Wentworth Sells Mtwara Power Plant for Upstream Funds

Source: www.gulfoilandgas.com 2/8/2012, Location: Africa

Wentworth is pleased to announce that its subsidiary, Wentworth Power Limited, has reached an agreement to sell its 100 percent owned 18MW gas-fired power plant and associated assets (located in Mtwara, Tanzania) to TANESCO for the cash consideration of US$13.5 million. The sale will, upon completion, be effective as of February 7, 2012, and is expected to close on or before March 9, 2012.

Reasons for & Benefits of the Sale:

1. Wentworth, an independent oil and gas company operating in the Rovuma Basin of East Africa, is focused on its upstream oil and gas operations and activities, and on developing large-scale gas monetisation projects, and sees power generation as a non-core business;
2. Allows Wentworth to streamline its Tanzania operations and focus exclusively on exploring for hydrocarbons and developing and producing its known natural gas resources;
3. Provides Wentworth with non-dilutive capital for near term investment in upstream operations and gas monetisation project development;
4. Wentworth and its Mnazi Bay Concession partners will continue to supply natural gas to the Mtwara Power Plant;
5. TANESCO is Tanzania's electrical power utility and is well suited to manage, develop and grow this business; and
6. TANESCO's mandate to own and expand electrical power generation fits well with Wentworth's commitment to increase production and sales of Mnazi Bay natural gas.

Mtwara Power Plant Key Financial Facts:

The plant generated $5.204 million revenues in the first nine months of 2011, with assets holding a net book value of $9.426 million and profit with a loss of 206.
The plant generated $4,861 million revenues in the year ended December 31 2010, with assets holding a net book value of $10,278 million and profit with a loss of 404.
The plant generated $3,415 million revenues in the year ended December 31 2009, with assets holding a net book value of $8,236 million and profit with a loss of 1,076.

Managing Director, Geoff Bury, commented:

"We believe the sale and purchase of the power plant is beneficial to both parties and we want to thank TANESCO and the government of Tanzania for their commitment and professionalism throughout the transaction process. This transaction provides us with further non-dilutive capital as we look to focus on our core strategy of exploring for hydrocarbons and developing known natural gas resources. We look forward to continuing to be a reliable, long-term gas supplier to the Mtwara Power Plant and to being a gas supply partner with TANESCO in other parts of Tanzania".


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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 


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