McMoRan Exploration Co. (NYSE: MMR):
HIGHLIGHTS
- Exploratory Activities:
- Positive drilling results
from the Davy Jones ultra-deep exploratory well on South Marsh
Island Block 230 indicate a major discovery in shallow water on the
Shelf of the Gulf of Mexico.
- Offset appraisal well at Davy
Jones commenced on April 7, 2010. The well is currently drilling
below 4,000 feet towards a proposed total depth of 29,950
feet.
- Blackbeard East ultra-deep
exploratory well commenced on March 8, 2010 and is currently
drilling below 11,000 feet towards a proposed total depth of 29,950
feet.
- Lafitte ultra-deep
exploratory well expected to commence drilling in 2010.
- Deep gas exploratory drilling
in 2010 expected to include sidetracking operations at Blueberry
Hill, re-drilling of Hurricane Deep and the Boudin and Platte
prospects.
- First-quarter 2010 production
averaged 190 Million cubic feet of natural gas equivalents per day
(MMcfe/d) net to McMoRan, compared with 198 MMcfe/d in the first
quarter of 2009.
- Average daily production for
2010 is expected to approximate 170 MMcfe/d net to McMoRan,
including 170 MMcfe/d in second quarter 2010.
- Operating cash flows totaled
$80.3 million for the first quarter of 2010, including working
capital sources of $31.2 million.
- Capital expenditures totaled
$40.8 million in the first quarter of 2010 and are expected to
approximate $240 million for the year. Capital spending will
continue to be driven by opportunities and managed based on market
conditions.
- Apparent high bidder on 17 of
19 blocks on the Shelf at Central Gulf of Mexico Lease Sale 213 in
March 2010.
- Cash at March 31, 2010
totaled $268 million.
McMoRan Exploration Co. (NYSE: MMR) today reported a net loss
applicable to common stock of $66.2 million, $0.74 per share, for
the first quarter of 2010 compared with a net loss applicable to
common stock of $63.2 million, $0.90 per share, for the first
quarter of 2009. Results include impairment charges totaling $57.0
million in the first quarter of 2010 and $39.0 million in the first
quarter of 2009, principally reflecting lower natural gas
prices.
James R. Moffett and Richard Adkerson, McMoRan’s Co-Chairmen,
said, “The first quarter of 2010 was one of the most exciting
periods of our company’s history. The initial results from
our Davy Jones well are promising and extend the geologic basin
from the deepwater, opening up multiple high-potential exploration
prospects on the Shelf of the Gulf of Mexico. We
congratulate our entire team for their execution of our strategy to
unlock the values we believe exist at depth in the shallow waters
of the Gulf of Mexico. We look forward to an active period
in 2010 and beyond as we define the potential of this new
exploration frontier.”
SUMMARY FINANCIAL
TABLE*
First Quarter 2010 2009
(In thousands, except per
share amounts)
Revenues $ 132,488 $ 97,376 Operating loss (41,282 )
(49,139 ) Net loss from continuing operations (51,754 ) (59,492 )
Net loss from discontinued operations (1,640 ) (1,067 ) Net loss
applicable to common stock(a,b) $ (66,160 ) $ (63,241 ) Diluted net
loss per share: Continuing operations $ (0.72 ) $ (0.88 )
Discontinued operations (0.02 ) (0.02 ) Applicable to
common stock $ (0.74 ) $ (0.90 ) Diluted average common shares
outstanding 89,762 70,475 Operating cash flows $ 80,294
(c)
$ 33,794
EBITDAX(d)
$ 84,730 $ 67,929 Capital Expenditures $ 40,838
$ 29,163
*
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 March 31, 2010 Form 10-Q, the related costs incurred
through March 31, 2010 would be charged to expense in McMoRan’s
first-quarter 2010 financial statements. MMR’s investment in its
five in-progress or unproved wells totaled $86.0 million at March
31, 2010, including $31.6 million associated with the Davy Jones
discovery.
a.
