Mart Resources, Inc.

Mart Resources, Inc.

May 03, 2010 09:55 ET

Mart Announces 2009 Financial and Operating Results: $10.3 Million Income From Operations, 30% Increase in Proven Reserves, Substantial Debt Reduction

CALGARY, ALBERTA--(Marketwire - May 3, 2010) - 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


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 and will be available on the Company's website at

  Twelve months ended December 31
Financial (CDN$) 2009 2008
Crude oil revenue after royalties 72,605,726   42,859,035  
Funds flow from operations (1) 55,485,284   24,408,078  
Funds flow from operations per share, basic and diluted 0.17   0.08  
Income (loss) from operations 10,321,575   (21,586,870 )
  Per share basic & diluted 0.03   (0.07 )
Net earnings (loss) (26,285,301 ) (21,586,870 )
  Per share basic & diluted (0.08 ) (0.07 )
Total Assets 82,143,164   121,748,865  
Net Debt (1) 28,600,869   50,460,562  
Common shares outstanding – end of period (2)        
    Basic and diluted 335,548,201   335,548,201  
Operating netback ($/bbl) (3)        
    Crude oil revenue 72.20   116.95  
    Royalties 5.81   9.08  
    Production Expenses 15.66   41.69  
    Operating netback 50.74   66.18  
Total Sales Volumes (bbls) (4) 1,093,569   442,553  
Total Production (bbls) 1,150,775   468,402  
Average daily oil production 3,073   1,739  

(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.


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.


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.


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

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.


Contact Information