1.0 million principal payment during Q4 2016 (2015 - $26.0 million).

Operational

Tanzania

• The Mnazi Bay field achieved average gross daily gas production during the fourth quarter of 39.4 MMscf/d compared to 34.3 MMscf/d during Q3 2016 as less downtime was experienced at the gas fired power generation facilities, Ubungo-II and Kinyerezi-I power stations.
• Expansion of the liquid separation units and gas processing facilities at Mnazi Bay was ongoing during Q4 2016 with commissioning and full operations expected in Q2 2017.
   

Mozambique

• Completed reprocessing of approximately 1,000 km of 1984/1985 vibroseis data which represents all of the existing regional seismic coverage over the Tembo appraisal area.
• Finalized the design details of a new 2D seismic survey of approximately 700 km of new data.

Geoff Bury, Managing Director, commented:

"Fourth quarter gas sales volumes were in line with our guidance of 40 and 50 MMscf/d and we remain confident this level is achievable for 2017, as we anticipate new demand from a local cement factory and a ceramics facility.  We expect a material increase in gas demand beginning in 2018 when the new Kinyerezi-I expansion and Kinyerezi-II power plants are commissioned.  The Company has taken prudent steps in order to reduce administrative and overhead costs coinciding with the reduction in capital activity expected in 2017.  During the quarter we have also had productive discussions with our external lenders, amending the timing of principal payments on the existing $20.0 million facility, to better align repayments with the current production profile.  We are confident in the Company's ability to generate positive cashflow at the existing production levels, allowing any upside in demand during 2017 to directly benefit the bottom line."

"The Company is focused on advancing a new 2D seismic acquisition program over the Tembo appraisal area in Mozambique and will be looking to secure an industry partner to share the costs and risk on the appraisal of the gas discovery."

"We enter 2017 with a positive outlook and with a business which is well positioned to take full advantage of the growing gas to power energy sector in Tanzania."

A conference call for investors, analysts and other interested parties will be held this morning at 01:30 MST (Calgary) / 08:30 GMT (London) / 09:30 CET (Oslo).  Call in numbers:

Call in numbers:

Canada: [phone]

Norway: [phone]

United States: [phone]

International/ United Kingdom Dial In: [phone]

The participants will be asked for their name, company and confirmation code. The Wentworth Resources confirmation code is: 3878585.

Enquiries:
Wentworth	Lance Mierendorf, Chief Financial Officer	[e-mail] [phone]
	Katherine Roe Vice President Corporate Development & Investor Relations	[e-mail] [phone]
Crux Advisers	Investor Relations Adviser (Norway)	[phone]
	Carl Bachke
Stifel Nicolaus Europe Limited	AIM Nominated Adviser and Broker (UK)	[phone]
	Callum Stewart Nicholas Rhodes
	Ashton Clanfield
FirstEnergy Capital	Broker (UK)	[phone]
	Hugh Sanderson
FTI Consulting	Investor Relations Adviser (UK)	[e-mail] [phone]
	Edward Westropp

Financial Statements

The following primary statements have been extracted from the Q4 2016 unaudited condensed consolidated financial statements which are located on the Company's website at www.wentworthresources.com.

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

	December 31, 2016	December 31, 2015
ASSETS
Current assets
Cash and cash equivalents	979	2,746
Trade and other receivables	6,699	3,253
Prepayments, deposits and advances to partners	187	841
Current portion of long-term receivables	12,283	18,190
	20,148	25,030
Non-current assets
Long-term receivables	18,034	18,897
Exploration and evaluation assets	45,538	43,141
Property, plant and equipment	93,366	95,168
Deferred tax asset	31,145	34,341
	188,083	191,547
Total assets	208,231	216,577
LIABILITIES
Current liabilities
Trade and other payables	8,675	6,269
Current portion of long-term loans	5,258	5,270
Current portion of other liability	1,260	1,508
	15,193	13,047
Non-current liabilities
Long-term loans	15,254	20,512
Other liability	1,100	1,634
Decommissioning provision	773	973
	17,127	23,119
Equity
Share capital	411,493	411,493
Equity reserve	26,275	25,683
Accumulated deficit	(261,857)	(256,765)
	175,911	180,411
Total liabilities and equity	208,231	216,577