Notable items impacting financial
results for the 2010 and 2009 periods are included in the following
table:
First Quarter 2010 2009 (In
Thousands) Impairment charges(1) $ 56,976 $ 38,954
Non-productive exploration well charges
4,612
(2)
16,226
(3)
Gain on oil and gas derivative contracts (4) 3,745 18,858 Charges
for inducement of preferred stock(5) 8,866 - Insurance proceeds -
18,707
(6)
(1)
Reduction of certain fields’ net
carrying value to fair value, including $40 million for Blueberry
Hill in the 2010 period further described on page 3.
(2)
Associated with the costs of the
Blueberry Hill offset appraisal well incurred through March 31,
2010 below 19,000 feet where future sidetracking operations are
expected to commence.
(3)
Primarily relating to the
Gladstone East and Tom Sauk wells.
(4)
See details of gains on oil and
gas derivative contracts on page I (d).
(5)
Reflects charges for privately
negotiated transactions to induce conversion of approximately
47,600 shares of McMoRan’s 8% Convertible Perpetual Preferred Stock
with a liquidation preference of $47.6 million into 7.0 million
shares of McMoRan common stock. Annual preferred dividend savings
following these transactions approximate $3.8 million. After giving
effect to these conversions, McMoRan has approximately 39,000
shares of its 8% Convertible Perpetual Preferred Stock and
approximately 93 million shares of common stock outstanding.
(6)
Partial payment for insured losses
related to the September 2008 hurricanes in the Gulf of Mexico.
b.
After preferred dividends.
c.
Includes working capital sources
of $31.2 million.
d.
See reconciliation of EBITDAX to
net loss applicable to common stock on page II.
PRODUCTION AND DEVELOPMENT ACTIVITIES
First-quarter 2010 production averaged 190 MMcfe/d net to
McMoRan, compared with 198 MMcfe/d in the first quarter of 2009.
Production in the first quarter of 2010 was in line with revised
estimates provided in March 2010 but below publicly reported
estimates of 200 MMcfe/d in January 2010 because of unplanned
downtime at certain fields and performance related issues.
Production is expected to average approximately 170 MMcfe/d in the
second quarter of 2010 and 170 MMcfe/d for the year, lower than the
previous estimate of 180 MMcfe/d. McMoRan’s estimated production
rates are dependent on the timing of planned recompletions,
production performance and other factors.
Following the Flatrock discovery in OCS 310 on South
Marsh Island Block 212 in July 2007, McMoRan has drilled five
additional successful wells in the field. Production from these six
wells in the Flatrock field averaged a gross rate of approximately
262 MMcfe/d (49 MMcfe/d net to McMoRan) in the first quarter of
2010. Current production rates have declined to approximately 190
MMcfe/d (35 MMcfe/d net to McMoRan) as a result of mechanical and
production performance issues. These issues are not expected to
impact the ultimate recovery from the field. McMoRan has a 25.0
percent working interest in Flatrock and Plains Exploration &
Production Company (NYSE: PXP) holds a 30.0 percent working
interest.
EXPLORATION ACTIVITIES
McMoRan’s exploration strategy is focused on the “deep gas
play,” drilling to depths of between 15,000 to 25,000 feet in the
shallow waters of the Gulf of Mexico and Gulf Coast area and on the
“ultra-deep gas play” of depths below 25,000 feet. Deep gas
prospects target large structures above the salt weld (i.e. listric
fault) in the Deep Miocene. Ultra-deep prospects target objectives
below the salt weld in the Miocene and older age sections that have
been correlated to those productive sections seen in deepwater
discoveries by other industry participants.
Deep Gas Exploration Activities
The Blueberry Hill offset appraisal well on Louisiana
State Lease 340 commenced drilling on November 8, 2009 and was
drilled to a total vertical depth of 23,585 feet in March 2010. The
well did not confirm the continuity of the pay sands seen in the
sidetrack #1, by-pass and sidetrack #2 wells drilled in 2009. The
information obtained from the well has been incorporated into
McMoRan’s 3-D seismic interpretations of the area and McMoRan
intends to sidetrack the well to a location southwest of the pay
sands seen in 2009. The Blueberry Hill #9 STK1 is expected to
commence drilling imminently and has a proposed total depth of
24,000 feet. McMoRan's first quarter results included $4.6 million
in exploration expenses associated with the drilling costs incurred
through March 31, 2010 below 19,000 feet, where future sidetracking
operations are expected to commence.
