Gulfsands Petroleum Says Onshore Facilities Damaged by Hurricane Rita
Gulfsands Petroleum says from initial review of operated and non-operated facilities it appears Hurricane Rita did only superficial damage to those facilities and such damages are insured. However, significant damage has occurred to the region's onshore gas plants and infrastructure, and to offshore pipelines which have resulted in much of the production in the Gulf of Mexico being shut-in not only for Northstar Gulfsands LLC, the 52.6% subsidiary of Gulfsands, but for all producers in the Gulf of Mexico. Production within Northstar Gulfsands LLC has resumed but it will take some time before production is back to pre Hurricane Rita production levels. The Company will provide a further update once an accurate timeframe has been determined when production will be back to pre storm levels.
John Dorrier, CEO of Gulfsands Petroleum, said:
"We have intensive ongoing efforts to restore production from operated facilities. These efforts require minimal repair to facilities before production can be restarted and we expect that production from operated properties will be increased steadily over the next 30 days. In non-operated facilities, we are still gathering information about expected production volumes over the near term and should develop clearer views during the next several weeks. The major impact to the Company will be a reduction in production volumes expected in the 4th quarter of 2005, but an offsetting extension in reserves life."
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