October 31, 2012 (asked by Andrew)
Question: Mart Resources has stated that the pipeline deal is done and just waiting for signatures. The umu 10 well is being tested and results could be in the next 4-6 weeks I would guess. Would you think these events will have a substantial impact on the share price or not since it is a year before we will be able to get the increased flow rates? Is the good news already baked in ? Can you explain how the lost oil is really being stolen. Partners, Nigerian government? Thanks very much.
5i Research Answer: Any real pipeline news will have an impact on the share price, depsite the time frame. Uncertainty is the killer, and the 'losses' have been very disconcerting. No oil is 'stolen' but the pipeline operator just pays Mart for a lower amount of oil than what is actually shipped. e.g. they ship 50,000 barrels, the operator gets paid for 50,000, but they only pay Mart for 42,000 barrels. Basically stealing but with government involvement (guessing here only).
The well news's impact is dependent on the test results, some of it may be in the price already.
October 24, 2012 (asked by Peter)
Question: Peter> Can you kindly provide your accessment of Mart Resources(MMT-V) . They appear to have several catalysts moving forward as well as paying a dividend currently yielding close to 11%
5i Research Answer: We like Mart quite a lot, but it remains very high risk. The dividend is nice, but the last quarter was horrible. There is potential positive news on the pipeline issue, where they continue to experience their partners stealing from them losses because of the way toll and payments are made. Note how we put that, it is part of the process of working in Nigeria.
It has excellent exploration potential, OK management and very good prospects overall. We expect the dividend to continue, especially as it has just started.
Investors are watching it, and it hit a new high today. We would expect pipeline news and exploration news in the 4th quarter. High risk but high potential, certainly.