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

	Three months ended  December 31,		Twelve months ended December 31,
	2016	2015	2016	2015
Total revenue	2,730	3,101	11,750	4,637
Operating expenses
Production and operating	(923)	(569)	(3,371)	(3,214)
General and administrative	(1,264)	(2,035)	(5,397)	(6,367)
Depreciation and depletion	(729)	(1,045)	(3,864)	(1,707)
Share based compensation	(121)	(173)	(592)	(767)
Loss from operating	(307)	(721)	(1,474)	(7,418)
Finance income	1,051	1,020	4,693	4,818
Finance costs	(1,045)	(1,829)	(5,115)	(4,707)
Loss before tax	(301)	(1,530)	(1,896)	(7,307)
Deferred tax (expense)/recovery	(121)	34,341	(3,196)	34,341
Net (loss)/profit and comprehensive (loss)/profit	(422)	32,811	(5,092)	27,034
Net (loss)/profit per ordinary share
Basic and diluted (US$/share)	-	0.19	(0.03)	0.17

WENTWORTH RESOURCES LIMITED
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, 2014	154,122,700	404,225	24,916	(283,799)	145,342
Net loss and comprehensive loss	-	-	-	27,034	27,034
Share based compensation	-	-	767	-	767
Issue of share capital	15,412,269	7,639	-	-	7,639
Share issue costs	-	(371)	-	-	(371)
Balance at December 31, 2015	169,534,969	411,493	25,683	(256,765)	180,411
Balance at December 31, 2015	169,534,969	411,493	25,683	(256,765)	180,411
Net loss and comprehensive loss	-	-	-	(5,092)	(5,092)
Share based compensation	-	-	592	-	592
Balance at December 31, 2016	169,534,969	411,493	26,275	(261,857)	175,911

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

		Three months ended December 31,		Twelve months ended December 31,
	2016		2015	2016	2015
Operating activities
Net (loss)/profit for the period	(422)		32,811	(5,092)	27,034
Adjustments for:
Depreciation and depletion	729		1,045	3,864	1,707
Finance (income)/costs, net	(6)		809	422	(111)
Deferred tax expense/(recovery)	121		(34,341)	3,196	(34,341)
Share based compensation	121		173	592	767
Change in non-cash working capital	(1,371)		(348)	(2,506)	175
Net cash (utilized in)/generated from operating activities	(828)		149	476	(4,769)
Investing activities
Acquisitions of evaluation and exploration assets	(736)		687	(2,371)	(10,299)
Acquisitions of property, plant and equipment	(2,338)		(692)	(2,347)	(12,926)
Reductions of/(additions to) long-term receivable	2,469		556	10,763	(1,116)
Interest income	-		7	-	7
Net cash (used in)/from investing activities	(605)		558	6,045	(24,334)
Financing activities
Proceeds from long-term loan	-		-	-	20,000
Repayment of long-term loan	(1,000)		-	(5,333)	-
Interest paid	(214)		(243)	(2,073)	(906)
Issue of share capital, net of issue costs	-		-	-	7,268
Payment of other liability	(102)		-	(882)	-
Net cash (used in)/from financing activities	(1,316)		(243)	(8,288)	26,362
Net change in cash and cash equivalents	(2,749)		464	(1,767)	(2,741)
Cash and cash equivalents, beginning of the period	3,728		2,282	2,746	5,487
Cash and cash equivalents, end of the period	979		2,746	979	2,746

About Wentworth Resources

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

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, 2015, available on Wentworth's website, for further description of the risks and uncertainties associated with Wentworth's business.

Notice

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.

This announcement contains inside information as defined in EU Regulation No. 596/2014 and is in accordance with the Company's obligations under Article 17 of that Regulation.

Q4 2016 MDA
2017 02 28 Press Release
Q4 2016 Financial Statements

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Source: Wentworth Resources Limited via Globenewswire