Mart provides operations and production update

Mart Resources, Inc. and its co-venturers, Midwestern Oil and Gas Company Limited and SunTrust Oil Company Limited are providing the following updates on Umusadege field production for August 2014 and other operations.

August 2014 production update

Umusadege field production during August 2014 averaged 7847 bpd. Aggregate Umusadege field downtime during August 2014 was approximately 12 days due to shutdowns of the Nigerian Agip Oil Company Limited (NAOC) export pipeline resulting from operational interruptions due to general pipeline repairs and maintenance. There were eight full down days during the month. The average field production based on producing days was 12 816 bpd in August 2014.

Total net crude oil deliveries into the NAOC export pipeline from the Umusadege field for August 2014 were approximately 243 143 bbls before pipeline losses. Based upon the 12 month rolling average rate of pipeline and export facility losses from August 2013 to July 2014 of 21.44%, Mart estimates pipeline and export facility losses for August 2014 will be approximately 52 131 bbls. Using this estimated pipeline and export facility loss volume, Mart estimates that the total net crude deliveries into the NAOC export pipeline from the Umusadege field for August 2014 less estimated pipeline losses will be 191 012 bbls.Pipeline and export facility losses reported by NAOC and allocated to Mart and its co-venturers for July 2014 were 31 324 bbls, or 14.9% of total crude oil deliveries into the export pipeline for that month. Pipeline and export facility losses allocated to Mart and its co-venturers from January to July 2014 have averaged 17.5% of total crude oil deliveries into the export pipeline for 2014.

As previously announced, total net crude oil deliveries into the export pipeline from the Umusadege field for July 2014 were approximately 210 566 bbls. Accordingly, after deducting the actual pipeline and export facility losses allocated for July 2014, the total net crude oil deliveries less losses for July 2014 were 179 242 bbls. Mart previously estimated pipeline and export facility losses for July 2014 to be approximately 47 052 bbls, based upon the 12 month rolling average rate of pipeline and export facility losses of 22.35% between July 2013 and June 2014. August 2014 pipeline and export facility losses have not yet been reported by NAOC.

Umugini pipeline update

The pipeline tie-in and start-up activities continue, but were delayed by heavy rains and local community complications, which have now been resolved. The pre-commissioning activities are continuing and metering facilities (LACT unit) to measure volume and quality of hydrocarbons injected into the export pipeline are being tied-in. Midwestern, the company operating the pipeline, now targets a start-up during September 2014.

Umusadege drilling update

The drilling, completion, clean up and preliminary testing of the UMU-4STH well is complete. The well was side-tracked into the VII sand, landing a 900 ft lateral drain hole in clean, high quality sand with an average oil column of 27 ft at 9000 ft measured depth. The well was flowed back for clean up and testing on various choke sizes for 41 hours, yielding a final test averaging 4702 bpd on a 40/64 choke at a surface flowing pressure of 180 psi over a three hour period. The oil API gravity is 24.1°, no sand with 0.1% bottom sediment and water (BS&W). The complete test of the UMU-4 well, including bottom hole pressures, will be performed after drilling of the UMU-12 well is completed. The rig has been skidded eight feet, and operations have commenced on the UMU-12 well. This is a new well targeting a horizontal completion in the sand VIII.

Adapted from press release by Hannah Priestley-Eaton

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