McMoRan Exploration Co. (NYSE: MMR) today updated its exploration
and development activities, including a discovery at Zigler Canal,
and its permitting efforts for its Main Pass Energy HubTM (MPEHTM)
offshore LNG project. EXPLORATION ACTIVITIES The Zigler Canal
exploratory well onshore in Vermilion Parish, Louisiana commenced
drilling on June 17, 2006 and was sidetracked to a true vertical
depth of 13,635 feet (14,792 feet measured depth). The well was
evaluated with log while drilling logs, which indicated a potential
30 net feet of hydrocarbon bearing sands over a 125 foot gross
interval. Production is expected to commence in the first quarter
of 2007. McMoRan has a 50.0 percent working interest and a 35.75
percent net revenue interest. The Laphroaig exploratory well in St.
Mary Parish, Louisiana commenced drilling on April 8, 2006. The
well was recently sidetracked and is currently drilling below
17,600 feet true vertical depth and 18,500 feet measured depth,
with a planned true vertical depth of 18,200 feet and measured
depth of 19,300 feet. McMoRan has a 37.5 percent working interest
and a 27.8 percent net revenue interest. The Marlin exploratory
well at Grand Isle Block 18 commenced drilling on October 25, 2006.
The well is currently drilling below 10,300 feet true vertical and
measured depth, with a planned true vertical depth of 16,000 feet
and measured depth of 17,100. The Marlin prospect is located in 55
feet of water, 7.5 miles offshore Louisiana in an area where
McMoRan has rights to 17,700 gross acres. McMoRan has a 26.0
percent working interest and a 19.9 percent net revenue interest.
The Hurricane Deep well at South Marsh Island Block 217 commenced
drilling on October 26, 2006. The well is currently drilling below
10,100 feet with a planned true vertical depth of 21,250 feet. The
Hurricane Deep prospect is located in twelve feet of water in OCS
310, one mile northeast of the Hurricane discovery well which is
currently producing. McMoRan controls 7,700 gross acres in this
area. McMoRan has a 25.0 percent working interest and a 17.7
percent net revenue interest. A rig is on location to test the
Blueberry Hill well at Louisiana State Lease 340. As previously
reported, the Blueberry Hill well encountered four potentially
productive hydrocarbon bearing sands below 22,200 feet. McMoRan has
a 35.3 percent working interest and a 24.2 percent net revenue
interest. Information obtained from the testing of the Blueberry
Hill well will be incorporated in future plans for the JB Mountain
Deep well, as both areas demonstrate similar geologic settings and
are targeting deep Miocene sands equivalent in age. Exploration
In-Progress Working Interest Net Revenue Interest Current Depth
Proposed Total Vertical Depth Spud Date St. Mary Parish, LA
�Laphroaig� 37.5% 27.8% 17,600'� 18,200'� April 8, 2006 Grand Isle
Block 18 �Marlin� 26.0% 19.9% 10,300� 16,000'� October 25, 2006
South Marsh Island Block 217 �Hurricane Deep� 25.0% 17.7% 10,100�
21,250'� October 26, 2006 Louisiana State Lease 340 �Blueberry
Hill� 35.3% 24.2% n/a� n/a� Testing Under Way Since 2004, McMoRan
has participated in 13 discoveries on 26 prospects that have been
drilled and evaluated, including five discoveries announced in
2006. Five additional prospects are either in progress or not fully
evaluated. McMoRan currently has rights to approximately 350,000
gross acres and is also actively pursuing opportunities to acquire
additional acreage and prospects through farm-in or other
arrangements. McMoRan also announced that it has entered into an
exploration agreement with Plains Exploration & Production
Company (NYSE: PXP) whereby PXP will participate in up to nine of
McMoRan�s Miocene exploratory prospects in 2007 for approximately
60 percent of McMoRan�s interest. Under the agreement, PXP paid
McMoRan $20 million for leasehold interests and associated
prospects. PXP currently is participating in the drilling of the
Marlin prospect at Grand Isle Block 18 and the Hurricane Deep
prospect at South Marsh Island Block 217. The spending commitments
under McMoRan�s exploration venture with a private partner have
been met, and McMoRan has agreed to an $8 million reimbursement for
certain exploration rights. PRODUCTION AND DEVELOPMENT ACTIVITIES
McMoRan�s share of fourth quarter 2006 production is expected to
average 75-80 million cubic feet of natural gas equivalents per day
(MMcfe/d), including new production from additional wells in the
fourth quarter of 2006, including Hurricane No. 3 and Liberty
Canal. The Hurricane No. 3 well commenced production in late
November at a gross rate of 13 million cubic feet per day, 144
barrels of oil per day and 250 barrels of water per day (completion
fluid), (2.7 million cubic feet net to McMoRan), with a flowing
tubing pressure of 8,900 pounds per square inch. The operator at
West Cameron Block 43 No. 3 is reviewing options to bring the well
on production in the fourth quarter. McMoRan has also recently
performed successful recompletions at Deep Tern C-1 and C-2 and
King Kong No. 2. The discovery well at Point Chevreuil in St.
