Mart Announces Financial and Operating Results For the Three Months Ended March 31, 2013
CALGARY, ALBERTA -- (Marketwired) -- 05/23/13 -- Mart Resources, Inc. (TSX VENTURE: MMT) ("Mart" or the "Company") is pleased to announce its financial and operating results (all amounts in United States dollars unless noted) for the three months ended March 31, 2013 ("Q113"):
THREE MONTHS ENDED MARCH 31, 2013
-- Mart's share of average daily oil produced and sold for Q113 from the
Umusadege field was 2,571 barrels of oil per day ("bopd") compared to
6,936 bopd for the three months ended March 31, 2012 ("Q112"). There was
a prolonged shutdown that started on February 24, 2013 and ended
subsequent to the end of Q113, on April 17, 2013 as a result of repairs
and maintenance of the export pipeline. During Q113, the Umusadege field
was shut down for a total of 46 days (Q112: 18 days) due to various
disruptions, repairs and maintenance of the export pipeline.
-- On March 12, 2013 Mart declared a quarterly dividend of CAD $0.05 per
common share. The quarterly dividend was paid on April 9, 2013 for an
aggregate amount of $17.5 million.
-- Net income for Q113 was $1.9 million ($0.005 per share) compared to net
income of $37.9 million ($0.113 per share) for Q112. The lower net
income during the period was due to the export pipeline shutdowns caused
by repairs and maintenance that resulted in decreased revenue during the
period.
-- Funds flow from production operations was $13.1 million ($0.037 per
share) for Q113 compared to $55.0 million ($0.163 per share) for Q112
(see Note 1 to the Financial and Operating Results table below regarding
Non-IFRS measures).
-- Mart's share of Umusadege field oil produced and sold in Q113 was
231,384 barrels of oil ("bbls") compared to 631,202 bbls for Q112.
-- The average price received by Mart for oil in Q113 was $110.01 per
barrel of oil ("bbl") compared to $115.61 per bbl for Q112.
-- Mart's share of pipeline and export facility losses for Q113 totaled
51,152 bbls, or approximately 17.6% of crude deliveries from the
Umusadege field for the period.
FINANCIAL AND OPERATING RESULTS
The following table provides a summary of Mart's selected financial and operating results for the three months ended March 31, 2013 and 2012 and the twelve months ended December 31, 2012:
USD $ 000's
(except oil produced and sold,
share, per share amounts, 3 months ended 3 months ended 12 months ended
and oil prices) Mar 31, 2013 Mar 31, 2012 Dec 31, 2012
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Mart's share of the Umusadege
Field:
Barrels of oil produced and
sold 231,384 631,202 1,844,389
Average sales price per barrel $110.01 $115.61 $103.43
Mart's percentage share of
total Umusadege oil produced
and sold during the period 54.0% 82.5% 66.7%
Mart's share of petroleum
sales after royalties,
content development levy and
community development costs 19,822 61,884 161,390
Funds flow from production
operations (1) 13,139 54,960 137,743
Per share - basic $0.037 $0.163 $0.398
Net income 1,909 37,907 58,046
Per share - basic $0.005 $0.113 $0.168
Per share - diluted $0.005 $0.109 $0.163
Total assets 241,453 237,132 281,506
Total bank debt Nil Nil Nil
Weighted average shares
outstanding for periods
ended:
Basic 356,296,165 336,752,599 345,715,889
Diluted 359,825,372 348,471,587 355,617,583
Note:
1. Indicates non-IFRS measures. Non-IFRS measures are informative measures
commonly used in the oil and gas industry. Such measures do not conform
to IFRS and may not be comparable to those reported by other companies
nor should they be viewed as an alternative to other measures of
financial performance calculated in accordance with IFRS. For the
purposes of this table, the Company defines "Funds flow from production
operations" as net petroleum sales less royalties, content development
levy, community development costs and production costs. Funds flow from
production operations is intended to give a comparative indication of
the Company's net petroleum sales less production costs as shown in the
following table:
3 months ended 3 months ended 12 months ended
USD $ 000's Mar 31, 2013 Mar 31, 2012 Dec 31, 2012
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Petroleum sales 25,455 72,974 190,761
Less: Royalties, content
development levy and
community development costs 5,633 11,090 29,371
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Net petroleum sales 19,822 61,884 161,390
Less: Production costs 6,683 6,924 23,647
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Funds flow from production
operations 13,139 54,960 137,743
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OUTLOOK AND OPERATIONS UPDATE:
Dividend
On March 12, 2013, Mart declared a quarterly cash dividend of CDN $0.05 per common share that was paid to shareholders on April 9, 2013 for an aggregate amount of CDN $17.8 million.
