Gulf Resources temporarily suspends trial production at Sichuan gas well
Gulf Resources announced the temporary suspension of trial production at its natural gas well in Daying County, Sichuan Province, China in order to comply with new environmental regulations being implemented in China. The company is required to obtain project approval for its well located in Daying, including the whole natural gas and brine water project, and approvals for safety production inspection, environmental protection assessment and to solve the related land issue. Until these approvals have been received, the company have to temporarily halt trial production at its natural gas well in Daying. Management has started discussions with local governmental officials about the oral notice. The company believes that the process that is now occurring in Sichuan Province is similar to the process that is occurring in Shandong Province. However, in this Sichuan case, management expects the process to be shorter and easier to accomplish. While many of the company's factories in Shandong were old and most of them were located near populous centers, all the machinery in Sichuan is new. From the beginning of the project, the company has been working closely with the Daying local governments to ensure the project and the equipment satisfy local requirements. In addition, the Daying well is located at a rural and mountainous area. The company does not believe it will encounter serious problems in meeting the new governmental requirements. It expects that this process could take approximately three months. At this time, the company cannot estimate potential costs in association with the compliance process. Until these approvals have been obtained, the company will not expect to apply for additional drilling permits. However, the company believes it remains highly committed to its Sichuan project.