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Mart Announces Financial and Operating Results For the Three Months Ended March 31, 2013
Press Release: EARNINGS –
CALGARY, ALBERTA--(Marketwired - May 23, 2013) - 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, and oil prices) |
3 months ended |
3 months ended |
12 months ended |
| Mar 31, 2013 |
Mar 31, 2012 |
Dec 31, 2012 |
| 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:
- 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:
| USD $ 000's |
3 months ended
Mar 31, 2013 |
3 months ended
Mar 31, 2012 |
12 months
ended
Dec 31, 2012 |
| Petroleum sales |
25,455 |
72,974 |
190,761 |
| Less: Royalties, content development levy and community development costs |
5,633 |
11,090 |
29,371 |
| Net petroleum sales |
19,822 |
61,884 |
161,390 |
| Less: Production costs |
6,683 |
6,924 |
23,647 |
| Funds flow from production operations |
13,139 |
54,960 |
137,743 |
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."