McMoRan Finds More at Flatrock #3 Drills Deeper at S. Timbalier Block 168

McMoRan Exploration Co. updated the status of drilling at the Flatrock No. 3 and South Timbalier Block 168 wells.

The Flatrock No. 3 delineation well at South Marsh Island Block 212 on the OCS 310 in 10 feet of water has been sidetracked to 18,175 feet and has logged additional pay in the Operc section. Wireline logs confirmed that the well encountered additional zones below 17,100 feet totaling 130 net feet of hydrocarbon bearing sands over a combined 250 foot gross interval. These pay zones are in addition to the previously announced zones that totaled 126 net feet of pay above 17,100 feet in the Rob-L and Operc. In aggregate, the well has encountered 256 feet of net pay. Drilling continues to a proposed total depth of 18,800 feet to evaluate deeper Operc targets.

As previously announced, McMoRan has drilled three successful wells in the Flatrock area. The initial discovery well came online in January 2008 at a gross rate of 50 MMcfe/d (~12 MMcfe/d net to McMoRan). The Flatrock No. 2 well was tested at a gross rate of 114 MMcfe/d (21.4 MMcfe/d net to McMoRan) and is expected to commence production mid-year 2008. The Flatrock No. 4 development well, which commenced on April 9, 2008, is currently drilling below 13,000 feet to a proposed total depth of 18,500 feet.

McMoRan controls approximately 150,000 gross acres in the Tiger Shoal/Mound Point area (OCS 310/Louisiana State Lease 340). McMoRan has made several discoveries in this important area, including Flatrock, Hurricane, Hurricane Deep, JB Mountain, and Mound Point. McMoRan has multiple additional exploration opportunities with significant potential on this large acreage position. McMoRan has a 25.0 percent working interest and an 18.8 percent net revenue interest in the Flatrock field. Plains Exploration & Production Company (NYSE: PXP) has a 30.0 percent working interest in the Flatrock field.

The South Timbalier Block 168 No. 1 wellbore, formerly known as the Blackbeard West No. 1 ultradeep exploratory well, has been drilled to 31,943 feet and McMoRan is preparing to evaluate the well with wireline logs. Following logging operations, McMoRan plans to deepen the well, which has been permitted to 33,000 feet. As previously announced, wireline logs have indicated that the well has encountered a potential hydrocarbon bearing zone above 30,964 feet. McMoRan operates the well and owns a 32.3 percent working interest. Other owners include PXP with a 35 percent working interest and Energy XXI (NASDAQ: EXXI) with a 20 percent working interest.