There was marginal decline in industrial demand due to weakened activity as a result of COVID-19 as well as heavy rain that resulted more reliance of hydro-power generated electricity in Tanzania. According to Wentworth Resources COVID-19 restictions and a prolonged rainy season in January and June (normally March to late May) resulted to less industrial demand.
The company produced 58.28 MMscf/day down from 66.17 MMscf/day a similar period last year for the period to 30 June 2020 with higher demand expected in the second half of the year. The effects were however mitigated by the continued growth of the Tanzania economy with recent data from the African Development Bank suggesting Tanzania’s projected GDP growth in 2020 is set to be the highest in the East Africa region at 5.2%.
Katherine Roe, CEO, commented:
‘Despite a challenging macroeconomic environment due to the ongoing impacts of the COVID-19 pandemic, Wentworth has continued to demonstrate business resilience, robust financial and operational performance which has underpinned our decision to increase our interim dividend.
Having only launched our sustainable dividend policy in Q3 2019, we’re delighted to have now declared three dividend payments within the last twelve months returning $4.2m in total to shareholders. This latest interim dividend also represents a 20% increase year-on-year from our inaugural dividend in September last year and demonstrates how our sustainable business model can withstand these global economic shocks.
The Mnazi Bay 2020 production guidance has been slightly adjusted to 60-70 MMscf/day with the partners well-positioned to supply increased gas volumes and support demand growth in H2 2020 and into 2021 with the capacity to supply volumes of 100 MMscf/day.
During the period 1st July 2020 to 31st August 2020 proportion of supply to Tanzania’s national grid provided by natural gas has increased from 47% to currently 60%. with the production averaged 68.48 MMscf/day during the period and 71.77 MMscf/day for the period 1 August 2020 to 31 August 2020.
“Looking ahead to the second half of 2020, with Tanzania now returning gradually to business-as-usual and following unprecedentedly high levels of rainfall in the H1 2020, we expect to see an increase in demand for natural gas during the remaining part of this year. ”
“Responsible and sustainable growth that creates value for all our stakeholders remains our priority. We are proud to be a Tanzanian business that is committed to playing a leading role in closing the country’s energy access gap through low-carbon solutions as it seeks to deliver universal access by 2030. Through the provision of reliable, affordable and low-carbon power we have a significant opportunity to deliver transformational change for the people of Tanzania and to support the ongoing socio-economic development of the country.”
Wentworth’s core asset is the Mnazi Bay Concession in Tanzania where the Company holds participation interests of 31.94%.