McMoRan Exploration Co. announced that its oil and gas exploration and production subsidiary, McMoRan Oil & Gas LLC, has completed its previously announced sale of three oil and gas properties to a third party for $60 million. McMoRan used the proceeds from the sale to repay the $51.7 million outstanding under its oil and gas bank credit facility on February 22, 2002. The balance of the proceeds are being used for working capital purposes. In connection with closing of the sale, McMoRan's oil and gas bank credit facility has been terminated. McMoRan is pursuing new financing arrangements for its future oil and gas exploration and development activities on the shelf of the Gulf of Mexico, where it holds approximately 500,000 gross acres of offshore exploration leases.
The properties sold in this transaction are subject to a reversionary interest after ``payout,'' which would occur at the point at which the purchaser receives aggregate cumulative revenues from the properties of $60 million plus an agreed upon rate of return. After payout, 75 percent of the interests sold would revert to McMoRan.
The sale is effective as of January 1, 2002. Following the transaction, McMoRan estimates its average net daily production, not including the three properties sold, will approximate 27 million cubic feet of natural gas equivalent during first-quarter 2002