Mart Resources, Inc.
TSX VENTURE : MMT

Mart Resources, Inc.

August 26, 2010 08:30 ET

Mart Announces Financial and Operating Results for the Six Months Ended June 30, 2010

CALGARY, ALBERTA--(Marketwire - Aug. 26, 2010) - Mart Resources, Inc. (TSX VENTURE:MMT) ("Mart" or the "Company") is pleased to announce its 2010 half year financial and operating results (all amounts shown in Canadian dollars unless noted):

HIGHLIGHTS – SIX MONTHS ENDED JUNE 30, 2010

  • Net operating income for the six months ended June 30, 2010 of $12.5 million, with net and comprehensive income after taxes of $2.5 million, compared to a loss of $2.2 million for the six months ended June 30, 2009.
  • Cash flow from operations of $11.8 million for the six months ended June 30, 2010 compared to $2.9 million for the six months ended June 30, 2009.
  • Total revenues of $34.8 million for the six months ended June 30, 2010 compared to $29.9 million for the six months ended June 30, 2009.
  • Total liabilities (including $7.3 million of bank debt) of $28.6 million at June 30, 2010, compared to total liabilities of $38.0 million at December 31, 2009 and $57.1 million at June 30, 2009.
  • Bank debt reduced to $7.3 million at June 30, 2009 compared to $13.3 million at December 31, 2009 and $27.1 million at June 30, 2009.
  • Average Umusadege field oil production for second quarter ended June 30, 2010 ("Q210") of 3,682 barrels of oil per day ("bopd") compared to 3,533 bopd for the second quarter ended June 30, 2009 ("Q209").

FINANCIAL AND OPERATING RESULTS

The following table provides a summary of Mart's selected financial and operating results for the six months ended June 30, 2010 and for the years ended December 31, 2009 and 2008. Unaudited interim financial statements for the period ended June 30, 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.

           
 (CDN$)  6 months ended June 30, 2010 12 months ended December 31, 2009   12 months ended December 31, 2008  
   
Crude oil revenue after royalties $ 33,666,384 $ 72,605,726   $ 42,859,035  
Funds flow from operations (1)   30,056,173   55,485,284     24,408,078  
Funds flow from operations per share - basic   0.09   0.17     0.08  
Income (loss) from operations   12,528,657   10,321,575     (21,586,870 )
Per share - basic   0.04   0.03     (0.07 )
Net earnings (loss)   2,472,153   (26,285,610 )   (21,586,870 )
Per share - basic   0.01   (0.08 )   (0.07 )
Total assets   76,372,372   82,143,164     121,748,865  
Net debt (1)   16,415,138   28,600,869     50,460,562  
Shares outstanding - end of period - basic   335,548,201   335,548,201     320,792,651  

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 Canadian 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.

CORPORATE AND OPERATIONS REVIEW

The Umusadege field development will begin with the drilling of the UMU-6 well with anticipated drilling operations to commence during the week of August 30, 2010. Site preparation at the UMU-6 drilling location has been completed and the NRG drilling Rig 201 has been mobilized to the UMU-6 site and rig-up is currently nearing completion. The UMU-6 well is scheduled to be drilled as a vertical well to a depth of approximately 9,000 feet. It is anticipated that the UMU-6 well will be completed with a dual tubing string configuration allowing for the potential of multiple zones to be produced in the well bore. The UMU-6 well primary objectives are the XIII, XIV, XV and XVI sands which have not been produced or production tested to date. It is anticipated that the UMU-6 well will take approximately 30 days to drill after commencement of drilling operations.

Current Umusadege field production is averaging approximately 3,878 bopd from the UMU-1 and UMU-5 wells.

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. (Operator of the Umusadege field) and SunTrust Oil Ltd. Mart also owns two land drilling rigs, has strong local relationships 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.

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE RELEASE.

Contact Information