Mart Announces $7.7 Million Income From Operations in the First Quarter of 2010
June 01 2010 - 8:30AM
Marketwired Canada
Mart Resources, Inc. (TSX VENTURE:MMT) ("Mart" or the "Company") is pleased to
announce its 2010 first quarter financial and operating results (all amounts
shown in Canadian dollars unless noted):
HIGHLIGHTS
-- Net operating income in the first quarter of 2010 ("Q110") of $7.7
million, with net and comprehensive income after taxes of $1.2 million.
-- Cash flow from operations of $5.6 million compared to a loss of $2.4
million in the first quarter of 2009 ("Q109").
-- Total revenues of $21.0 million compared to $10.4 in Q109 and $19.6
million in the fourth quarter of 2009 ("Q409").
-- Substantial reductions in production costs, general and administrative
expenses, interest and bank charges and rig operating costs compared to
Q109.
-- Total liabilities (including $10.4 million of bank debt) of $32.1
million at the end of Q110, compared to total liabilities of $38.0
million at the end of Q109.
-- Bank debt reduced to $10.4 million at the end of Q110 compared to $23.9
million at the end of Q109.
-- Average Umusadege field oil production for Q110 of 3,844 barrels of oil
per day ("bopd") a 9% increase compared to 3,535 bopd in Q409.
-- Q110 Umusadege field oil production increased 6% to 343,822 barrels
("bbl") compared to 325,282 bbl in Q409.
FINANCIAL AND OPERATING RESULTS
The following table provides a summary of Mart's selected financial and
operating results for Q110 and for the years ended December 31 2009 and 2008.
Unaudited interim financial statements for the period ended March 31, 2010 along
with Management's Discussion and Analysis ('MD&A') are available on the
Company's website at www.martresources.com and will also be available on the
SEDAR website at www.sedar.com.
Three months 12 months ended December 31
ended March 31
---------------------------------------------
Financial (CDN$) 2010 2009 2008
---------------------------------------------
Crude oil revenue after
royalties 20,250,230 72,605,726 42,859,035
Funds flow from operations (1) 18,214,024 55,485,284 24,408,078
Funds flow from operations per
share - basic 0.05 0.17 0.08
Income (loss) from operations 7,740,389 10,321,575 (21,586,870)
Per share - basic 0.02 0.03 (0.07)
Net earnings (loss) 1,232,632 (26,285,610) (21,586,870)
Per share - basic 0.004 (0.08) (0.07)
Total Assets 78,608,573 82,143,164 121,748,865
Net Debt (1) 20,636,238 28,600,869 50,460,562
Shares outstanding - end of
period - basic 335,548,201 335,548,201 320,792,651
Note:
(1) Non-GAAP measures. The Corporation 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.
CORPORATE AND OPERATIONS REVIEW
With increased cash flow being generated from the Umusadege field, Mart has and
continues to focus on reducing costs and increasing oil production and reserves.
With oil prices fluctuating around $70 per barrel, Mart believes it is well
placed to fund the continued development of the Umusadege field utilizing
current cash on hand and future anticipated cash flow.
The next stage of Umusadege field development will be the drilling of the UMU-6
well. All government approvals have been received, acquisition of the site has
been completed and preparation of the drilling location is on-going despite
challenges due to the rainy season in the Niger Delta. It is anticipated that
the UMU-6 well and subsequent development wells will be tested and completed in
multiple zones, subject to final drilling results.
As reported in the Company's recently filed NI 51-101F1 report, Mart's share of
proved reserves at the Umusadege field increased to 6.2 million barrels as at
December 31, 2009. Current field production is averaging approximately 3,700
bopd from the UMU-1 and UMU-5 wells.
The Company also announces that David Halpin has resigned as CFO to pursue other
business interests. David has agreed to assist the Company in a consulting role
for a short transition period. Mart would like to thank David for his support
and contribution to the Company over the past years and wishes him all the best
in his future endeavors. The Company is also pleased to announce the appointment
of Angela Clark as the CFO. Angela is a Fellow of the Association of Chartered
Certified Accountants in good standing. She has more than 20 years experience in
the oil and gas industry gained with Shell Exploration and Production UK Ltd.,
Occidental (Caledonian) PLC and Hess PLC in Europe and West Africa. She has
recently been advising in a consultant role with several smaller exploration and
production companies.
CHAIRMAN'S COMMENT
Wade Cherwayko, Chairman & CEO of Mart commented: "The first quarter of 2010
continues the recent trend of positive results being achieved by the Company.
The foundation has now been established with the generation of solid cash flow
to fund development activities at the Umusadege field. The increase in proven
reserves to 6.2 million barrels net to Mart and 13 identified sands in the
Umusadege field, of which only three sands are currently producing, justifies
additional development drilling, subject to sustaining current levels of cash
flow and successful well results."
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 Nigeria, West Africa. The Company is currently producing and
developing the Umusadege field with Midwestern Oil and Gas Co. Plc. and SunTrust
Oil Ltd. Mart also owns two land drilling rigs, has strong local relationships
and experience and is evaluating additional proven undeveloped opportunities in
Nigeria.
Additional information regarding Mart Resources, Inc. is available on the
company's website at www.martresources.com.
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
funds flow from operations and funds flow 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. Net debt is
used to valuate financial leverage and includes bank debt plus the principal
amount of convertible debentures and accounts payable and accrued liabilities,
less current assets. Management considers operating netback important as it is a
measure of profitability per barrel of production. Funds flow from operations,
funds flow per share, net debt and operating netbacks 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 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 timing of
the drilling of the UMU-6 well, the future success of such well, the ability of
the Company to successfully complete and commercially produce, transport and
sell oil from such well, the maintenance of current production levels from
existing wells, future crude oil pricing levels and the ability to of the
Company to fund future drilling operations (including the drilling of the Umu-6
well) from future cash flow 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 Company 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.
Investors are cautioned that such forward-looking statements involve risks and
uncertainties. 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. The
forward-looking statements contained herein are expressly qualified by this
cautionary statement.
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.
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