Wentworth, the independent, Tanzania -focused natural gas production company, announces that the Operator of the Mnazi Bay asset has informed the Company that it has received a notification from Tanzania Petroleum Development Corporation ("TPDC ") in relation to the settlement of gas purchase invoices (the "Notification").
The Notification states that owing to TPDC facing a scarcity of US dollars, TPDC has requested that all future gas purchase invoices be settled in Tanzanian shillings by applying the exchange rate available on the date of payment.
Payment in Tanzanian shillings is provided for in the Mnazi Bay gas sales agreement, subject to a payment guarantee in the form of either a World Bank partial risk guarantee or an escrow supported by a letter of credit, although to date, all gas purchase invoices have been settled in US dollars.
Wentworth expects this matter to be the subject of further discussion between the Operator and TPDC. However, in the event that invoices are to be settled in Tanzanian shillings, Wentworth expects the change to have the following effects:
· Wentworth will be exposed to currency fluctuation between the date of payment and conversion to foreign currency; and
· Wentworth will be exposed to the cost of converting Tanzanian shillings into foreign currency.
Furthermore, historically, there have been times when scarcity of foreign currency in Tanzania has resulted in:
o Exchanging Tanzanian shillings for foreign currency being subject to restrictions; or
o Foreign currency being available only at disadvantageous exchange rates, or not at all.