Mart Resources, Inc.: Operations and Production Update
CALGARY, ALBERTA--(Marketwired - Jun 17, 2014) -
- Umusadege field production averaged 10,237 barrels of oil per
day ("bopd") during May 2014 based on calendar days; average field
production based on production days was 12,654 bopd during May
2014.
- Umusadege field net deliveries into the export pipeline were
approximately 322,086 barrels of oil ("bbls") in May 2014 before
pipeline losses and approximately 248,115 bbls after deducting
pipeline and export facility losses estimated by Mart for May 2014
based upon the 12-month rolling average rate of actual pipeline and
export facility losses.
- Pipeline and export facility losses reported and allocated to
Mart and its co-venturers for April 2014 were 71,643 bbls, or 28.8%
of total crude oil deliveries into the export pipeline.
- Aggregate downtime during May 2014 totaled approximately 6.0
days, with no full down days during the month.
- Construction of the Umugini pipeline is substantially complete;
hydro-testing is under way.
- Water disposal well drilled and completed in early June. The
rig has been moved and directional drilling operations for the
UMU-3 well commenced.
- Mart is one of the member companies of a consortium that has
been confirmed as the preferred bidder to acquire an interest in a
producing Nigerian Oil Mining Lease.
- Mart defers common share dividend.
- The 2014 Annual General and Special Meeting will be held on
Friday, June 20, 2014 in Calgary, Alberta.
Mart Resources, Inc. (TSX:MMT) ("Mart" or the "Company") and its
co-venturers, Midwestern Oil and Gas Company Plc. ("Midwestern",
Operator of the Umusadege field) and SunTrust Oil Company Limited
are providing the following updates on Umusadege field production
for May 2014 and other operations.
May 2014 Production
Update
Umusadege field production during May 2014 averaged 10,237 bopd.
Aggregate Umusadege field downtime during May 2014 was
approximately 6.0 days due mainly to a shutdown of the Nigerian
Agip Oil Company Limited ("NAOC") export pipeline resulting from a
lack of storage capacity at the Brass River export terminal due to
export shipment delays, combined with other minor operational
interruptions. There were no full down days during the month. The
average field production based on producing days was 12,654 bopd in
April 2014.
Total net crude oil deliveries into the NAOC export pipeline
from the Umusadege field for May 2014 were approximately 322,086
bbls before pipeline losses. Based upon the 12-month rolling
average rate of pipeline and export facility losses from May 2013
to April 2014 of 22.97%, Mart estimates pipeline and export
facility losses for May 2014 to be approximately 73,971 bbls. Using
this estimated pipeline and export facility loss volume, the total
net crude deliveries into the NAOC export pipeline from the
Umusadege field for May 2014 less estimated pipeline losses is
248,115 bbls.
Pipeline and export facility losses reported by NAOC and
allocated to Mart and its co-venturers for April 2014 were 71,643
bbls, or 28.8% of total crude oil deliveries into the export
pipeline for that month. Pipeline and export facility losses
allocated to Mart and its co-venturers from January to April 2014
have averaged 14.8% of total crude oil deliveries into the export
pipeline for 2014.
As previously announced, total net crude oil deliveries into the
export pipeline from the Umusadege field for April 2014 were
approximately 249,056 bbls, so after deducting the actual pipeline
and export facility losses allocated for April 2014, the total net
crude oil deliveries less losses for April 2014 were 177,413 bbls.
Mart previously estimated pipeline and export facility losses for
April 2014 to be approximately 55,153 bbls, based upon the 12-month
rolling average rate of pipeline and export facility losses of
22.14% between April 2013 and March 2014. May 2014 pipeline and
export facility losses have not yet been reported by NAOC.
Umugini Pipeline
Update
The Umugini pipeline construction is nearing completion. The
first 49 kilometres ("km") of the pipeline have been completed and
backfilled. Stringing of another 2 km of pipe has been completed
and welding, coating, radiograph testing has been completed on
approximately 1 km of this 2 km section. The installation of a
fiber optic cable that is part of the leak detection system has
been completed on 50 km of pipeline. A 23 km section of the
pipeline has been fully hydro-tested and preparation for
hydro-testing on the remaining section is in progress.
Procurement of materials and equipment required to complete the
pipeline pumping, monitoring and control facilities has been
completed in preparation for hook-up and commissioning of the
pipeline. Midwestern, which is managing construction of the Umugini
pipeline, continues to estimate that pipeline construction will be
completed by the end of June 2014. Pipeline commissioning will
occur following completion of pipeline construction and
installation of pipeline pumping, monitoring and control
facilities.
Umusadege Drilling
Update
The water disposal well was completed during early June, was
drilled to a depth of 6400 feet and was completed in the I sand.
The final test injection rate was over 5000 barrels of water per
day at a surface injection pressure of 650 psi. The good injection
rates into the sand will enable improved produced water management
for the Umusadege field. Following completion of the water disposal
well, the rig was skidded to the existing UMU-3 well location.
Directional drilling operations were commenced on June 15, 2014.
