McMoran Unveils Davy Jones Find; Affirms Shallow-Water Projects' Safety

(Dow Jones Newswires), June 29, 2011

McMoRan confirmed that its ultra-deep drilling programs in shallow waters of the Gulf of Mexico can be pursued safely, and unveiled more finds in its Davy Jones prospect.

The company said its exploration activities have indicated the potential for large accumulations of hydrocarbons at the deeper depths.

Its shares were up 8.6% at $18 in recent premarket trading. The stock through Tuesday's close has risen 50%.

McMoran, which focuses on such "deep gas plays" has been pinning its hopes on the Davy Jones project, which the company has said has the potential to be one of the largest on the Gulf's shelf in decades.

This month, one of its wells in the Davy Jones prospect encountered 192 net feet of potential hydrocarbons. McMoRan is evaluating development options and expects to complete the well in the second quarter of next year.

The company late this year also plans to complete and flow test another well, which it previously reported logged 200 net feet of hydrocarbon pay. McMoRan holds a 60.4% working interest and a 47.9% net revenue interest in Davy Jones.

Other working interest owners include Energy XXI (Bermuda) with a 15.8% interest, Nippon Oil Exploration USA Limited at 12%, W.A. "Tex" Moncrief, Jr. at 8.8% and a private investor with 3%.

McMoRan late last year acquired Plains Exploration & Production Co.'s shallow-water operations in the Gulf plus other assets in a deal initially valued at $818.1 million.

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