CALGARY, ALBERTA — (Marketwire) — 03/11/13 —
Mart Resources, Inc. (TSX VENTURE: MMT) (“Mart” or the “Company”) and its co-venturers, Midwestern Oil and Gas Company Plc. (Operator of the Umusadege field) and SunTrust Oil Company Limited (together “the Co-venturers”) are pleased to announce additional flow rate test results for the UMU-10 well, and provide the following update on Umusadege field operations and progress on the new export pipeline.
UMU-10 Well Test Results
The UMU-10 well encountered 479 feet of gross hydrocarbon pay in 20 sands. Six of these sands, XVIIa & XVIIb (commingled), XVIIIa, XIX, XXb, and XXI, have been perforated and completed for production. Any two of these sands can be produced simultaneously using dual string sliding sleeve completion technology. The sands completed in UMU-10 are expected to access 161 feet of the total 479 feet of gross pay in the well.
Flow rate tests conducted during initial testing operations have now been completed on the XVIIa & XVIIb (commingled) sands and the XVIIIa sand. A stabilized flow rate of 3,076 bopd was recorded from the 33 foot (gross pay) XVIIa & XVIIb commingled sands of 49 API gravity oil through 2 7/8 inch tubing (short string) on a 32/64 inch choke at a flowing tubing pressure of 680 psi. Water production has reduced to zero after cleanup with a gas/oil ratio of 125 standard cubic feet per barrel.
The flow rate tests of the 18 foot (gross pay) XVIIIa gas/condensate sand recorded a stabilized test rate of 609 bpd of condensate and 4.26 MMcf/d of gas during testing operations conducted through 2 7/8 inch tubing (short string) on a 20/64 inch choke at a flowing tubing pressure of 2,400 psi. The well flowed gas and 53 API gravity condensate with basic sand and water (“BS&W”) of 11%.
The gas/condensate sand completed in XVIIIa is expected to be produced after the XVIIa & XVIIb sands are fully depleted. This is consistent with the field development strategy of the Operator, which focuses on bringing the oil zones on production in the near term through additional development drilling. The gas from the XVIIIa sand is expected to be utilized as fuel for the new central processing gas fired generators.
As previously announced, the first extended flow rate test was conducted on the XXI sand, the deepest of the sands to be tested, at a stabilized rate of 1,943 bopd during initial well testing. During the test of the XXI sand, the well flowed 55.3 API gravity oil through 3 1/2 inch tubing on a 28/64 inch choke at a flowing tubing pressure of 1,260 psi. BS&W was 5% with a gas/oil ratio of approximately 588 standard cubic feet per barrel.
The Operator plans to return to the UMU-10 well after drilling the UMU-11 well to carry out the remaining testing operations on sands XXb and XIX in the long string. Using a coiled tubing unit, the multirate flow testing will then be performed on all sands completed in the long string: XIX, XXb, and XXI.
Umusadege Field Development Activity Update
Field development is continuing with the UMU-11 well, to be drilled from the same surface location as UMU-9 and UMU-10. The rig has been skidded to the last drill slot on the existing drill pad and the rig is being set up and upgraded to prepare for the UMU-11 well. The well is expected to spud during March 2013. The oil reservoirs expected to be completed in the UMU-11 well are the XIIb, XIIc, XVIa, and XVIb sands, which had a combined 79 feet of oil pay in UMU-10.
During 2013, horizontal wells are anticipated to be drilled to develop the shallow oil reservoirs in the main accumulation. Sourcing of a second rig has begun, which, if successful, will perform the horizontal drilling activities. Once a second rig has been leased and mobilized, horizontal drilling is anticipated to begin with the horizontal sidetrack wells from the existing UMU-3 and UMU-4 vertical wellbores.
The new Central Production Facility is expected to be commissioned during March 2013. This facility has been designed to handle the full field capacity anticipated from the existing reserves, as well as the potential for prospective resources in the field.
March 2013 Production Update
Umusadege field production has been down the first 11 days of March 2013 due to maintenance being performed on the export pipeline by the pipeline operator. The pipeline operator has advised that the pipeline will be operational at the beginning of next week.
Umugini Pipeline and Shell Export Pipeline
Mart and its co-venturers are proceeding with plans to provide a second independent export pipeline for Umusadege field production. The construction contract for the Umugini pipeline has been awarded, and more than 90% of the pipe has arrived by truck to the Umusadege site. It is anticipated that ditching operations will commence shortly. The pipeline contractor will begin working from two locations: one near the Umusadege field and one near the midpoint between Umusadege and the Shell Export station. The Umugini pipeline will connect the Umusadege field to the Shell Export pipeline. The Shell export pipeline will deliver Umusadege crude to the Shell Forcados terminal. Negotiations regarding the crude handling agreement with the export pipeline and terminal operators are nearing completion.
Wade Cherwayko, Chairman & CEO of Mart Resources stated: “Mart and its partners are very pleased with the initial clean up and flow test results from the first three zones of the UMU-10 well. We look forward to receiving results from the remaining flow tests, and are making preparations to begin drilling UMU-11.”
Additional information regarding Mart is available on the Company–s website at and under the Company–s profile on SEDAR at .
INVESTOR RELATIONS:
Investors are also welcome to contact the following investor relations specialists for all corporate updates and investor inquiries:
FronTier Consulting Ltd.
Mart toll free # 1-888-875-7485
Email:
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).
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 the Company will be able to commercially produce, transport or sell oil from the UMU-10 well (or any one or more of the sands identified by the UMU-10 well) or successfully test the XXb or XIX sands. Statements (express or implied) regarding the ability of the Company to successfully complete, test and commercially produce, transport and sell oil from the UMU-10 well (or any one or more of the hydrocarbon sands identified by the UMU-10 well), should all be viewed as forward-looking statements. The well log interpretations indicating hydrocarbon-bearing sands are not necessarily indicative of future production. There is no assurance that reserves will be assigned to such hydrocarbon bearing sands. In addition, there is no assurance that there will not be future disruptions of the AGIP pipeline or that future repairs will not be required. Any future disruptions will materially and adversely affect the ability of the Company to transport, deliver and sell its crude oil production from the Umusadege field. Statements (express or implied) concerning the allocation of export and pipeline capacity to the Umusadege field from their party pipeline owners, should also be viewed as forward looking statements.
There is no assurance that Mart and its Co-venturers will be able to secure a second drilling rig or that drilling activities will occur within the timeframes indicated. There is no assurance that any future wells will be successfully drilled or if drilled, will be capable of commercial production.
There is no assurance that construction and completion of the Umugini Pipeline referenced herein will be completed within the timeframes indicated or at all or that Mart and its Co-venturers will be able to enter into an acceptable crude oil handling agreement. There is no assurance that the production capacity of the Umugini Pipeline will be adequate for future levels of Umusadege field oil production. Any new export pipeline will face risks generally associated with pipeline operations in Nigeria including the risk of pipeline disruption and line losses. 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 no 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.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE RELEASE.
Contacts:
Mart Resources, Inc. – London, England office
Wade Cherwayko / Dmitri Tsvetkov
+44 207 351 7937
/
Mart Resources, Inc.
Investor Relations
Toll Free 1-888-875-7485