The UMU-3 well will be side-tracked into the VI sand with a 700
foot horizontal wellbore at a total vertical depth of approximately
7151 feet and a total measured depth of about 8549 feet. Completion
of directional drilling operations on the UMU-3 well is anticipated
in July 2014. After completing the UMU-3 well operations, the rig
is scheduled to be moved to the UMU-4 location for a horizontal
side-track into the VII sand.
Mart Participates in
Consortium for Nigerian Oil Mining Lease
Mart is a member of a consortium (the "Consortium) that has been
confirmed as the preferred bidder to acquire a participating
interest in an oil mining lease (the "Property") being divested by
certain multi-national oil companies currently operating in
Nigeria. The Consortium is currently negotiating the terms and
conditions of the acquisition of a participating interest in the
Property and has paid a deposit that will be applied against the
acquisition cost of the Property should the acquisition be
completed. Although the Consortium is the preferred bidder, there
is no assurance that the Consortium will successfully conclude its
negotiations to acquire a participating interest in the Property.
The acquisition of a participating interest in the Property by the
Consortium is subject to numerous terms and conditions including
Nigerian government approval.
Mart Defers Common
Share Dividend
Pursuant to the Company's dividend policy, the declaration of
dividends is determined quarterly based upon Mart's cash flows,
liquidity, capital expenditure budgets, earnings, financial
condition and other factors as the Board of Directors may consider
appropriate from time to time. In view of Mart's ongoing drilling
program on the Umusadege field, additional capital required for the
possible acquisition of the Property and uncertainty regarding
timing of first oil through the Umugini Pipeline, Mart's Board of
Directors have deferred the decision to declare a quarterly
dividend until the Board is able to fully assess the capital needs
for the Company's ongoing business and growth opportunities.
2014 Annual General and
Special Meeting of Shareholders
As previously announced, Mart's Annual General and Special
Meeting (the "Meeting") of Shareholders will be held at 3:00pm on
Friday, June 20, 2014 at the Calgary Petroleum Club. The Meeting
will be webcast for shareholders and others unable to attend the
Meeting in person. To listen to the Meeting and view the meeting
presentation materials, please visit the company's website at
www.martresources.com and connect using the link under AGM June
2014 in the Investor Centre section of the webpage or connect and
register directly using the following link
https://webcasts.welcome2theshow.com/martresources2014.com. The
webcast will also be available on the company's website for a
period of time following the Meeting.
The Meeting will also be broadcast by teleconference and to
access please dial 403-451-9838 (Local) or 1-888-231-8191 (North
American Toll Free) and accessing conference ID 57624639.
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 and Risks
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, there is no assurance that there will not be
future disruptions of the NAOC pipeline or Brass River export
terminal. Any future disruptions will materially and adversely
affect the ability of the Company to transport, deliver and sell
its crude oil production from the Umusadege field. Statements
(express or implied) concerning the allocation of export and
pipeline capacity to the Umusadege field from their third party
pipeline owners, should also be viewed as forward looking
statements. Pipeline and export facilities losses are expected to
continue in the future and such losses could be material. There is
no assurance that there will not be adjustments to previously
reported pipeline losses. There is no assurance that the estimates
of current month pipeline losses will reflect actual pipeline
losses once reported to the Company by NAOC. There is no assurance
regarding that the completion of the Umugini pipeline will be
completed in the first half of 2014 or that all equipment,
agreements or approvals required to commission, operate or
transport oil through the Umugini pipeline will be received in a
timely fashion or at all. There is also no assurance that the
Consortium will successfully conclude negotiations that it will
acquire an interest in the Property. There is no assurance
regarding Mart's participation level in the Consortium or its
economic interest in the Property. Nothing herein is intended to
indicate the existence of oil and gas reserves or resources in the
Property.
There is no assurance that future dividends will be declared
or the timing or amount of any future dividend. The payments of
dividends or distributions in the future are within the discretion
of Mart's Board of Directors and are dependent on numerous factors
including the Company's cash flow, capital expenditure budgets,
earnings, financial condition, the satisfaction of the applicable
solvency test in the Company's governing statute (the Business
Corporations Act (Alberta)), and such other factors as the Board of
Directors may consider appropriate from time to time. Mart's
ability to continue to pay dividends in the future is also subject
to many other factors including falling commodity prices,
repatriation restrictions, disruptions or reductions in production
or collection of receivables following sales of production.
Dividend payments to shareholders will be subject to applicable
statutory deductions and tax withholdings prescribed by applicable
law.
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 no 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.
NEITHER THE TSX NOR ITS REGULATION SERVICES PROVIDER (AS THAT
TERM IS DEFINED IN THE POLICIES OF THE TSX) ACCEPTS RESPONSIBILITY
FOR THE ADEQUACY OR ACCURACY OF THE RELEASE.
Mart Resources, Inc. - London, England officeWade Cherwayko+44
207 351 7937Wade@martresources.comMart Resources, Inc. - London,
England officeDmitri Tsvetkov+44 207 351
7937dmitri.tsvetkov@martresources.comMart Resources, Inc. -
CanadaSam
Grier403-270-1841sam.grier@martresources.comwww.martresources.com
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