McMoRan’s first quarter results also include $40.0 million in
charges to reduce the carrying value of its investment in Blueberry
Hill, reflecting completion of an impairment assessment following
the decline in forward prices of natural gas during the first
quarter. McMoRan's total investment in Blueberry Hill approximated
$16.7 million at March 31, 2010, including $9.8 million for the
offset appraisal well, compared with a total investment of $53.5
million at December 31, 2009.
The Hurricane Deep sidetrack well on South Marsh Island
Block 217 commenced drilling on November 17, 2009 and had a
proposed total depth of 21,750 feet. As previously reported, the
operator encountered an underground flow in the well at
approximately 18,450 feet in February 2010. McMoRan plans to
re-drill the well during 2010 and its share of costs to re-drill to
18,450 feet will be covered under its insurance program. McMoRan’s
investment in Hurricane Deep totaled $21.0 million at March 31,
2010, including $8.1 million on operations since November 2009.
McMoRan’s deep gas exploratory drilling plans in 2010 also
include the Boudin and Platte prospects. Boudin is
located in 20 feet of water on Eugene Island Block 26. The well has
a proposed total depth of 23,050 feet and will test Miocene
objectives. Platte, which is located in Vermillion Parish,
Louisiana, has a proposed total depth of 18,700 feet.
Ultra-deep Exploration Activities
The data received to date from ultra-deep drilling on the Shelf
confirm McMoRan’s original geologic modeling, which correlates
objective sections on the Shelf below the salt weld (i.e. listric
fault) in the Miocene and older age sections to those productive
sections seen in deepwater discoveries by other industry
participants. In addition to Davy Jones and Blackbeard West,
McMoRan has identified 15 ultra-deep prospects in shallow water
near existing infrastructure. The lead times for development of
wells on the Shelf are not expected to be as long or expensive as
development would be in the deepwater Gulf of Mexico. McMoRan’s
ultra-deep drilling plans in 2010 include the Blackbeard East and
Lafitte exploratory wells and delineation drilling at Davy Jones.
Future plans also include the John Paul Jones prospect located
north of Davy Jones.
In February 2010, the Davy Jones discovery well on South
Marsh Island Block 230 was drilled to a total depth of 29,000 feet.
As reported in January 2010, McMoRan logged 200 net feet of pay in
multiple Eocene/Paleocene (Wilcox) sands in the well. In March
2010, a production liner was set and the well was temporarily
abandoned until necessary equipment for the completion is
available. Flow testing will be required to confirm the ultimate
hydrocarbon flow rates from the well. McMoRan, working with a team
of experts, has initiated studies on the design for the completion
of the well and various fast track alternatives to flow test the
well are being evaluated. The timing of the flow test is uncertain
and subject to a number of factors, but is expected within 12 to 18
months.
On April 7, 2010, McMoRan commenced drilling the Davy Jones
offset appraisal well on South Marsh Island Block 234, two and
a half miles southwest of the discovery well. The well is currently
drilling below 4,000 feet towards a proposed total depth of 29,950
feet. The offset appraisal well (Davy Jones #2) is expected to test
similar sections up-dip to the discovery well.
Davy Jones involves a large ultra-deep structure encompassing
four OCS lease blocks (20,000 acres). McMoRan is funding 25.7
percent of the drilling costs and holds a 32.7 percent working
interest and 25.9 percent net revenue interest. Other working
interest owners in Davy Jones include: PXP (27.7%), Energy XXI
(NASDAQ: EXXI) (15.8%), Nippon Oil Exploration USA Limited (12%),
W.A. "Tex" Moncrief, Jr. (8.8%) and a private investor (3%).
McMoRan’s investment in Davy Jones totaled $31.6 million at March
31, 2010.
