Wentworth Resources Limited : Acquisition of Cove Energy's Interest in Mnazi Bay Concession, Tanzania

 WENTWORTH RESOURCES LIMITED

("Wentworth" or "the Company")

 ACQUISITION OF COVE ENERGY'S INTEREST IN MNAZI BAY CONCESSION, TANZANIA

Highlights:

• Wentworth will acquire Cove's 16.38% participation interest in Mnazi Bay 

• In exchange Wentworth will terminate its 4.95% royalty interest out of net profits from Cove's 8.5% working interest in the Offshore Rovuma Area 1 Concession 

• Cove will receive two million newly issued fully paid shares in Wentworth  

• Cove will also receive a Contingent Payment from Wentworth of up to US$ 8.5 million, should certain future natural gas production thresholds from Mnazi Bay be reached 

• The transaction is valued at approximately US$38.8 million  

Wentworth is pleased to announce that it has reached an agreement with Cove Energy plc ("Cove") to acquire its 100% owned subsidiary, Cove Energy Tanzania Mnazi Bay Limited ("Cove Tanzania").  Cove Tanzania holds a 16.38% participation interest in the production operations (20.475% participating interest in exploration operations) in the Mnazi Bay Concession, Tanzania ("Mnazi Bay").  In exchange, the Company will terminate its right to receive a 4.95% royalty interest out of net profits (the "Royalty Interest") from Cove's 8.5% working interest in the Offshore Rovuma Area 1 Concession, Mozambique (collectively the "Swap Transaction").  Pursuant to the Swap Transaction, Cove will also receive two million newly issued and fully paid up shares in Wentworth and a contingent payment of up to US$8.5 million should certain future natural gas production thresholds from Mnazi Bay be reached ("Contingent Payment").

Following completion of the Swap Transaction, the interests in Mnazi Bay are as follows:

• Wentworth will have a 41.78% participating interest in the production operations (52.225% participating interest in exploration operations), 

• Les Etablissements Maurel & Prom S.A. ("Maurel & Prom"), operator, will have a 38.22% participating interest in the production operations (47.775% participating interest in exploration operations), and 

• Tanzania Petroleum Development Corporation ("TPDC") will retain its 20% participating interest in the production operations (0% participating interest in exploration operations). 

Under the terms of the existing Joint Operating Agreement ("JOA") between Wentworth, Maurel & Prom, Cove Tanzania and TPDC, both TPDC and Maurel & Prom have the right to acquire their proportionate share of Cove's interest in Mnazi Bay for the cash equivalent value of the Swap Transaction, which is approximately US$38.8 million, by February 26, 2012 ("Pre-emptive Rights").  At the time of this press release, neither TPDC nor Maurel & Prom have exercised or waived their Pre-emptive Rights.    

Under the terms of the farm-out to Maurel & Prom and Cove Tanzania in 2009, Wentworth is to be carried 70% by Maurel & Prom and 30% by Cove Tanzania through the cost of one exploration well and 200 square kilometers of 3D seismic or an alternative exploration and appraisal program of an equal cost ("Carry Obligation").  With Wentworth's acquisition of Cove Tanzania, the Company will now be required to fund 30% of this Carry Obligation, with Maurel & Prom funding the remaining 70%, in these exploration operations.  Following completion of the Carry Obligation, each party's funding obligations will revert to their participating interests.

Both the Swap Transaction and the exercise of any Pre-emptive Rights are subject to the terms of the JOA and approval by the Government of Tanzania.

Benefits of the Swap Transaction       

Wentworth's Royalty Interest is subject to the estimated probability and timing of construction and commissioning of a gas monetization project, and/or the discovery, development and production of any oil or natural gas liquids.  Mnazi Bay is core to Wentworth's future growth strategy and the Swap Transaction eliminates the uncertainties associated with the Royalty Interest and adds significant value to Wentworth as it:

• increases Wentworth's revenue, cash flow, and net contingent and prospective resources; 

• monetises Wentworth's Royalty Interest by exchanging it for an additional working interest in Mnazi Bay; 

• puts Wentworth in a position of greater strategic influence over Mnazi Bay's gas monetisation plan; 

• increases exposure (and any potential upside) to the Ziwani-1 exploration well and all future exploration and appraisal activities, while preserving the benefit of being largely carried for the 2012 exploration expenditures; and 

• increases the Company's potential future net production of hydrocarbons, which strengthens the ability to sanction and supply a petrochemical or other large-scale gas monetisation project. 

