Mart Resources, Inc. and its partners Midwestern Oil and Gas Company PLC and Suntrust Oil Company Nigeria Limited, announced the following update on their operational activities at the Umusadege field, onshore Nigeria.
Construction of the 10,000 barrels of oil per day (bopd) early production system and the gathering and metering facilities and tie-in to the existing adjacent pipeline are nearing completion. Although some delays have been encountered in securing and installing components of the gathering and metering facilities, Mart and its partners now anticipate that these facilities will be completed, commissioned and ready for production between the middle and the end of March.
The government has reviewed the recent production tests undertaken on the Umusadege wells and has granted an initial authorization (a "Technical Allowable") to produce up to 6,030 barrels of oil per day from the XIIa and XIIb zones in the UMU-1 well and up to 1,600 barrels of oil per day from the D1 zone in the UMU-3 well (formerly known as UMU-N2). Receipt of this Technical Allowable authorization is key to the process of obtaining an Export Permit, which is the final government authorization necessary for commencement of oil production. All efforts are being made to secure this Export Permit as quickly as possible and Mart and its partners anticipate this will be received by the time the production facilities have been commissioned.
Following commissioning of the production facilities and receipt of the Export Permit, Mart and its partners intend to produce separately from the XIIa and XIIb oil zones in the UMU-1 well for an initial period of approximately one month. Based upon the flow rates achieved during the initial well tests, it is anticipated that the production from individual zones during this initial production period will be in the range 2,000 to 3,000 bopd. Following this initial production period, and in accordance with good oilfield practices and subject to final government approval, Mart and its partners intend to commingle and produce these two zones concurrently, which is expected to result in an increased overall initial production rate from the well.
Preparation for drilling the UMU-1 Twin well is continuing and, subject to receipt of government approvals, it is anticipated that the well will commence drilling before the end of March. This well is intended to test and produce some of the additional 11 oil zones identified in UMU-1 and provide additional production from the field. In addition, Mart and its partners are currently re-processing seismic data and once this is complete, and subject to government approvals, they anticipate drilling one or more further development wells in the Umusadege field in the second half of 2008.
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