This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

McMoRan Exploration Co. Reports Fourth-Quarter/Twelve-Month 2012 Results

James R. Moffett and Richard Adkerson, McMoRan’s Co-Chairmen, said, “The geologic data from our drilling results on seven wells associated with the ultra-deep sub-salt trend indicate significant resource potential on the Shelf of the Gulf of Mexico and onshore in the Gulf Coast area. These results, combined with advances in proprietary technologies required to develop and produce these large structures, establish a multi-year program to unlock a significant long-term natural gas resource. Through the proposed acquisition transaction, McMoRan shareholders will receive cash compensation for the value potential of this emerging new trend and an ongoing participation through the distribution of royalty trust units.”

SUMMARY FINANCIAL TABLE*

Fourth Quarter   Twelve Months  
2012   2011   2012   2011  
  (In thousands, except per share amounts)
Revenues $ 84,170 $ 121,919 $ 376,888 $ 555,414
Operating income (loss) 10,724 43,189 (91,646 ) 1,368
Income (loss) from continuing operations 10,767 43,385 (97,033 ) (6,604 )
Loss from discontinued operations (1,688 ) (4,642 ) (7,261 ) (9,364 )
Net income (loss) applicable to common stock (a,b,c) (1,207 ) d 28,400 e (145,570 ) d (58,768 ) e

Diluted net income (loss) per share:Continuing operations

 

$

(0.00 )

$

0.19

$

(0.86 )

$

(0.31 )

Discontinued operations

(0.01 ) (0.03 ) (0.04 ) (0.06 )
Applicable to common stock $ (0.01 ) $ 0.16 $ (0.90 ) $ (0.37 )
Diluted average shares outstanding 161,928 181,436 161,702 159,216
Operating cash flows (f) $ (28,878 ) $ 48,535 $ 33,650 $ 227,048
EBITDAX (g) $ 37,022 $ 67,558 $ 180,073 $ 309,815
Capital Expenditures $ 89,505   $ 105,606   $ 505,132   $ 509,494  
 

*

        If any in-progress well or unproved property is determined to be non-productive or no longer meets the capitalization requirements under applicable accounting rules after the date of this release but prior to the filing of McMoRan’s 2012 Form 10-K, the related costs incurred through December 31, 2012 would be charged to expense in McMoRan’s 2012 financial statements.  At December 31, 2012 McMoRan’s total drilling costs for its nine in-progress or unproven wells totaled $1,828.2 million, including $693.5 million in allocated value associated with property acquisitions.

 

a.

  After preferred dividends.

 

b.

  Includes impairment charges totaling $34.5 million in fourth-quarter 2012, $9.1 million in fourth-quarter 2011, $46.2 million in 2012 and $71.1 million in 2011 to reduce certain fields’ net carrying value to fair value.  Also includes adjustments for asset retirement obligations associated with certain of McMoRan’s oil and gas properties totaling approximately $1.3 million in the fourth-quarter 2012, $11.4 million in the fourth-quarter 2011, $17.6 million in 2012 and $57.3 million in 2011.

 

c.

  Includes $93.5 million of charges to exploration expense in 2012 primarily resulting from the write-off of allocated carrying value of leasehold interests from the December 2010 property acquisition no longer being pursued as well as the write-off of costs associated with the lease expiration of the Boudin well.  Also includes charges to exploration expense totaling $42.3 million in 2011 for non-commercial well costs primarily associated with the Blueberry Hill #9 STK1 well.

 

d.

  Includes gain on sale of oil and gas properties resulting from McMoRan’s completed sale of two traditional GOM shelf oil and gas property packages totaling $39.7 million in the fourth quarter 2012 and $40.5 million in 2012.

 

e.

  Includes McMoRan’s share of insurance reimbursements related to losses incurred from the September 2008 hurricanes totaling $39.1 million in fourth quarter 2011 and $91.1 million in 2011.

 

f.

  Includes reclamation spending of $28.4 million in fourth-quarter 2012, $56.6 million in fourth-quarter 2011, $76.6 million in 2012 and $150.0 million in 2011.  Also includes working capital sources/(uses) of $(31.0) million in fourth-quarter 2012, $2.5 million in fourth quarter 2011, $(28.7) million in 2012 and $30.4 million in 2011.

 

g.

  See reconciliation of EBITDAX to net loss applicable to common stock on page III.

PROPOSED TRANSACTION UPDATE

On December 5, 2012, McMoRan entered into an agreement whereby Freeport-McMoRan Copper & Gold Inc. (FCX) would acquire McMoRan for per-share consideration consisting of $14.75 in cash and 1.15 units of a royalty trust, which will hold a 5 percent overriding royalty interest in future production from McMoRan’s existing ultra-deep exploration prospects. In connection with the proposed transaction, Gulf Coast Ultra Deep Royalty Trust, the royalty trust formed, has filed with the Securities and Exchange Commission a registration statement on Form S-4 that includes a preliminary proxy statement of McMoRan that also constitutes a prospectus of the royalty trust. In addition to the transaction requiring McMoRan’s shareholder approval, U.S. antitrust clearance under the Hart-Scott-Rodino Act is also required. On December 26, 2012, the Federal Trade Commission granted early termination of the Hart-Scott-Rodino waiting period. The transaction is expected to close in the second quarter of 2013.

2 of 9

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 17,976.31 +263.65 1.49%
S&P 500 2,086.24 +25.22 1.22%
NASDAQ 4,947.4410 +56.2220 1.15%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs