As of this morning aerial surveys indicated that all operated platforms and producing structures are intact and appear to have suffered only minimal damage. Some of Cimarex's onshore Gulf Coast operations also suffered light damage. Overall, net daily production of approximately 50 million cubic feet of natural gas equivalent is shut-in as a result of the hurricane.
The Company has not conducted any inspections of platforms, pipelines and other downstream assets owned by third parties. As such, we remain uncertain as to the timing of the resumption of production. However we will continue to be in contact with partners, pipeline operators and other service providers to ensure that production will be restored as soon as possible.
Prior to the storm, Cimarex was drilling at Main Pass 185 (33% operated working interest) utilizing the Rowan New Orleans jackup. Rowan Companies, Inc., the owner of the New Orleans, announced that the rig has not been located and fears it may have sunk. A storm plug was set in the well prior to the hurricane and evacuation of the rig. Cimarex is insured for the cost of services it may incur to re-establish drilling operations above a customary deductible and Rowan is insured for the cost of the rig.
Incorporating the impact of Hurricane Katrina, the Company now estimates third quarter production volumes may average between 455 - 465 million cubic feet equivalent per day. Third and fourth quarter volume estimates will be impacted by the timing of the resumption of production, could potentially be affected by delayed exploration and development drilling, and incorporate the September 1, 2005 sale of various royalty interests to Cornerstone Acquisition & Management Company, LLC, the energy division of the Argent Funds Group, for approximately $60 million.
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