McMoRan Successful at Mound Point #2 Well

McMoRan Exploration Co. announced that its Louisiana State Lease 340 (Mound Point) No. 2 exploratory well was perforated between 18,558 and 18,600 feet measured depth and flowed at various rates from 10 million cubic feet of natural gas per day (mmcf/d) to 20 mmcf/d. The well was initially flowing free of water, however, the cement that isolates the hydrocarbon-bearing sands apparently failed and salt water from sands above the perforated zone quickly encroached on the well. The flow test confirms that the 50-foot interval that had been logged as hydrocarbon bearing has excellent porosity and should be capable of achieving high flow rates. The well has been shut in and there will be an attempt to re-cement and retest the well. The well was drilled by Parker Drilling's inland barge rig, PD 76-B.

James R. Moffett, Co-Chairman of McMoRan, said, "This well is significant because it validates our exploration concept for the Mound Point area where we predicted that deep gas-productive Miocene sands underlie shallow production in the Mound Point area, which is one of the largest geologic structures in the shallow waters offshore Louisiana and has produced approximately 3 trillion cubic feet of natural gas from sands above 12,000 feet. Immediately below these shallow sands, the deeper Miocene sands known as the Robulus L and Operculinoides/Gyroidina, have been sparsely drilled. McMoRan currently has exploration rights in 60,000 acres in the Mound Point area with the opportunity to earn rights in an additional 20,000 acres in an adjacent prospect area. Mr. Moffett continued, "In addition to the 50-foot interval at 18,558 feet which has no indicated water level and has tested 10 to 20 mmcf/d, the well also encountered a laminated sand section in an interval from 16,890 to 17,275 feet, which, from log calculations, could also contain hydrocarbons. In addition to the 50-foot tested interval and the laminated sand section, the State Lease 340 No. 2 well encountered numerous well-developed thick, non-hydrocarbon bearing Miocene sands from 17,400 to 18,700 feet. These sands may exist in separate structural envelopes in the Mound Point and the adjacent Tiger Shoal/Lighthouse Point areas and could be hydrocarbon bearing in those areas, which have produced over 6 trillion cubic feet of gas from shallower sands above 12,000 feet.

As previously announced, the Mound Point No. 2 well reached total depth of 18,704 feet in August of 2001 and logged a gross 50-foot sand interval beginning at 18,558 measured depth which, by wireline log analysis, was interpreted to be a potential hydrocarbon bearing accumulation with no indicated water level.

McMoRan has a 30.4% interest; ChevronTexaco has a 43.0% interest; Samedan has a 25% percent interest; and an individual investor owns the remaining interest.