McMoRan Achieves Technical Completion at Davy Jones Well

McMoRan Exploration Co. provided an update on flow testing activities at the Davy Jones No. 1 well on South Marsh Island Block 230. Technical completion has been achieved successfully and work is ongoing to establish commercial production from the well.

The perforation of the Wilcox "D" sand resulted in positive pressure build-up in the wellbore followed by a gas flare from the well. Initial samples indicated that the natural gas from the Wilcox "D" sand is high quality and contains low levels of CO2 and no H2S. Blockage from drilling fluid associated with initial drilling operations prevented McMoRan from obtaining a measurable flow rate. Attempts to perforate the Wilcox "C" sand did not clear the blockage and McMoRan has commenced operations to remove the tubing from the well, clear the residual drilling fluid, and remove the perforating guns currently set across the Wilcox "F" sand to provide access to all of the Wilcox reservoirs ("A" through "F") totaling 200 net feet.

To maximize production from the well and enable effective formation penetrations, McMoRan plans to use electric wireline casing guns that are larger than the tubing guns used to perforate the Wilcox "C" and "D" sands. The Bureau of Safety and Environmental Enforcement (BSEE) issued the final permits on Friday, April 6, 2012 to approve the current operations. McMoRan expects the operations currently under way will enable a measurable flow rate during the second quarter of 2012 followed by commercial production shortly thereafter.

James R. Moffett, Co-Chairman, President and CEO of McMoRan, said, "We are pleased to report that we have achieved a major engineering milestone in completing the first sub-salt well in the shallow waters of the Gulf of Mexico and are making continuing progress to convert our geologic success into commercial success. Results of the limited test of Wilcox "D" sand reservoir indicate that our equipment and completion technologies have met the challenge of completing high pressure and high temperature wells. We are also encouraged by the high quality initial samples of gas from the Wilcox "D" sand. Current operations are being initiated to remove the blockage of residual drilling fluid that has hampered flow from the Wilcox "D" sand and to provide access to all Wilcox sands encountered in the wellbore using powerful wireline casing guns capable of effective reservoir penetration. We look forward to the results of these activities and the establishment of commercial production from the well."