Mart Announces 2009 Financial and Operating Results: $10.3 Million Income From Operations, 30% Increase in Proven Reserves, Subs
May 03 2010 - 9:57AM
Marketwired Canada
Mart Resources, Inc. (TSX VENTURE:MMT) ("Mart" or the "Company") is pleased to
announce its 2009 financial and operating results for the year ended December 31
2009. (All amounts in Canadian dollars unless noted):
Year 2009 Highlights
-- Total gross crude oil sales revenue for 2009 increased by 68 % to $79.0
million
-- Funds flow from operating activities increased by 127% to $55.5 million
-- Income from operations of $10.3 million compared to a loss of $21.6
million in 2008
-- Proven Umusadege reserves (net to Mart) increased by 29.7% to 6.2
million barrels, per report from independent reservoir engineers
-- Proven and Probable Umusadege reserves (net to Mart) of 9.4 million
barrels.
-- Average crude oil production increased by 77% to 3,073 barrels of oil
per day ("bopd") in 2009, compared to 1,739 bopd in 2008
-- Reduced bank debt as at December 31, 2009 to $13.4 million, a reduction
of 53% from December 31, 2008 balance of $28.4 million
-- Property write down of $9.0 million due to termination of Mart's
interest in the Ke Field and equipment write down of $13.0 million in
relation to Mart-owned drilling rigs
Fourth Quarter 2009 Highlights:
-- Fourth quarter ("Q4") 2009 Umusadege oil production of 325,282
-- Average Umusadege production in Q4 2009 of 3,535 bopd
-- Average price received for Umusadege crude oil per barrel was $74.54USD
for Q4 2009
-- Upgrade and installation of permanent production facilities completed
replacing rental equipment at the Umusadege field resulting in reduced
operating costs
FINANCIAL AND OPERATING RESULTS
The following table provides a summary of Mart's selected financial and
operating results for the years ended December 31, 2009 and 2008. Audited
financial statements and corresponding Management's Discussion and Analysis
("MD&A") are available on SEDAR at www.sedar.com and will be available on the
Company's website at www.martresources.com.
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Twelve months ended December 31
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Financial (CDN$) 2009 2008
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Crude oil revenue after royalties 72,605,726 42,859,035
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Funds flow from operations (1) 55,485,284 24,408,078
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Funds flow from operations per share, basic 0.17 0.08
and diluted
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Income (loss) from operations 10,321,575 (21,586,870)
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Per share basic & diluted 0.03 (0.07)
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Net earnings (loss) (26,285,301) (21,586,870)
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Per share basic & diluted (0.08) (0.07)
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Total Assets 82,143,164 121,748,865
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Net Debt (1) 28,600,869 50,460,562
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Common shares outstanding - end of period (2)
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Basic and diluted 335,548,201 335,548,201
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Operating
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Operating netback ($/bbl) (3)
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Crude oil revenue 72.20 116.95
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Royalties 5.81 9.08
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Production Expenses 15.66 41.69
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Operating netback 50.74 66.18
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Total Sales Volumes (bbls) (4) 1,093,569 442,553
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Total Production (bbls) 1,150,775 468,402
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Average daily oil production 3,073 1,739
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Notes:
(1) Non-GAAP measures. The company defines Funds flow from operations as net
crude oil sales less production costs and Net debt as the total of all bank debt
and accounts payable.
(2) Consists of issued and outstanding common shares.
(3) Consists of crude oil revenues less direct royalty and production costs.
(4) Mart's share of volumes.
CORPORATE AND OPERATIONS OVERVIEW:
The Company began 2009 with increasing debt and seeking a corporate transaction
in a difficult market; it ended the year with solid cash flow, reduced debt, and
reduced trade payables and now has sufficient cash from current production to
continue development drilling at the Umusadege field.
