Good news for next in line producers AMINEX & Solo – First revenues expected in July
Last week was a not only a great week for Tanzania’s domestic gas producer, Wentworth (WRL) who published their Q1 2016 financial statement, but also for AIM Tanzania focused E&P players, AMINEX (AEX) and Solo Oil, (SOLO) where shareholders and potential investors in both companies will be buoyed by Wentworth’s recent results.
Receiving Cash
Wentworth Resources LON:WRL announced that they had gas sales revenue of $3.21 million from their Mnazi Bay onshore gas production field, but the interesting item of detail reveled in the Q1 figures was the fact the company was actually receiving cash from TANESCO, Tanzania’s sate owned electricity utility and primary user of the Mnazi Bay gas. Some critics of Tanzania’s gas sector have cast doubt on TANESCO’s ability to pay for gas, this criticism must now be put to one side.
Wentworth reported an Increase in cash and cash equivalents to $4.05 million at March 31, 2016 from $2.75 million on hand at December 31, 2015, a clear indication that payments from TANESCO are flowing into Wentworth as fast as the gas is flowing out. The first revenues were received back on the 4th November 2015. Like AMINEX and SOLO Wentworth have secured a sales price for the gas at US$3.00 per million BTU, approximately US$3.07 per thousand cubic feet, rising in line with the US CPI industrial index.
Wentworth reported average gross daily gas production of 48 MMscf/d for the first quarter 2016 and reached 65 MMscf/d on 31 March.
AMINEX and SOLO…….I am expecting first sales revenue reporting as early as July 2016
AMINEX and SOLO announced first gas production from their Kiliwani North gas project on the 6th April this year. It took Wentworth four months to report first gas sales revenue (Mnazi Bay first gas flow was on August 21st 2015, first revenue reported 4th November 2015).
Accordingly I would expect AMINEX and Solo to report first cash around July this year, in what would be a major value catalyst for both companies, but also help increase the financial reporting transparency of Tanzania’s gas sector.
Author: BrandPetrogas
