Continental Focus, International Reach

Umusadege Numbers Are In

Monday, January 6, 2014

Mart Resources and its co-venture partners in Nigeria, Midwestern Oil and Gas Co. and SunTrust Oil, have reported their latest production numbers and loss percentages at the Umusadege field for November. Production at Umusadege field averaged 10,263 bpd in November; based on actual producing days the field saw rates of 12,801 bpd. Output was attributed to a pipeline stoppage carried out by the operator, Nigerian Agip Oil Company (NAOC), to handle maintenance and repairs. This process lasted six days, putting Umusadege on hold. Also contributing to the downtime was testing operations at UMU-11 well.

Oil flow through export facilities in October experienced 108,375 barrels or 33.3% in losses as allocated to Mart and its co-venturers and a total of 25.3% for Q4 on average.

NAOC has been unable or unwilling to provide the marginal field companies that produce through the Umusadege export facility, or the Cluster Group, with an explanation for the basis for the pipeline and export facility losses or for the reasons for the fluctuations in allocated pipeline losses.

The Cluster Group disputed the allocation of the losses and requested the formal involvement of the Department of Petroleum Resources (DPR). As a result of a meeting in November 2013 that included the DPR, NAOC and representatives from the Cluster Group, a committee including all involved and affected parties has been set up. Suspension of the allocation of pipeline and export facility losses to the Cluster Group has been imposed until the pipeline loss allocation issues are resolved.

Mart and its partners also saw some shut ins during December while maintenance was being performed on its export pipeline, causing the pipeline operator to temporarily close the pipeline on December 6. As a consequence, all Umusadege field production shipped through the NAOC export pipeline was shut in from December 6 until December 24 while NAOC’s completed maintenance operations. Oil flows from the Umusadege field through the NAOC pipeline resumed on December 24.

Mart also reported that a drilling rig provided by an independent third-party company is on site and preparing for operations to drill and complete a water disposal well. The well will be located at the surface site of the UMU-3 well, drilled from a newly constructed cement pad. The water disposal well is being drilled under contract by Centurion Drilling Ltd., and is expected to be completed by the end of January 2014. The water disposal well will be used to dispose of water from the producing wells in the Umusadege field and will improve the efficiency of managing all ongoing water production from the field.


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