OUTLOOK AND OPERATIONS UPDATE:
On March 12, 2013, Mart declared a quarterly cash dividend of CDN $0.05 per common share that was paid to shareholders on April 9, 2013 for an aggregate amount of CDN $17.8 million.
The Company announced on November 5, 2012 that the UMU-10 well encountered 479 feet of gross hydrocarbon pay in 20 sands. The results of the well tests conducted have been previously press released.
The operator of the Umusadege field plans to return to the UMU-10 well after drilling the UMU-11 well (discussed below) to carry out the remaining testing operations on sands XXb and XIX in the long string as a coiled tubing unit is required. Multirate flow testing will then be performed on all sands completed in the long string: XIX, XXb, and XXI.
Umusadege Field Development Activity Update
Umusadege field development is continuing with the UMU-11 well, to be drilled from the same surface location as UMU-9 and UMU-10. The rig has been skidded to the last drill slot on the existing drill pad and the rig is being set up and upgraded to prepare for the UMU-11 well. The well is expected to spud in the second quarter of 2013. The oil reservoirs expected to be completed in the UMU-11 well are the XIIb, XIIc, XVIa, and XVIb sands, which had a combined 79 feet of oil pay in UMU-10.
It is anticipated that drilling activities on the Umusadege field will include at least one additional vertical development well, one horizontal development well and one exploration well.
A horizontal well is planned to be the sidetrack well from the existing UMU-3 vertical wellbore. It will develop the shallow oil reservoirs in the main accumulation using a second rig.
Exploration drilling is planned for the East prospect within the Umusadege farmout area.
The new Central Production Facility is expected to be commissioned during the second quarter of 2013. This facility has been designed to handle the full field capacity anticipated from the existing reserves, as well as the potential for production from prospective resources in the Umusadege farmout area.
Umugini Pipeline and Shell Export Pipeline
Mart and its co-venturers are currently constructing a second independent export pipeline (known as the Umugini Pipeline) for Umusadege field production. The pipeline contractor is currently working from two locations: one near the Umusadege field and one near the midpoint between Umusadege and the Shell export station. The Umugini pipeline will connect the Umusadege field to the Shell export pipeline. The Shell export pipeline will deliver Umusadege crude to the Shell Forcados terminal. Negotiations regarding the crude handling agreement with the export pipeline owners and terminal operators are continuing.
Umusadege field production during January 2013 averaged 11,459 bopd. Umusadege field downtime during January 2013 totaled 1 day. The average field production based on producing days was 11,841 bopd in January 2013.
Total crude oil deliveries into the export pipeline from the Umusadege field for January 2013 were approximately 355,000 bbls before pipeline losses. Umusadege field pipeline and export facility losses for January 2013 were 52,842 bbls, or approximately 14.1% of total Umusadege field crude deliveries.
Umusadege field production during February 2013 averaged 6,458 bopd. Umusadege field downtime during February 2013 was 14 days due mainly to maintenance on the export pipeline performed by the pipeline operator. The average Umusadege field production based on producing days was 12,740 bopd in February 2013.
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