CALGARY, ALBERTA — (Marketwired) — 08/15/13 — Mart Resources, Inc. (TSX VENTURE: MMT) (“Mart” or the “Company”) is pleased to announce its financial and operating results (all amounts in United States dollars unless noted) for the three and six months ended June 30, 2013 (“Q2 2013”):
THREE MONTHS ENDED JUNE 30, 2013
SIX MONTHS ENDED JUNE 30, 2013
FINANCIAL AND OPERATING RESULTS
The following table provides a summary of Mart–s selected financial and operating results for the three and six months ended June 30, 2013 and 2012 and the twelve months ended December 31, 2012:
OUTLOOK AND OPERATIONS UPDATE:
Dividend
On June 26, 2013, Mart declared a quarterly cash dividend of CAD $0.05 per common share that was paid to shareholders on July 18, 2013 for an aggregate amount of CAD $17.8 million.
UMU-10 Well
The Company announced on November 5, 2012 that the UMU-10 well encountered 479 feet of gross hydrocarbon pay in 20 sands. The results of the well tests conducted have been previously press released.
The operator of the Umusadege field plans to return to the UMU-10 well after drilling the UMU-11 well (discussed below) to carry out the remaining testing operations on the XXb and XIX sands in the long string with a coiled tubing unit. Multirate flow testing will then be performed on all sands completed in the long string: XIX, XXb, and XXI.
UMU-11 Well
The UMU-11 well commenced drilling operations on August 14, 2013 and is currently at a depth of 1,100 feet in the 16-inch upper hole section. The 16-inch upper hole section is anticipated to be drilled to a depth of approximately 5,000 feet. The next activity will include running and cementing 13 3/8 inch casing in the upper hole section. Once completed, drilling will then continue with a 12 1/4 inch section to a total measured depth of approximately 8,700 feet, followed by running a 9 5/8 inch casing.
The main objectives for the UMU-11 well are to appraise and produce proven oil reservoirs encountered but not completed in the UMU-9 and UMU-10 wells. These sands (XIIb, XIIc, XVIa, and XVIb) were previously logged and sampled. The UMU-11 objective is to test four of these oil-bearing sands, and if successful, complete these sands for production.
After completion of the UMU-11 well, an exploration/appraisal well is planned to be drilled on the East exploration structure of the Umusadege field.
Second Drilling Rig
A tender for a second drilling rig was successfully completed, and after site preparation the second drilling rig is expected to start drilling a water disposal well in September 2013. After completion of the water disposal well, the rig is planned to be used to re-entry UMU-8 well. Following the activities at UMU-8, the drilling rig will move to the UMU-4 location to drill a re-entry horizontal development well in Q1 2014. Mart and its co-venturers plan to drill several additional horizontal wells.
Umugini Pipeline Construction Update
Construction of the Umugini pipeline has been completed from the location near the Umusadege field to a point approximately 17 kilometers into the 51-kilometer pipeline. Construction operations are being delayed due to weather conditions and heavy rains in the area that required the construction contractor to shut down operations. It is now expected that pipeline construction will be completed in the first quarter of 2014.
The Umugini pipeline has two segments. The first segment is from the Umusadege field south to the Ogini flow station on OML 26. This section is 23 kilometers in length and is where the 17 kilometers of pipeline construction has been completed. The second segment is from the Ogini flow station west to the Eriemu flow station. This section of the pipeline will be constructed along an existing right of way and will be twinning the existing pipeline currently operating between the Ogini flow station and the Eriemu flow station. The Umugini pipeline will provide a second independent export pipeline for Umusadege field production. The Umugini pipeline–s gross transportation capacity will be approximately 45,000 barrels per day and it will connect the Umusadege field to the Trans Forcados export pipeline. The Trans Forcados export pipeline will deliver crude oil from Umusadege field to the Forcados export terminal operated by Shell.
Production Update
Umusadege field production during July 2013 averaged 10,800 bopd. Umusadege field downtime during July 2013 was approximately 4.5 days due to sporadic shutdowns required for commissioning and testing of the new central processing facility and operations connected to preparation for drilling of the UMU-11 well. The average field production based on producing days was 13,200 bopd in July 2013, which is the highest average production rate for a calendar month based on production days.
Total net crude oil deliveries into the export pipeline from the Umusadege field for July 2013 were approximately 347,100 bbls before pipeline losses. Pipeline and export facility losses for May 2013, June 2013 and for July 2013 have not yet been reported by Nigerian Agip Oil Company (“Agip”), the export pipeline operator. In the past, Agip has reported pipeline and export facility losses one month after the final reporting of each month–s injection totals, but for the past two months the pipeline losses have not been reported. Mart and its co-venturers have requested the loss information from Agip and will publicly disclose this information when it is received.
