Mart Announces Financial and Operating Results for the Nine Months Ended September 30, 2015

CALGARY, ALBERTA--(Marketwired - Nov. 13, 2015) - Mart Resources, Inc. (TSX:MMT) ("Mart" or the "Company") is pleased to announce its financial and operating results (all amounts in United States dollars unless noted) for the nine months ended September 30, 2015, including the Company's outlook and operations update:

FINANCIAL AND OPERATING RESULTS

The following table provides a summary of Mart's selected financial and operating results for the three and nine month periods ended September 30, 2015 and 2014 and the twelve month period ended December 31, 2014:

OUTLOOK AND OPERATIONS UPDATE

Umusadege drilling and testing update

The UMU-15 well was spudded on October 13, 2015. The well is being drilled from the UMU-13 well pad location to target the east accumulation that was previously appraised by the UMU-13 well. The intended sands for completion in the UMU-15 well will be those oil bearing sands discovered in the UMU-13 well that were not completed. The UMU-15 well is currently at a depth of 5,010 feet, and 9 5/8 inch casing is being run and cemented to this depth. After the casing is set, drilling will continue to the planned total depth of 9,300 feet.

Initial clean-up of the UMU-14H well was concluded in September 2015. The well has been producing for 32 days and is currently producing 2,675 barrels of oil per day with no watercut on a 28/64-inch choke setting. The API gravity of the oil is 26.2 degrees. Detailed testing information will be released upon the conclusion of the Maximum Efficient Rate ("MER") testing program. The MER testing is planned to take place approximately within the next month.

The Umusadege Joint Venture budgeted to spend approximately $113 million during 2015 for the planned drilling program and miscellaneous Umusadege field capital expenditures. However, the work program and capital expenditure budget is being revised.

Umugini pipeline capital expenditure

Following the completion of the Umugini pipeline construction in Q4 2014, capital expenditures for 2015 are expected to be minimal, mainly relating to completion of remaining civics works, pumps and LACT units. Mart expects to spend $2.0 million on capital expenditures for 2015 for the Umugini pipeline.

Arrangement Agreement with Delta

On October 16, 2015, Mart entered into an arrangement agreement with Delta. Pursuant to the terms of the Arrangement Agreement, an indirect wholly-owned subsidiary of Delta will acquire all of the issued and outstanding common shares of Mart by way of a plan of arrangement under the Business Corporations Act (Alberta), including the assumption of all outstanding bank debt of Mart (currently, approximately $200 million), and each Mart shareholder will receive CAD$0.35 in exchange for each Mart common share held. The completion of the Arrangement is subject to numerous customary closing conditions including the Financing Condition. The Arrangement Agreement includes customary non-solicitation covenants by Mart and provides Mart with the ability to respond to unsolicited proposals considered superior to the Arrangement in accordance with the terms of the Arrangement Agreement. In the event Mart accepts a superior proposal, Mart will be required to pay a break fee of CAD$2.9 million to Delta. Delta has the customary right to match.

On November 10, 2015, Mart and Delta entered into an amending agreement to amend the terms of the Arrangement Agreement in order to provide Delta with additional time to satisfy the Financing Condition. A proportion of the Financing Condition is to be funded from Delta's cash resources and the balance from other sources that will not require debt servicing to satisfy the Financing Condition. Delta has agreed to provide financing to Mart while Delta sources funding, and accordingly in connection with the extension to satisfy the Financing Condition, Delta or a wholly-owned subsidiary thereof has agreed to purchase, on a non-brokered private placement basis, 44,617,000 units at a price of CAD$0.18 per Unit for an aggregate consideration of CAD$8,031,060 (payable in US dollars and based on an exchange rate of CAD$1.3283: $1.00). Each Unit consists of one Mart common share and one non-transferable common share purchase warrant with each Warrant entitling the holder thereof to acquire one additional Common Share in the capital of the Company at a price of CAD$0.225 per common share (payable in US dollars and based on an exchange rate of CAD$1.3283: $1.00) expiring February 15, 2016. The closing of the private placement is conditional only upon receipt of the requisite approval of the Arrangement by the holders of Common Shares and options at a special meeting and the approval of the TSX and will occur forthwith following the Special Meeting. The proceeds of the private placement will be used for general working capital purposes.

