Thanks to “dukedosh” on IV Board:
Mart Resources poised to add transformational scale in Nigeria
By Jamie AshcroftAugust 29 2014, 1:10pm
The Umugini pipeline, which is now being commissioned, will quickly enable a more than doubling of production from Mart’s Umusadege oil field
The coming months will deliver transformational scale to Mart Resources’ (
CVE:MMT) operations in Nigeria.
Mart, which already benefits from oil production, is poised for potentially two major share price catalysts this autumn.
The first is the Umugini pipeline, which has been built by Mart’s Nigerian partner, Midwest Oil & Gas, and is currently being commissioned.
Once online it will quickly enable a more than doubling of production from Mart’s Umusadege oil field.
Umusadege last month yielded an average of 11,958 barrels of oil per production days. Currently the field feeds into an existing Agip owned NAOC pipeline.
When Umugini is operational, supplementing existing pipeline exports, it is expected that Umusadege will average 25,000 barrels a day in the fourth quarter and exit 2014 producing in the order of 30,000.
The Umugini start-up is due imminently, Mart chief financial officer Dmitri Tsvetkov told Proactive Investors.
“It is the next major catalyst in our development of the Umusadege field because we will be more than doubling our production when we have the additional pipeline capacity,” he said.
Having funded the field’s development, the Toronto listed oil firm has an economic interest on average of between 65-70% of the output from Umusadege, which is operated by Mart’s Nigerian partners.
In the first six months of Mart’s share of sold oil totalled 1.09mln barrels (net of pipeline losses), which on average is just over 6,000 barrels per calendar day - factoring in downtime for pipeline maintenance, this equates to 8,000 barrels per production day.
Moving onto the second potential catalyst, Mart has a stated strategy to expand its footprint in Nigeria and it has been assessing for some time new opportunities.
In June the company confirmed it was among a consortium of oil companies selected as preferred bidders for assets being divested by certain multi-national oil majors.
And rumours this week have linked it to a US$1.2bn acquisition of OML 18 from Shell, as part of a series of divestments by the Anglo-Dutch ‘supermajor’ for a cumulative value in excess of US$5bn.
For its part, Shell confirmed that it had reached agreements over certain divestments but negotiations were ongoing for other deals – a narrative reflected in a report by the Financial Times, which identified the Mart consortium among the potential buyers.
Talks continue over two of the four potential transactions, according to the FT, which cited banking sources familiar with the situation.
Bound by signed confidentiality agreements, Tsvetkov was unable to provide Proactive Investors with any details about the ongoing process.
If an agreement is signed Mart will issue a public press release, he said.
He describes it as an ongoing dynamic process, which could reach a definite conclusion in the near future. “It is moving in the right direction.”
The FT report claimed Eroton, which is said to be a partnership between Mart and its Nigerian partner, Midwest Oil and Gas, will buy OML 18 for US$1.2bn.
The report also names Nigerian oil traders Taleveras and Aiteo as US$2.6bn buyers of OML 29, which is the largest asset on the auction block.
It also identified Pan Ocean Oil Corporation and Crestar as buyers of OML 24 and OML 25 respectively in separate deals worth US$900mln and US$500mln.
With at least one major catalyst due in the near future Mart will certainly one for investors to watch more closely in the coming weeks.
https://www.proactiveinvestors.co.uk/companies/news/71723/mart-resources-poised-to-add-transformational-scale-in-nigeria-71723.html