Mart Announces Financial and Operating Results for the Quarter Ended March 31, 2012
May 30 2012 - 8:30AM
Marketwired Canada
Mart Resources, Inc. (TSX VENTURE:MMT) ("Mart" or the "Company") is pleased to
announce its financial and operating results for the three months ended March
31, 2012 ("Q112") (all amounts in Canadian dollars unless noted):
THREE MONTHS ENDED MARCH 31, 2012
-- Net income for Q112 was $38.2 million ($0.11 per share) compared to net
income of $7.8 million ($0.02 per share) for the three months ended
March 31, 2011 ("Q111").
-- Funds flow from production operations of $55.0 million ($0.16 per share)
for Q112 compared to $23.9 million ($0.07 per share) for Q111 (see Note
1 to the Financial and Operating Results table below regarding Non-IFRS
measures).
-- Mart's share of Umusadege field oil produced and sold in Q112 was
631,202 barrels of oil ("bbls") compared to 332,890 bbls for Q111.
-- The average price received by Mart for oil in Q112 was USD $115.61 per
bbl (approximately $115.74 per bbl) compared to USD $91.80 ($90.54 per
bbl) for Q111.
-- Mart's average share of daily oil produced and sold for Q112 from the
Umusadege field was 6,936 barrels of oil per day ("bopd") compared to
3,698 bopd for Q111.
-- During Q112, the Umusadege field was shut-in for a total of 18 days
(Q111 - 18 days) due to various disruptions in the export pipeline, well
testing activities, maintenance and modification of production
facilities.
-- Well tests were completed on UMU-9 well in Q112 resulting in a combined
stabilized flow rate of 11,718 bopd from the five sands tested.
-- In February 2012, Mart and Network Exploration & Production Nigeria
Limited ("Network") mutually terminated Mart's participating interest in
the Qua Ibo field. Network has assumed responsibility for Mart's
previously outstanding liabilities of approximately USD $3.6 million for
the Qua Ibo field and has also paid Mart a USD $1.0 million termination
fee. A gain of $4.6 million has therefore been recognized in Q112.
FINANCIAL AND OPERATING RESULTS
The following table provides a summary of Mart's selected financial and
operating results for the three months ended March 31, 2012 and 2011 and the
twelve months ended December 31, 2011:
CDN $ 000's
(except oil produced and
sold, per share
amounts, and oil 3 months ended 3 months ended 12 months ended
prices) Mar 31, 2012 Mar 31, 2011 Dec 31, 2011
----------------------------------------------------
Mart's share of the
Umusadege Field:
Barrels of oil produced
and sold 631,202 332,890 1,803,459
Average sales price per
barrel $ 115.74 $ 90.54 $ 102.08
Mart's percentage share
of total Umusadege oil
produced and sold
during the period 82.5% 61.2% 71.1%
Mart's share of
petroleum sales after
royalties $61,952 $26,979 $162,431
Funds flow from
production operations
(1) $55,021 $23,948 $144,129
Per share - basic $ 0.16 $ 0.07 $ 0.43
Net income (2) $ 38,179 $ 7,800 $ 71,801
Per share - basic (2) $ 0.11 $ 0.02 $ 0.21
Per share - diluted (2) $ 0.11 $ 0.02 $ 0.21
Total assets (2) $ 236,539 $ 119,665 $ 198,021
Total bank debt $ Nil $ 4,139,935 $ Nil
Weighted average shares
outstanding for period:
Basic 336,752,599 336,048,202 336,084,275
Diluted 348,471,587 344,951,987 344,318,066
Notes:
(1) Indicates non-IFRS measures. Non-IFRS measures are informative measures
commonly used in the oil and gas industry. Such measures do not conform to
IFRS 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 IFRS. For the purposes of this
table, the Company defines "Funds flow from production operations" as net
petroleum sales less royalties, community development costs and production
costs. Funds flow from production operations is intended to give a
comparative indication of the Company's net petroleum sales less production
costs as shown in the following table:
3 months ended 3 months ended 12 months ended
CDN $ 000's Mar 31, 2012 Mar 31, 2011 Dec 31, 2011
----------------------------------------------------------------------------
Petroleum sales $ 73,055 $ 30,139 $ 184,100
Less: Royalties and
community development costs 11,103 3,160 21,669
----------------------------------------------------------------------------
Net petroleum sales 61,952 26,979 162,431
Less: Production costs 6,931 3,031 18,302
----------------------------------------------------------------------------
Funds flow from production
operations $ 55,021 $ 23,948 $ 144,129
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(2) For comparative purposes, net income for the first quarter of 2011
includes quarterly adjustments for corrections to depletion expense,
depreciation expense, share-based payments, general and administrative
expenses, deferred tax expense, earnings per share - basic, earnings per
share - diluted and total assets. Each of the first three quarters of 2011
will contain adjustments to correct the foregoing items. The audited
Consolidated Financial Statements for the years ended December 31, 2011 and
December 31, 2010 are unaffected by these adjustments and remain unchanged.