The Blackbeard East ultra-deep exploration well commenced
drilling on March 8, 2010 and is currently drilling below 11,000
feet. The well, which is located in 80 feet of water on South
Timbalier Block 144, has a proposed total depth of 29,950 feet and
will target Middle and Deep Miocene objectives seen below 30,000
feet in Blackbeard West, nine miles away. McMoRan is funding 32.0
percent of the exploratory costs and holds a 38.5 percent working
interest and 30.7 percent net revenue interest. Other working
interest owners in Blackbeard East include: PXP (31.5%), EXXI
(18.0%), W.A. "Tex" Moncrief, Jr. (10.0%) and a private investor
(1.6%). McMoRan’s investment in Blackbeard East totaled $5.2
million at March 31, 2010.
The Lafitte ultra-deep exploration well is expected to
commence drilling in 2010. Like Blackbeard East, Lafitte will
target Middle and Deep Miocene objectives. Lafitte is located on
Eugene Island Block 223 in 140 feet of water.
The information gained from the Blackbeard East and Lafitte
wells will enable McMoRan to consider the priorities for future
operations at Blackbeard West. As previously reported, the
Blackbeard West ultra-deep exploratory well on South Timbalier
Block 168 was drilled to 32,997 feet in 2008. Logs indicated four
potential hydrocarbon bearing zones that require further evaluation
and the well was temporarily abandoned. In May 2009, the Minerals
Management Service granted McMoRan’s request for a geophysical
Suspension of Operations (SOO) to extend its Blackbeard West leases
in the Blackbeard area. The SOO is allowing McMoRan to evaluate
whether to drill deeper at Blackbeard West, drill an offset
location or complete the well to test the existing zones. McMoRan’s
investment in the Blackbeard West well totaled $31.3 million at
March 31, 2010.
Central Gulf of Mexico Lease Sale 213
On March 17, 2010, the Minerals Management Service (MMS)
conducted Central Gulf of Mexico Lease Sale 213 in New Orleans,
Louisiana. McMoRan participated in the sale and submitted apparent
high bids on 17 of 19 blocks on the Shelf totaling $9.4 million.
Apparent high bids are subject to a review process by the MMS
before they can be awarded. If granted, the lease acquisitions
would add approximately 75,000 gross acres to McMoRan’s leasehold
inventory, which currently approximates one million gross acres,
including 150,000 gross acres associated with the ultra-deep gas
play.
REVENUES
McMoRan’s first-quarter 2010 oil and gas revenues totaled $128.8
million, compared to $95.1 million during the first quarter of
2009. During the first quarter of 2010, McMoRan’s sales volumes
totaled 11.2 Bcf of gas, 691,500 barrels of oil and condensate and
1.7 Bcfe of plant products, compared to 12.2 Bcf of gas, 749,200
barrels of oil and condensate and 1.1 Bcfe of plant products in the
first quarter of 2009. McMoRan’s first-quarter comparable average
realizations for gas (before hedging) were $5.53 per thousand cubic
feet (Mcf) in 2010 and $4.88 per Mcf in 2009; for oil and
condensate McMoRan received an average of $76.34 per barrel in
first-quarter 2010 compared to $40.91 per barrel in first-quarter
2009.
CASH, LIQUIDITY AND CAPITAL EXPENDITURES
At March 31, 2010, McMoRan had $268 million in cash, compared
with $241 million on December 31, 2009. Total debt was $375 million
at March 31, 2010, including $75 million in 5 1/4% convertible
senior notes due in 2011 with a conversion price of $16.575 per
share. McMoRan currently has no amounts borrowed under its $175
million revolving credit facility and $75 million in availability
after considering $100 million in outstanding letters of credit.
McMoRan’s bank group is currently completing its semi-annual
redetermination of its borrowing base. The review is expected to be
completed in the second quarter of 2010. McMoRan does not expect
the redetermination to impact its future plans or operations.
Capital expenditures totaled $40.8 million for the first quarter
of 2010 and are expected to approximate $240 million in 2010,
including $170 million in exploration and $70 million in
development spending. Capital spending will continue to be driven
by opportunities and managed based on market conditions and
participation by partners.
