Mart Resources, Inc. (TSX VENTURE:MMT) ("Mart" or the "Corporation") is pleased
to announce its third quarter financial and operating results (all amounts shown
in Canadian dollars unless noted):
HIGHLIGHTS
- Total crude oil sales revenue for the quarter increased by 25% to $25.6
million compared to $20.5 million in the third quarter of 2008.
- Cash flow from operating activities of $15.0 million recorded in the third
quarter.
- Crude oil production from the Umusadege Field increased by 115% to 4,097
barrels oil per day ("bopd") for the third quarter, compared with 1,910 bopd for
the same period in 2008.
- Average price received for crude oil per barrel was $71.12 USD for the third
quarter of 2009 (averaged $73.31 USD year to date in 2009).
- Total bank debt and accounts payable at September 30, 2009 of $39.7 million
(consisting of $20.5 million bank debt and $19.2 million payables), a reduction
of 21% from 2008 year end.
- Bank debt reduced further to $14.9 million on November 27, 2009, compared to
$20.5 million on September 30, 2009 and $29.4 million on December 31, 2008.
- Write down of $9 million in relation to termination of Mart's interest in the
KE field.
FINANCIAL AND OPERATING RESULTS
The following table provides a summary of Mart's selected financial and
operating results for the three and nine month periods ended September 30, 2009
and 2008. Unaudited interim financial statements with Management's Discussion
and Analysis ("MD&A") will be available on the Corporation's website at
www.martresources.com and will also be available on the SEDAR website at
www.sedar.com.
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Three months ended Nine months ended
September 30 September 30
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Financial (CDN$) 2009 2008 2009 2008
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Crude oil revenue after
royalties 23,670,890 18,820,765 53,614,621 30,410,985
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Cash flow from operating
activities (1) 14,966,929 5,288,273 25,732,839 2,190,542
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Cash flow from operating
activities per share,
basic & diluted (1) 0.045 0.017 0.077 0.007
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Earnings (loss) from
operations 9,532,141 503,111 7,342,552 (6,930,712)
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Per share basic & diluted 0.028 0.002 0.022 (0.022)
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Net earnings (loss) 489,540 503,111 (1,700,049) (6,930,712)
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Per share basic & diluted 0.001 0.002 (0.005) (0.022)
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Total Assets 113,157,389 126,172,597 113,157,389 126,172,597
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Total bank debt & accounts
payable 39,655,738 41,500,647 39,655,738 41,500,647
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Common shares outstanding
- end of period
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Basic and diluted (2) 335,548,201 315,887,943 335,548,201 315,887,943
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Crude oil sales revenue 25,638,105 20,531,654 58,408,552 33,188,919
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Less: Royalties 1,967,215 1,710,889 4,793,931 2,777,934
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Net crude oil sales 23,670,890 18,820,765 53,614,621 30,410,985
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Total Sales Volumes (bbls) 340,000 165,000 855,000 257,150
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Total Production (bbls) 357,552 168,072 859,290 293,756
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Average daily oil production 4,097 1,910 3,252 1,920
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Notes:
(1) Non-GAAP measure.
(2) Consists of outstanding and issued common shares.
CORPORATE AND OPERATIONS REVIEW
The Board has recently completed a strategic review of Mart's ongoing
operations, cash position and production revenue. As a result of this review,
the Corporation will focus its efforts in the near term on reducing trade
payables, maximizing production, increasing cash flow and enhancing oil and gas
reserves from the Umusadege Field. Mart is also considering divesting from its
drilling rig business and has also leased out its NRG Rig 101 to improve the
Corporation's cash flow. In addition, Mart will be strengthening its operations
and management team to better position the Corporation for its near term
production and development activities.
As previously announced, the Corporation's gross total proved reserves (before
deduction of royalties) increased from 1.9 million barrels of oil reported in
the 2008 NI 51-101 Statement to 4.8 million barrels. This increase results
principally from the inclusion of additional reservoir zones in the proven
category as a result of the UMU-5 well. The Corporation's gross total proved
plus probable reserves (before deduction of royalties) decreased slightly from
22.8 million barrels of oil reported in the 2008 NI 51-101 Statement to 22.4
million barrels of oil.
Mart and its partners are currently reviewing options to increase production and
reserves from the Umusadege field in 2010, including drilling new development
wells and re-completion of the two existing producing wells. The timing of these
operational activities will be confirmed once adequate capital resources have
been allocated and work programs and budgets have been approved by Mart and its
partners. Mart and its partners continue to reduce operating costs by replacing
high cost rental equipment with permanent production facilities.
Mart also announces that David Parker is leaving the Corporation to pursue other
business interests. His role as President and Director ended November 30, 2009.
The Board of Directors would like to thank David for his contribution towards
Mart's growth.
CHAIRMAN'S COMMENT
Wade Cherwayko, Chairman of Mart Resources Inc, said "The third quarter results
mark a turnaround for the Corporation. With the commencement of production from
the UMU-5 well in April 2009, production in the third quarter averaged 4,097
bopd, representing a 115% increase over the same period in 2008. Increased cash
flow is allowing Mart to reduce debt and the Corporation anticipates being in a
position to commence development activities at the Umusadege field in the near
term.
Although the Corporation is still facing challenges, we believe that Mart's
position is firming up and the Corporation is well placed to fulfill its goal of
increasing shareholder value over the medium term."
ABOUT MART RESOURCES:
Mart Resources, Inc. is an independent, international petroleum company focused
on drilling, developing and producing oil and gas from low-risk proven petroleum
properties in Africa. The Corporation owns two drilling rigs, has strong local
relationships and has formed joint venture partnerships with indigenous
operators in Nigeria.
Non-GAAP Measures
This press release contains financial terms that are not considered measures
under Canadian generally accepted accounting principles ("GAAP"), such as funds
flow from operations, funds flow per share, net debt and operating netback.
These measures are commonly utilized in the oil and gas industry and are
considered informative for management and shareholders. Specifically, funds flow
from operations and funds flow per share reflect cash generated from operating
activities before changes in non-cash working capital. Management considers cash
flow from operating activities and cash flow from operating activities per share
important as they help evaluate performance and demonstrate the Company's
ability to generate sufficient cash to fund future growth opportunities and
repay debt. Cash flow from operating activities and cash flow from operating
activities per share may not be comparable to those reported by other companies
nor should they be viewed as an alternative to cash flow from operations, net
income or other measures of financial performance calculated in accordance with
GAAP.
Forward Looking Statements
Certain information provided in this press release constitutes forward-looking
statements. The words "anticipate", "expect", "project", "estimate", "forecast",
and similar expressions are intended to identify such forward-looking
statements. Specifically, this press release contains forward-looking statements
relating to financial results and the results of operations. The reader is
cautioned that assumptions used in the preparation of such information, although
considered reasonable at the time of preparation, may prove to be incorrect.
Actual results may vary from the information provided herein as a result of
numerous known and unknown risks and uncertainties and other factors. Such
factors include, but are not limited to: general economic, market and business
conditions; fluctuations in oil prices; fluctuation in foreign currency exchange
rates; risks associated with oil and gas operations; and other factors, many of
which are beyond the control of the Company. There is no representation by Mart
Resources Inc. that actual results achieved during the forecast period will be
the same in whole or in part as those forecast. Except as may be required by
applicable securities laws, Mart Resources Inc. assumes no obligation to
publicly update or revise any forward-looking statements made herein or
otherwise, whether as a result of new information, future events or otherwise.
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