CALGARY, ALBERTA--(Marketwired - Oct. 15, 2013) - Mart Resources, Inc. (TSX VENTURE:MMT) ("Mart" or the "Company") and its co-venturers, Midwestern Oil and Gas Company Plc. (Operator of the Umusadege field) and SunTrust Oil Company Limited are providing the following updates on Umusadege field production for September 2013 and other operations.
September 2013 Production Update
Umusadege field production during September 2013 averaged 8,293 bopd. Umusadege field downtime during September 2013 was approximately 8.5 days due mainly to maintenance and repairs on the export pipeline performed by the pipeline operator, Nigerian Agip Oil Company Limited ("NAOC"). The average field production based on producing days was 11,674 bopd in September 2013.
Total net crude oil deliveries into the export pipeline from the Umusadege field for September 2013 were approximately 261,200 bbls before pipeline losses. Pipeline and export facility losses reported by NAOC for August 2013 were 53,786 bbls, or 18.3% of total crude oil deliveries into the export pipeline. September 2013 pipeline and export facility losses have not yet been reported by NAOC. In addition to August 2013 losses reported by NAOC, adjustments to pipeline losses allocated to Mart and its co-venturers for January 2013 and February 2013 were reported by NAOC in its most recent report. These adjustments increased previously reported pipeline and export facility losses for January 2013 by 31,808 bbls to an updated total for the month of 84,290 bbls, which represents 22.6% of total crude oil deliveries into the export pipeline during January 2013. The adjustments also resulted in a decrease to previously reported pipeline and export facility losses for February 2013 of 4,266 bbls and an updated total for the month of 38,004 bbls, representing 22.9% of total crude oil deliveries into the export pipeline during February 2013. No additional adjustments to pipeline losses previously reported by NAOC in 2013 are anticipated. Pipeline and export facility losses have averaged 23.5% for the first eight months of 2013.
The adjustments for January 2013 and February 2013 and an increase in the pipeline losses during 2013 are a result of application of a new formula for calculation of the pipeline losses. The new formula was imposed by NAOC in the crude handling agreement entered into in 2013. The formula has an effect on the overall calculation and allocation of pipeline losses, and the members of the cluster are in discussions with NAOC to contest the formula and are considering all options available.
UMU-11 Well Update
As previously announced, the UMU-11 well reached a final total drilling depth of approximately 8,910 feet on September 27, 2013. Open hole well logging has been completed, pressure surveys on prospective zones have been conducted, and fluid samples have been acquired. Operations to run 9 5/8 inch casing to the bottom of the well have been completed and the casing has been cemented. The primary objectives of the UMU-11 well are to appraise and produce the proven oil reservoirs encountered but not completed in the UMU-9 and UMU-10 wells. Target sands for flow testing have been identified and preparation to perforate and test the IX, XIIb and XIIIb zones is underway. The completion and testing of UMU-11 is expected to take approximately 30 days.
Umugini Pipeline Update
Negotiations are nearing conclusion with the local communities for right of way for the last five kilometres of the first section of the Umugini pipeline. It is expected that the pipeline contractor will re-mobilize and restart construction operations after current rains diminish and flooding recedes, which is anticipated by December 2013. Once final government approval is received for the second phase of the project and weather conditions permit, construction of the second section of the Umugini pipeline using a second construction crew will commence. It is expected that pipeline construction will be completed in the first half of 2014.
Mart Presenting at Canaccord Genuity Global Resources Conference in Miami
Wade Cherwayko, Chairman and CEO of Mart, will be a presenter at the Canaccord Genuity Global Resources Conference in Miami on October 16-18, 2013. Links containing the locations and details of the conferences are available on Mart's website under Investor Centre / Events Calendar - www.martresources.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 that future repairs will not be required. 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.
In addition, there is no assurance that the drilling program for the UMU-11 well will be successful or will successfully appraise the target sands identified by the 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-11 well (or any one or more of the hydrocarbon sands identified by the UMU-11 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 no 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.