Genesis Energy, L.P. Provides Operational and Commercial Update

Genesis Energy, L.P. (NYSE:GEL) intends herewith to provide an update on its offshore operations, following Hurricane Laura, as well as disclose the receipt of some $41 million in cash that will also be accounted for as an increase in reported Adjusted EBITDA for the third quarter.

Turning first to the offshore, there is no apparent damage to our 100% owned and operated Cameron Highway Oil Pipeline System (“CHOPS”) nor any of its appurtenant facilities. As currently configured, the CHOPS pipeline goes up and over a junction platform located in Garden Banks block 72, where it can receive pigs and launch pigs for proper maintenance of two of its 30 inch diameter pipeline segments. That platform, located in 520 feet of water, recorded waves in the 70-80 foot range and sustained winds in excess of 130 mph as the eye of Laura passed some 17 miles to the southwest of its location. The platform experienced damage to its topside facilities which is usual and customary, and not significant nor unexpected, after experiencing those type of weather conditions. Below the waterline, through diving and remotely operated vehicle inspections, several areas of structural stress have been identified that will require further investigation and analysis. As a result, no oil is currently flowing through the CHOPS pipeline.

Grant Sims, CEO of Genesis Energy, said, “We are aggressively working to collect data and conduct a rigorous structural analysis for review by the Bureau of Safety and Environmental Enforcement to hopefully be able to re-occupy the platform, conduct the cleanup tasks required and return the CHOPS pipeline to normal operations. Based upon continuing data collection, observations and analysis, it would appear that CHOPS is more than likely not going to be in a position to resume operations before October 1 at the earliest.

However, we have been successful, to date, in working with shippers to divert all available and affected CHOPS barrels into our 64% owned and operated Poseidon Oil Pipeline for deliveries by it directly to shore or for Poseidon to deliver barrels into the Auger Pipeline for further transportation to shore via this alternative path. Because of the rate structures amongst the various pipelines, we expect minimal revenue impact to Genesis during this period of interrupted operations of CHOPS, other than when the volumes were shut in for the storm, and assuming the continuing conditions that there is enough available capacity on Poseidon and/or Auger to receive and transport all of the affected CHOPS volumes.