Mart Resources, Inc.
TSX : MMT

Mart Resources, Inc.

September 11, 2014 09:27 ET

Mart Resources, Inc.: Operations and Production Update

CALGARY, ALBERTA--(Marketwired - Sept. 11, 2014) - Mart Resources, Inc. (TSX:MMT)

  • Umusadege field production averaged 7,847 barrels of oil per day ("bopd") during August 2014 based on calendar days; average field production based on production days was 12,816 bopd during August 2014.

  • Umusadege field net deliveries into the export pipeline were approximately 243,143 barrels of oil ("bbls") in August 2014 before pipeline losses and approximately 191,102 bbls after deducting pipeline and export facility losses estimated by Mart for August 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 July 2014 were 31,324 bbls, or 14.9% of total crude oil deliveries into the export pipeline.

  • Aggregate downtime during August 2014 totalled approximately 12.0 days.

  • Umugini pipeline tie-in and start-up activities continue, but were delayed by heavy rains and local community complications, which have now been resolved.

  • Drilling of the UMU-4 side-track horizontal well has been completed, and the well is flowing approximately 4,700 barrels of oil per day ("bopd"). The rig was skidded and operations commenced on the UMU-12 well for a horizontal well design, targeting a completion in the VIII sand.

Mart Resources, Inc. (TSX:MMT) ("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 August 2014 and other operations.

August 2014 Production Update

Umusadege field production during August 2014 averaged 7,847 bopd. Aggregate Umusadege field downtime during August 2014 was approximately 12.0 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 eight full down days during the month. The average field production based on producing days was 12,816 bopd in August 2014.

Total net crude oil deliveries into the NAOC export pipeline from the Umusadege field for August 2014 were approximately 243,143 bbls before pipeline losses. Based upon the 12-month rolling average rate of pipeline and export facility losses from August 2013 to July 2014 of 21.44%, Mart estimates pipeline and export facility losses for August 2014 will be approximately 52,131 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 August 2014 less estimated pipeline losses will be 191,012 bbls.

Pipeline and export facility losses reported by NAOC and allocated to Mart and its co-venturers for July 2014 were 31,324 bbls, or 14.9% 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 July 2014 have averaged 17.5% 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 July 2014 were approximately 210,566 bbls. Accordingly, after deducting the actual pipeline and export facility losses allocated for July 2014, the total net crude oil deliveries less losses for July 2014 were 179,242 bbls. Mart previously estimated pipeline and export facility losses for July 2014 to be approximately 47,052 bbls, based upon the 12-month rolling average rate of pipeline and export facility losses of 22.35% between July 2013 and June 2014. August 2014 pipeline and export facility losses have not yet been reported by NAOC.

Umugini Pipeline Update

The pipeline tie-in and start-up activities continue, but were delayed by heavy rains and local community complications, which have now been resolved. The pre-commissioning activities are continuing and metering facilities (LACT unit) to measure volume and quality of hydrocarbons injected into the export pipeline are being tied-in. Midwestern, the company operating the pipeline, now targets a start-up during September 2014.

Umusadege Drilling Update

The drilling, completion, clean up and preliminary testing of the UMU-4STH well is complete. The well was side-tracked into the VII sand, landing a 900-foot lateral drain hole in clean, high quality sand with an average oil column of 27 feet at 9,000 feet measured depth. The well was flowed back for clean up and testing on various choke sizes for 41 hours, yielding a final test averaging 4,702 bopd on a 40/64 choke at a surface flowing pressure of 180 psi over a three hour period. The oil API gravity is 24.1 degrees, no sand with 0.1% bottom sediment and water (BS&W). The complete test of the UMU-4 well, including bottom hole pressures, will be performed after drilling of the UMU-12 well is completed. The rig has been skidded eight feet, and operations have commenced on the UMU-12 well. This is a new well targeting a horizontal completion in the sand VIII.

Mart Presenting at FirstEnergy Capital Global Energy Conference in London, England

Wade Cherwayko, Chairman & CEO of Mart, will be a presenter at the Global Energy Conference in London, England at 11:25 a.m. BST on September 16, 2014. Links containing the locations and details of the conferences are available on Mart's website under Shareholder Centre / Events Calendar - www.martresources.com.

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 September 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 no assurance that the Company will be able to commercially produce, transport or sell oil from the UMU 4STH 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-4STH well (or any one or more of the hydrocarbon sands identified by the UMU-4STH well) should all be viewed as forward-looking statements. The test results from the UMU-4STH well should be considered as preliminary. There is also no assurance that the Company will be able to successfully drill, complete or test the UMU 12 well. 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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