Wentworth, the East Africa and Rovuma Basin-focused oil & gas company, announces the following operations update:
Mnazi Bay Exploration
The 248km˛ of new 3D seismic recently acquired offshore Mnazi Bay is currently being processed and interpreted with full results expected in the third quarter 2013. The acquisition of additional onshore 2D seismic is being considered and the concession partners have agreed to drill one well in the fourth quarter of this year, subject to identifying a drillable prospect after taking into account the interpreted offshore 3D, existing 2D and possible additional onshore seismic.
Mnazi Bay to Dar es Salaam Gas Pipeline Project
China National Petroleum Corporation (CNPC) recently awarded a US$45 million contract to Zhejiang Kingland Pipeline & Technologies to supply spiral and longitudinal submerged arc welded pipe for the Mnazi Bay to Dar es Salaam natural gas pipeline project (Pipeline). Wentworth has been advised by the government that the Pipeline is expected to be completed in the second half of 2014.
Gas Sales Agreement for Mnazi Bay Concession
Negotiations with the Government of Tanzania for a gas sales agreement (GSA) for a minimum of 80 mmscf/d (gross) and 25.6 mmcf/d (net to Wentworth), with the potential to increase it to 130 mmcf/d (gross) and 41.5 mmcf/d (net to Wentworth), subject to available gas resources, of Mnazi Bay concession natural gas to supply the Pipeline are ongoing and the execution of that GSA is expected in the near term. The commencement of gas sales to the Pipeline will unlock Wentworth's cost recovery pools, which currently total approximately US$80 million (net to Wentworth), and is expected to result in the recovery of the US$35 million receivable (net to Wentworth) from Tanzania Petroleum Development Corporation. Recovery of this receivable is expected within 18 months following commencement of gas sales to the Pipeline.
Onshore Rovuma 2D Seismic & Drilling
Wentworth's partner and concession operator, Anadarko Petroleum, advised that, pursuant to the provisions of the Petroleum Law of Mozambique, a request to extend the second exploration period of the Exploration and Production Concession Contract for the Rovuma Block Onshore Area has been approved by the Government. The second exploration period now ends on 31 August 2014. The concession partners have agreed to drill two wells back-to-back in 2014 with an option for a third well. The partners are awaiting execution of the rig contract.
This extension will give the concession partners time to finalize the detailed processing and interpretation of the new 2D seismic and to optimize the usage of the drilling rig when secured. Spudding of the first well is expected by the end of the second quarter 2014 with the second well expected to spud immediately following completion of the drilling operations of the first well. The drilling of the first and second wells shall satisfy the exploration work commitments of the second and third exploration periods respectively.
Geoff Bury, Managing Director added:
"This is an exciting time in our Company's history. The new gas pipeline being built in Tanzania brings a large untapped market to our doorstep. We are preparing for the very first large scale production of Mnazi Bay gas to serve that market. Our G&G and other exploration work is paying off and we are preparing to drill new exploration and development wells in Tanzania and Mozambique."
"We are grateful to the government of Mozambique for granting additional time to complete the concession's second exploration work program. The extension enables us to fully evaluate the new 2D seismic that has recently been acquired over the north central and northern coastal sections of the concession; commit to a second firm exploration well; and provides sufficient time within the weather window to drill an optional third well. Our operator in Mozambique, Anadarko, is gearing up for onshore exploration drilling which Wentworth believes is on trend with the recent massive offshore Rovuma Basin natural gas discoveries."
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