| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | n/a | n/a |
| Intrinsic value (DCF) | n/a | |
| Graham-Dodd Method | n/a | |
| Graham Formula | n/a |
Wentworth Resources plc (LSE: WEN.L) is a Jersey-based natural gas exploration and production company with a primary focus on the Mnazi Bay concession in southern Tanzania. Spanning approximately 756 square kilometers, Mnazi Bay is a key asset contributing to Tanzania's domestic gas supply, supporting power generation and industrial demand. Wentworth operates in the Oil & Gas Exploration & Production sector, emphasizing sustainable and efficient hydrocarbon extraction. The company, founded in 2000, has positioned itself as a niche player in East Africa's energy market, leveraging its long-term gas sales agreements with Tanzania's national power utility. With a market capitalization of approximately £58.6 million, Wentworth maintains a low-debt profile and a commitment to shareholder returns, evidenced by its dividend distribution. The company's operations align with Tanzania's energy development goals, offering strategic relevance in a region with growing gas demand.
Wentworth Resources presents a mixed investment profile. On the positive side, the company benefits from stable cash flows due to long-term gas contracts in Tanzania, zero debt, and a dividend yield, which is rare among small-cap E&P firms. However, its FY2022 net loss of £12.98 million and negative EPS (-6.75p) raise concerns about profitability. The company's low beta (0.32) suggests lower volatility compared to the broader energy sector, but its concentrated asset base in Tanzania exposes it to geopolitical and regulatory risks. Investors may find appeal in its strong operating cash flow (£12.89 million) and disciplined capex, but the lack of diversification and reliance on a single concession limit growth prospects. The stock could suit income-focused investors comfortable with African energy market risks.
Wentworth Resources operates in a highly competitive and capital-intensive sector dominated by larger players with diversified portfolios. Its competitive advantage lies in its niche focus on Tanzania's Mnazi Bay, where it has established infrastructure and long-term offtake agreements, ensuring revenue stability. Unlike many junior E&P companies, Wentworth is debt-free, providing financial flexibility. However, its small scale and single-asset concentration make it vulnerable to operational disruptions and limit its ability to compete with multinationals in bidding for new licenses. The company's low-cost operations and strategic partnerships with local stakeholders (e.g., Tanzania Petroleum Development Corporation) enhance its positioning in the East African market. Yet, its lack of exploration upside and dependence on a single customer (TANESCO) for revenue are significant weaknesses. Wentworth's valuation reflects its status as a 'cash cow' rather than a growth story, contrasting with peers pursuing multi-basin strategies.