The venture will be called "McMoRan-Palace Joint Venture" and McMoRan and Palace will share revenues and costs equally. The funds will be spent as needed over a multi-year period on McMoRan's existing inventory of high potential "Deep Shelf" prospects and on new prospects as they are identified or acquired. McMoRan and Palace have been jointly conducting exploration activities in the Gulf of Mexico since December 2003. The venture has drilled one noncommercial well and is currently participating in the drilling of six other wells in the Gulf of Mexico, including Dawson Deep at Garden Banks 625, Minuteman at Eugene Island Blocks 212/213 and Deep Tern at Eugene Island 193 which appear successful, with the three remaining wells drilling toward objective horizons. The venture plans a continuous acquisition and drilling effort and plans to commence drilling at least 10-12 additional wells during the next six months, and hopes to accelerate these efforts as new opportunities arise.
James R. Moffett and Richard C. Adkerson, Co-Chairmen of McMoRan said: "We are very pleased to have expanded our venture with Palace into a true partnership. We are encouraged by the potential for large accumulations of hydrocarbons in the Deep Miocene in the Gulf of Mexico shelf area based upon our success in the JB Mountain and Mound Point areas and our drilling results in 2004. This expanded venture together with our experience in pursuing the Deep Miocene trend and Palace's long history of drilling successes position us to aggressively pursue these and other high potential opportunities."
Richard D. Siegal, Chairman of Palace Exploration said: "Palace is delighted to be a partner with McMoRan, a company that we consider to be the single preeminent 'Deep Shelf' oil and gas explorationist. The Joint Venture and its decisions will be driven by pure economics and monies will be spent as needed, so as to most effectively maximize the economics of each prospect, without regard to fiscal year or other non economic considerations. Currently, and it appears in the future, there is and will continue to be an unquenched thirst for increased oil and gas production in the United States. It is a goal of this joint venture to become a major supplier of these products to the United States."
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