If the Financing Condition is not met and the Arrangement transaction does not proceed, Delta or its wholly-owned subsidiary will own approximately 11.11% of the outstanding shares of Mart after giving effect to the issuance of the Units, and will be entitled to increase its ownership to approximately 19.99% of the outstanding shares of Mart if Delta exercises all of the Warrants. The Amending Agreement provides Delta an outside date of February 15, 2016 to satisfy the conditions to the Arrangement, including the existing Financing Condition, and close the Arrangement transaction. Mart and Delta have agreed to continue to use their reasonable commercial efforts to complete the transaction by January 29, 2016.

Mart will hold a conference call to discuss the operational and financial results for the quarter ended September 30, 2015. The conference call is scheduled for November 18, 2015 at 9:30 AM Mountain Standard Time (11:30 AM Eastern Standard Time). Derrick Armstrong, Director and Chairman of Mart, and Dmitri Tsvetkov, Director, Interim CEO & CFO of Mart, will host the call and be available during the question-and-answer session. To access the conference call, please dial 416-340-8527 / 800-355-4959. An instant replay of the call will be available until November 23, 2015 by dialing 905-694-9451 / 800-408-3053 and entering pass code 9139047.

Additional information regarding Mart is available on the Company's website at www.martresources.com and under the Company's profile on SEDAR at www.sedar.com.

Notes: Except where expressly stated otherwise, all production figures set out in this press release, including bopd, reflect gross Umusadege field production rather than production attributable to Mart. Mart's share of total gross production before taxes and royalties from the Umusadege field fluctuates between 82.5% (before capital cost recovery) and 50% (after capital cost recovery).

Forward-Looking Statements

Certain statements contained in this press release constitute "forward-looking statements" as such term is used in applicable Canadian and US securities laws. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or are not statements of historical fact and should be viewed as "forward-looking statements". These statements relate to analyses and other information that are based upon forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Such forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. 

In particular, statements (express or implied) contained herein or in Mart's Management's Discussion and Analysis ("MD&A") regarding the following should be considered forward-looking statements: the Company's goals and growth strategy, estimates of reserves and future net revenues, exploration and development activities in respect of the Umusadege field, the Company's ability to finance its drilling and development plans with cash flows from operations, the ability of the Company to successfully drill and complete future wells, the ability of the Company to commercially produce, transport and sell oil from the Umusadege field, future anticipated production rates, export pipeline capacity available to the Company, the extent of future production and export pipeline disruptions and pipeline losses, the expectation of the Company that production and export pipeline disruptions will not have a lasting impact on the Company's future production, timing of completion of the Company's upgrading of the central production facility, the construction, completion, commissioning and tie-in of the Umugini pipeline, the acceptance of the Company's tax filings by the Nigerian taxing authorities, treatment under government regulatory regimes including royalty and tax laws, projections of market prices and costs, supply and demand for oil, timing for receipt of government approvals, and the ability of the Company to satisfy its current and future financial obligations to its banks and other creditors.

In addition, information regarding the reserve and resource estimates attributable to Mart's oil and gas properties should be considered forward looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves and resources described exist in the quantities predicted or estimated and that the reserves and resources can be profitably produced in the future. Readers are referred to the heading "Forward Looking Statements" in the Company's Statement of Reserves Data for a more detailed discussion of risks associated with forward looking statements regarding reserves. In addition, past production performance, sales volumes and prices from the Umusadege field are not necessarily indicative of future performance, sales volumes and prices.

Finally, there is no assurance that the conditions set out in the Arrangement Agreement, including the Financing Condition, will be met. There is no assurance that the Arrangement will be completed on the terms, within the timelines indicated or at all or that there will not be future additional amendments to the Arrangement Agreement.

There can be no assurance that such forward-looking statements will prove to be accurate as actual results and future events could vary or differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements contained in this news release. This cautionary statement expressly qualifies the forward-looking statements contained herein.

Forward-looking statements are made based on management's beliefs, estimates and opinions on the date the statements are made and the Company undertakes no obligation to update forward-looking statements and if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable law.