Mart, Midwestern and Suntrust provide January 2015 updates

Mart Resources, Inc. and its co-venturers, Midwestern Oil and Gas Company Limited and SunTrust Oil Company Limited are providing the following updates on Umusadege field production for January 2015 and other operations.

January 2015 aggregate production update

Umusadege field production during January 2015 averaged approximately 17 050 bpd resulting in total production of approximately 528 560 bbls for the month. Aggregate calculated Umusadege field downtime during January 2015 was approximately 1.8 days (based upon days with production of more than 10 000 bpd being considered to have no downtime). Although shutdowns of both the NAOC and Trans Forcados export pipelines were experienced during January 2015 due to operational interruptions for general pipeline repairs and maintenance and due to vandalism, ongoing production from the Umusadege field was minimally affected due of the ability of the field operator to alternate production between the two pipelines. There were no full down days during January. The average field production based on producing days was approximately 18 070 bpd in January 2015.

The combined net delivery of oil from the Umusadege field through the new Umugini pipeline and NAOC export pipeline totalled approximately 525 920 bbls in January 2015 before estimated pipeline and export facility losses, and approximately 450 430 bbls after deduction of combined pipeline and export facility losses estimated for January 2015 by Mart. Combined delivery of oil from the Umusadege field through the Umugini pipeline and NAOC export pipeline reached a record one-day volume of approximately 29 000 bpd in late January 2015.

NAOC export pipeline update

Total net crude oil deliveries into the NAOC export pipeline from the Umusadege field for January 2015 were approximately 306 960 bbls before pipeline losses. Based upon the 12 month rolling average rate of pipeline and export facility losses from December 2013 to November 2014 of 17.46%, Mart estimates NAOC pipeline and Brass River export facility losses for January 2015 will be approximately 53 590 bbls. Accordingly, Mart estimates that the total net crude deliveries into the NAOC export pipeline from the Umusadege field for January 2015 less estimated pipeline losses will be approximately 253 370 bbls.

As previously announced, total net crude oil deliveries into the NAOC export pipeline from the Umusadege field for December 2014 were approximately 295 392 bbls. Actual NAOC pipeline and export facility losses have not been allocated for December 2014 because allocation was suspended by the Department of Petroleum Resources pending an approved loss computation formula. Mart previously estimated pipeline and export facility losses for December 2014 to be approximately 51 568 bbls, based upon the 12 month rolling average rate of pipeline and export facility losses of 17.46% between December 2013 and November 2014.

Umugini Pipeline update

p>Mart and its co-venturers have not yet received official reports from the operators of the Trans Forcados export pipeline or the Forcados oil export terminal stating actual oil injection volumes or pipeline and export facility losses for the Trans Forcados export system. Based upon Mart's internal production and facility data, the Company estimates that Umusadege field deliveries into the Trans Forcados export pipeline connected to the Forcados oil export terminal were approximately 218 960 bbls in January 2015. Based upon historic pipeline losses encountered by other exploration and production companies utilising the Trans Forcados export system, Mart estimates pipeline and export facility losses of 10% of crude oil deliveries, resulting in estimated Umusadege field deliveries of approximately 197 060 bbls for January 2015 after deduction of estimated pipeline and export facility losses.

Update on debt repayment obligations to Nigerian lender

As previously described in Mart's Consolidated Financial Statements and Management's Discussion and Analysis for the period ended 30 September, 2014, Mart, through its wholly-owned Nigerian subsidiary Mart Umusadege Resources Nigeria Limited, has a US$232.5 million term loan facility with Guaranty Trust Bank (GTB) of Nigeria. 

As of 28 February, 2015, the total outstanding balance under this term loan facility is approximately US$201.1 million of which approximately US$119.1 million relates to the OML 18 acquisition and US$82 million to Umusadege field development and working capital funding. Approximately US$68.2 million is payable during the period from 1 March, 2015, to 31 December, 2015, of which approximately US$8.5 million net is payable during March 2015. Mart is currently working with GTB towards a restructuring and deferral of principal payments scheduled in 2015.

Drilling update

After completion of drilling and testing of the Umu-13 well in January 2015 the drill rig has been on standby while reviewing the 2015 capital expenditure program and restructuring the loan facility.


Adapted from press release by Hannah Priestley-Eaton

Published on 06/03/2015


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