The UMU-5 well, which commenced production in April 2009, had a significant
contribution towards increased production and cash flow from the Umusadege
field. The UMU-5 well came on stream in April 2009 and has produced 777,299
barrels of oil to date, with stable production during the first quarter of 2010
averaging 2,137 bopd. Production for the entire Umusadege Field in the first
quarter 2010 averaged 3,843 bopd. The most recent independent reserve study
confirmed a 30% improvement in proven reserves.
The first stage of the 2010 Umusadege field development will be the drilling of
UMU-6 development well. The UMU-6 well is scheduled to be drilled as a vertical
well to a depth of approximately 8,800 feet and it is anticipated that the well
will be completed as a dual zone producer. All required government approvals
have been obtained, all surface land rights have been acquired and site
preparation has commenced for the drilling of the UMU-6 well, located adjacent
to the producing UMU-1 and UMU-5 wells.
PRODUCTION OVERVIEW:
Total 2009 gross crude sales were 1,121,609 barrels, with Mart's share of gross
crude oil sales for the year 2009 totaling $78,956,947 compared to $46,876,064
in 2008.
During Q4 2009, 325,282 barrels (bbls) of oil were produced from the Umusadege
field, of which 58,673 bbls was added to stock and 266,609 bbls were sold for
total gross proceeds of $19,639,375 compared to $12,438,522 in Q4 2008.
Production from the Umusadege field came from the UMU-1 and the UMU-5 wells.
Average daily total production from the Umusadege field during Q4 2009 was 3,535
bopd, compared to average daily total production of 4,097 bopd during Q3 2009.
The daily average total production rate in Q1 2010 from the Umusadege field was
approximately 3,844 bopd.
CHAIRMAN'S COMMENT
Wade Cherwayko, Chairman & CEO of Mart, said "Mart commenced 2009 in turbulent
times with mounting debt, difficult market conditions and seeking a corporate
transaction. With the success of the UMU-5 well, continued stable production
from the UMU-1 well and firmer oil prices, Mart has weathered the storm. The
Company is now focused on increasing cash flow and reserves by development
drilling and dual zone re-completion operations at the Umusadege field.
The Board would like to thank its dedicated shareholders and employees for the
continued support during a difficult period. With our focus and efforts on
developing the Umusadege field, Mart is well positioned to increase shareholder
value over the short to 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 Company owns two drilling rigs, has strong local
relationships and has formed joint venture partnerships with indigenous
operators in Nigeria.
All references to production levels contained in this press release are to total
field production rates. A detailed description of Mart's ownership interest in
the Umusadege Field in contained in the Company's Management's Discussion and
Analysis filed on SEDAR at www.sedar.com.
Certain statements contained in this press release constitute "forward-looking
statements" as such term is used in applicable Canadian and US securities laws.
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. In particular, statements concerning the successful
drilling of the UMU-6 well, ongoing production and development of the Umusadege
Field and events or projections referenced or implied herein should be viewed as
forward-looking statements.
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". Such forward looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the Corporation to be materially
different from any future results, performance or achievements expressed or
implied by such forward-looking statements. Such risks and other factors
include, among others, costs and timing of exploration and production
development, availability of capital to fund exploration and production
development; political, social and other risks inherent in carrying on business
in a foreign jurisdiction, the effects of a recessionary economy and such other
business risks as discussed herein and other publicly filed disclosure
documents. Although the Corporation has attempted to identify important factors
that could cause actual actions, events or results to differ materially from
those described in forward-looking statements, there may be other factors that
cause actions, events or results not to be as anticipated, estimated or
intended. There can be no assurance that such 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.
Forward-looking statements are made based on management's beliefs, estimates and
opinions on the date the statements are made and the Corporation 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.
This news release contains forward-looking statements based on assumptions,
uncertainties and management's best estimates of future events. When used
herein, words such as "intended" and similar expressions are intended to
identify forward-looking statements. Forward-looking statements are based on
assumptions by and information available to the Corporation. Investors are
cautioned that such forward-looking statements involve risks and uncertainties.
Actual results may differ materially from those currently anticipated. The
forward-looking statements contained herein are expressly qualified by this
cautionary statement.
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