Gulf Resources Announces Temporary Suspension of Production at its First Natural Gas Well in Sichuan Province
July 10 2017 - 8:00AM
Gulf Resources, Inc. (Nasdaq:GURE) ("Gulf Resources" or the
"Company"), a leading manufacturer of bromine, crude salt, and
specialty chemical products, today announces the temporary
suspension of production at its first natural gas well in Sichuan
Province.
In the initial stages of production, the content
of the natural gas did not meet the expected quality standards. The
basic issue is that the water content in the natural gas is too
high, which is a common problem in natural gas wells. From the
outset, the Company was aware that this type of problem could
occur, which is why it was only producing test quantities of
natural gas.
Gulf Resources currently is consulting with the
professional petroleum experts from Southwest Petroleum University
to assess the issue and make recommendations. At the present
time, the Company believes the solution will likely involve the
addition of relatively inexpensive pieces of equipment, which
should take a few months to procure and install. However, until the
full plan from the Southwest Petroleum University team is received,
the Company cannot be completely certain of the cost or the
timing.
While this is a short-term set back, the Company
believes this will not change the intermediate to long-term
opportunities for natural gas production in Sichuan Province.
Gulf Resources continues to be optimistic about
both its core business and the opportunities in Sichuan Province.
At the present time, Gulf expects to report strong results in
bromine and improved results in chemicals for the second quarter of
2017. Overall, excluding potential extraordinary items and currency
exchange problem, the Company expects to report that sales in the
second quarter of 2017 increased over those in the previous year.
It also expects to report that earnings and earnings per share
increased by double digits.
Liu Xiaobin, the President and CEO of Gulf
Resources stated, “We are moving very carefully to insure that our
Sichuan project produces natural gas of the highest quality. We
believe we have a great opportunity and do not want to jeopardize
it by taking any shortcuts. Meanwhile, we are very pleased that our
chemical business has improved and our bromine business remains
very strong. We look forward to reporting strong results for the
second quarter and for the remainder of the year.”
About Gulf Resources, Inc.Gulf Resources, Inc.
operates through four wholly-owned subsidiaries, Shouguang City
Haoyuan Chemical Company Limited ("SCHC"), Shouguang Yuxin Chemical
Industry Co., Limited ("SYCI"), Shouguang City Rongyuan Chemical
Co, Limited (“ SCRC”) and Daying County Haoyuan Chemical Company
Limited (“DCHC”). The company believes that it is one of the
largest producers of bromine in China. Elemental Bromine is used to
manufacture a wide variety of compounds utilized in industry and
agriculture. Through SYCI, the company manufactures chemical
products utilized in a variety of applications, including oil and
gas field explorations and papermaking chemical agents. SCRC is a
leading manufacturer of materials for human and animal antibiotics
in China and other parts of Asia. DCHC was established to further
explore and develop natural gas and brine resources (including
bromine and crude salt) in China. For more information, visit
www.gulfresourcesinc.com.
Forward-Looking Statements
Certain statements in this news release contain forward-looking
information about Gulf Resources and its subsidiaries business and
products within the meaning of Rule 175 under the Securities Act of
1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and
are subject to the safe harbor created by those rules. The actual
results may differ materially depending on a number of risk factors
including, but not limited to, the general economic and business
conditions in the PRC, future product development and production
capabilities, shipments to end customers, market acceptance of new
and existing products, additional competition from existing and new
competitors for bromine and other oilfield and power production
chemicals, changes in technology, the ability to make future
bromine asset purchases, and various other factors beyond its
control. All forward-looking statements are expressly qualified in
their entirety by this Cautionary Statement and the risks factors
detailed in the company's reports filed with the Securities and
Exchange Commission. Gulf Resources undertakes no duty to revise or
update any forward-looking statements to reflect events or
circumstances after the date of this release.
CONTACT: Gulf Resources, Inc.
Web: http://www.gulfresourcesinc.com
Director of Investor Relations
Helen Xu (Haiyan Xu)
beishengrong@vip.163.com
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