RE: RE: RE: RE: Oando puts a well on production cl From Cormark Securities, July 13, 2012. Page 18.
15% Mart - 85% Midwestern/Suntrust. Don't see any mention of Oando or any others being part owners. Let me know if there is other info. to the contrary. Seem to remember Wade mentioning he would have liked more than 15%.
Radcat
The Umusadege field’s share of pipeline capacity (gross) through the Nigerian Agip Oil
Company (“Agip”) line is expected to increase to 14-15 MB/d in the near term while
discussions are continuing with Shell Petroleum to also utilize Shell’s export pipeline at
Forcados (see Figure 9). Should the current discussions with Shell come to fruition, a
new 54 km pipeline (the “Ogini” line) linking Umusadege to Shell’s facilities at Eriemu
would be required and would increase field volumes to 20 MB/d (gross). Mart is
anticipated to have a 15% equity interest in the Ogini line with Midwestern and Suntrust
holding the remaining 85%. Approximately 50% of the cost of the pipeline would be
funded with debt, leaving Mart responsible for less than $5.0 MM in capital spending for
the pipeline (initial estimates).
On June 21, 2012 Mart announced the signing of a Crude Oil Purchase Agreement with
Shell, the first step in reaching a definitive agreement for the Ogini line. A crude oil
handling agreement remains to be finalized, at which time Mart would be expected to be
able to ship oil through the Trans Forcados line to the Forcados export terminal. Tariffs
on the Trans Forcados line are expected to be similar to that currently paid to Agip
($3.50-3.75/B). Access to the Forcados terminal (combined with Agip capacity) would
be expected to support full development of the Umusadege field including exploration
activities and potentially third party volumes. We would anticipate first oil flowing
through the Trans Forcados line within 12 months of finalization of the crude handling
agreement with Shell. Our 2012 and 2013 estimates currently do not incorporate any
incremental export capacity associated with a potential Shell deal.
The central Umusadege processing facilities have 35 Mb/d of capacity. Crude from the
field is currently being purchased by Eni and exported through the Brass terminal.
It should be noted that due to regular vandalism of pipelines or damage to pipelines that
occurs when individuals illegally access pipelines, disruptions in shipping oil is common
in Nigeria. We are currently using 10-15% downtime in pipeline accessibility in our
forecasts while the Company budgets 60 days of downtime per annum. In 2011 there
were 50 days of downtime while Q1/12 experienced 18 days of outages. We would note
however, that should Mart ultimately be able to ship oil down the Trans Forcados line we
would expect fewer lost production days due to Shell’s better record of transportation
“up time” compared to Agip.