Tetra Technologies, Inc. (TTI), an oil and gas services company, announced recently it has withdrawn its previous 2008 earnings guidance of $1.30 – $1.55 per share. According to Geoffrey M. Hertel, president and chief executive officer, the impact of hurricanes Gustav and Ike have created significant downtime in the company’s Well Abandonment & Decommissioning (WA&D) Services and Maritech and Fluids businesses. Additionally, Hurricane Ike destroyed three platforms that have direct implications for Maritech’s production operations.
WA&D Services, Maritech and offshore Gulf of Mexico Fluids operations have essentially been curtailed since August 30. The company did not incur any significant damage to any of the WA&D Services fleet of vessels. Though the company believes that their platforms are insured, the reduction in their production is material. The company will also incur costs of insurance deductibles, among other things.
With the destruction of at least twenty-eight platforms, the potential for additional business for the company is great. Tetra expects the evaluation process to take months, and it could take years before some of this work will be undertaken. The company’s EPIC Diving subsidiary will see increased utilization as the evaluation takes place, and two of their primary heavy-life vessels are moving onto work that was previously scheduled.
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