Wentworth Resources says demand for Mnazi Bay discovered gas reserves firms

Shares in Wentworth Resources are up more than 2% after it said demand for its discovered gas reserves from from Mnazi Bay, Tanzania is firming up.

The East Africa-focused oil and gas company said current gross volumes were being maintained within the previously guided range of 40-50 MMscf/d. First-quarter production was averaging 43 MMscf/d.

"As expected, Tanzania Petroleum Development Corporation (TPDC) commenced gas delivery to a new industrial customer, Goodwill Tile Factory, in the first quarter.

Wentworth Resources said this demonstrated demand growth from the industrial sector that was expected to increase in 2017 as Dangote Cement started using gas for power generation.

"So far in 2017, TPDC has settled in full the November 2016 and December 2016 invoices that were outstanding at the year end, and has also settled a 2015 invoice for line fill gas volumes," the company said.

Wenworth Resources said it had additionally received payment from Tanesco for five months of outstanding invoices.

"Combined cash receipts totalling $4.9m, net to Wentworth, have been primarily used to settle outstanding amounts that were due to the Operator, Maurel et Prom. As part of our Gas Sales Agreement with TPDC, payment guarantees are in place which can be utilized, if determined necessary, should payments from TPDC be excessively delayed," the company said.

Turning to appraisal activities in norhtern Mozmbique, Wentworth Resources reported the reprocessing of roughly 1000 km of existing seismic data was now complete, and interpretation was being finalised. It said results from the Tembo-1 discovery well had fully analysed.

The company was working on advancing a farm-out process with a view to securing an industry partner to jointly drill an appraisal well in 2018.

At 14:52 GMT, shares in AIM-quoted Wentworth Resources were up 2.45% to 26.12p each.