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

Stocks in this article: EXXI MMR


As previously reported in October and November 2012, McMoRan completed the sale of two traditional GOM shelf oil and gas property packages. The combined net cash proceeds from the two transactions (after closing adjustments) totaled $55.9 million and reclamation obligations assumed by the buyers totaled $45.6 million. McMoRan’s fourth-quarter 2012 results included net gains totaling approximately $39.7 million in the connection with these transactions.

On January 17, 2013, McMoRan completed the sale of the Laphroaig field to EXXI for cash consideration of $80 million, before closing adjustments, and the assumption of related abandonment obligations. The field represented approximately 10 percent of McMoRan’s total average daily production for the fourth quarter 2012. The transaction was effective January 1, 2013. McMoRan expects to record a net gain of approximately $74 million in the first quarter of 2013 in connection with this transaction.


At December 31, 2012, McMoRan had $114.9 million in cash. Total debt was $557.3 million at December 31, 2012, including $257.3 million in convertible securities. Currently, McMoRan has no borrowings and $115 million in availability under its revolving credit facility. In January 2013, McMoRan reached agreement with the beneficiary of a $100 million letter of credit for future abandonment obligations to suspend the letter of credit requirement until June 30, 2013.

McMoRan has approximately 162 million shares of common stock outstanding. Assuming conversion of McMoRan’s remaining outstanding 8% Convertible Perpetual Preferred Stock, 4% Convertible Senior Notes, 5¾% Convertible Perpetual Preferred Stock and 5¼% Convertible Senior Notes, McMoRan would have approximately 224 million common shares outstanding on a fully converted basis.

Capital expenditures totaled $89.5 million for the fourth quarter of 2012 and $505.1 million for the twelve-months ended December 31, 2012. Net abandonment expenditures, which include scheduled conventional and hurricane-related work, totaled $28.4 million for the fourth quarter of 2012 and $76.6 million for the twelve-months ended December 31, 2012.

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