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

Davy Jones involves a large ultra-deep structure encompassing four OCS lease blocks (20,000 acres). McMoRan is the operator and holds a 63.4 percent working interest and a 50.2 percent net revenue interest in Davy Jones. Other working interest owners in Davy Jones include: Energy XXI (NASDAQ: EXXI) (15.8%), JX Nippon Oil Exploration (Gulf) Limited (12%) and Moncrief Offshore LLC (8.8%). McMoRan’s total investment in Davy Jones, which includes $474.8 million in allocated property acquisition costs, totaled $961.0 million at September 30, 2012.

During the third quarter of 2012, McMoRan submitted initial development plans for Blackbeard East to BSEE. McMoRan is seeking approval to test and complete the Upper Miocene sands during 2013 using conventional equipment and technologies. Additional plans for development of the deeper zones are being evaluated.

As previously reported, the Blackbeard East ultra-deep exploration by-pass well was drilled to a total depth of 33,318 feet in January 2012. Exploration results from the well indicate the presence of hydrocarbons below the salt weld in geologic formations including Upper/Middle Miocene, Frio, Vicksburg, and Sparta carbonate. Pressure and temperature data below the salt weld in the Miocene sands between 19,500 feet and 24,600 feet at Blackbeard East indicate that a completion at these depths could utilize conventional equipment and technologies. These exploration results enhance the potential of McMoRan’s other acreage in the Blackbeard strategic area, including McMoRan’s Blackbeard West No. 2, Barbosa and Queen Anne’s Revenge ultra-deep prospects.

Blackbeard East is located in 80 feet of water on South Timbalier Block 144. McMoRan holds a 72.0 percent working interest and a 57.4 percent net revenue interest in the well. Other working interest owners in Blackbeard East include EXXI (18.0%) and Moncrief Offshore LLC (10.0%). McMoRan’s total investment in Blackbeard East, which includes $130.5 million in allocated property acquisition costs, totaled $305.9 million at September 30, 2012.

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