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Mart Resources Inc mmt.v C$.17
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Bobwins



Joined: 05 Feb 2007
Posts: 1227
Location: Seattle, Wa

PostPosted: Fri Dec 17, 2010 12:57 pm    Post subject: more great test results +.06 to C$.76 Reply with quote

Mart tests 4,179 and 3,605bpd from zone XIII(the zone was so wide, they split it into two sections about 20feet each). Add this to zones XVII and XVI and you get cumulative test results of 14,319bpd with minimal water and 40+API oil.

UM-6 was a development well drilling into known structure currently being produced by two wells for the past 2 years. BUT these sands that just test 14Kbpd have not been produced before and are not included in any reserves for the company. Updated reserve report is coming. There were 4 more zones but company will test and produce them in the upcoming two development wells.

Looks like this well could easily produce 5,000bpd+. 5,000bpd X 82.5%(share until cost is recovered) X 30 days = $9.9million per month. Cost recovery will take a month!!! Then the share drops to 50% or a measly $6 million per month gross revs. Cashflow from this one well after cost recovery will be something like 4.5 million per month.

By this time next year, Mart should have all three development wells drilled and producing. I would be surprised if we are much under $2. Nigerian factor still holding down share price but if you can stomach the risk, the rewards could be substantial.

http://finance.yahoo.com/news/.....0&.v=1
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Bobwins



Joined: 05 Feb 2007
Posts: 1227
Location: Seattle, Wa

PostPosted: Mon Feb 14, 2011 11:05 am    Post subject: Mart finally producing near capacity +.04 to C$.66 Reply with quote

Pump in pipeline fixed so Mart can produce from their new well at something close to capacity. Note the increased production from their two existing wells. Produced at 1836 bpd net in Q3. Now producing at close to 2400bpd net. Shows size of reservoir is big because these wells have been producing for over 2 years.

I like the fact that Mart can produce from any or all of the 4 zones completed in UM-6 by just turning a valve. When the pipeline is optimized, they will experiment to get the best mix.

UM-7 proceeding well. Another 5,000+bpd capacity is coming.

Netbacks on these wells is very high. Using $50/bbl X 8500bpd=12,750,000 per month!~ Drops back to 50%WI when drill costs are recovered but UM-7 should be ready to be test by that time.




Press Release Source: Mart Resources, Inc. On Monday February 14, 2011, 9:28 am
CALGARY, ALBERTA--(Marketwire - Feb. 14, 2011) - Mart Resources, Inc. (TSX VENTURE:MMT - News; "Mart" or the "Company") and its co-venturers, Midwestern Oil and Gas Company Plc. (Operator of the Umusadege field) and Suntrust Oil Ltd., provide the following production and drilling update at the Umusadege field.

We are pleased to announce that production at the Umusadege Field has reached an all-time high of 8,533 barrels oil per day ("bopd") and that drilling activities are progressing at the UMU-7 well.

UMUSADEGE PRODUCTION UPDATE

The Umusadege field is currently producing at 8,533 bopd from three wells: the UMU-1 well at 2,005 bopd from the XIIa and XIIb sands; the UMU-5 well at 2,477 bopd from the IX sand; and the UMU-6 well at 2,164 bopd from the XIIIa sand and 1,887 bopd from the XVII sand. Completion of repairs on pumps at third party owned and operated export facilities has resulted in this increased production level compared to levels announced on January 19, 2011.

Midwestern, Suntrust and Mart are negotiating with the third party pipeline owners and the crude oil export company to further increase the export allocation for the Umusadege field to accommodate additional production from existing and future wells. Upon completion of these negotiations, it is anticipated that the aggregate gross Umusadege field production could increase to between 9,000 and 10,000 bopd from the current three wells on production.

The UMU-6 well was completed in December 2010 with a dual 3 1/2 inch and 2 7/8 inch tubing string configuration. The XVII, XVI and XIIIb sands were completed in the 3 1/2 inch tubing string and the XIIIa sand was completed in the 2 7/8 inch tubing string. As a result of the completion technology used, the four zones that have been completed can be opened and closed at any time. Although four zones have been completed and tested it is not technically feasible to produce the UMU-6 well from all four zones simultaneously due mainly to capacity limitations in the tubing and initial pressure differential between the sands. In accordance with good oil field practices and well test results, production is occurring from two zones at the present time. Production will be monitored over the next few months to determine the optimal combination of sands to be produced from the UMU-6 well.

In addition, to ensure there is adequate pipeline capacity to meet anticipated full Umusadege field development requirements, Midwestern, Suntrust and Mart are currently evaluating new pipeline and export options to provide increased future production capacity and to provide another independent export route. Upgrading of the permanent central production facility located at the Umusadege field to process up to 30,000 bopd is currently ongoing.

UMU-7 WELL

The UMU-7 well has reached its objective depth in the 16-inch upper hole section of 3,685 feet and 13 3/8 inch casing is currently being run and cemented. Once this casing is in place, a 12 1/4 inch hole will be drilled to an estimated total depth of approximately 8,800 feet and 9 5/8 inch casing will be run. It is anticipated the UMU-7 well will then be tested, completed and placed on production.

As previously announced, it is planned that the UMU-7 well will be completed as a dual tubing string configuration allowing for the potential of multiple zones to be produced from the same well bore. The UMU-7 well's primary objectives are the previously identified VIII sand and the new X11c, XIV and XV sands that were discovered by the UMU-6 well in December 2010. The UMU-7 well is being drilled from the same three-slot drilling pad as the recently drilled and completed UMU-6 well. The third slot on the pad will be used to drill the UMU-8 well.

Chairman's comment:

Wade Cherwayko, Chairman and CEO of Mart Resources Inc, said "The UMU-6 well represents a significant milestone, having more than doubled Umusadege production from the 2010 average of 3,938 bopd to 8,533 bopd. With drilling activity continuing on UMU-7 well and future development drilling, we also look forward to further increases in production in the near term."
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kjm



Joined: 13 Jun 2004
Posts: 802

PostPosted: Mon Feb 14, 2011 3:40 pm    Post subject: Reply with quote

What percentage does Mart get Bobwins?
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Bobwins



Joined: 05 Feb 2007
Posts: 1227
Location: Seattle, Wa

PostPosted: Mon Feb 14, 2011 4:26 pm    Post subject: Mart percentage Reply with quote

Mart funds 100% and gets 87% until drilling costs are recovered. After that, they get 50%.

So right now they are getting the 87% but the $6-8million drilling costs will be recovered in a matter of weeks so net will drop down to ~4500bpd. But as the PR indicates, they still have some capacity out of the UM-6 well to bump that up a bit. Notice the two existing wells that have been producing for 2 years have increased production recently. Reserve report should show a healthy boost in reserves based on the excellent performance of the first two wells and the additional 4 or 5 zones they hit on UM-6 that were not included in the previous reserve report.
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kjm



Joined: 13 Jun 2004
Posts: 802

PostPosted: Thu Feb 17, 2011 10:51 am    Post subject: Reply with quote

Okay ......thanks for that.
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kjm



Joined: 13 Jun 2004
Posts: 802

PostPosted: Tue Mar 08, 2011 10:47 pm    Post subject: Reply with quote

Bob.........what is the percentages relationship that Mart has with Midwestern and Suntrust. I couldn't find that info.

Thanks
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Bobwins



Joined: 05 Feb 2007
Posts: 1227
Location: Seattle, Wa

PostPosted: Wed Mar 09, 2011 12:50 am    Post subject: from Q3 MD&A Reply with quote

Under the original terms of the Finance and Technical Services Agreements between Mart, Midwestern
and Suntrust (the “Umusadege F&S Agreements”), Mart contributes to the development of the
Umusadege field by providing 100% funding of capital costs in exchange for an allocation of
hydrocarbons discovered and produced from the field. Under the original terms of these agreements,
during the cost recovery phase, Mart was entitled to up to 95% of the production revenues remaining after
deduction of royalties, petroleum profits tax (“PPT”), NDDC contributions, operating costs and
abandonment obligations. The remaining 5% of production revenues were allocated 50% to Mart and
50% to Midwestern and Suntrust. This provided Mart with a maximum of 97.5% of distributable revenues
during the cost recovery phase. Mart initially reached payout in Q110. In recognition that the cost
recovery for the current development of Umusadege field is being re-couped from revenues generated by
the current producing wells, Mart has agreed with Midwestern and Suntrust that the recovery rate as of
October 2010 will be restricted to a maximum of 82.5%. Once Mart has recovered all of its capital costs,
all production revenues remaining after deduction of royalties, PPT, NDDC contributions, operating costs
and abandonment obligations are shared 50% to Mart and 50% to Midwestern and Suntrust. During the
nine months ended September 30, 2010, Mart’s capital costs with respect to the Umusadege field had
been recovered and the Company’s share of revenue was an average of 58.9% in Q310 compared to an
average of 64.2% in Q210 and an average of 97.5% in Q309. The Company plans to continue developing
the Umusadege field and adding recoverable costs throughout 2010, which will affect Mart’s share of
revenue for the remainder of 2010 as additional eligible costs are recovered.
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kjm



Joined: 13 Jun 2004
Posts: 802

PostPosted: Mon Mar 14, 2011 7:53 pm    Post subject: Reply with quote

Bought several thousand Mart today at O.60. will average down if it goes that way but doubt if it will.

Pretty ironic that since I never had any uranium exposure, I picked up two juniors last week. Ouch! If I never had them, I would definitely have bought some today.
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Bobwins



Joined: 05 Feb 2007
Posts: 1227
Location: Seattle, Wa

PostPosted: Tue Mar 15, 2011 12:19 pm    Post subject: UM-7 well looks like a winner Reply with quote

Mart announced they hit total depth and identified 380 feet of net pay in 15 different zones. They are installing dual string production casing to allow up to 4 zones to be produced at once. The company will have above ground valve control to open or shut all zones. They plan to pick 4 zones that weren't produced in UM-6.

