Mart Resources, Inc.

Mart Resources, Inc.

May 30, 2012 08:30 ET

Mart Announces Financial and Operating Results for the Quarter Ended March 31, 2012

CALGARY, ALBERTA--(Marketwire - May 30, 2012) - 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):


  • 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.


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 prices)
3 months ended
Mar 31, 2012
3 months ended
Mar 31, 2011
12 months ended
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



Mart's share of petroleum sales after royalties


Funds flow from production operations (1)


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
(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:
CDN $ 000's 3 months ended
Mar 31, 2012
3 months ended
Mar 31, 2011
12 months ended
Dec 31, 2011
Petroleum sales $ 73,055 $ 30,139 $ 184,100
Less: Royalties and community development costs


Net petroleum sales 61,952 26,979 162,431
Less: Production costs 6,931 3,031 18,302
Funds flow from production operations $
(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.


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.


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."


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 and under the Company's profile on SEDAR at


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

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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