CALGARY, ALBERTA--(Marketwired - Nov. 26, 2015) -
- Umusadege field production averaged approximately 14,320 barrels of oil per day ("bopd") during October 2015 based on calendar days; average field production based on production days was approximately 20,070 bopd during October 2015.
- Total production from the Umusadege field in October 2015 was approximately 443,860 barrels of oil ("bbls").
- The combined net delivery of oil from the Umusadege field through the Umugini pipeline and the Nigerian Agip Oil Company Limited ("NAOC") export pipeline totaled approximately 458,570 bbls in October 2015 before estimated combined pipeline and export facility losses, and approximately 404,540 bbls after deduction of combined pipeline and export facility losses for October 2015 as estimated by Mart.
- Aggregate calculated downtime during October 2015 totaled approximately eight days.
- The UMU-15 well was spudded on October 13, 2015 and has reached a total depth of 9,350 feet. Production casing has been cemented and the completion activities are ongoing to install the dual tubing string completion for the three zones of interest: the XIV, XVIIa, and XXa sands.
- The UMU-14H well completed in the VIII sand has been production tested resulting in a final flow rate of 5,021 bopd.
- The UMU-8st short string completed in the XIIc sand has been production tested resulting in a final flow rate of 1,660 bopd.
- The UMU-8st long string completed in the XXI sand has been production tested resulting in a final flow rate of 2,425 bopd.
Mart Resources, Inc. (TSX:MMT) ("Mart" or the "Company") and its co-venturers, Midwestern Oil and Gas Company Limited ("Midwestern", Operator of the Umusadege field) and SunTrust Oil Company Limited are providing the following updates on Umusadege field production for October 2015 and other operations.
October 2015 Aggregate Production Update
Umusadege field production during October 2015 averaged approximately 14,320 bopd resulting in total production of approximately 443,860 bbls for the month. Aggregate calculated Umusadege field downtime during October 2015 was approximately eight days (based upon days with production of more than 10,000 bopd being considered to have no downtime). There were shutdowns of the Trans Forcados pipeline and the NAOC export pipeline during October 2015 due to operational interruptions for general pipeline and facility maintenance, a shutdown due to a lack of storage capacity at the Forcados terminal, and repairs required due to vandalism, but ongoing production from the Umusadege field was managed by the ability of the field operator to alternate production between the Trans Forcados and NAOC export pipelines. There were no full down days during the month. The average field production based on producing days was approximately 20,070 bopd in October 2015.
The combined net delivery of oil from the Umusadege field through the Umugini pipeline and NAOC export pipeline totaled approximately 458,570 bbls in October 2015 before estimated pipeline and export facility losses, and approximately 404,540 bbls after deduction of combined pipeline and export facility losses estimated for October 2015 by Mart.
NAOC Export Pipeline Update
Total net crude oil deliveries into the NAOC export pipeline from the Umusadege field for October 2015 were approximately 109,590 bbls before pipeline losses. Based upon the 12-month rolling average rate of pipeline and export facility losses from December 2013 to November 2014 of 17.46%, Mart estimates NAOC export pipeline and Brass River export facility losses for October 2015 will be approximately 19,130 bbls. Accordingly, Mart estimates that the total net crude deliveries into the NAOC export pipeline from the Umusadege field for October 2015 less estimated pipeline losses will be approximately 90,460 bbls.
As previously announced, total net crude oil deliveries into the NAOC export pipeline from the Umusadege field for September 2015 were approximately 157,407 bbls. Actual NAOC pipeline and export facility losses have not been allocated for September 2015 because allocation was suspended beginning in December 2014 by the Department of Petroleum Resources pending an approved loss computation formula. Mart previously estimated pipeline and export facility losses for September 2015 to be approximately 27,480 bbls, based upon the 12-month rolling average rate of pipeline and export facility losses of 17.46% between December 2013 and November 2014.
The NAOC export pipeline was down for six days in October 2015 due to maintenance and repair work done on the pipeline.
Trans Forcados and Umugini Pipeline Update
Based upon Mart's internal production and facility data, the Company estimates that Umusadege field deliveries into the Trans Forcados export pipeline connected to the Forcados oil export terminal were approximately 348,980 bbls in October 2015. Based upon historic pipeline losses encountered by other exploration and production companies utilizing the Trans Forcados export system, Mart estimates pipeline and export facility losses of 10% of crude oil deliveries, resulting in estimated Umusadege field deliveries of approximately 314,080 bbls for October 2015 after deduction of estimated pipeline and export facility losses.
The Umugini pipeline was down for seven days in October 2015 due maintenance and repair work done on the pipeline and one day due to a lack of storage capacity at the Forcados terminal.
Further to its previous disclosures regarding the absence of accurate and reconcilable injection data from Shell Petroleum Development Company of Nigeria Limited ("SPDC"), the operator of the Trans Forcados oil export terminal system, Mart advises that the Company and its co-venturers have received unreconciled reports that include only preliminary gross oil injection volumes and estimated pipeline and export facility losses. From our initial review, it is not clear whether the reported volumes represent all producers on the system or only Mart and its co-venturers. Mart and its co-venturers have requested additional and more complete information from SPDC in order to accurately reconcile volumes and any attributed pipeline losses. However, based upon preliminary analysis of the volume and loss information provided, Mart has calculated that the average loss rate could range between 10% and 21% of gross oil injections. The Company cautions that it is currently not able to obtain confirmation of these values, and it is not able to perform a reliable reconciliation. Until more accurate and complete information and reports can be obtained from SPDC, Mart will continue to estimate such pipeline losses at a rate of 10% based upon historic pipeline losses encountered by other exploration and production companies utilizing the Trans Forcados export system.
