Wentworth Resources (formerly Artumas Group) confirmed Monday that it has signed a long term agreement for sale of gas from the Mnazi Bay and Msimbati southern Tanzania.
The agreement was signed with Tanzania’s state oil company TPDC.
The gas will be transported through the state-owned and operated Mtwara / Dar es Salaam pipeline from the Madimba plant, which is under construction these days. The project is expected to be completed in Q1 2015.
The first delivery is expected to occur during the period 22 January 2015 to 22. April 2015, at a fixed price of $ 3.07 per thousand cubic feet of gas.
The entire message here.
The world’s cheapest stock
Analysts have responded by jacking up their price target on the stock.
Panmure Gordon, according to American Banking & amp; Market News raised its price target from 70 to 80 pence (approximately 8.30 million), according to an update dated Monday. The British investment firm has a Buy recommendation on the stock.
Wentworth Resources rose 12.9 percent to 4.89 million in today’s trading on Oslo Børs. Course objective is thus equivalent to an upside of about 70 percent.
Analysts at Investec has reiterated its buy recommendation with a target price 65 pence (about 6.75 million).
Analysis Manager Stig Myrseth in Dovre Administration said in January that Wenthworth Resources could be the world’s cheapest share, and that the company would earn market capitalization his one year when gas agreement was in place.
Wentworth is up 9 per cent last year, but still down 46 percent from the peak.
– Removes all risk in the stock
In an interview with the TDN Finans said a delighted Wentworth-director Geoffrey Bury that there is no significant risk remaining in stock.
– Gas sales agreement eliminates essentially all, since we know the pipeline is scheduled for completion at the end of the year. Then it will only remain open taps, he says.
The risk is limited according Bury now for future exploration activities, and he stresses faced news agency also key point that all exploration related capex (capital expenditure) in Mnazi Bay, and will be written off.
– We have therefore essentially eliminated all financial risk from future exploration, he said.
Bury emphasis on face TDN Finans that Wentworth did not pay anything for transporting or processing gas, so the price quoted is the company receives net.
– In the first year of production, we expect to generate positive cash flow in excess of $ 20 million, net of Wentworth, for operating and development costs, and during the first five years, we expect total net cash flow around $ 140 million, he said to the news agency.
When closing the Oslo Stock Exchange Monday was Wentworth Resources priced at NOK 753 million.
If cash flow is that Bury is pending, ie the market value could be recouped during these first five years of the agreement.
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