Mart always takes forever to get thru testing and get to production because they have to get partner and government approvals at every step.

They are also going thru a reserve update and probably want to get as much test data on the zones they don't produce so they can get some reserve credit in the update.

This will take time for Mart to produce the oil and show the cashflow but by the end of summer, Mart should be well above today's levels.

http://finance.yahoo.com/news/.....0&.v=1
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kjm



Joined: 13 Jun 2004
Posts: 802

PostPosted: Tue Mar 15, 2011 8:32 pm    Post subject: Reply with quote

I doubled up this morning at 0.58 right after I read the news release.
Nice to have some green on sucha red sort of day.
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Bobwins



Joined: 05 Feb 2007
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Location: Seattle, Wa

PostPosted: Thu Mar 17, 2011 2:00 pm    Post subject: sequence of events Reply with quote

Looking at UM-6 dates, it was 5 weeks after total depth PR that they announced final test results. That would be mid April for UM-7. Another month before well was completed and producing. So May for first production and PR in June for production numbers. Should have a modest positive effect on Q2 and boost Q3 the most during the high WI% payback period.

I remember agonizing during the testing period of UM-6, wondering why it took so long but there are 15 different pay zones! We know that Mart is only going to produce from 4 but they need to test different zones that are candidates to produce later from this well.

Mart is trying to get the max benefit from drilling the fewest wells. These are expensive wells and with this many potential zones, they want to give themselves the best chance to efficiently drain the various zones.

It's hard to wait but this should be a multi-bagger from here.
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kjm



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PostPosted: Thu Mar 17, 2011 10:30 pm    Post subject: Reply with quote

Appreciate the comments Bob
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Bobwins



Joined: 05 Feb 2007
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PostPosted: Sat May 07, 2011 12:38 am    Post subject: UM-7 test results Reply with quote

Mart finally announced UM-7 results. Tested over 10,000bpd from 4 completed zones out of a possible 14. Mart completed the well with dual string tubing so they can turn any of the four zones on or off from the surface. Due to pressure differences, they can only produce one zone per string.

In addition to the good results on UM-7, Mart also said that they have pipeline capacity for anything UM-7 and 8 can produce. They are negotiating for more capacity with several existing nearby pipelines and deciding whether to build their own line.

They are also expanding their main processing facility to handle up to 30,000bpd. This is important because it demonstrates the high expectations that Mart has for future development drilling at the Umadesege field. They are currently around 11,000gross bpd.

This second development well should allow Mart to rapidly build production and cashflow thru the summer.

Mart is currently selling for around 1X fwd cashflow. Amazingly cheap and UM-8 is coming next.


http://finance.yahoo.com/news/.....0&.v=1
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langenburg



Joined: 12 Jan 2007
Posts: 25

PostPosted: Fri May 20, 2011 12:13 pm    Post subject: Reply with quote

I'm surprised there is not more buzz about this stock. It looks very promising. I want to buy more but worried about the lack of sentiment
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Bobwins



Joined: 05 Feb 2007
Posts: 1227
Location: Seattle, Wa

PostPosted: Fri May 20, 2011 12:40 pm    Post subject: Nigeria scares people Reply with quote

Mart is doing what it said it was going to do. Drill out low risk development wells that are big by North American standards(testing over 10,000bpd and producing 3,000 to 6,000bpd). They have taken more time than they thought but so far so good.

There have been hiccups like the pipeline disruption in Q4 that has to be paid back in Q1 and will reduce Q1 results. Q2 will be better and Q3 should be even better. Cash is building quickly now and should reach some big numbers by year end, allowing self financed drilling.

Mart is looking for additional fields in Nigeria. Government is supposed to be auctioning off "marginal fields". Mart is one of the few local partner/outside E&P that has successfully brought one of the smaller marginal fields into production so they should get consideration for additional fields.

The JV is part of the problem. The local partners do not want ANY publicity. They fear higher visibility will bring more threats/extortion/danger of pipeline disruptions. So any PR's have to be approved by the partnership and the local partners always want to emphasize the negative and lower the positive vibes. You will see many complaints about the CEO and his lack of ability to bring Mart needed PR attention but it's not all his fault. Nigeria is also notorious for slow governmental approval of the different steps to production.

So that's the downside. The upside is production and cashflow. This is ridiculously cheap. Something like 1.5 X fwd cashflow and we aren't done drilling. Several more low risk development wells left. Company is expanding capacity of processing site to 30,000bpd for a reason. 50% of 30,000 is 15,000bpd. Low costs so at $100 oil(they get the Brent price plus a premium for high quality light sweet crude) they are printing money.

This is my biggest holding. High risk but stupid cheap. I think Q2 results will help but that's several months away. Q1 may disappoint some that don't remember the company got paid in Q4 as if they produced the oil thru the pipeline disruption. They have to pay that oil back in Q1 so will reduce total revs and cashflow.

Good luck, Bobwins
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