Net abandonment expenditures, which include scheduled
conventional and hurricane-related work, totaled $17.5 million for
the first quarter of 2010 and are expected to approximate $100
million in 2010. McMoRan is entitled to receive reimbursement of
certain hurricane-related abandonment costs under its insurance
programs associated with the 2008 hurricane events in the Gulf of
Mexico.
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. Additional information about McMoRan is available on its
internet website “www.mcmoran.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, capital expenditures, reclamation costs and anticipated
and potential production and flow rates. Accuracy of these
forward-looking statements 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 the forward-looking
statements in this press release and does not intend to update
these statements more frequently than quarterly. Important factors
that might cause future results to differ from results anticipated
by forward-looking statements include: adverse conditions such as
high temperature and pressure that could lead to mechanical
failures or increased costs; 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; as well as other general exploration and
development risks and hazards. These and other factors are more
fully described in McMoRan’s 2009 Annual Report on Form 10-K on
file with the Securities and Exchange Commission (SEC), as updated
by our subsequent filings with the SEC.
This press release contains a financial measure, earnings before
interest, taxes, depreciation, amortization and exploration
expenses (EBITDAX), commonly used in the oil and natural gas
industry but not defined under GAAP. As required by SEC Regulation
G, reconciliations of this measure to amounts reported in McMoRan’s
consolidated financial statements are included in the supplemental
schedules of this press release.
A copy of this release is available on McMoRan’s web site at
www.mcmoran.com. A conference call with securities analysts about
first-quarter 2010 results is scheduled for today at 10:00 a.m.
Eastern Time. The conference call will be broadcast on the Internet
along with slides. Interested parties may listen to the conference
call live and view the slides by accessing “www.mcmoran.com”. A
replay of the webcast will be available through Friday, May 14,
2010.
McMoRan EXPLORATION CO.
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
March 31,
2010 2009
(In Thousands, Except
Per Share Amounts)
Revenues: Oil and natural gas $ 128,846 $ 95,082 Service
3,642 2,294 Total revenues 132,488
97,376
Costs and expenses: Production and delivery costs a
42,785 49,046 Depletion, depreciation and amortization expense b
108,245 93,397 Exploration expenses c 12,409 28,426 Gain on oil and
gas derivative contracts d (3,745 ) (18,858 ) General and
administrative expenses 13,743 12,446 Main Pass Energy Hub™ costs
333 765 Insurance recoveries -
(18,707
)
e
Total costs and expenses 173,770 146,515
Operating loss f (41,282 ) (49,139 ) Interest expense, net
(10,533 ) (10,666 ) Other income, net 61 329
Loss from continuing operations before income taxes (51,754
) (59,476 ) Income tax expense - (16 ) Loss
from continuing operations (51,754 ) (59,492 ) Loss from
discontinued operations (1,640 ) (1,067 ) Net loss
(53,394 ) (60,559 )
Preferred dividends and inducement
payments for early conversion of convertible preferred stock
(12,766
)
g
(2,682 ) Net loss applicable to common stock $ (66,160 ) $
(63,241 )
Basic and diluted net loss per share of common
stock: Continuing operations $ (0.72 ) $ (0.88 ) Discontinued
operations
(0.02 )
(0.02 )
Net loss per share of common stock
$
(0.74 )
$ (0.90 )
Average
shares outstanding: Basic and diluted
89,762 70,475
a.
Includes hurricane damage assessment and repair charges totaling
$0.5 million and $10.8 million in the quarters ended March 31, 2010
and 2009, respectively.
b.
Includes impairment charges totaling $57.0 million and $39.0
million in the quarters ended March 31, 2010 and 2009,
respectively.
c.
Includes charges for non-productive well costs of $4.6 million
related to a portion of the Blueberry Hill appraisal well costs in
2010 and $16.2 million primarily related to the Gladstone East and
Tom Sauk wells in 2009.
d.
McMoRan’s gains on its oil and gas derivative contracts include the
following (in thousands): First Quarter 2010
2009 Gains on settled contracts $ (3,303 ) $ (18,080
) Mark-to-market gain (442 ) (778 ) Gain on oil and
gas derivative contracts $ (3,745 ) $ (18,858 )
e.
