Gulfport Energy Says Restoration Efforts Moving Slower Than Expected
Gulfport Energy Corporation, reports updates on 2005 Drilling Program and Effects of Hurricane Rita.
West Cote Blanche Bay Field Drilling Program
Gulfport commenced its West Cote Blanche Bay ("WCBB") drilling program in March 2005 and to date has finished drilling 18 wells and recompleting nine wells with another 21 wells scheduled to be drilled along with 18 recompletions over the next 12 months. The new wells primarily target proved undeveloped reserve locations for conversion into proved developed reserves. In addition, as we drill those proved undeveloped locations, we encounter multiple other objectives which we expect will also result in the addition of other proved developed reserves. Of the 18 wells drilled, nine were completed as producing wells, seven are waiting on completion, one is waiting on side- tracking and one was unsuccessful. The one unsuccessful well was a shallow exploratory well that allowed the Company to satisfy requirements to maintain undeveloped acreage within State Lease 340 WCBB.
The Company has previously reported that it sustained damage to both its Hackberry fields located in Cameron Parish, Louisiana and its WCBB field located in St. Mary Parish, Louisiana as a result of Hurricane Rita. While repair and restoration operations have been underway to return both fields to production, these efforts have taken longer than anticipated. We intend to begin placing producing wells back on line following completion of repairs to a gas sales line and Tank Battery 1A and Tank Battery 1B. It is currently expected that these repairs will be completed by the end of February 2006. Prior to Hurricane Rita, Tank Battery 1A and Tank Battery 1B together handled approximately 70% of total WCBB field production. Tank Battery 3, which handled approximately 24% of WCBB production prior to the hurricane, is currently expected to be repaired by mid-April 2006. Tank Battery 2, which handled approximately 6% of WCBB production prior to the hurricane, is currently expected to be repaired by the end of June 2006.
Subsequent to Hurricane Rita, the Company has drilled and set production casing on six new wells. These wells, together with one additional well that had been drilled but not completed prior to the storm and the additional wells to be drilled under the Company's ongoing drilling program, will be completed once the Company's facilities have been repaired and its existing producing wells have been put back on line.
The Company is currently producing approximately 260 net barrel of oil equivalents per day from its Hackberry fields, none from its WCBB field and approximately 1,000 net Mcf of gas per day from its non-Louisiana production. The Company has an insurance program in place which it believes will adequately cover damage to its platform and facilities and some of the effect of the interruption to its business operations.
The full impact of Hurricane Rita on our previously announced 2006
guidance will not be known until production has been restored. Accordingly, the Company will provide updated guidance for 2006 if needed after production has been restored from the WCBB field.
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