Wentworth Resources Limited has secured $26million in loan agreements from the Tanzanian Bank for the development of a well and loan repayments.
The company said it had also signed a long-term gas sales and purchase agreement to supply discovered natural gas at a price of $3 per mmbtu (million metric British thermal units) for its Mnazi Bay concession.
In its third quarter results the company said its working capital was down to $24million compared with $38.4million for the same time last year.
Geoff Bury, managing director, said: “Signing of a long-term gas sales agreement on September 12, 2014 was a key milestone for Wentworth and has established a solid foundation for significant growth in East Africa.
“With the government owned, Chinese constructed gas pipeline and gas processing facilities on schedule for completion and commissioning in Q1 2015, development activities connecting our existing field infrastructure to the pipeline have accelerated.
“We expect to be ready to deliver gas from our discovered gas fields in Mnazi Bay when requested by the government and production is expected to reach 80mmscf/day by the end of Q2 2015.
“Drilling of the Tembo-1 exploration well has taken much longer than originally planned and we appreciate the patience of shareholders as the well remains a tight hole until drilling operations are complete.
“With the drilling of Tembo-1 and Kifaru-1 and the delivery of the first gas, the next three to six months looks to be a transformational period in the company’s short history.”
The loan agreements will cover the development of a well in Tanzania and the repayment of a $6million long-term loan.
Wentworth Resources also completed the acquisition of 315km of conventional 2D seismic over prospective areas of the Mnazi Bay concession.