Petroleum Africa
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Thursday, May 15, 2014
Mart Resources reported that it has contracted a second drilling rig to drill a water disposal well on the Umusadege field in Nigeria. This well is expected to be completed this month. The company and its partners will also use the well to drill a re-entry horizontal development well, followed by deepening of the UMU-8 well in June 2014.
The company expects to spend approximately $56 million during 2014 for the planned drilling program including the amounts expected to be spent on the above-mentioned wells and miscellaneous Umusadege field capital expenditures.
It also reported that it will continue funding its 15% share of the Umugini pipeline project costs in 2014. Mart’s share of the total Umugini pipeline construction budget was $11 million of which $7.2 million had been incurred by March 31, and the company has budgeted to spend $6 million during 2014 towards the construction of the pipeline. Additional costs are expected to be incurred in connection with the tie-in and commissioning of the Umugini pipeline.
Mart expects the Umugini pipeline to be completed in Q2, which is expected to facilitate an increase in production and revenues from the Umusadege field and therefore lead to an increase in the company’s cash flows from operating activities.
Surveying and clearing of the right of way for the Umugini pipeline has been completed and pipeline construction is ongoing. The first 35 km of the pipeline have been completed and backfilled. Stringing of approximately another 16 km of pipe has been completed, and welding, coating, radiograph testing has been completed on 14 km of this 16 km section. Trenching and lowering is currently being finished on approximately 8 km of this length, and the installation of fiber optic cable that is part of the leak detection system has been completed on the first 3 km. Procurement of materials and equipment required to complete the pipeline pumping, monitoring, and control facilities is ongoing. The group managing construction of the Umugini pipeline continues to estimate that pipeline construction will be completed by the end H1 2014. Pipeline commissioning will occur following completion of pipeline construction and installation of pipeline pumping, monitoring and control facilities.
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