Wentworth Resources a natural gas production firm announced to have reached an agreement with Scirocco Energy Plc (Scirocco) to acquire 25 per cent non-operated working interest in the Ruvuma Production Sharing Agreement (PSA).
The discovery of 1.9 trillion standard cubic feet (tscf) gas at Ntorya, Ruvuma and operated by ARA Petroleum Tanzania which has a 50 per cent working interest alongside Aminex Plc holds 25 per cent stakes and seen as adjacent to Wentworth’s Mnazi Bay gas producing asset.
Wentworth’s Chief Executive Katherine Roe in Dar es Salaam said that the transformational transaction for the company established a dual-asset, full-cycle Exploration and Production (E&P) with a significantly enhanced resource base and production profile.
“The deal represents an attractively priced, low-risk entry into a high growth opportunity which cements our position as a leading supplier of domestic gas to Tanzania,” Ms Katherine said in a press statement released in Dar es Salaam on Tuesday.
She further said that the consideration was composed of an initial cash payment of 3.0 million US dollars due upon completion, with further deferred and contingent cash payments of up to 13 million US dollars dependent on certain development and production milestones.
According to Wentworth, the consideration will be funded through the firm’s cash resources whilst allowing the company to maintain its commitment to a long-term, sustainable and progressive dividend for shareholders.
“This compelling growth opportunity is fully aligned with our commitment to support Tanzania to reach its goal of providing universal energy access by 2030 in accordance with our purpose to empower people with energy and deliver value for Tanzania, Wentworth and all our stakeholders,” she said.
The Final Investment Decision (FID) is targeted for 2023 with the first gas expected in late 2024 and an ultimate target production rate of up to 140 Million Standard Cubic Feet a day (MMscf/d).
According to Wentworth, the project will require the construction of a pipeline from the gas field to the government-operated Madimba gas facility which is currently receiving most of the production volumes from the Mnazi Bay gas field.
Gas from the Madimba gas facility will then be distributed via existing gas infrastructure to end-users who are located in different parts of the country, with Dar es Salaam city hosting most of the gas users for domestic.