Mart Resources Inc MAUXF

RE:RE:First Capital Verbal Opinion

[Louis9Suarez]

Fully agree that Mart BOD is withholding relevant information;

The reason First Capital opinion is not shared with Mart sharholders is that the opinion  does not include information about OML-18 production capacity and OML-18 current production.

Here is an example.

The number one measure of performance  for Mart the current and the future cash flow.

The current cash flow will be used by Ngerian banks to measure whether or nor Mart is capable of meeting its 200 million loan, 20 million of which comes due in March.

Future cash flows also help to value Mart onve the oil price stabilizes. Mart  has  200 million  debt, but large increases in future production make this debt  quite serviceable.

As a rule of tumb  2 to 1  or less ratio of debt to cash flow for oil and gas companies is acceptable.

What is the current debt to cash flow ratio for Mart and what is Mart future cash flow looks like?

Mart loan is 200 million and has some 20 million in cash and receivables.

From OML-18 10% current production of 3500 bopd Mart should have generate huge cash flow for the next two years. Mart is on record that the company needs Brent in the $30s to break even. At  $95 hedged the net backs Mart should be getting between $55 and $65 netback. Based on 330 days production and 15 % loss Mart should be generating between $57 million and $65 million in free cash flow.


So the current low offer is based on a a blended current cash flow and net asset valuation.

The current cash flow valuation is unfair to Mart Mart shareholders as it does only represent a snapshot of current depressed oil prices.

The net assett valuation is also unfair as it does not include OML-18 reserves and current production capacity. That is why the OML-18 report is being  witheld from Mart shareholders.

To me the lowball offer is a rip-off as the most important information for fair and objective information is being purposely withheld.

Louis Suarez