Drilling and Testing Update
As previously announced, the UMU-15 well was spudded on October 13, 2015. The well is being drilled from the UMU-13 well pad location to target the east accumulation that was previously appraised by the UMU-13 well. The well has been drilled to a total depth of 9,350 feet and the production casing has been cemented in the well. The dual completion assembly is currently being installed to target the XIV, XVIIa, and XXa sands, which have combined gross oil pay of 40 feet. Following the completion activities, the clean-up and production testing operations will be undertaken.
The UMU-14H well completed in the VIII sand has been production tested at multiple choke settings, resulting in a final test rate of 5,021 barrels of oil per day ("bopd") on a 40/64 inch choke. The oil gravity was 26.8 degrees API with a gas oil ratio ("GOR") of 4 standard cubic feet per barrel ("scf/bbl"). The flowing tubing head pressure ("FTHP") was 200 psi, with basic sediment and water ("BS&W") of 1.2%.
The UMU-8st short string completed in the XIIc sand has been production tested at multiple choke settings, resulting in a final test rate of 1,660 bopd on a 40/64 inch choke. The oil gravity was 47.2 degrees API with a GOR of 1,823 scf/bbl. The FTHP was 580 psig, with BS&W of 2.4%.
The UMU-8st long string completed in the XXI sand has been production tested at multiple choke settings, resulting in a final test rate of 2,425 bopd on a 32/64 inch choke. The oil gravity was 47.9 degrees API with a GOR of 1,670 scf/bbl. The FTHP was 1,220 psig, with BS&W of 0%.
Additional information regarding Mart is available on the Company's website at www.martresources.com and under the Company's profile on SEDAR at www.sedar.com.
Except where expressly stated otherwise, all production figures set out in this press release, including bopd, reflect gross Umusadege field production rather than production attributable to Mart. Mart's share of total gross production before taxes and royalties from the Umusadege field fluctuates between 82.5% (before capital cost recovery) and 50% (after capital cost recovery). As a result of the Umusadege field capital expenditure funding arrangement entered into by Mart and its co-venturers with Guaranty Trust Bank Limited ("GTB") in April 2014, during the twelve moratorium period, Mart's share of funding of the 2015 Umusadege field capital expenditure program will be approximately 50% and there will be no recovery of Mart's capital expenditures incurred and not recovered before the start and during the moratorium period. This arrangement results in Mart's share of total gross production before taxes and royalties from the Umusadege being 50% during the during the twelve moratorium period ending in March 2016.
Forward-Looking Statements and Risks
Certain statements contained in this press release constitute "forward-looking statements" as such term is used in applicable Canadian and US securities laws. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or are not statements of historical fact and should be viewed as "forward-looking statements". These statements relate to analyses and other information that are based upon forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.
In particular, there is no assurance that there will not be future disruptions of the NAOC export pipeline or Brass River export facility. Any future disruptions may materially and adversely affect the ability of the Company to transport, deliver and sell its crude oil production from the Umusadege field. Pipeline and export facilities losses are expected to continue in the future and such losses could be material. There is no assurance that there will not be adjustments to previously reported pipeline and export facilities losses by NAOC. There is no assurance that the estimates of current month pipeline and export facilities losses will reflect actual losses once reported to the Company by NAOC.
There is no assurance that there will not be future disruptions to the Umugini Pipeline, Trans Forcados export pipeline or the Forcados export terminal. Any future disruptions may materially and adversely affect the ability of the Company to transport, deliver and sell its crude oil production from the Umusadege field. There is no assurance on when the operators of the Trans Forcados export system will report actual oil injections or pipeline and export facility losses to the Company or that the estimates of the Company regarding oil injection volumes or pipeline and export facility losses referenced in this press release will reflect those volumes and losses reported by the operators of the Trans Forcados export system to the Company. The Umugini pipeline is a relatively new pipeline and will continue to face risk associated with any new pipeline installation and with risks generally associated with pipeline operations in Nigeria.
There is no assurance that the Company will be able to successfully conduct multi-rate production tests and bottom hole pressure buildup surveys for the completed intervals of the UMU-14H well. Statements (express or implied) regarding the ability of the Company to successfully test and commercially produce, transport and sell oil from the UMU-14H well (or any one or more of the hydrocarbon sands encountered or identified by the UMU-14H well) should all be viewed as forward-looking statements.
There is no assurance that the Company will be able to successfully complete the UMU-15 well or that the well will be commercially produced. Statements (express or implied) regarding the ability of the Company to successfully drill, complete, test and commercially produce, transport and sell oil from the UMU-15 well (or any one or more of the hydrocarbon sands encountered or identified by the UMU-15 well) should all be viewed as forward-looking statements.
There can be no assurance that such forward-looking statements will prove to be accurate as actual results and future events could vary or differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements contained in this news release. The forward-looking statements contained herein are expressly qualified by this cautionary statement.
Forward-looking statements are made based on management's beliefs, estimates and opinions on the date the statements are made and the Company undertakes no obligation to update forward-looking statements and if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable law.
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