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McMoRan Exploration Co. Reports Third-Quarter/Nine-Month 2012 Results

McMoRan Exploration Co. (NYSE: MMR):

  • Ultra-Deep Development Activities
    • Davy Jones No. 1 well has been successfully cleaned out following delays associated with removing residual barite material in the bottom of the wellbore. McMoRan is preparing to re-install production tubing before flow testing the well, which has 165 feet of perforated sand sections.
    • Completion and testing of Davy Jones No. 2 expected to commence following review of results from Davy Jones No. 1. As previously reported, Davy Jones No. 2 confirmed 120 net feet of pay in multiple Wilcox sands and also encountered 192 net feet of potential hydrocarbons in the Tuscaloosa and Lower Cretaceous carbonate sections.
    • Submitted development plans to complete and test the Upper Miocene sands at Blackbeard East and the Jackson/Yegua sands in the Upper Eocene at Lafitte with the Bureau of Safety and Environmental Enforcement (BSEE).
  • Ultra-Deep Exploration Activities
    • Blackbeard West No. 2
      • Drilling below 23,600 feet with a proposed total depth of 24,500 feet.
      • Targeting Miocene aged sands seen below the salt weld at Blackbeard East.
      • If successful, completion could utilize conventional equipment and technologies.
    • Lineham Creek onshore prospect
      • Drilling below 23,100 feet with a proposed total depth of 29,000 feet. Targeting Eocene/Paleocene objectives below the salt weld.
    • Lomond North prospect onshore in Highlander area
      • Commenced drilling exploratory well on September 19, 2012.
      • Drilling below 6,700 feet with a proposed total depth of 30,000 feet.
      • Targeting Eocene, Paleocene and Cretaceous objectives seen below the salt weld in the Davy Jones wells.
      • Identified multiple high potential prospects on 80,000 acre position in the Highlander area.
    • Bureau of Ocean Energy Management (BOEM) awarded McMoRan all 14 leases, including eight bids made jointly with Chevron U.S.A., from the June 2012 Central Gulf of Mexico Lease Sale 216/222.
  • Third-quarter 2012 production averaged 134 million cubic feet of natural gas equivalents per day (MMcfe/d) net to McMoRan, and 143 MMcfe/d for the nine months ended September 30, 2012.
  • Average daily production for 2012 is expected to approximate 137 MMcfe/d net to McMoRan, including 120 MMcfe/d in fourth quarter 2012.
  • Operating cash flows totaled $12.1 million for the third quarter of 2012, including $16.3 million in working capital sources and $20.6 million in abandonment expenditures, and $62.5 million for the nine months of 2012.
  • Capital expenditures totaled $103.4 million in the third quarter of 2012 and $415.6 million for the nine months of 2012.
  • Cash at September 30, 2012 totaled $191.9 million.
  • Agreed to sell two traditional Gulf of Mexico (GOM) property packages for cash consideration totaling $64.8 million and the assumption of $43.4 million of related abandonment obligations.

McMoRan Exploration Co. (NYSE: MMR) today reported a net loss applicable to common stock of $64.0 million, $0.40 per share, for the third quarter of 2012 compared with a net loss of $9.4 million, $0.06 per share, for the third quarter of 2011. Third quarter 2012 results include charges to exploration expense primarily resulting from the write-off of allocated carrying value of leasehold from the December 2010 property acquisition no longer being pursued totaling $37.2 million.

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