McMoRan Exploration Logs Pay in Vermilion Parish, Louisiana


Vermillion, Offshore Louisiana
(Click to Enlarge)
McMoRan Exploration says that the Long Point exploratory well on Louisiana State Lease 18090, located onshore in Vermilion Parish, Louisiana, has been drilled to 19,000 feet and has been evaluated with log-while-drilling tools and wireline logs, indicating an interval approximating 150 gross feet of hydrocarbon bearing sands, which could potentially be a significant discovery. The wireline log indicated excellent porosity. McMoRan plans to set a production liner and complete the well. Infrastructure near this onshore location in inland waters would allow production to be established quickly. The information gained from this well will be used to determine future drilling plans.

McMoRan acquired rights to 5,000 gross acres comprising the Long Point prospect from El Paso Production Company, a subsidiary of El Paso Corporation, in the second quarter of 2005 as part of a package of six deep-gas exploratory prospects covering approximately 18,000 gross acres onshore and in state waters in Vermilion Parish, Louisiana. Under the terms of the agreement, McMoRan and its private partner agreed to fund 100 percent of the drilling costs to casing point in up to six wells. At casing point of each well, El Paso can elect to participate for a 25 percent interest, and McMoRan and its private partner would own a 75 percent working interest (37.5 percent each) and an approximate 54 percent net revenue interest (approximately 27 percent each). The Long Point well commenced drilling on July 21, 2005.

McMoRan is actively engaged in exploratory activities on the following five prospects, Long Point, JB Mountain Deep at South Marsh Island Block 224, Cane Ridge at Louisiana State Lease 18055, Elizabeth at South Marsh Island Block 230 and Cabin Creek at West Cameron Block 95. McMoRan is also actively engaged in development activities at West Cameron Block 43 No. 4, King Kong No. 2 at Vermilion Blocks 16/17, and Hurricane No. 2 at South Marsh Island Block 217. McMoRan expects to commence drilling at least two additional prospects by year-end 2005 and is also actively pursuing opportunities through its exploration venture to acquire additional acreage and prospects through farm-in or other arrangements.

DRILLING SCHEDULE

----------------------------------------------------------------------
                                   Net             Proposed
                        Working  Revenue  Current   Total
                        Interest Interest  Depth    Depth   Spud Date
----------------------------------------------------------------------
Exploration In-Progress
----------------------------------------------------------------------
Louisiana State Lease
 18090                                                       July 21,
"Long Point"               37.5%    26.8%  19,000'  19,000'    2005
----------------------- -------- -------- -------- -------- ----------
South Marsh Island
 Block 224                                                   July 14,
"JB Mountain Deep"(a)      27.5%    19.4%  19,750'  23,000'    2005
----------------------- -------- -------- -------- -------- ----------
Louisiana State Lease
 18055                                                       July 29,
"Cane Ridge"               37.5%    27.5%  10,000'  16,500'    2005
----------------------- -------- -------- -------- -------- ----------
South Marsh Island
 Block 230                                                  September
"Elizabeth"(a)             15.0%    11.3%   5,100'  20,000'  16, 2005
----------------------- -------- -------- -------- -------- ----------
West Cameron Block 95                        On              October
"Cabin Creek"(a)           37.5%    31.0% Location 18,500'     2005
----------------------------------------------------------------------
Development
----------------------------------------------------------------------
West Cameron Block 43                                       April 25,
 No. 4(a)                  41.7%    32.3%  18,500'  18,500'    2005
----------------------- -------- -------- -------- -------- ----------
Vermilion Blocks 16/17                                        August
"King Kong No. 2"          40.0%    29.2%  13,000'  13,750'  12, 2005
----------------------- -------- -------- -------- -------- ----------
South Marsh Island
 Block 217                                                    August
"Hurricane No. 2"          27.5%    19.4%   7,250'  16,000'  21, 2005
----------------------------------------------------------------------
Near-Term Well(b)
----------------------------------------------------------------------
Louisiana State Lease                                        Fourth-
 18350                                                       Quarter
"Point Chevreuil"          25.0%    17.5%     n/a   17,000'    2005
----------------------- -------- -------- -------- -------- ----------
Onshore Vermilion                                            Fourth-
 Parish, LA                                                  Quarter
"Liberty Canal"            37.5%    27.7%     n/a   16,000'    2005
----------------------- -------- -------- -------- -------- ----------

(a) Depending upon applicability of the Deep Gas Royalty Relief
    eligibility criteria, the leases on which these wells are located
    could be eligible for royalty relief up to 25 Bcf under current
    Minerals Management Service guidelines. McMoRan's net revenue
    interest would increase during the royalty relief period for
    eligible leases.

(b) Timing is subject to change.

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