Mart Announces Financial and Operating Results for the Six Months Ended June 30, 2015
(firmenpresse) - CALGARY, ALBERTA -- (Marketwired) -- 08/13/15 -- Mart Resources, Inc. (TSX: MMT) ("Mart" or the "Company") is pleased to announce its financial and operating results (all amounts in United States dollars unless noted) for the six months ended June 30, 2015, including the Company's outlook and operations update:
THREE MONTHS ENDED JUNE 30, 2015
Six Months Ended June 30, 2015
FINANCIAL AND OPERATING RESULTS
The following table provides a summary of Mart's selected financial and operating results for the three and six month periods ended June 30, 2015 and 2014 and the twelve month period ended December 31, 2014:
OUTLOOK AND OPERATIONS UPDATE
Umusadege drilling and testing update
The UMU-8 well was side-tracked and deepened to 9,506 feet. The sands selected for completion include XIIc, XIX, XXb, and XXI, with the XIX and XXb sands being commingled. The combined gross oil pay for the completed sands is 87 feet. The clean-up and initial flow testing has been concluded for the XXI and XIIc sands. In these tests, no sand or water production was observed. The initial flow testing of the XIIc sand was conducted over a six hour period and yielded a stabilized oil rate of 1,106 bopd of 35 API crude oil on a 28/64 choke setting and flowing tubing head pressure of 180 psig. Basic sediment and water ("BS&W") was less than 1%, and the gas-oil ratio ("GOR") was 309 scf/bbl.
The initial flow testing of the XXI sand was conducted over a five hour period and yielded a stabilized oil rate of 1,914 bopd of 50 API crude oil on a 36/64 choke setting and flowing tubing head pressure of 1,150 psig. BS&W was less than 1%, and the GOR was 1,573 scf/bbl. The foregoing test results should be considered as preliminary. Readers are cautioned that the test results herein are not necessarily indicative of long-term performance, future production levels, or of ultimate oil recovery.
The rig has been skidded to the UMU-14 horizontal well location and the well was spudded on July 12, 2015. As at July 15, 2015, the well is drilling ahead at 3,350 feet. The UMU-14 horizontal well is the fourth horizontal well in the Umusadege field, and is planned to target the VIII sand in the central-east area of the field. After drilling and completion of the UMU-14 horizontal well, the operator plans to clean up and test the commingled XIX and XXb sands, and conduct multirate production tests and bottom hole pressure buildup surveys for both the UMU-8 and UMU-14 wells.
The Umusadege Joint Venture has budgeted to spend approximately $113 million during 2015 for the planned drilling program and miscellaneous Umusadege field capital expenditures. However, the work program and capital expenditure budget are expected to be revised and may be reduced during 2015.
Umugini pipeline capital expenditure
Following the completion of the Umugini pipeline construction in Q4 2014, capital expenditures for 2015 are expected to be minimal, mainly relating to completion of remaining civics works, pumps and LACT units. Mart expects to spend $2.0 million on capital expenditures for 2015 for the Umugini pipeline.
Definitive Arrangement Agreement with Midwestern
In March 2015, Mart entered into a definitive arrangement agreement with Midwestern, the operator of and one of Mart's co-venturers in the Umusadege field in Nigeria. Pursuant to the terms of the Arrangement Agreement, a wholly-owned subsidiary of Midwestern will acquire all of the issued and outstanding common shares of Mart by way of a plan of arrangement under the Business Corporations Act (Alberta), including the assumption of all outstanding bank debt of Mart (currently, approximately US$200 million), and each Mart shareholder will receive CDN$0.80 in exchange for each Mart common share held. The completion of the Arrangement is subject to numerous customary closing conditions including the completion the Midwestern Financing. The transaction was expected to complete on June 16, 2015 but on June 15, 2015, Mart and Midwestern entered into an amending agreement that provided for the Midwestern Financing to be completed on or before July 26, 2015. On July 26, 2015 Mart and Midwestern entered into a second amending agreement. Under the terms of the Second Amending Agreement, Midwestern has until August 19, 2015 to complete the Midwestern Financing and until August 26, 2015 to complete the transaction. If Midwestern has not met the Midwestern Financing Condition by August 19, 2015, Mart is able to terminate the Arrangement Agreement and compel Midwestern to provide to Mart the benefit of the reverse break fee of CDN$5.8 million. The Second Amending agreement also provides an additional covenant on behalf of Midwestern that should the transaction not be completed, Midwestern will pay Mart's portion of a corporate tax liability out of the proceeds payable under the reverse break fee.
Management Changes
Effective March 30, 2015, Wade Cherwayko took a voluntary leave of absence as Chief Executive Officer of the Company and Dmitri Tsvetkov, the current Chief Financial Officer was appointed as interim Chief Executive Officer. Mr. Cherwayko ceased to be a director of the Company on June 15, 2015. Effective July 31, 2015, Mr. Cherwayko ceased to be the CEO of the Company. Mr. Cherwayko will however continue to provide consulting services to the Company with respect to the proposed Arrangement with Midwestern. Mr. Tsvetkov continues to be the Interim CEO and CFO of the Company.
Additional information regarding Mart is available on the Company's website at and under the Company's profile on SEDAR at .
Notes: 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 Management's Discussion and Analysis ("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 extent of future production and export pipeline disruptions and pipeline losses, 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, completion, commissioning and tie-in of the Umugini 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.
In addition, information regarding the reserve and resource estimates attributable to Mart's oil and gas properties should be considered forward looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves and resources described exist in the quantities predicted or estimated and that the reserves and resources can be profitably produced in the future. Readers are referred to the heading "Forward Looking Statements" in the Company's Statement of Reserves Data for a more detailed discussion of risks associated with forward looking statements regarding reserves. In addition, past production performance, sales volumes and prices from the Umusadege field are not necessarily indicative of future performance, sales volumes and prices.
Finally, there is no assurance that the conditions set out in the Arrangement Agreement, including the Financing Condition, will be met. There is no assurance that the Arrangement will be completed on the terms, within the timelines indicated or at all or that there will not be future additional amendments to the Arrangement Agreement.
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.
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.
Contacts:
Mart Resources, Inc. - London, England
Dmitri Tsvetkov
+44 207 351 7937
Mart Resources, Inc. - Canada
Sam Grier
403-270-1841
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Datum: 13.08.2015 - 12:30 Uhr
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News-ID 413476
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Oil & Gas
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