UMU-10 Well
The Company announced on November 5, 2012 that the UMU-10 well encountered 479 feet of gross hydrocarbon pay in 20 sands. The results of the well tests conducted have been previously press released.
The operator of the Umusadege field plans to return to the UMU-10 well after drilling the UMU-11 well (discussed below) to carry out the remaining testing operations on sands XXb and XIX in the long string as a coiled tubing unit is required. Multirate flow testing will then be performed on all sands completed in the long string: XIX, XXb, and XXI.
Umusadege Field Development Activity Update
It is anticipated that drilling activities on the Umusadege field will include at least one additional vertical development well, one horizontal development well and one exploration well.
Umusadege field development is continuing with the UMU-11 well, to be drilled from the same surface location as UMU-9 and UMU-10. The rig has been skidded to the last drill slot on the existing drill pad and the rig is being set up and upgraded to prepare for the UMU-11 well. The well is expected to spud in the second quarter of 2013. The oil reservoirs expected to be completed in the UMU-11 well are the XIIb, XIIc, XVIa, and XVIb sands, which had a combined 79 feet of oil pay in UMU-10.
The horizontal well is planned to be the sidetrack well from the existing UMU-3 vertical wellbore. It will develop the shallow oil reservoirs in the main accumulation using a second rig.
The exploration drilling is planned for the East prospect within the Umusadege farmout area.
The new Central Production Facility is expected to be commissioned during the second quarter of 2013. This facility has been designed to handle the full field capacity anticipated from the existing reserves, as well as the potential for production from prospective resources in the Umusadege farmout area.
Umugini Pipeline and Trans Forcados Export Pipeline
Mart and its co-venturers are currently constructing a second independent export pipeline (known as the Umugini Pipeline) for Umusadege field production. The pipeline contractor is currently working from two locations: one near the Umusadege field and one near the midpoint between Umusadege and the Trans Forcados export pipeline station. The Umugini pipeline will connect the Umusadege field to the Trans Forcados export pipeline. The Trans Forcados export pipeline will deliver Umusadege crude to the Forcados export terminal. Negotiations regarding the crude handling agreement with the export pipeline owners and terminal operators are continuing.
Production Update
Production from the Umusadege field that was shut down on February 24, 2013 resumed on April 17, 2013 following notice given by Nigerian Agip Oil Company, the pipeline operator, that maintenance and repairs to the export pipeline have been completed.
Umusadege field production during April 2013 averaged 4,148 bopd. Umusadege field downtime during April 2013 totaled 18.5 days. The average field production based on producing days was 10,864 bopd in April 2013.
Total crude oil deliveries into the export pipeline from the Umusadege field for April 2013 were approximately 150,500 bbls before pipeline losses, of which 124,500 bbls were from new production from the Umusadege field with the additional amount being deliveries from storage tanks injected into the export pipeline when pipeline operations resumed.
Loan facility
On March 26, 2013, Mart, through its wholly-owned Nigerian subsidiary, Mart Umusadege Resources Nigeria Limited, arranged a $100 million secured term loan facility with Guaranty Trust Bank PLC. The finalization of the facility is subject to completion of a facility agreement and customary security documents. The facility is comprised of a $75 million, 5-year term loan facility and a $25 million, 1-year revolving loan facility. The facilities are intended to finance capital expenditures required for further Umusadege field development activities and the Umugini Pipeline and Mart's ongoing working capital requirements. Interest is based on 90 day LIBOR, plus 4 percent (floor of 8.25 percent) and is secured by all assets of Mart Umusadege Resources Nigeria Limited.