Mary�s Parish, Louisiana is expected to commence production in
early 2007. Following start-up of these wells and planned
activities from existing production, McMoRan expects its share of
total production to reach 90 MMcfe/d. MAIN PASS ENERGY HUB� UPDATE
McMoRan announced today that the public comment period, including
the period allowed for comments from Governors of the adjacent
states of Louisiana, Mississippi and Alabama, for the Main Pass
Energy HubTM project expired on November 20, 2006, with no
opposition. McMoRan expects the Maritime Administration to issue a
positive record of decision on the project by January 3, 2007. The
receipt of a positive record of decision is an important milestone
as McMoRan continues to pursue the highly attractive commercial
potential for the project. The project�s location near large and
liquid U.S. gas markets and the significant potential of the onsite
cavern storage provide attractive commercial opportunities for LNG
suppliers, natural gas consumers and marketers. The MPEH� terminal
would be permitted to regas LNG at a rate of 1.6 Bcf per day.
McMoRan is continuing discussions with potential LNG suppliers as
well as gas marketers and consumers in the United States to develop
commercial arrangements for the facilities. There are several
advantages to the project, including the use of existing facilities
at the site, the onsite natural gas cavern storage capabilities,
the significant logistical savings associated with the offshore
location and the premium markets available from the eastern Gulf of
Mexico location. These advantages provide suppliers with a highly
attractive netback and offer U.S. natural gas consumers a reliable
source of supply. 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� 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� 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; the economic potential of properties;
and the potential Main Pass Energy HubTM Project. 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; general exploration and development risks and
hazards; and the ability to obtain regulatory approvals and
significant project financing for the potential Main Pass Energy
HubTM project. Such factors and others are more fully described in
more detail in McMoRan�s 2005 Annual Report on Form 10-K and
subsequent Quarterly Reports on Form 10-Q on file with the
Securities and Exchange Commission. McMoRan Exploration Co. (NYSE:
MMR) today updated its exploration and development activities,
including a discovery at Zigler Canal, and its permitting efforts
for its Main Pass Energy Hub(TM) (MPEH(TM)) offshore LNG project.
EXPLORATION ACTIVITIES The Zigler Canal exploratory well onshore in
Vermilion Parish, Louisiana commenced drilling on June 17, 2006 and
was sidetracked to a true vertical depth of 13,635 feet (14,792
feet measured depth). The well was evaluated with log while
drilling logs, which indicated a potential 30 net feet of
hydrocarbon bearing sands over a 125 foot gross interval.
Production is expected to commence in the first quarter of 2007.
McMoRan has a 50.0 percent working interest and a 35.75 percent net
revenue interest. The Laphroaig exploratory well in St. Mary
Parish, Louisiana commenced drilling on April 8, 2006. The well was
recently sidetracked and is currently drilling below 17,600 feet
true vertical depth and 18,500 feet measured depth, with a planned
true vertical depth of 18,200 feet and measured depth of 19,300
feet. McMoRan has a 37.5 percent working interest and a 27.8
percent net revenue interest. The Marlin exploratory well at Grand
Isle Block 18 commenced drilling on October 25, 2006. The well is
currently drilling below 10,300 feet true vertical and measured
depth, with a planned true vertical depth of 16,000 feet and
measured depth of 17,100. The Marlin prospect is located in 55 feet
of water, 7.5 miles offshore Louisiana in an area where McMoRan has
rights to 17,700 gross acres. McMoRan has a 26.0 percent working
interest and a 19.9 percent net revenue interest. The Hurricane
Deep well at South Marsh Island Block 217 commenced drilling on
October 26, 2006. The well is currently drilling below 10,100 feet
with a planned true vertical depth of 21,250 feet. The Hurricane
Deep prospect is located in twelve feet of water in OCS 310, one
mile northeast of the Hurricane discovery well which is currently
producing. McMoRan controls 7,700 gross acres in this area. McMoRan
has a 25.0 percent working interest and a 17.7 percent net revenue
interest. A rig is on location to test the Blueberry Hill well at
Louisiana State Lease 340. As previously reported, the Blueberry
Hill well encountered four potentially productive hydrocarbon
bearing sands below 22,200 feet. McMoRan has a 35.3 percent working
interest and a 24.2 percent net revenue interest. Information
obtained from the testing of the Blueberry Hill well will be
incorporated in future plans for the JB Mountain Deep well, as both
areas demonstrate similar geologic settings and are targeting deep
Miocene sands equivalent in age. -0- *T Proposed Net Total
