HOUSTON, Sept. 19, 2008 (GLOBE NEWSWIRE) -- The Meridian Resource Corporation (NYSE:TMR) reported today the status of its oil and gas operations affected by Hurricane's Gustav and Ike. Crews working on the drilling rigs and various production facilities in the Company's operating areas of South Louisiana and East Texas were safely evacuated prior to the arrival of the hurricanes. The rigs utilized by the Company in the Weeks Island area of south-central Louisiana and East Texas were either laid down or mobilized to safe areas out of the anticipated path of the hurricanes for the duration of the storms. Each rig has since been placed back into operations.
The Company's headquarters were closed from Friday, September 12 through Tuesday, September 16 due to the effects of Hurricane Ike passing through Houston and the surrounding areas. Although many employees are still without power in their homes, the Company's offices opened for business on Wednesday of this week. Relative to Meridian's operations, the Company has conducted onsite inspection of all of its production platforms and production facilities to assess damage from the storms. In general, the Company sustained limited physical damage from the storms, but has experienced delays in bringing production back on-line in several of its operating areas due primarily to limited access to the Biloxi Marshland and Turtle Bayou fields and awaiting third party pipelines and processing facilities to return to operational status.
East Texas
Production from the Company's East Texas Austin Chalk wells was shut-in by a third party pipeline prior to the arrival of Hurricane Gustav for a short period of time, and again shut-in by the same third party pipeline prior to the arrival of Hurricane Ike. Although Hurricane Ike traveled directly through the Company's East Texas producing area, no damage was sustained. Full production from this field is expected to be back on-line as of today or tomorrow. Meridian has resumed drilling two wells in the field, the Sutton A-574 No. 1 well and the BSM A-507 No. 2 well. Both wells are drilling at a depth of approximately 12,000 feet in the vertical section of the scheduled dual horizontal wells. The drilling of these wells was delayed by several days due to the hurricanes.
Weeks Island
Production in the Weeks Island field was shut-in prior to the arrival of Hurricane Gustav for a period of approximately four days. Although the field did sustain minor damage from the storm, production has returned and is currently producing at levels higher than those prior to the arrival of the storm. This is due in part to the recent completion of the Myles Salt No. 31 well. Additional operations continue at Weeks Island that the Company expects will increase production, cash flows and reserves. Currently, Meridian has a two rig program in the field with two wells drilling and two awaiting rigs that are expected to move in shortly.
Biloxi Marshland Field
Production facilities located in the Biloxi Marshland field were shut-in prior to the arrival of Hurricane Gustav. A minor amount of damage was done to one of the production facilities, and is in the process of being repaired. Resumption of production at this field has been initially delayed because of access and that third party pipeline facilities sustained damage. Production is expected to be back on-line in different stages within the coming week to ten days.
Other South Louisiana Fields
Production facilities in some of the Company's other south Louisiana fields (Ramos, Turtle Bayou and Gibson) likewise received only minor damage from Hurricane Gustav. Production from the Company's Ramos field was shut-in for approximately six days and has been back on-line since September 6th. Production in the Turtle Bayou and Gibson fields remain shut-in due to damages sustained by the third party gas plant that receives natural gas from these fields. It is unknown at this point exactly how long those repairs are expected to take. The Company is working with the facilities processor to accelerate this timing.
The Company has adequate cash and insurance (in excess of its industry standard deductions) to cover the damage caused by the storms to production facilities and other related equipment. To date, it is estimated that the production that has been delayed by Hurricanes Gustav and Ike in the Company's various operating areas equates to approximately 500 Mmcfe. Meridian's average daily production prior to being shut-in by Hurricane Gustav was approximately 45 Mmcfe/d. With current activities in its exploration areas, the Company projects continued growth in production and reserves in its various operating areas.
The Meridian Resource Corporation is an independent oil and natural gas company engaged in the exploration, exploitation, acquisition and development of oil and natural gas in Louisiana, Texas, and the Gulf of Mexico. Meridian has access to an extensive inventory of seismic data and, among independent producers, is a leader in using 3-D seismic and other technologies to analyze prospects, define risk, target and complete high-potential wells for exploration and development. Meridian is headquartered in Houston, Texas, and has a field office in Weeks Island, Louisiana. Meridian stock is traded on the New York Stock Exchange under the symbol "TMR."
Safe Harbor Statement and Disclaimer
Statements identified by the words "expects," "projects," "plans," and certain of the other foregoing statements may be deemed "forward-looking statements." Although Meridian believes that the expectations reflected in such forward-looking statements are reasonable, these statements involve risks and uncertainties that may cause actual future activities and results to be materially different from those suggested or described in this press release. These include risks inherent in the drilling of oil and natural gas wells, including risks of fire, explosion, blowout, pipe failure, casing collapse, unusual or unexpected formation pressures, environmental hazards, and other operating and production risks inherent in oil and natural gas drilling and production activities, which may temporarily or permanently reduce production or cause initial production or test results to not be indicative of future well performance or delay the timing of sales or completion of drilling operations; risks with respect to oil and natural gas prices, a material decline in which could cause the Company to delay or suspend planned drilling operations or reduce production levels; and risks relating to the availability of capital to fund drilling operations that can be adversely affected by adverse drilling results, production declines and declines in oil and gas prices. These and other risks are described in the Company's documents and reports, available from the U.S. Securities and Exchange Commission, including the report filed on Form 10-K for the year ended December 31, 2007.
The Meridian Resource Corporation Website: www.tmrc.com
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