Mart Resources, Inc.
TSX : MMT

Mart Resources, Inc.

August 13, 2014 08:45 ET

Mart Resources, Inc.: Operations and Production Update

CALGARY, ALBERTA--(Marketwired - Aug. 13, 2014) - Mart Resources, Inc. (TSX:MMT) -

  • Umusadege field production averaged 7,439 barrels of oil per day ("bopd") during July 2014 based on calendar days; average field production based on production days was 11,958 bopd during July 2014.
  • Umusadege field net deliveries into the export pipeline were approximately 210,566 barrels of oil ("bbls") in July 2014 before pipeline losses and approximately 163,514 bbls after deducting pipeline and export facility losses estimated by Mart for July 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 June 2014 were 55,087 bbls, or 27% of total crude oil deliveries into the export pipeline.
  • Aggregate downtime during July 2014 totaled approximately 11.7 days.
  • Progress continues as the Umugini pipeline construction and tie-in near completion.
  • Drilling continues on the UMU-4STH well, currently drilling the horizontal section in the VII sand. The rig will then be skidded to drill a new horizontal well targeting the VIII sand.
  • Appointment of Senior Vice President, Operations.

Mart Resources, Inc. ("Mart" or the "Company") and its co-venturers, Midwestern Oil and Gas Company Limited ("Midwestern", Operator of the Umusadege field) and SunTrust Oil Company Limited are providing the following updates on Umusadege field production for July 2014 and other operations.

July 2014 Production Update

Umusadege field production during July 2014 averaged 7,439 bopd. Aggregate Umusadege field downtime during July 2014 was approximately 11.7 days due to shutdowns of the Nigerian Agip Oil Company Limited ("NAOC") export pipeline resulting from operational interruptions due to general pipeline repairs and maintenance. There were five full down days during the month. The average field production based on producing days was 11,958 bopd in July 2014.

Total net crude oil deliveries into the NAOC export pipeline from the Umusadege field for July 2014 were approximately 210,566 bbls before pipeline losses. Based upon the 12-month rolling average rate of pipeline and export facility losses from July 2013 to June 2014 of 22.35%, Mart estimates pipeline and export facility losses for July 2014 will be approximately 47,052 bbls. Using this estimated pipeline and export facility loss volume, Mart estimates that the total net crude deliveries into the NAOC export pipeline from the Umusadege field for July 2014 less estimated pipeline losses will be 163,514 bbls.

Pipeline and export facility losses reported by NAOC and allocated to Mart and its co-venturers for June 2014 were 55,087 bbls, or 27.0% 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 June 2014 have averaged 17.8% 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 June 2014 were approximately 203,786 bbls. Accordingly, after deducting the actual pipeline and export facility losses allocated for June 2014, the total net crude oil deliveries less losses for June 2014 were 148,699 bbls. Mart previously estimated pipeline and export facility losses for June 2014 to be approximately 46,353 bbls, based upon the 12-month rolling average rate of pipeline and export facility losses of 22.75% between June 2013 and May 2014. July 2014 pipeline and export facility losses have not yet been reported by NAOC.

Umugini Pipeline Update

Progress continues as the Umugini pipeline construction and tie-in near completion. Radiographic testing of the welds on the pipeline is complete. Pre-start-up assessment is ongoing. Midwestern, the company managing the construction and operation of the Umugini pipeline, is targeting completion by the end of August 2014.

Umusadege Drilling Update

The rig was moved to the UMU-4 well, to drill a horizontal side-track targeting the VII sand. After setting casing at the entry point, the lateral section is presently being drilled. The design is similar to the recently completed UMU-3STH horizontal well in the VI sand. The UMU-3STH well had a final test of 4898 bopd on a 40/64 choke with a bottom hole flowing pressure of 2962 psi, and a final shut in bottom hole pressure of 3015 psi. Following the drilling of the UMU-4STH well, the rig will be skidded to another slot on the same pad location to drill a horizontal well targeting the VIII sand.

Mart Appoints Senior Vice President, Operations

The Company is pleased to announce the appointment of Mr. Michael Gutkoski as Senior Vice President, Operations of the Company, effective July 1, 2014.

Mr. Gutkoski was previously Chief Operating Officer Nigeria for Afren Plc, a FTSE 250 (Premium Listed on the London Stock Exchange) oil and gas exploration and production company, from 2011 to 2013. Before that Mr. Gutkoski was with Hess Corporation as Manager, African Joint Ventures and Devon Energy as Operations Manager, based in Egypt. Mr. Gutkoski has more than 30 years of management and engineering experience in the oil and gas industry, and has a Civil Engineering (BS CE) degree from Montana State University-Bozeman.

Mr. Gutkoski has been issued 500,000 incentive stock options at a price of $1.36 per common share, expiring on the fifth anniversary of the date of grant.

Additional information regarding Mart is available on the Company's website at www.martresources.com and under the Company's profile on SEDAR at www.sedar.com.

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 by the end of August 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 Company will be able to execute a successful horizontal well sidetrack of the UMU-4 well. Statements (express or implied) regarding the ability of the Company to successfully complete, test and commercially produce, transport and sell oil from the UMU-3 well (or any one or more of the hydrocarbon sands identified by the UMU-3 well) or the UMU-4 well, should all be viewed as forward-looking statements. The well log interpretations indicating hydrocarbon-bearing sands are not necessarily indicative of future production. There is no assurance that reserves will be assigned to such hydrocarbon bearing sands.

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. 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.

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