Devon initially forecast production for the third and fourth quarters of 2005 to approximate 56 million Boe per quarter. Because of the hurricanes, Devon subsequently lowered its third quarter 2005 company-wide production estimate to 54.6 million Boe. After considering the ongoing impact of the hurricanes, the company now expects fourth quarter 2005 production to be about 53 million Boe.
Devon is insured against physical damage to its offshore facilities caused by the hurricanes. Its insurance program also includes substantial business interruption coverage which Devon will utilize to recover costs associated with the suspended production. Business interruption insurance is subject to a standard waiting period, upper limits to oil and natural gas prices and a per event maximum.
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