McMoRan's net loss from its continuing operations totaled $11.1 million, which includes $4.3 million of start-up costs associated with the Main Pass Energy Hub(TM) and $3.3 million of oil and gas exploration expense. During the first quarter of 2003, McMoRan's net loss from continuing operations totaled $2.2 million.
James R. Moffett and Richard C. Adkerson, Co-Chairmen of McMoRan, said, "We are excited about our opportunities to pursue our Deep Shelf exploration prospects. Our new exploration venture allows us to meaningfully expand our activities and expose our shareholders to a series of high potential prospects. To date, we have commenced activities at three prospects outside of the ongoing drilling activities in the JB Mountain and Mound Point areas and plan to drill additional prospects throughout the year. During the first quarter of 2004 we also submitted our application to the U.S. Coast Guard for the development of our Main Pass Energy Hub(TM) project, which would provide an important gateway for required LNG imports into the U.S. natural gas distribution system."
McMoRan's first-quarter 2004 revenues totaled $3.6 million, compared to $4.8 million during the first quarter of 2003. McMoRan's first-quarter 2004 production averaged approximately 7 Mmcfe/d. McMoRan's first-quarter 2004 production rates were adversely affected by the cessation of production from the Vermilion Block 160 BJ well during the quarter and the deferral of certain remediation work at the Eugene Island Block 97 field, which is now anticipated to occur in the second quarter of 2004. McMoRan expects its average net production rate to approximate 5 Mmcfe/d in the second quarter of 2004 and 6 Mmcfe/d for the remainder of 2004. During the first quarter of 2004, McMoRan's sales volumes totaled 0.4 Bcf of gas and 25,600 barrels of oil and condensate compared to 0.6 Bcf of gas and 18,300 barrels of oil and condensate in the first quarter of 2003. McMoRan's first-quarter comparable average realizations for gas were $5.93 per thousand cubic feet (Mcf) in 2004 and $6.55 per Mcf in 2003; for oil and condensate McMoRan received an average of $35.10 per barrel in 2004 compared to $34.68 per barrel in 2003.
CASH AND CASH EQUIVALENTS AND CAPITAL EXPENDITURES
At March 31, 2004, McMoRan had unrestricted cash and cash equivalents of $89.8 million. McMoRan's share of its near-term drilling costs is estimated to approximate $40-$50 million. McMoRan's capital budget may increase depending on results of additional drilling or farm-in opportunities under review. In addition, McMoRan plans to spend $6 million over the balance of the year to advance permitting and commercialization of MPEH(TM). McMoRan is considering additional financing opportunities to continue the aggressive pursuit of its business plan.
DISCONTINUED SULPHUR OPERATIONS
McMoRan's discontinued operations resulted in a net loss of $1.7 million during the first quarter of 2004, primarily reflecting retiree-related costs associated with former sulphur employees, legal expenses, and certain caretaking costs for the closed sulphur facilities. McMoRan's discontinued operations resulted in a net loss of $1.0 million in the first quarter of 2003.
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