Executive Chairman, Bob McBean, commented:

"This transaction is a classic win situation for both parties involved as it goes a long way toward allowing Wentworth and Cove Energy to meet their own distinct corporate objectives. I would like to thank the management of Cove Energy for the cooperation and diligence shown throughout the process. We look forward to providing further updates."

   

About the Mnazi Bay Concession

The Mnazi Bay Concession Area is located in coastal, south-eastern Tanzania in the Rovuma (Ruvuma) Basin. The area lies between Aminex and Tullow Oil's Ruvuma Concession Area and Ophir Energy and BG Group's offshore Block 1. Ophir and BG Group's Chaza-1 gas discovery lies just northeast of Mnazi Bay's marine border. The 756 km² concession area contains two discovered Tertiary aged gas fields (Mnazi Bay and Msimbati) and holds additional Tertiary, Cretaceous and Jurassic hydrocarbon potential. Four wells have been drilled to date:  MB-1, MB-2, MB-3 and MS-1X, and all four wells encountered hydrocarbons. MB-1 is currently producing gas at a rate of 1.7-2.0mmscf/d and this gas is transported via an 8", 27 kilometre pipeline to the Mtwara Power Plant where it generates electricity for numerous local communities.

On this Swap Transaction, Wentworth was assisted by Clermont Energy Partners LLP.    

Enquiries:

About Wentworth Resources

Wentworth Resources is a publicly traded (AIM:WRL, OSE:WRL), independent oil & gas company with:  natural gas production; midstream and downstream assets; a committed exploration and appraisal drilling programme; and large-scale gas monetisation programmes, all in the Rovuma Delta Basin of coastal southern Tanzania and northern Mozambique.

FORWARD LOOKING STATEMENTS

This press release may contain certain forward-looking information.  The words "expect", "anticipate", "believe", "estimate", "may", "will", "should", "intend", "forecast", "plan", and similar expressions are used to identify forward looking information.

The forward-looking statements contained in this press release are based on management's beliefs, estimates and opinions on the date the statements are made in light of management's experience, current conditions and expected future development in the areas in which Wentworth is currently active and other factors management believes are appropriate in the circumstances. Wentworth undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless required by applicable law.

Readers are cautioned not to place undue reliance on forward-looking information. By their nature, forward-looking statements are subject to numerous assumptions, risks and uncertainties that contribute to the possibility that the predicted outcome will not occur, including some of which are beyond Wentworth's control.  These assumptions and risks include, but are not limited to: the risks associated with the oil and gas industry in general such as operational risks in exploration, development and production, delays or changes in plans with respect to exploration or development projects or capital expenditures, the imprecision of resource and reserve estimates, assumptions regarding the timing and costs relating to production and development as well as the availability and price of labour and equipment, volatility of and assumptions regarding commodity prices and exchange rates, marketing and transportation risks, environmental risks, competition, the ability to access sufficient capital from internal and external sources and changes in applicable law.  Additionally, there are economic, political, social and other risks inherent in carrying on business in Tanzania and Mozambique. There can be no assurance that forward-looking statements will prove to be accurate as actual results and future events could vary or differ materially from those anticipated in such statements. See Wentworth's Management's Discussion and Analysis for the year ended December 31, 2010, available on Wentworth's website, for further description of the risks and uncertainties associated with Wentworth's business.

NOTICE

Neither the Oslo Bors Exchange nor the AIM Market of the London Stock Exchange has reviewed this press release and neither accepts responsibility for the adequacy or accuracy of this press release.