Robert Gerry, Chairman and CEO, stated, "We would like to produce the field at higher rates, but prudent reservoir management requires us to take these actions. This decision is not an indication of any less oil in place in the field. The importance of maintaining sufficient aquifer support exceeds the benefits of accelerating cash flow in the near term if we are going to recover the maximum amount of reserves from the field."
On the Avouma development project, the Company announced that the fabrication yard building the production platform reopened on Tuesday September 6, 2005 after a ten day shut down for Hurricane Katrina. The Company is assessing additional costs and delays that may occur as a result of other manufacturers of platform equipment that are still shut down. The manufacturers have indicated that no damage occurred to our equipment, but until such time as the return of power infrastructure is known, it is difficult to assess the nature of delays for completing this equipment. The Company currently believes a delay of between 30 to 90 days for the Avouma project is possible.
VAALCO's next scheduled lifting for the consortium is set for approximately 600,000 barrels in mid September which will bring total oil sales from Etame to approximately 18 million barrels since inception. The Company expects to report third quarter results during the first week in November.
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