Repost of my post on SH


I just would like to clarify some expectations on the new rigs and increased dividend.


NRG is a company owned by Mart. Their contribution to Mart's results is minimal (2011 year end report $200K) They made several claims in the past that were a bit let's say "optimistic".

They do not have a new rig coming on their own as far as I know. On their web site they list 3 "available" rigs. However it looks like a new rig is coming for Mart to drill the UMU4 horizontal You can figure that one out by looking at the last 2 presentations of Mart. I think NRG will act as the facilitator for the 3rd party rig supplier.

I expect the new rig to get production by mid year. Since they are going for UMU4 it would be a net 7K to 9K since 4 is not producing. Realize that this is the first horizontal for Mart and it is the unpredictable oil business and it is Nigeria after all so, give it some slack on timing.

Assuming everything goes well it would make Q3 production quite good and just in time for the new pipeline. 19K behind the pipe now, add UMU10 for 3K UMU11 for 3K horizontal for 7K that's at least 32K for the field (Mart 50%)

Speaking of the pipeline. There is nothing the pipeline partners (Mart 15%) can do about accelerating the signature. They have to wait for Heritage/Shell to close their own deal. There is nobody to sign anything on the other side. However the partners seem so confident of the positive outcome that construction could start very soon since the pipes are already in Nigeria. Of course the fact that Mart's CEO use to work for Heritage and left in very good terms has nothing to do with it :-). I did not expect the pipeline to be ready for Q3 but it may happen. Good thing since we will have 6 months left on the pioneer tax status.

Dividend increase. Some may expect a dividend increase before year end. Please don't. IMO the Board will wait until they have at least 6 months increased production under their belt before they do that. I remember people about an earlier dividend in 2012. Guess what? aren't we glad that the Board waited to have enough money to cover a couple of dividend payments in case of a catastrophic event like a 50 years flood that would shut down the pipeline for 2 months. :-)


GLTA this looks like a very good 2013 for Mart