Mart Resources, Inc. UMU-9 well drilling results and operational update

Tuesday, January 31, 2012
  • Mart Resources, Inc., Midwestern Oil and Gas and SunTrust Oil Company Limited are pleased to provide an operational update on the Umusadege field, onshore Nigeria.

UMU-9 Well Update

The UMU-9 well has reached a final total drilling depth of approximately 10,848 feet. As previously announced, the intermediate section drilled to 8,311 feet indicated 260 feet of gross oil pay from eleven sands based on open hole logs. 9 5/8 inch casing was run in the intermediate hole section. The lower 8 1/2 inch deviated section of the well drilled from 8,311 feet to 10,848 feet was open hole logged and indicated an additional 170 feet of gross oil pay in eight sands. This resulted in a total cumulative gross oil pay of approximately 430 feet in the 19 sands encountered by the well.

Pressure and fluid sample tests were taken on the six deepest sands in the 8 1/2 inch hole section with preliminary results indicating five sands containing light oil and condensate and one sand containing mainly gas. Further analyses are being conducted on the samples collected over these sands. The deviated 8 1/2 inch section of the well has now been cemented off, as this hole section was never intended to be completed in the UMU-9 well. Completion and testing operations are currently being conducted on the 9 5/8 section of the well. The Company has retained RPS Energy, independent reserve evaluators, to prepare new reserve reports as of December 31, 2011 and intends to update the year-end reserve report at a future date following testing of the UMU-9 well.

December 2011 Production Update

Crude oil deliveries into the export pipeline from the Umusadege field for the month of December averaged 6,230 barrels of oil per day ("bopd"). Umusadege field downtime during the month was approximately 11.5 days, mainly as a result of export pipeline maintenance and pipeline injection constraints due to limits on export storage tank capacity. The average field production based on producing days was 10,804 bopd.

January 2012 Production Update

Crude oil deliveries into the export pipeline from the Umusadege field for the period of January 1, 2012 to January 30, 2012 averaged 6,959 bopd. During this same period, there was approximately 12 days of field production downtime due to various shutdowns of the export pipeline and export storage tank capacity constraints at the third party export terminal. The average field production based on producing days was 11,754 bopd for the period.

2011 Pipeline Losses

The owners of the export pipeline have notified Mart and its co-venturers that export pipeline owner's estimate of the Umusadege field's share of crude oil lost or taken from the export pipeline during the 2011 calendar year is approximately 213,000 barrels of oil. Mart's share of the crude oil lost or taken will be calculated based upon its average share of production in 2011. The final export pipeline losses to be allocated to the Umusadege field for 2011 are expected to be reconciled with the export pipeline owner by the end of Q1 2012. Mart's share of the estimated charge will be reflected in Mart's December 31, 2011 financial statements.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser. More

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