McMoRan Announces Discovery at Thunderbolt
McMoRan Exploration Co. announced that the Eugene Island Block 97 No. 3 exploratory well (Thunderbolt prospect) has encountered 5 sand intervals with approximately 250 net feet of highly resistive sands indicating potential hydrocarbons by log-while-drilling (LWD) log within a 725-foot section between 14,025 and 14,750 feet true vertical depth (TVD). The well continues to drill with a planned total measured depth of 17,500 feet (15,900 TVD). Because of the shallow water depth and the close proximity to existing production facilities, the Thunderbolt No. 3 can be brought on production quickly.
McMoRan holds a 38.0 percent working interest and a 27.4 percent net revenue interest in the Eugene Island 97 No.3 well. Ocean Energy, Inc., the operator, holds a 35.0 percent working interest; Samedan Oil Corporation, a wholly owned subsidiary of Noble Affiliates, Inc. holds a 25.0 percent working interest; and an individual investor holds the remaining 2.0 percent working interest in the prospect. The Eugene Island 97 discovery is located in 27 feet of water, approximately 25 miles offshore Louisiana in the Gulf of Mexico. McMoRan controls 20,000 acres in the area.
McMoRan has also identified a related prospect at a greater depth in the immediate area of the Eugene Island Block 97 (Hornung-deep prospect). The Hornung deep prospect has gross unrisked potential of approximately 1.6 trillion cubic feet of natural gas and is expected to be drilled to approximately 21,000 feet during the first half of 2002.
McMoRan also announced that initial flow tests of its West Cameron 624 No. B-3ST (Barite prospect) has indicated an expected flow rate of 5 to 8 million cubic feet of natural gas per day (mmcfe/d). The flow rates under the tests were limited to approximately 5 mmcfe/d with approximately 1,600 pounds per square inch pressure because of constraints of the testing equipment. McMoRan expects the Barite prospect to commence production in November 2001. McMoRan has a 95 percent working interest and a 66.8 percent net revenue interest in the Barite well, located in 365 feet of water approximately 130 miles offshore Louisiana.
McMoRan also announced that its LA State Lease 340 No. 3 (Lighthouse Point) exploratory well did not encounter commercial hydrocarbons and the well which was drilled to approximately 11,700 feet total measured depth will be plugged and abandoned. McMoRan's share of drilling and related costs for the Lighthouse Point well were approximately $2.4 million. McMoRan's costs incurred through September 30, 2001 totaling approximately $1.6 million, $(0.10) per share, will be reflected in McMoRan's third quarter 2001 earnings included in its financial statements to be filed prior to November 15, 2001, with the Securities and Exchange Commission on Form 10-Q. As a result, McMoRan's previously reported net loss for the third quarter will be adjusted to $8.4 million, $0.53 per share.