McMoRan's 3Q Earnings Down $52.2 Million
McMoRan Exploration (NYSE: MMR) reported a net loss of $52.2 million, $1.50 per share, for the third quarter of 2007 compared with a net loss of $19.0 million, $0.67 per share, for the third quarter of 2006. McMoRan’s third-quarter 2007 financial and operating results include the acquired Newfield properties beginning on the August 6, 2007 close date. The results of the acquired properties from the July 1, 2007 effective date through the closing date are reflected as a purchase price adjustment on McMoRan’s balance sheet.
McMoRan's net loss from continuing operations for the third quarter of 2007 totaled $51.0 million, including (1) $37.1 million in exploration expense (including $12.5 million for the acquisition of seismic data for the acquired Newfield acreage and $20.4 million for nonproductive exploratory well costs primarily associated with the Cas well at South Timbalier Block 98), (2) an impairment charge of $13.6 million to write off the remaining net book value of the Cane Ridge field, (3) a gain of $10.7 million for noncash mark-to-market accounting adjustments associated with McMoRan’s derivative contracts and (4) $2.3 million of start-up costs associated with Main Pass Energy Hub™ (MPEH™). McMoRan’s net loss from its continuing operations for the third quarter of 2006 totaled $16.1 million, which included $23.4 million of exploration expenses and $3.2 million of start-up costs associated with MPEH™.
James R. Moffett and Richard C. Adkerson, McMoRan’s Co-Chairmen, said: "We are pleased to have completed the acquisition of the Newfield Gulf of Mexico properties during the quarter, which has significantly expanded our scale and footprint in our geographic area of focus. The significant production, reserves and leasehold acreage acquired complements our deep gas exploration program. The positive results from our Flatrock discovery have important implications for our future drilling plans in this area. We are enthusiastic about the results to date and will aggressively pursue future operations in this highly prospective area."
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