Mart Resources Inc MAUXF

News: OML 18 purchase completed

[wallywill]

Mart Resources, Inc.: Purchase of Onshore Nigerian Oil Mining Lease 18 Completed

20 Mar 2015 08:47 ET

Marketwire Canada

Mart Resources, Inc. (TSX:MMT) ("Mart" or the "Company") is pleased to announce that it is a member of a consortium (the "Consortium") that has acquired a 45% participating interest in Nigerian Oil Mining Lease 18 ("OML 18") and all associated assets, wells, pipelines and infrastructure from The Shell Petroleum Development Company of Nigeria Limited ("SPDC"), Total E&P Nigeria Limited, and Nigerian AGIP Oil Company Limited (collectively, the "Sellers"). The acquisition was completed pursuant to an Assignment Agreement between the Sellers and Eroton Exploration & Production Company Limited ("Eroton"), a special purpose company owned directly or indirectly by the Consortium members. The remaining 55% participating interest of OML 18 is owned by the Nigerian National Petroleum Corporation. The total purchase price for the interest was US$1.1 billion, not including acquisition costs. All approvals required for the completion of the acquisition of OML 18 have been received from the relevant authorities of the Federal Government of Nigeria.

Mart holds an indirect working interest in OML 18 of approximately 10% through its share ownership of Martwestern Energy Limited that in turn owns 50% of the shares of Eroton.

OML 18 covers an area of 1,035 square kilometers and includes the Alakiri, Awoba, Cawthorne Channel, Krakama, and Buguma Creek fields and related facilities. The Awoba field straddles into Oil Mining Lease 24. The acquired infrastructure includes flow stations together with associated gas infrastructure plus oil and gas pipelines within the OML 18 license area. According to SPDC, the assigned fields produced an average of approximately 14,000 gross barrels of oil equivalent per day of oil, condensate and gas during 2014.

Crude oil production from OML 18 is exported through the Bonny Crude Oil Terminal via the Nembe Creek Trunkline. Gas production from OML 18 is delivered to various power, industrial and commercial customers via the Nigeria Gas Company's pipeline.

[radcat]

When will OML-18 revenues start flowing Mart's way as well as "partners" cash to pay for their share of the down payment? This should help with Bank line of credit negotiations. 

[knife2]

I wonder if Mart agreeing to 80 cent takeover has anything to do with this transaction being finalized

[radcat]

The transaction will not be finalized until Midwestern has 66 2/3% of the vote. As far as I am concerned, the closing of OML-18 almost three months prior to the June 15th vote is another reason to vote NO for this schitt deal. Now if only the price of crude would co-operate. 

[mjh9413]

They put in $134MM for 10% of OML18 which cost consortium $1.1B plus acqun costs...that must mean the partners  have to put in $1.2B for their share...funny math...funny too there was no mention of effective date of change of control of OML18. And finally, are Shell paying the co-venturers for the Umigini deliveries to date? Lots of unknowns.

[righand2]

It has already been handed over. That was noted in a Nigerian paper.

[mjh9413]

So, Righand, wot was the EFFECTIVE date of transfer? thanks

[righand2]

According to the Nigerian news, Mart and their partners took over yesterday. The actual effective date is unknown, but what else is new with this outfit? Just be glad to be getting bought out.

[radcat]

Midwestern will have to raise $280 million for Mart (thus far), $200 million for Mart debt, cash to buy  Delta States 20% stake which will probably costing more than Mart purchase. And some spare cash for exploration & development. Is it any wonder Mart is trading sub-60 cents with an 80 cents take-over offer. The market seems to believe Midwestern can't pull it off.   

[radcat]

.... And Midwestern's remaining proportional share of OML-18's $1.2 BILLION purchase.  Sub 60 cents? Small wonder.

[glory7]

You can be sure for .80$ they will scrape up the money, that's a given so 25% for 2 months in this market I,ll wait and the way they scam maybe another offer? anythings possible for a buck.