McMoRan Exploration Co. Announces Successful Production Tests; Updates Production Rates and Drilling Activities
November 22 2005 - 12:04PM
Business Wire
McMoRan Exploration Co. (NYSE: MMR) today announced a successful
production test on the Long Point discovery on Louisiana State
Lease 18090, located onshore in Vermilion Parish, Louisiana. The
production test indicated a gross flow rate of approximately 41
million cubic feet of natural gas per day (MMcf/d) and 860 barrels
of condensate per day (total of approximately 46 MMcfe/d, 12
MMcfe/d net to McMoRan) on a 29/64ths choke with flowing tubing
pressure of 10,200 pounds per square inch. Infrastructure near this
onshore location in inland waters would allow production to be
established quickly, currently expected in early 2006. Following
completion activities, McMoRan expects to commence drilling the
Long Point No. 2 development well. As previously reported, the Long
Point exploratory well was drilled to 19,000 feet in October 2005.
The well was evaluated with log-while-drilling tools and wireline
logs, indicating an interval approximating 150 gross feet of
hydrocarbon bearing sands with excellent porosity. McMoRan acquired
rights to 5,000 gross acres comprising the Long Point prospect from
El Paso Production Company, a subsidiary of El Paso Corporation
(NYSE: EP), in June of 2005 as part of a package of six deep-gas
exploratory prospects covering approximately 18,000 gross acres
onshore and in state waters in Vermilion Parish, Louisiana. McMoRan
owns a 37.5 percent working interest and a 26.8 percent net revenue
interest in the Long Point well. McMoRan also reported a successful
production test at the King Kong No. 2 well at Vermilion Block
16/17. The production test indicated a gross flow rate of
approximately 8 MMcf/d, approximately 24 barrels of condensate per
day and zero barrels of water (total of approximately 8.1 MMcfe/d,
2.3 MMcfe/d net to McMoRan) on a 16/64ths choke. As previously
reported, the King Kong No. 2 development well at Vermilion Blocks
16/17 was drilled to a total depth of 13,680 feet in October 2005.
McMoRan expects to establish production in the fourth quarter from
the King Kong No. 1 well (which was tested in August 2005 at a
gross rate of approximately 42 MMcfe/d, 12 MMcfe/d net to McMoRan),
and commence production at the No. 2 well shortly thereafter. A rig
is on location to begin drilling of the King Kong No. 3 development
well. McMoRan has a 40.0 percent working interest and a 29.2
percent net revenue interest in the King Kong prospect, which is
located in 12 feet of water. McMoRan is the operator and has rights
to approximately 2,500 gross acres in the area. McMoRan also
reported that substantially all of its production affected by
Hurricanes Katrina and Rita has been restored, including oil
production from Main Pass Block 299. McMoRan's share of production
currently approximates 57 MMcfe/d including 3,300 bbls/d (20
MMcfe/d) from Main Pass Block 299. McMoRan expects production to
increase to 60-70 MMcfe/d by the end of 2005 and average 30-40
MMcfe/d for the fourth quarter of 2005. First-quarter 2006
production is expected to benefit from full rates at McMoRan's
producing fields and new production from recent discoveries,
including King Kong, West Cameron Block 43 and Long Point. McMoRan
is actively engaged in drilling activities on five exploratory
prospects and two development wells. The five exploration prospects
in progress are JB Mountain Deep at South Marsh Island Block 224,
Cane Ridge at Louisiana State Lease 18055, Elizabeth at South Marsh
Island Block 230, Cabin Creek at West Cameron Block 95 and Point
Chevreuil at Louisiana State Lease 18350. McMoRan is also engaged
in development drilling at Hurricane No. 2 at South Marsh Island
Block 217 and King Kong No. 3 at Vermilion Blocks 16/17. Since
inception in 2004 of a multi-year, $500 million exploration
venture, McMoRan and its private partner have participated in seven
discoveries on the fifteen prospects that have been drilled and
evaluated. McMoRan is actively pursuing opportunities through this
venture to acquire additional acreage and prospects through farm-in
or other arrangements. -0- *T DRILLING SCHEDULE Net Proposed
Working Revenue Current Total Interest Interest Depth Depth Spud
Date
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Exploration In-Progress
----------------------------------------------------------------------
South Marsh Island Block 224 "JB Mountain July 14, Deep"(a) 27.5%
19.4% 20,950' 23,000' 2005
----------------------------------------------------------------------
Louisiana State Lease 18055 July 29, "Cane Ridge" 37.5% 27.5%
13,200' 16,500' 2005
----------------------------------------------------------------------
South Marsh Island Block 230 September 16, "Elizabeth"(a) 15.0%
11.3% 12,300' 20,000' 2005
----------------------------------------------------------------------
West Cameron Block 95 October 15, "Cabin Creek"(a) 37.5% 31.0%
10,900' 18,500' 2005
----------------------------------------------------------------------
Louisiana State Lease 18350 November 18, "Point Chevreuil" 25.0%
17.5% 750' 17,000' 2005
----------------------------------------------------------------------
Development In-Progress
----------------------------------------------------------------------
South Marsh Island Block 217 August 21, "Hurricane No. 2" 27.5%
19.4% 9,300' 16,000' 2005
----------------------------------------------------------------------
Vermilion Blocks 16/17 On November "King Kong No. 3" 40.0% 29.2%
Location 15,800' 2005
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Near-Term Well(b)
----------------------------------------------------------------------
Onshore Vermilion Parish, LA First-Quarter "Liberty Canal" 37.5%
27.7% n/a 16,000' 2006
----------------------------------------------------------------------
(a) Depending upon applicability of the Deep Gas Royalty Relief
eligibility criteria, the leases on which these wells are located
could be eligible for royalty relief up to 25 Bcf under current
Minerals Management Service guidelines subject to pricing
thresholds. McMoRan's net revenue interest would increase during
the royalty relief period for eligible leases. (b) Timing is
subject to change. *T McMoRan Exploration Co. is an independent
public company engaged in the exploration, development and
production of oil and natural gas offshore in the Gulf of Mexico
and onshore in the Gulf Coast area. McMoRan is also pursuing plans
for the development of the MPEH(TM) which will be used for the
receipt and processing of liquefied natural gas and the storage and
distribution of natural gas. Additional information about McMoRan
and the MPEH(TM) project is available on its internet website
"www.mcmoran.com" and at "www.mpeh.com". CAUTIONARY STATEMENT: This
press release contains certain forward-looking statements regarding
various oil and gas discoveries, oil and gas exploration,
development and production activities, anticipated and potential
production and flow rates; anticipated revenues; the economic
potential of properties; and estimated exploration costs. Accuracy
of the projections depends on assumptions about events that change
over time and is thus susceptible to periodic change based on
actual experience and new developments. McMoRan cautions readers
that it assumes no obligation to update or publicly release any
revisions to the projections in this press release and, except to
the extent required by applicable law, does not intend to update or
otherwise revise the projections more frequently than quarterly.
Important factors that might cause future results to differ from
these projections include: variations in the market prices of oil
and natural gas; drilling results; unanticipated fluctuations in
flow rates of producing wells; oil and natural gas reserves
expectations; the ability to satisfy future cash obligations and
environmental costs; availability of third party downstream
facilities, and general exploration and development risks and
hazards. Such factors and others are more fully described in more
detail in McMoRan's 2004 Annual Report on Form 10-K on file with
the Securities and Exchange Commission.
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