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 - NINE MONTH PERIOD ENDED SEPTEMBER 30, 2010
- Total Umusadege field oil production for nine months ended September 30, 2010
of 901,429 barrels of oil ("bbls") compared to 848,461 bbls for the nine months
ended September 30, 2009.
- Mart's share of Umusadege field oil production for nine months ended September
30, 2010 was 573,309 bbls compared to 827,249 bbls for the nine months ended
September 30, 2009. This reflects the decrease in cost oil recovery from 97.5%
to 63.6% during the period.
- Total crude oil revenues of $47.5 million for the nine months ended September
30, 2010 compared to $53.6 million for the nine months ended September 30, 2009.
- Cash flow from operations of $15.7 million for the nine months ended September
30, 2010 compared to $16.5 million for the nine months ended September 30, 2009.
- Income from operations for the nine months ended September 30, 2010 of $13.7
million, with net and comprehensive loss after taxes of $1.1 million, compared
to a loss of $1.7 million for the nine months ended September 30, 2009.
- Total liabilities (including $5.0 million of bank debt) of $32.4 million at
September 30,, 2010, compared to total liabilities of $38.0 million at December
31, 2009 and $44.6 million at September 30, 2009.
HIGHLIGHTS - THREE MONTH PERIOD ENDED SEPTEMBER 30, 2010
- Total Umusadege field oil production for three months ended September 30, 2010
of 302,638 bbls compared to 352,811 bbls for the three months ended September
30, 2009.
- Mart's share of Umusadege field oil production for three months ended
September 30, 2010 was 273,051 bbls compared to 343,991 bbls for the three
months ended September 30, 2009. This reflects the decrease in cost oil recovery
from 97.5% to 58.9% during the period.
- Total crude oil revenues of $13.8 million for the three months ended September
30, 2010 compared to $23.7 million for the three months ended September 30,
2009.
- Cash flow from operations of $3.9 million for the three months ended September
30, 2010 compared to $13.6 million for the three months ended September 30,
2009.
- Income from operations for the three months ended September 30, 2010 of $1.2
million, with net and comprehensive loss after taxes of $3.6 million, compared
to net income and comprehensive income of $0.5 million for the three months
ended September 30, 2009.
- Average Umusadege field oil production for three months ended September 30,
2010 of 3,886 barrels of oil per day ("bopd") compared to 4,097 bopd for the
three months ended September 30, 2009.
FINANCIAL AND OPERATING RESULTS
The following table provides a summary of Mart's selected financial and
operating results for the three and nine months ended September 30, 2010 and
September 30, 2009. Unaudited interim financial statements with Management's
Discussion and Analysis ("MD&A") are available on the Company's website at
www.martresources.com and will also be available on the SEDAR website at
www.sedar.com.
---------------------------------------------------------
3 months 3 months 9 months 9 months
ended ended ended ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
Financial (CDN$) 2010 2009 2010 2009
---------------------------------------------------------
Crude oil revenue
after royalties $ 13,831,361 $ 23,670,890 $ 47,497,745 $ 53,614,621
Funds flow from
operations (1) $ 11,502,245 $ 15,503,212 $ 41,558,418 $ 36,580,539
Funds flow from
operations per
share
- basic $ 0.034 $ 0.046 $ 0.124 $ 0.109
- diluted $ 0.034 $ 0.046 $ 0.121 $ 0.109
Income (loss) from
operations $ 1,162,639 $ 9,532,141 $ 13,691,296 $ 7,342,552
per share
- basic $ 0.003 $ 0.028 $ 0.041 $ 0.022
per share
- diluted $ 0.003 $ 0.028 $ 0.040 $ 0.022
Net earnings (loss) $ (3,605,471) $ 489,540 $ (1,133,318) $ (1,700,049)
per share
- basic $ (0.011) $ 0.001 $ (0.003) $ (0.005)
per share
- diluted $ (0.011) $ 0.001 $ (0.003) $ (0.005)
Total assets $ 76,708,135 $113,157,389 $ 76,708,135 $113,157,389
Net debt (1) $ 14,807,279 $ 39,655,738 $ 14,807,279 $ 39,655,738
Shares outstanding
- end of period
- basic 335,548,201 335,548,201 335,548,201 335,548,201
- diluted 342,351,534 335,548,201 342,351,534 335,548,201
---------------------------------------------------------
Note:
(1) Indicates non-GAAP measures. Non-GAAP measures are informative measures
commonly used in the oil and gas industry. Such measures do not conform to
generally accepted accounting principles and may not be comparable to those
reported by other companies nor should they be viewed as an alternative to
other measures of financial performance calculated in accordance with GAAP.
