McMoRan's Q2 Revenues Sink to $94.1MM
McMoRan has reported a net loss applicable to common stock of $100.6 million, $1.40 per share, for the second quarter of 2009 compared
with net income applicable to common stock of $49.7 million, $0.63 per fully diluted share, for the second quarter of 2008. For the six months ended June 30, 2009, McMoRan reported a net loss of $163.9 million, $2.30 per share, compared with net income of $81.7 million, $1.09 per fully diluted share, in the 2008 period.
James R. Moffett and Richard Adkerson, McMoRan's Co-Chairmen, said, "We are continuing our focused strategy of drilling high potential exploratory wells in the shallow waters of the Gulf of Mexico. We are encouraged by the recent positive drilling results at our Blueberry Hill deep gas exploratory well and by the important data we have gained on the potentially significant ultra-deep trend. We are engaging in an active drilling program during the second half of the year. The equity financings completed during the second quarter strengthened our financial position as we pursue aggressively these opportunities. We will continue to be prudent about our capital spending programs in light of the currently weak natural gas market but remain optimistic about the potential for significant value creation through our drilling activities."
McMoRan's second-quarter 2009 oil and gas revenues totaled $94.1 million, compared to $372.3 million during the second quarter of 2008. During the second quarter of 2009, McMoRan’s sales volumes totaled 11.2 Bcf of gas; 751,500 barrels of oil and condensate and 1.3 Bcfe of plant products, compared to 17.9 Bcf of gas; 1,125,400 barrels of oil and condensate and 2.1 Bcfe of plant products in the second quarter of 2008. McMoRan’s second-quarter comparable average realizations for gas were $3.92 per thousand cubic feet (Mcf) in 2009 and $12.11 per Mcf in 2008; for oil and condensate McMoRan received an average of $58.24 per barrel in second-quarter 2009 compared to $122.99 per barrel in second-quarter 2008.
As previously reported, in June 2009 McMoRan raised $168 million in net proceeds ($176 million gross proceeds) through the sale of 15.5 million shares of common stock at $5.75 per share and $86 million of 8.00% convertible perpetual preferred stock. The preferred stock is convertible into commonstock at a price of $6.84 per share. McMoRan currently has approximately 86 million shares of common stock outstanding and approximately 111 million after assuming conversion of McMoRan's newly issued 8.00% convertible perpetual preferred stock and the outstanding 6¾% mandatory convertible preferred stock.
Cash, Liquidity And Capital Eexpenditures
At June 30, 2009, McMoRan had $225 million in cash. Total debt was $375 million at June 30, 2009, including $75 million in convertible senior notes due in 2011 with a conversion price of $16.575 per share. McMoRan currently has no borrowings outstanding on its $235 million revolving credit facility and $135 million in availability after considering $100 million in outstanding letters of credit. Capital expenditures totaled $55.2 million for the second quarter of 2009 and $84.3 million for the six-months ended June 30, 2009. Capital expenditures are expected to approximate $180 million for the year. In addition, abandonment expenditures, which include scheduled conventional and hurricane related work, are expected to approximate $80 million in 2009.
During the second quarter of 2009, McMoRan financially settled swap positions hedging 2.8 Bcf of
natural gas and 126,000 barrels of oil at average prices of $8.92 per Mcf and $71.93 per barrel,
respectively. McMoRan received $16.8 million in cash for these positions. At June 30, 2009, McMoRan had
a total of 3.7 Bcf of natural gas and 163,000 barrels of oil hedged through 2010 through open swap
positions and 4.4 Bcf of natural gas and 175,000 barrels of oil hedged through 2010 through puts.
These derivative contracts have not been designated as hedges for accounting purposes.
Accordingly, these contracts are subject to mark-to-market fair value adjustments and unrealized gains and
losses are recognized in our operating results. McMoRan’s second-quarter 2009 results included a net loss
of $3.0 million for mark-to-market accounting adjustments associated with derivative contracts based on
changes in their respective fair market values through June 30, 2009. McMoRan’s derivative contracts’ fair
value was $18.5 million at June 30, 2009.
- McMoRan Touts 'Sizable Reserves' at Sub-Salt, Ultra-Deep Trend (Feb 20)
- McMoRan Preps Davy Jones Well for Fracking Ops (Jan 31)
- McMoRan's Latest Efforts at Davy Jones Site Meet 'Limited Success' (Dec 28)