CALGARY, ALBERTA — (Marketwired) — 11/19/13 — 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 nine months ended September 30, 2013 (“Q3 2013”):
THREE MONTHS ENDED SEPTEMBER 30, 2013
NINE MONTHS ENDED SEPTEMBER 30, 2013
FINANCIAL AND OPERATING RESULTS
The following table provides a summary of Mart–s selected financial and operating results for the three and nine months ended September 30, 2013 and 2012 and the twelve months ended December 31, 2012:
Notes:
OUTLOOK AND OPERATIONS UPDATE:
Dividend
On September 4, 2013, Mart declared a quarterly cash dividend of CAD $0.05 per common share that was paid to shareholders on October 2, 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 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 reached a final total drilling depth of approximately 8,910 feet on September 27, 2013. Open hole well logging has been completed, pressure surveys on prospective zones have been conducted, and fluid samples have been acquired.
Operations to run 9 5/8 inch casing to the bottom of the well have been completed and the casing has been cemented. The primary objectives of the UMU-11 well are to appraise and produce the proven oil reservoirs encountered but not completed in the UMU-9 and UMU-10 wells. Target sands for testing have been identified, and the well has been completed using a dual-string configuration. Flow testing of the completed IX, XIIb and XIIIb sands is underway.
Drilling program
A second drilling rig has been contracted and it is anticipated that the water disposal well will be drilled in December 2013.
Also, it is planned to re-enter the UMU-8 well in December 2013 or January 2014. Preliminary plans are to drill a re-entry horizontal development well and an exploration well in 2014.
Umugini Pipeline Construction Update
Construction of the Umugini pipeline has been completed from the location near the Umusadege field to a point approximately 18 kilometers into the 51-kilometer pipeline. Construction operations have been delayed due to weather conditions in the area that required the construction contractor to shut down pipeline construction operations. Work on a road crossing is underway in preparation for resumption of pipeline construction operations. Negotiations are nearing conclusion with the local communities for right of way for the last five kilometers of the first section of the Umugini pipeline. It is expected that the pipeline contractor will re-mobilize and restart construction operations after current rains diminish and flooding recedes, which is anticipated by December 2013. Once final government approval is received for the second phase of the project and weather conditions permit, construction of the second section of the Umugini pipeline will commence. It is expected that pipeline construction will be completed in the first half 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 approximately 18 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 October 2013 averaged 10,735 bopd. Umusadege field downtime during October 2013 was approximately 4.5 days due mainly to maintenance and repairs on the export pipeline performed by the pipeline operator, AGIP. The average field production based on producing days was 12,638 bopd in October 2013. On certain days in October 2013 export oil shipments into AGIP pipeline, before pipeline losses, reached record levels in excess of 16,000 bopd.
Total net crude oil deliveries into the export pipeline from the Umusadege field for October 2013 were approximately 325,700 bbls before pipeline losses. Pipeline and export facility losses reported by AGIP and allocated to Mart and its co-venturers for September 2013 were 74,103 bbls, or 28.4% of total crude oil deliveries into the export pipeline. October 2013 pipeline and export facility losses have not yet been reported by AGIP. Pipeline and export facility losses have averaged 24.1% for the first nine months of 2013.
As previously reported, the Umusadege field has been allocated an additional pipeline reserved production capacity of up to 4,500 bopd by AGIP. An increase in oil shipments from the Umusadege field is expected to be achieved after modifications are made in and around Kwale flow station to facilitate the additional oil shipments.
CHAIRMAN–S COMMENT:
Wade Cherwayko, Chairman & CEO of Mart said, “Drilling of the UMU-11 well was completed in September and testing of three target zones is nearly complete, with results anticipated soon. The Umusadege field–s production capacity remains strong, and the potential of the field continues to be very positive. Unfortunately, in the third quarter of 2013 Mart has experienced high pipeline and export facility losses, which resulted in lower production and revenue in Q3 2013 compared to Q2 2013. Mart–s revenue for Q3 2013 was $35.8 million with a net income after taxes of $6.3 million.
The construction of the Umugini pipeline is scheduled to resume in December 2013, and when completed will enable the Umusadege co-venturers to more 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. 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 October 2, 2013 for a total amount of CAD $17.8 million.”
Mart will hold a conference call to discuss the operational and financial results for the quarter ended September 30, 2013. The conference call is scheduled for November 22, 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 1-800-769-8320 or 416-340-8527. An instant replay of the call will be available until November 29, 2013 by dialing 1-800-408-3053 or 905-694-9451 and entering pass code 9302715.
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
Wade Cherwayko / Dmitri Tsvetkov
+44 207 351 7937
/
Mart Resources, Inc. – Canada
Sam Grier
403-270-1841 or toll free 1-888-875-7485