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

The Lineham Creek exploration prospect, which is located onshore in Cameron Parish, Louisiana is currently drilling below the salt weld at 23,100 feet. The well, which is targeting Eocene and Paleocene objectives below the salt weld, has a proposed total depth of 29,000 feet. Chevron U.S.A. Inc., as operator of the well, holds a 50 percent working interest. Lineham Creek is approximately 55 miles northwest of Davy Jones. McMoRan is participating for a 36.0 percent working interest. Other working interest owners include EXXI (9.0%) and W. A. “Tex” Moncrief Jr. (5.0%). McMoRan’s investment in Lineham Creek totaled $41.6 million at September 30, 2012.

McMoRan also announced today that drilling commenced on September 19, 2012 in the Highlander area on the Lomond North ultra-deep prospect. Lomond North, which is located in St. Martin Parish, LA, is currently drilling below 6,700 feet. This exploratory well has a proposed total depth of 30,000 feet and is targeting Eocene, Paleocene and Cretaceous objectives below the salt weld. McMoRan has identified multiple exploratory prospects in the Highlander area where it controls rights to approximately 80,000 gross acres in Iberia, St. Martin, Assumption and Iberville Parishes, Louisiana. Lomond North is approximately 65 miles north of Davy Jones. McMoRan is operator and currently holds a 72.0 percent working interest. Other working interest owners include EXXI (18.0%) and W. A. “Tex” Moncrief Jr. (10.0%). McMoRan’s investment in Lomond North totaled $23.1 million at September 30, 2012.

McMoRan believes that the deepwater, Shelf and the onshore are all one geologic basin. Onshore ultra-deep prospects like Lineham Creek and Lomond North have structural similarities both in shape and size to major sub-salt structures in the deepwater GOM. Lineham Creek and the Highlander Area are approximately 95 miles apart.

LEASE SALE 216/222 UPDATE

BOEM has awarded McMoRan all 14 leases from the June 2012 Central Gulf of Mexico Lease Sale 216/222 held in New Orleans, Louisiana. As previously reported, six of the 14 bids were sole bids by McMoRan and the remaining eight bids were made jointly with Chevron U.S.A. Inc. These blocks enhance McMoRan’s shallow water, ultra-deep exploration acreage in and around Davy Jones West, England, Calico Jack, Barataria, Captain Blood and Lafitte. Below is a summary of the total acres under control on these structures:

   

Acreage

Held Before

June 2012 Lease Sale

 

 

Acreage Acquired in June 2012 Lease Sale

 

 

Total Acreage Under Control on Lease Sale Prospects

Leases Held Jointly with Chevron      
Davy Jones West - 14,404 14,404
England 5,000 18,334 23,334
Calico Jack 3,750 5,000 8,750
McMoRan 100% Leases
Lafitte/Barataria Complex 25,000 15,000 40,000
Captain Blood 10,000 15,000 25,000
Total 43,750 67,738 111,488

Including these newly awarded leases, McMoRan’s leasehold inventory approximates 920,000 gross acres, including 385,000 gross acres associated with the ultra-deep trend.

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