Represents McMoRan’s share of partial payments of insurance
reimbursements related to losses incurred from the September 2008
hurricanes.
f.
Includes non-cash stock-based compensation totaling $9.7 million
and $6.3 million in the 2010 and 2009 periods, respectively. These
amounts include charges for immediately vested stock options and
stock options granted to retirement-eligible employees which
results in one-year’s compensation expense being immediately
recognized at the date of grant. These charges totaled $6.7 million
and $2.9 million in the first quarters of 2010 and 2009,
respectively.
g.
Includes $8.9 million of payments to induce the conversion of
approximately 47,600 shares of McMoRan’s 8% convertible perpetual
preferred stock into approximately 7.0 million shares of its common
stock.
McMoRan EXPLORATION CO.
RECONCILIATION OF REPORTED
AMOUNTS TO NON-GAAP ITEMS (SEE NOTE) (Unaudited)
EBITDAX is a financial measure commonly used in the oil and natural
gas industry but is not a recognized accounting term under
accounting principles generally accepted in the United States of
America (“GAAP”). As defined by McMoRan, EBITDAX reflects the
company’s adjusted oil and gas operating income (loss). “EBITDAX”
is derived from net loss from continuing operations before other
income, net, interest expense, net, income tax expense, Main Pass
Energy HubTM costs, exploration expenses, depletion, depreciation
and amortization expense, stock-based compensation charged to
general and administrative expenses, change in fair value of oil
and gas derivative contracts, hurricane-related charges included in
production and delivery costs, and insurance recoveries. EBITDAX
should not be considered by itself or as a substitute for net
income (loss), operating income (loss), cash flows from operating
activities or any other measure of financial performance presented
in accordance with GAAP, or as a measure of McMoRan’s profitability
or liquidity. Because EBITDAX excludes some, but not all, items
that affect net income (loss), the computation of this non-GAAP
financial measure may be different from similar presentations of
other companies, including oil and gas companies in our industry.
As a result, the EBITDAX data presented below may not be comparable
to similarly titled measures of other companies. McMoRan’s
management utilizes both the GAAP and non-GAAP results presented in
this news release to evaluate McMoRan’s performance and believes
that comparative analysis of results are useful to investors and
other internal and external users of our financial statements in
evaluating our operating performance, and such analysis can be
enhanced by excluding the impact of these items to help investors
meaningfully compare our results from period to period. The
following is a reconciliation of reported amounts from net loss
applicable to common stock to EBITDAX (in thousands):
First Quarter 2010 2009 Net loss
applicable to common stock, as reported $ (66,160 ) $ (63,241 )
Preferred dividends and inducement
payments for early conversion of convertible preferred stock
12,766 2,682 Loss from discontinued operations 1,640
1,067 Loss from continuing operations, as reported
(51,754 ) (59,492 ) Other income, net (61 ) (329 ) Interest
expense, net 10,533 10,666 Income tax expense - 16 Main Pass Energy
HubTM costs 333 765 Exploration expenses 12,409 28,426 Depletion,
depreciation and amortization expense 108,245 93,397
Hurricane-related charges included in production and delivery costs
537 10,845
Stock-based compensation charged
to general and administrative expenses
4,930 3,120 Insurance recoveries - (18,707 ) Change in fair value
of oil & gas derivative contracts (442 ) (778 )
EBITDAX $ 84,730 $ 67,929
McMoRan EXPLORATION CO.
OPERATING DATA
(Unaudited)
First Quarter 2010 2009 Sales
volumes: Gas (thousand cubic feet, or Mcf) 11,238,800 12,165,600
Oil (barrels) 691,500 749,200 Plant products (Mcf equivalent) a
1,749,000 1,118,100 Average realizations: Gas (per Mcf) $ 5.53 $
4.88 Oil (per barrel) 76.34 40.91
a.
