Mart Resources (MMT.T) was halted at 6:34 am PST this morning pending news.

The company has announced that the Umugini pipeline is now flowing oil. The stock resumes trading at 8:15 am PST.

Investors have been waiting on this news for years. I expect to see a significant move in the stock price as the word gets out.

Mart will be able to solve two problems with the new pipeline:

1. There is plenty of oil behind pipe and the company will be able double current production levels from 12,500 bopd to 25,000 bopd.

2. Pipeline losses have been extremely high averaging close to 20% and will now be hopefully reduced to between 8-10%.

Mart will see a huge jump in cashflow and earnings as a result of these problems being solved which should mean a share price well above the current level.

Wade Cherwayko, Chairman & CEO of Mart, commented: "The commencement
of oil flowing through the Umugini pipeline is a significant milestone for Mart and its co-venturers, Midwestern and SunTrust. The Umugini pipeline will provide additional export capacity and will enable Mart and its co-venturers to more fully optimize the current production potential of the Umusadege field. We are very pleased that the Umugini pipeline is now up and running, and look forward to having the capacity to increase production from the Umusadege field to significantly higher volumes in the near future."

See my post on Nigerian oil junior frustrates investors on Nov 14th.

The Economist Magazine is out with a great article on how the Nigerian economy relies heavily on oil which can be found here

 

MMT1yrchart

 

Mart stock has been cut in half from $1.40 to $0.70 cents as a result of pipeline delays and the sell off in oil equities.

Investors note: the company operates in Nigeria and should be considered a high risk speculative investment.

I believe today's news will be the catalyst for a significant re rating in the stock.

Symbol: MMT.T
Share price: $0.71
Shares outstanding: 356.94 M
Market cap: $253.4 M

Read: Mart's Umusadege JV starts oil flow via Umugini pipeline or A junior oil stock with potential to double production

* The author of this article will be buying shares of Mart stock at the resumption of trading so therefore  is extremely biased. All facts are to be verified by reader and this is not investment advice. Please do your own due diligence and consult an investment advisor before purchasing any shares of companies mentioned in this article. Penny stocks are extremely risky and you could potentially lose your entire investment.