McMoRan Sees Positive Results from Hurricane Prospect

McMoRan reports a potentially significant discovery at the Hurricane Upthrown prospect which is located on South Marsh Island Block 217. Log-while-drilling tools have indicated that the well encountered two hydrocarbon bearing sands in the Rob-L section of the middle Miocene with a total gross interval of approximately 205 feet. The well has been drilled to 14,170 feet where casing will be set before drilling continues toward the planned total depth of 19,500 feet. If successful, the well could utilize the Tiger Shoal facilities being used to produce the Mound Point/JB Mountain wells. McMoRan operates the Hurricane Upthrown prospect and would earn a 27.5 percent working interest and a 19.4 percent net revenue interest. McMoRan has rights to approximately 7,700 gross acres in the Hurricane prospect area which is located offshore Louisiana in 10 feet of water.

The King of the Hill well at High Island Block 131 is currently drilling below 16,200 feet towards a total depth of 17,300 feet. McMoRan holds a 25.0 percent working interest and a 19.6 percent net revenue interest in the King of the Hill well.

The Blueberry Hill well at Louisiana State Lease 340 in the JB Mountain/Mound Point area is currently drilling below 9,000 feet towards a total depth of 22,000 feet. McMoRan operates Blueberry Hill, located on State Lease 340, 7 miles east of the JB Mountain discovery and 7 miles south southeast of the Mound Point Offset discovery. McMoRan holds a 35.3 percent working interest and a 24.2 percent net revenue interest in the Blueberry Hill well.

The West Cameron Block 43 No. 3 exploratory well is at 9,815 feet where casing is being set before drilling towards a total proposed depth of 17,500 feet. McMoRan holds a 23.4 percent working interest and an 18.0 percent net revenue interest in the West Cameron Block 43 well.

The Gandalf prospect at Mustang Island Blocks 829/830 commenced drilling on November 9, 2004. The well is currently drilling below 8,700 feet towards a total depth of 12,000 feet. McMoRan has a 20.0 percent working interest and a 16.0 percent net revenue interest in the well.

The Caracara prospect at Vermilion Blocks 227/228, which commenced drilling on November 14, 2004, is currently drilling below 8,100 feet. The well has a proposed total depth of 18,000 feet. McMoRan has a 33.3 percent working interest and a 27.8 percent net revenue interest in the well.

Each of the wells mentioned above, with the exception of Blueberry Hill and Gandalf, are eligible for Deep Gas Royalty Relief under current Mineral Management Service guidelines. Depending upon applicability of the royalty relief eligibility criteria, each of the leases on which these wells are located could be eligible for royalty relief on 10 to 25 billion cubic feet (Bcf). Each 25 Bcf of royalty relief would equate to approximately $21 million in gross savings per well at gas prices approximating $5.00 per mcf. McMoRan expects that royalty relief would be available on additional deep shelf prospects being planned for drilling.

During 2004, McMoRan has participated in three additional discoveries including Deep Tern at Eugene Island Block 193, Minuteman at Eugene Island Block 213 and Dawson Deep at Garden Banks Block 625. Deep Tern and Minuteman are expected to be producing by year-end 2004 using McMoRan's facilities at Eugene Island Block 193 and 215, respectively. Estimated timing of first production at Dawson Deep is pending the final development plan. McMoRan owns a 48.6 percent working interest and a 37.2 percent net revenue interest in depths greater than 17,123 feet and a 26.7 percent working interest and a 20.6 percent net revenue interest at depths less than 17,123 feet in the Deep Tern well. McMoRan owns a 33.3 percent working interest and a 24.3 percent net revenue interest in the Minuteman well. McMoRan owns a 30.0 percent working interest and a 24.0 percent net revenue interest in the Dawson Deep well.

McMoRan has six exploration wells in progress and expects to commence drilling at least three additional wells in the first quarter of 2005 which include Delmonico in Louisiana state waters near the Lake Sand Field Area, Bayou Sale onshore Louisiana in St. Mary's parish and JB Mountain Deep at South Marsh Island Block 224. McMoRan currently has rights to approximately 250,000 gross acres and continues to identify prospects to be drilled on its lease acreage position. McMoRan is also actively pursuing opportunities through its new exploration venture to acquire additional acreage and prospects through farm-in or other arrangements.

Our near-term exploration activities include the following wells:

                                  Net           Proposed
                       Working  Revenue  Water    Total
                       Interest Interest Depth    Depth     Spud Date
                       -------- -------- ------ --------- ------------
In-Progress Exploration Wells
South Marsh Island
 Block 217 "Hurricane                                     September 7,
 Upthrown"                27.5%    19.4%   10'   19,500'         2004
---------------------- -------- -------- ------ --------- ------------
High Island Block 131                                        August 9,
"King of the Hill"        25.0%    19.6%   40'   17,300'         2004
---------------------- -------- -------- ------ --------- ------------
Louisiana State Lease                                      November 2,
 340 "Blueberry Hill"     35.3%    24.2%   10'   22,000'         2004
---------------------- -------- -------- ------ --------- ------------
                                                           November 6,
West Cameron Block 43     23.4%    18.0%   30'   17,500'         2004
---------------------- -------- -------- ------ --------- ------------
Mustang Island Blocks                                      November 9,
 829/830 "Gandalf"        20.0%    16.0%  176'   12,000'         2004
---------------------- -------- -------- ------ --------- ------------
Vermilion Blocks                                          November 14,
 227/228 "Caracara"       33.3%    27.8%  115'   18,000'         2004
---------------------- -------- -------- ------ --------- ------------

Near-Term Wells
Lake Sand Field Area                                        Quarter
 "Delmonico"              25.0%    18.8%   10'   19,000'      2005
---------------------- -------- -------- ------ --------- ------------
                                          less               First-
St. Mary's Field Area                     than              Quarter
"Bayou Sale"              25.0%    18.5%   10'   19,000'      2005
---------------------- -------- -------- ------ --------- ------------
South Marsh Island                                           First-
 Block 224                                                  Quarter
"JB Mountain Deep"        27.5%    19.4%   10'   23,000'      2005
---------------------- -------- -------- ------ --------- ------------
East Cameron Block 342                                        Half
"Falcon"                  25.0%    18.8%  260'   19,000'      2005
---------------------- -------- -------- ------ --------- ------------

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