Exploration Working Revenue Current Vertical In-Progress Interest
Interest Depth Depth Spud Date --------------- -------- --------
-------- --------- ----------------- St. Mary Parish, LA
"Laphroaig" 37.5% 27.8% 17,600' 18,200' April 8, 2006
--------------- -------- -------- -------- ---------
----------------- Grand Isle Block 18 "Marlin" 26.0% 19.9% 10,300'
16,000' October 25, 2006 --------------- -------- -------- --------
--------- ----------------- South Marsh Island Block 217 "Hurricane
Deep" 25.0% 17.7% 10,100' 21,250' October 26, 2006 ---------------
-------- -------- -------- --------- ----------------- Louisiana
State Lease 340 "Blueberry Hill" 35.3% 24.2% n/a n/a Testing Under
Way --------------- -------- -------- -------- ---------
----------------- *T Since 2004, McMoRan has participated in 13
discoveries on 26 prospects that have been drilled and evaluated,
including five discoveries announced in 2006. Five additional
prospects are either in progress or not fully evaluated. McMoRan
currently has rights to approximately 350,000 gross acres and is
also actively pursuing opportunities to acquire additional acreage
and prospects through farm-in or other arrangements. McMoRan also
announced that it has entered into an exploration agreement with
Plains Exploration & Production Company (NYSE: PXP) whereby PXP
will participate in up to nine of McMoRan's Miocene exploratory
prospects in 2007 for approximately 60 percent of McMoRan's
interest. Under the agreement, PXP paid McMoRan $20 million for
leasehold interests and associated prospects. PXP currently is
participating in the drilling of the Marlin prospect at Grand Isle
Block 18 and the Hurricane Deep prospect at South Marsh Island
Block 217. The spending commitments under McMoRan's exploration
venture with a private partner have been met, and McMoRan has
agreed to an $8 million reimbursement for certain exploration
rights. PRODUCTION AND DEVELOPMENT ACTIVITIES McMoRan's share of
fourth quarter 2006 production is expected to average 75-80 million
cubic feet of natural gas equivalents per day (MMcfe/d), including
new production from additional wells in the fourth quarter of 2006,
including Hurricane No. 3 and Liberty Canal. The Hurricane No. 3
well commenced production in late November at a gross rate of 13
million cubic feet per day, 144 barrels of oil per day and 250
barrels of water per day (completion fluid), (2.7 million cubic
feet net to McMoRan), with a flowing tubing pressure of 8,900
pounds per square inch. The operator at West Cameron Block 43 No. 3
is reviewing options to bring the well on production in the fourth
quarter. McMoRan has also recently performed successful
recompletions at Deep Tern C-1 and C-2 and King Kong No. 2. The
discovery well at Point Chevreuil in St. Mary's Parish, Louisiana
is expected to commence production in early 2007. Following
start-up of these wells and planned activities from existing
production, McMoRan expects its share of total production to reach
90 MMcfe/d. MAIN PASS ENERGY HUB(TM) UPDATE McMoRan announced today
that the public comment period, including the period allowed for
comments from Governors of the adjacent states of Louisiana,
Mississippi and Alabama, for the Main Pass Energy Hub(TM) project
expired on November 20, 2006, with no opposition. McMoRan expects
the Maritime Administration to issue a positive record of decision
on the project by January 3, 2007. The receipt of a positive record
of decision is an important milestone as McMoRan continues to
pursue the highly attractive commercial potential for the project.
The project's location near large and liquid U.S. gas markets and
the significant potential of the onsite cavern storage provide
attractive commercial opportunities for LNG suppliers, natural gas
consumers and marketers. The MPEH(TM) terminal would be permitted
to regas LNG at a rate of 1.6 Bcf per day. McMoRan is continuing
discussions with potential LNG suppliers as well as gas marketers
and consumers in the United States to develop commercial
arrangements for the facilities. There are several advantages to
the project, including the use of existing facilities at the site,
the onsite natural gas cavern storage capabilities, the significant
logistical savings associated with the offshore location and the
premium markets available from the eastern Gulf of Mexico location.
These advantages provide suppliers with a highly attractive netback
and offer U.S. natural gas consumers a reliable source of supply.
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;
the economic potential of properties; and the potential Main Pass
Energy Hub(TM) Project. 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; general exploration and development risks and
hazards; and the ability to obtain regulatory approvals and
significant project financing for the potential Main Pass Energy
Hub(TM)project. Such factors and others are more fully described in
more detail in McMoRan's 2005 Annual Report on Form 10-K and
subsequent Quarterly Reports on Form 10-Q on file with the
Securities and Exchange Commission.
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