ANNUAL GENERAL AND SPECIAL MEETING OF MART SHAREHOLDERS
Mart is pleased to announce that its Annual General and Special Meeting of Shareholders will be held at 3:00pm on Thursday, June 27, 2013 at the Calgary Petroleum Club. The Meeting will be webcast for shareholders and others unable to attend the Meeting in person. Full details of the Meeting and webcast will be provided prior to the Meeting date.
CHAIRMAN'S COMMENT:
Wade Cherwayko, Chairman & CEO of Mart said, "In the first quarter of 2013 Mart experienced production shutdowns that were far above normal due to maintenance and repairs to the export pipeline performed by the pipeline operator. This resulted in much lower production and revenue in Q113 compared to Q112 and Mart's revenue for Q113 was $19.8 million with a net income after taxes of $1.9 million. The export pipeline resumed normal operations on April 17, 2013, and production and injection into the export pipeline has been at levels at or nearing the maximum allocation. The Company declared a quarterly cash dividend of CAD $0.05 per common share that was paid to shareholders on April 9, 2013 for an aggregate amount of CAD $17.8 million. The Umusadege field's production capacity remains strong, and despite significant interruptions to production in Q113 the potential of the field continues to be very positive. The Company continues to work towards maximizing production and increasing reserves. The construction of the additional export pipeline will also enable the Umusadege co-venturers to fully exploit the potential of the Umusadege field. The drilling program scheduled for 2013 includes the UMU-11 well, expected to begin drilling operations in Q213, and additional development drilling activities are planned for the remainder of 2013."
Mart will hold a conference call to discuss the operational and financial results for the quarter ended March 31, 2013. The conference call is scheduled for May 24, 2013 at 8:30 AM Mountain Daylight Time (10:30 Eastern Daylight Time). Wade Cherwayko, Chairman & CEO of Mart, and Dmitri Tsvetkov, Chief Financial Officer of Mart, will host the call and be available during the question-and-answer session. To access the conference call, please dial 1- 800-769-8320 or 416-695-6616. An instant replay of the call will be available until June 1, 2013 by dialing 1-800-408-3053 or 905-694-9451 and entering pass code 6207792.
Mart Presenting at Oil Council Africa Assembly in Paris, Earth's Resources Forum 2013 in Hong Kong and Oil & Gas Finance Forum 2013 in New York
Wade Cherwayko, Chairman and CEO of Mart, will be a presenter at the Oil Council Africa Assembly in Paris on June 11-12, 2013 and Earth's Resources Forum 2013 in Hong Kong on June 19-20, 2013. Dmitri Tsvetkov, CFO of Mart, will be a presenter at the Oil & Gas Finance Forum 2013 in New York on June 12-13, 2013. Links containing the locations and details of the conferences will be available on Mart's website under News & Presentations / Corporate Presentations - 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.
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).
This news release provides information regarding the Company's possible reserves. Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability that the quantities actually recovered will be equal or exceed the sum of the proved plus probable plus possible reserves.
Information Regarding Reserves and Net Present Value of Future Net Revenues
All information contained in this press release regarding reserves and the net present value of future net revenue has been derived from the Company's Form 51-101 F1-Statement of Reserves Data and Other Oil and Gas Information for the year ended December 31, 2011 ("Statement of Reserves Data") which report, along with the Form 51-101F2-Report on Reserves Data and Form 51-101F3-Report of Management and Directors on Reserves Data and Other Information are available for review at www.sedar.com and on the Company's website at www.martresources.com.
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 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 and completion of an alternative export 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.
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 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.
Contacts:
Mart Resources, Inc.
Wade Cherwayko / Dmitri Tsvetkov
England office # +44 207 351 7937
Wade@martresources.com / dmitri.tsvetkov@martresources.com
Mart Resources, Inc.
Investor Relations
Toll Free 1-888-875-7485
www.martresources.com