Results include approximately $13.9 million and $5.0 million
of revenues associated with plant products (ethane, propane,
butane, etc.) during the first quarters of 2010 and 2009,
respectively. One Mcf equivalent is determined using an estimated
energy content differential ratio of six Mcf of natural gas to one
barrel of crude oil, condensate or natural gas liquids.
McMoRan EXPLORATION
CO.
CONDENSED BALANCE SHEETS
(Unaudited)
March 31, December 31, 2010 2009
(In Thousands)
ASSETS Cash and cash equivalents $ 267,778 $
241,418 Accounts receivable 66,251 79,681 Inventories 48,362 47,818
Prepaid expenses 10,031 14,457 Fair value of oil and gas derivative
contracts 8,766 8,693
Current assets from discontinued
operations, including restricted cash of $3,600 and $470,
respectively
3,795 825 Total current assets 404,983 392,892
Property, plant and equipment, net 736,521 796,223 Restricted cash
45,430 41,677 Deferred financing costs and other assets 11,301
11,931 Long-term assets from discontinued operations 2,996
6,159 Total assets $ 1,201,231 $ 1,248,882
LIABILITIES AND STOCKHOLDERS’ EQUITY Accounts payable $
72,221 $ 66,544 Accrued liabilities 64,294 51,945 Accrued interest
and dividends payable 17,889 8,535 Current portion of accrued oil
and gas reclamation costs 116,954 106,791 Fair value of oil and gas
derivative contracts 867 1,237 Current portion of accrued sulphur
reclamation costs (discontinued operations) 8,300 8,300 Current
liabilities from discontinued operations 1,577 1,183
Total current liabilities 282,102 244,535 5¼% convertible senior
notes 74,720 74,720 11.875% senior notes 300,000 300,000 Accrued
oil and gas reclamation costs 292,395 321,920 Other long-term
liabilities 17,101 16,602 Accrued sulphur reclamation costs
(discontinued operations) 19,273 19,152 Other long-term liabilities
from discontinued operations 6,134 6,145 Total
liabilities 991,725 983,074 Stockholders' equity
209,506 265,808 Total liabilities and stockholders'
equity $ 1,201,231 $ 1,248,882
McMoRan EXPLORATION CO.
STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31,
2010 2009 (In Thousands)
Cash flow from operating
activities: Net loss $ (53,394 ) $ (60,559 ) Adjustments to
reconcile net loss to net cash provided by operating activities:
Loss from discontinued operations 1,640 1,067 Depletion,
depreciation and amortization expense 108,245 93,397 Exploration
drilling and related expenditures 4,612 16,226 Compensation expense
associated with stock-based awards 9,688 6,347 Amortization of
deferred financing costs 896 931 Change in fair value of oil and
gas derivative contracts (442 ) (778 ) Reclamation expenditures,
net of prepayments by third parties (17,540 ) (12,351 ) Increase in
restricted cash (3,753 ) (3,772 ) Other 227 64 (Increase) decrease
in working capital: Accounts receivable 20,164 14,697 Accounts
payable and accrued liabilities 7,109 (12,846 ) Prepaid expenses
and inventories 3,880 (8,193 ) Net cash
provided by continuing operations 81,332 34,230 Net cash used in
discontinued operations (1,038 ) (436 ) Net cash
provided by operating activities 80,294 33,794
Cash flow from investing activities:
Exploration, development and other capital expenditures
(40,838 ) (29,163 ) Net cash used in continuing operations
(40,838 ) (29,163 ) Net cash activity from discontinued operations
- - Net cash used in investing
activities (40,838 ) (29,163 )
Cash flow
from financing activities:
Dividends paid and inducement
payments on early conversion of convertible preferred stock
(13,274 ) (2,682 ) Proceeds from exercise of stock options and
other 178 - Net cash used in continuing
operations (13,096 ) (2,682 ) Net cash activity from discontinued
operations - - Net cash used in
financing activities (13,096 ) (2,682 ) Net increase
in cash and cash equivalents 26,360 1,949 Cash and cash equivalents
at beginning of year 241,418 93,486
Cash and cash equivalents at end of period $ 267,778 $
95,435
Mcmoran (NYSE:MMR)
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