Interesting timing for Midwestern bidLets have a look at the timing.....
Mart in October invested 132 Million $$ in Oct as part of that deal for the Nigerian Oil producing property.
MART PARTICIPATES IN CONSORTIUM TO ACQUIRE ONSHORE NIGERIAN OIL MINING LEASE 18
Mart Resources Inc. is a member of a consortium that has entered into an assignment agreement with the Shell Petroleum Development Company of Nigeria Ltd., Total E&P Nigeria Ltd. and Nigerian AGIP Oil Company Ltd. pursuant to which a special-purpose company owned directly or indirectly by the consortium members will acquire a 45-per-cent participating interest in Nigerian oil mining lease 18 and all associated assets, wells, pipelines and infrastructure. The remaining 55-per-cent participating interest of OML 18 will be retained by the Nigerian National Petroleum Corp. The acquisition is subject to numerous terms and conditions, including receipt of Nigerian government approval.In consideration for its indirect working interest in OML 18, Mart has advanced $134-million (U.S.), representing its proportionate share of the initial bid deposit paid by the consortium to the sellers, the remaining closing cash consideration, and transaction costs and initial working capital for consortium SPV. The closing cash consideration is refundable should the transaction not be completed.
Oil prices begin to fall hard shortly after .
Midwestern knows Mart stretched their financial flexibility a bit to make that deal.
With the lower oil prices Mart has to suspend the dividend.
December Mart hits with drilling
Mart drills UMU-13 into 220 ft of gross pay in 11 sands
Good news and MMT stock price jumps to .90 in short order from .67
Very negative oil markets and MMT gets punished again and hits the 52 week low in december at around .45
Mart and partners produce 573,663 bbls of oil in December from Umusadege
Midwestern bids for MMT in Feb and MMT hires an advisor to consider the offer.
Mart and Partners announce oil production from the Umusadege field in Jan is less that Dec at 528,560... interesting .....
And then the big offer hits the table for .80 cash March 02
MART ENTERS NON-BINDING LETTER OF INTENT FOR SALE OF THE COMPANY
Mart Resources Inc. has entered into a letter of intent with Midwestern Oil and Gas Company Ltd., the operator of, and one of Mart's co-venturers in the Umusadege field. The letter of intent sets out the intention of the company and Midwestern, on a non-binding basis, to use good faith efforts to negotiate and enter into a definitive agreement, pursuant to which Midwestern would agree to acquire all of the issued and outstanding shares of Mart for cash consideration of 80 cents per common share by way of a plan of arrangement. The proposed offer price represents a 40.3-per-cent premium to the closing price and a 28-per-cent premium to the 20-day volume-weighted average trading price of Mart's common shares on the Toronto Stock Exchange on Feb. 27, 2015, the last trading day for Mart's common shares prior to the date of this announcement.
Using the 20 day volume weighted average is taking advantage of the selloff in junior oils , and also taking advantage of MMT's financial standing after they agreed to the deal costing them 134 MILLION $ for just a 10% ownership!
This stinks to high heaven, looking at the trading after the great news , look at the production numbers for January after the stated they hit a record daily production of 29,000 bbls per day in late January. The explanation as to why they were less than December: Although shutdowns of both the NAOC and Trans Forcados export pipelines were experienced during January, 2015, due to operational interruptions for general pipeline repairs and maintenance, and due to vandalism, continuing production from the Umusadege field was minimally affected due of the ability of the field operator to alternate production between the two pipelines. There were no full down days during January.
But we got this tidbit in that same production update.
The average field production based on producing days was approximately 18,070 bopd in January, 2015.
The combined net delivery of oil from the Umusadege field through the new Umugini pipeline and NAOC export pipeline totalled approximately 525,920 bbl in January, 2015, before estimated pipeline and export facility losses, and approximately 450,430 bbl after deduction of combined pipeline and export facility losses estimated for January, 2015, by Mart. Combined delivery of oil from the Umusadege field through the Umugini pipeline and NAOC export pipeline reached a record one-day volume of approximately 29,000 bopd in late January, 2015.
Anybody who believes Midwestern wont come up with the financing is fooling themselves.
Mart's assets are a steal at this level even with Brent selling for just over 60$ a bbl.
Marts share of production from this partnership is about 65% after all is said and done.
THE 80 CENT OFFER implies a 285 million $ buyout price. Nearly half of that is the 134 million $ Mart already has into that new venture!