Mart Resources Inc. and its co-venturers, Midwestern Oil and Gas Company Ltd (Midwestern, Operator of the Umusadege field) and SunTrust Oil Company Ltd have provided the following updates on Umusadege field production for September 2015 and other operations.
September 2015 Aggregate Production Update
Umusadege field production during September 2015 averaged approximately 20,330 bopd resulting in total production of approximately 609 790 bbls for the month. Aggregate calculated Umusadege field downtime during September 2015 was less than one day (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 September 2015 due to operational interruptions for general pipeline maintenance, 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. The average field production based on producing days was approximately 20,900 bopd in September 2015.
Several wells in the Umusadege field produce water in addition to crude oil, which is stored, treated, and re-injected into the water disposal well. The current volume of water produced if all wells are on stream is up to 9000 bpd. The current pump capacity for the installed water injection pumps is 8000 bpd, however the water injection system is undergoing maintenance at this time. Expansion of water handling facilities is planned to be included in the 2016 budget.
The combined net delivery of oil from the Umusadege field through the Umugini pipeline and NAOC export pipeline totaled approximately 595 670 bbls in September 2015 before estimated pipeline and export facility losses, and approximately 524 360 bbls after deduction of combined pipeline and export facility losses estimated for September 2015 by Mart.
NAOC Export Pipeline Update
Total net crude oil deliveries into the NAOC export pipeline from the Umusadege field for September 2015 were approximately 157 407 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 September 2015 will be approximately 27 480 bbls. Accordingly, Mart estimates that the total net crude deliveries into the NAOC export pipeline from the Umusadege field for September 2015 less estimated pipeline losses will be approximately 129 930 bbls.
As previously announced, total net crude oil deliveries into the NAOC export pipeline from the Umusadege field for August 2015 were approximately 124 340 bbls. Actual NAOC pipeline and export facility losses have not been allocated for August 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 August 2015 to be approximately 21 710 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 one day in September 2015 due maintenance 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 438 260 bbls in September 2015. Based upon historic pipeline losses encountered by other exploration and production companies utilising 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 394 430 bbls for September 2015 after deduction of estimated pipeline and export facility losses.
The Umugini pipeline experienced one scheduled down day in September 2015 due maintenance work done on the pipeline.
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 utilising the Trans Forcados export system.
The Lease Automatic Custody Transfer (LACT) unit that is being installed at the Eriemu facility is ready for inspection and approval by the manufacturers and regulatory authorities. These inspections are currently planned for the first half of November 2015, following which the LACT unit can be commissioned and used for metering the injection of crude into the Trans Forcados pipeline. The LACT unit is anticipated to increase the allowable crude injection capacity and reduce any allocated export pipeline losses.
Drilling and Testing Update
The UMU-15 well was spudded on 13 October 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 intended sands for completion in the UMU-15 well will be those oil bearing sands discovered in the UMU-13 well that were not completed. The UMU-15 well is currently at a depth of 5010 ft, and 9 5/8 inch casing is being run and cemented to this depth. After the casing is set, drilling will continue to the planned total depth of 9300 ft.
As previously announced, initial clean-up of the UMU-14H well was concluded in September 2015. The well has been producing for 32 days and is currently producing 2675 bpd of oil with no watercut on a 28/64-in. choke setting. The API gravity of the oil is 26.2°. Detailed testing information will be released upon the conclusion of the Maximum Efficient Rate (MER) testing program. The MER testing is planned to take place approximately within the next month.
Edited from press release by Angharad Lock