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Mart Resources, Inc.: October 2012 Operational Update and November Production Disruptions
| 15 Nov 2012 08:00 ET || |
Mart Resources, Inc. (TSX VENTURE:MMT) -
-- Umusadege field production averaged 10,217 barrels of oil per day ("bopd") during October 2012; average field production based on production days was 12,669 bopd during October 2012.-- Umusadege field net deliveries into the export pipeline were approximately 317,000 barrels of oil ("bbls") in October 2012 before pipeline losses.-- Flooding and other factors affecting the export pipeline and export terminal cause temporary shut-down of Umusadege field production.
Mart Resources, Inc. ("Mart" or the "Company") and its co-venturers, Midwestern Oil and Gas Company Plc. (Operator of the Umusadege field) and SunTrust Oil Company Limited are providing the following update on Umusadege field production and drilling operations for the month of October 2012 and production operations for the first part of November 2012.
October 2012 Production Update
Umusadege field production during October 2012 averaged 10,217 bopd. Umusadege field downtime during October 2012 was 6 days due to due to various disruptions in the export pipeline, well testing activities, maintenance and modification of production facilities. The average field production based on producing days was 12,669 bopd in October 2012.
Total crude oil deliveries into the export pipeline from the Umusadege field for October 2012 were approximately 317,000 bbls before pipeline losses. Pipeline and export facility losses for September 2012 as reported by the pipeline operator were 40,018 bbls or approximately 11.6% of total crude deliveries (losses for August 2012 as reported the pipeline operator were 52,000 bbls or approximately 13.7% of total crude deliveries). October pipeline and export facilities losses have not yet been reported by the pipeline operator. Pipeline and export facility losses as reported by pipeline operator from the beginning of the year to end of September 2012 are approximately 13.1% of total crude deliveries during this nine month period.
November 2012 Production Disruptions
Mart was informed of leakages on its export pipeline, causing the pipeline operator to temporarily close the pipeline on October 30, 2012. The pipeline operator has advised that it has been unable to inspect the export pipeline to determine the extent of damage, as flooding due to bad weather has caused the export pipeline to be inaccessible.
The Brass River Export Terminal, where oil production from the Umusadege field is shipped, has also been experiencing loading delays due to extreme flooding in the area. As a consequence, Nigerian Agip Oil Company Ltd. ("AGIP") has declared force majeure on loadings at the Brass River Export Terminal until the flooding situation is rectified.
As a consequence of the foregoing, all Umusadege field production shipped through the AGIP export pipeline has been shut in pending AGIP's ability to access, inspect and repair the export pipeline and rectify the flooding situation at the Brass River Export Terminal. Mart will provide periodic operational updates on the resolution of these matters as they become available.
UMU-10 Well Update
As previously released, the UMU-10 well encountered 479 foot gross hydrocarbon pay in 20 sands. Six of these sands, XVIIa & XVIIb (commingled), XVIIIa, XIX, XXb, and XXI, will be perforated, tested, and completed for production. Any two of these zones can be produced simultaneously using dual string sliding sleeve completion technology. The sands completed in UMU-10 will access 161 feet of the total 479 feet of gross pay in the well.
Mart and its co-venturers are nearing conclusion of negotiations with an affiliate of Royal Dutch Shell plc. ("Shell") to complete a crude handling agreement that will enable plans to move forward to provide a second independent export pipeline for Umusadege field production. Mart and its co-venturers will then gain access to Shell's export facilities and a 50-kilometer pipeline will be constructed.