As a result of negotiations with Agip, the Umusadege field has been allocated an additional pipeline reserved production capacity of up to 4,500 bopd. An increase in oil shipments from the Umusadege field will be achieved after more powerful pumps are obtained and installed by Agip.
CHAIRMAN–S COMMENT:
Wade Cherwayko, Chairman & CEO of Mart, said, “In the second quarter of 2013 Mart resumed normal production operations, after experiencing shutdowns in the first quarter that were far above normal due to maintenance and repairs to the export pipeline performed by the pipeline operator. This resulted in much improved production and revenue in Q2 2013 compared to Q1 2013 and Mart–s revenue for Q2 2013 was $43.2 million with a net income after taxes of $19.1 million.
The export pipeline resumed normal operations on April 17, 2013, and production and injection into the export pipeline has continued at levels at or nearing the maximum allocation. The Umusadege field–s production capacity remains strong, and the potential of the field continues to be very positive. The Company continues to work towards maximizing production and increasing reserves. The construction of the additional export pipeline will also enable the Umusadege co-venturers to fully exploit the potential of the Umusadege field. The new Central Production Facility (“CPF”) was commissioned in the beginning of July 2013 at the Umusadege field and all production is being processed by new facility. Current capacity of the CPF is 35,000 barrels per day and is expandable to handle future production increases as needed. The drilling of UMU-11 well began in August 2013. Additional development drilling activities are planned for the remainder of 2013. The Company declared a quarterly cash dividend of CAD $0.05 per common share that was paid to shareholders on July 18, 2013 for an aggregate amount of CAD $17.8 million.”
Mart will hold a conference call to discuss the operational and financial results for the quarter ended June 30, 2013. The conference call is scheduled for August 16, 2013 at 10:00 AM Mountain Daylight Time (12:00 Eastern Daylight Time). Wade Cherwayko, Chairman & CEO of Mart, and Dmitri Tsvetkov, Chief Financial Officer of Mart, will host the call and be available during the question-and-answer session. To access the conference call, please dial 1-866-225-2055 or 416-340-8061. An instant replay of the call will be available until August 23, 2013 by dialing 1-800-408-3053 or 905-694-9451 and entering pass code 5224100.
Additional information regarding Mart is available on the Company–s website at and under the Company–s profile on SEDAR at .
Notes: Except where expressly stated otherwise, all production figures set out in this press release, including bopd, reflect gross Umusadege field production rather than production attributable to Mart. Mart–s share of total gross production before taxes and royalties from the Umusadege field fluctuates between 82.5% (before capital cost recovery) and 50% (after capital cost recovery).
Forward-Looking Statements
Certain statements contained in this press release constitute “forward-looking statements” as such term is used in applicable Canadian and US securities laws. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or are not statements of historical fact and should be viewed as “forward-looking statements”. These statements relate to analyses and other information that are based upon forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Such forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.
In particular, statements (express or implied) contained herein or in Mart–s Management–s Discussion and Analysis (“MD&A”) regarding the following should be considered forward-looking statements: the Company–s goals and growth strategy, estimates of reserves and future net revenues, exploration and development activities in respect of the Umusadege field, the Company–s ability to finance its drilling and development plans with cash flows from operations, the ability of the Company to successfully drill and complete future wells, the ability of the Company to commercially produce, transport and sell oil from the Umusadege field, future anticipated production rates, export pipeline capacity available to the Company, the expectation of the Company that production and export pipeline disruptions will not have a lasting impact on the Company–s future production, timing of completion of the Company–s upgrading of the central production facility, the construction and completion of an alternative export pipeline, the acceptance of the Company–s tax filings by the Nigerian taxing authorities, treatment under government regulatory regimes including royalty and tax laws, projections of market prices and costs, supply and demand for oil, timing for receipt of government approvals, and the ability of the Company to satisfy its current and future financial obligations to its banks and other creditors.
There can be no assurance that such 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. Accordingly, readers should not place undue reliance on forward-looking statements contained in this news release. This cautionary statement expressly qualifies the forward-looking statements contained herein.
Forward-looking statements are made based on management–s beliefs, estimates and opinions on the date the statements are made and the Company undertakes no obligation to update forward-looking statements and if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable law.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE RELEASE.
Contacts:
Mart Resources, Inc.-London, England office
Wade Cherwayko
+44 207 351 7937
Mart Resources, Inc.-London, England office
Dmitri Tsvetkov
+44 207 351 7937
Mart Resources, Inc.-Canada
Sam Grier
403-270-1841 or toll free 1-888-875-7485