Details of these changes for the first quarter of 2011 are set out in Note
11 of the Condensed Consolidated Financial Statements for the three months
ended March 31, 2012.
OUTLOOK AND OPERATIONS UPDATE:
The NRG 201 drilling rig has been moved to the UMU-10 slot on the current
drilling pad and the rig has been prepared for drilling. There has been a delay
in the receipt of some long lead time items and accordingly it is currently
anticipated that the UMU-10 well will be spudded before the end of June 2012.
The primary objectives of the UMU-10 well will be the oil-bearing sands
identified in the 8 1/2 inch deviated hole section of the UMU-9 well.
Umusadege field production during the month of April averaged 12,206 bopd.
Umusadege field downtime during April 2012 was less than one half of one day.
Total oil deliveries into the export storage tanks from the Umusadege field for
the month of April, adjusted for estimated pipeline losses, were approximately
366,000 bbls.
Mart and its co-venturers are continuing discussions with an affiliate of Royal
Dutch Shell plc, ("Shell") to provide a second independent export pipeline for
Umusadege field production. If Mart and its co-venturers gain access to Shell's
export facilities, a new 50 kilometer pipeline will be constructed. Construction
of the pipeline connecting the Umusadege field to Shell's export facilities is
expected to be completed and in service in approximately one year.
The upgrade of the existing central production facility at the Umusadege field
to a design capacity of approximately 30,000 bopd is expected to be completed by
the end of Q312.
CHAIRMAN'S COMMENT:
Wade Cherwayko, Chairman & CEO of Mart said, "We are very pleased to report
strong financial and operating results for Q112 with $38.2 million of net
income, which amounts to $0.11 per share. This reflects the growth of the
Umusadege field's production capacity. The Company continues to work towards
maximizing production and efficiency, and significant steps have been taken
towards building an additional export pipeline to enable us to exploit the
potential of the Umusadege field. Increasing total pipeline capacity is expected
to substantially increase production and cash flow."
ABOUT MART RESOURCES:
Mart Resources, Inc. is an independent, international petroleum company focused
on drilling, developing and producing oil and gas from 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 a land drilling rig,
has strong local relationships and experience and is evaluating additional
proven undeveloped opportunities in Nigeria.
Mart's Condensed Consolidated Financial Statements (unaudited) for the three
months ended March 31, 2012, and the accompanying Management's Discussion and
Analysis are available on the company's website at www.martresources.com and
under the Company's profile on SEDAR at www.sedar.com.
INVESTOR RELATIONS:
Investors are also welcome to contact one of the following investor relations
specialists for all corporate updates and investor inquiries:
FronTier Consulting Ltd.
Mart toll free # 1-888-875-7485
Attn: Sam Grier
Dan Glass
Email: inquiries@martresources.com
Note: 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
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.
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