McMoRan Reels-In 3Q Revenues of $282.7MM
McMoRan Exploration Co. reported a net loss applicable to common stock of $6.1 million, $0.10 per share, for the third quarter of 2008 compared with a net loss applicable to common stock of $52.2 million, $1.50 per share, for the third quarter of 2007. For the nine months ended September 30, 2008, McMoRan reported net income of $75.6 million, $1.14 per fully diluted share, compared with a net loss of $73.6 million, $2.40 per share, in the 2007 period.
Third-quarter 2008 results from continuing operations totaled $6.1 million, including $152.6 million, $2.37 per share, of charges associated with damage to certain properties from Hurricane Ike (see Production and Development Activities section), and a gain of $82.3 million, $1.28 per share, for unrealized mark-to-market charges on McMoRan's open oil and gas derivative contracts (see Derivative Contracts section). During the third quarter of 2007, McMoRan's net loss from continuing operations totaled $51.0 million, including $37.1 million of exploration expense.
Results for the nine months of 2008 from continuing operations totaled income of $98.2 million, including a loss of $2.5 million, $0.03 per share, for unrealized mark-to-market charges on McMoRan's open oil and gas derivative contracts. Results for the nine months of 2007 from continuing operations totaled a net loss of $72.1 million, including $52.2 million of exploration expense.
Third-quarter 2008 oil and gas revenues totaled $282.7 million, compared to $131.0 million during the third quarter of 2007.
During the third quarter of 2008, McMoRan's sales volumes totaled 13.5 Bcf of gas, 811,900 barrels of oil and condensate and 2.3 Bcfe of plant products, compared to 12.6 Bcf of gas, 671,300 barrels of oil and condensate and 0.3 Bcfe of plant products in the third quarter of 2007.
McMoRan's third-quarter comparable average realizations for gas were $10.67 per thousand cubic feet (Mcf) in 2008 and $6.17 per Mcf in 2007; for oil and condensate McMoRan received an average of $124.05 per barrel in third-quarter 2008 compared to $75.08 per barrel in third-quarter 2007.
Following the decline of natural gas prices during the third quarter of 2008, McMoRan's third quarter results reflect its current estimate that annual average 2008 natural gas prices will be less than $10.34 per MMbtu, the Minerals Management Service's established price threshold under which eligible deep gas production is available for royalty relief in 2008. Third-quarter 2008 results also include an increase to revenues of $9.4 million associated with the royalty relief for the first six months of 2008.
James R. Moffett and Richard C. Adkerson, Co-Chairmen of McMoRan, said, "With the important steps taken to reduce debt over the last year, McMoRan is well positioned to pursue its strategy of drilling high potential deep and ultra-deep prospects in the shallow waters of the Gulf of Mexico. We are encouraged by the results of our exploration program. Production from existing properties, which will increase as we restore production following the curtailment from Hurricane Ike, is providing significant cash flows that will enable us to continue an active drilling program to build asset values for shareholders."
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