For the purposes of this table, the Corporation defines "Funds flow from
operations" as net crude oil sales less production costs, and defines "Net
debt" as the total of all bank debt and accounts payable.
OPERATIONS REVIEW
Drilling and Testing
The UMU-6 well reached a final total drilling depth of 8,750 feet on November 6,
2010. Open hole wire line logs have been run with results indicating a total of
18 hydrocarbon-bearing sands. The logs also indicate a cumulative gross
hydrocarbon pay of approximately 420 feet in the UMU-6 well from all sands.
All of the UMU-6 well's primary objectives, including the XIII, XIV, XV and XVI
sands were hydrocarbon bearing with preliminary results indicating gross oil pay
of 40 feet, 24 feet, 6 feet and 18 feet from these sands respectively. A deeper
XVII sand was also encountered with initial results indicating 8 feet of gross
oil pay. The XIII, XIV, XV, XVI and XVII sands were not assigned reserves in the
Company's most recent NI 51-101 reserve report. The UMU-6 well also encountered
hydrocarbons in the XI and XIIc sands with preliminary results indicating gross
oil pay of 14 feet and 18 feet respectively. The previous Umusadege wells did
not contain material hydrocarbons in these sands.
Fluid samples and side wall cores were obtained, 9 5/8 inch production casing
has been run and four sands have been perforated. A dual tubing completion has
been run consisting of 2 7/8 and 3 1/2 inch tubing strings which will allow for
each of the four sands to be tested and produced individually, or simultaneously
by co-mingling. The installation of production testing equipment is nearing
completion with testing to commence on the first of four zones. Results will be
announced as each zone is tested.
The current UMU-6 site includes a three well drilling pad which will facilitate
two more wells being drilled from this location. It is anticipated that the next
well, UMU-7, will commence drilling operations after production testing of the
UMU-6 well is completed.
Production Overview
Gross production from the Umusadege field for three months ended September 30,
2010 was 302,638 barrels ("bbl") of oil compared to the 352,811 bbls produced in
the three months ended September 30, 2009 and 273,051 bbls produced in the three
months ended June 30, 2010. Based on actual production days, average production
was 3,886 bopd in Q310 compared to 4,097 bopd in Q309 and 3,682 bopd in Q210.
During Q310 the Umusadege wells were shut-in for 12.5 days due to disruption of
the third party owned and operated export pipeline. The Umusadege field has
experienced additional shut downs during the months of October and November.
CHAIRMAN'S COMMENT
Wade Cherwayko, Chairman of Mart Resources, Inc. said, "we are encouraged by the
initial data from the UMU-6 drilling campaign. The additional hydrocarbon
bearing sands discovered in the Umu-6 well confirms the potential of the
Umusadege field. We look forward to the production test results, which will
allow us to evaluate a development plan to maximize the field's production and
reserve potential."
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 along with Midwestern Oil and Gas Co. Plc (the
Operator of the field) 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.
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 concerning the timing of the testing of the UMU-6
well, the future success of such testing operations, the ability of the Company
to successfully complete and commercially produce, transport and sell oil from
the UMU 6 well (or any one or more of the hydrocarbon sands identified by the
UMU 6 well, the ability of the Company to successfully drill other wells on the
Umusadege field and the ability to of the Company to fund future drilling
operations should be viewed as forward-looking statements.
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. 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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