McMoRan Expects Production to Average 220 MMcfe/d in Q3
McMoRan's second-quarter 2009 production averaged 187 MMcfe/d net to McMoRan, compared with 294 MMcfe/d in the second quarter of 2008. Production in the second quarter exceeded publicly reported estimates of 180 MMcfe/d but was lower than the first quarter average of 198 MMcfe/day because of scheduled maintenance activities at the Flatrock field.
Production is expected to average approximately 220 MMcfe/d in the third quarter of 2009 and 210 MMcfe/d for the year. Current annual estimates are lower than the previously announced estimate of 215 MMcfe/d because of longer than anticipated delays in the startup of third party downstream production facilities and pipeline availability following shut-ins for hurricane repairs and the timing of certain planned recompletions. McMoRan continues to work to restore production shut-in as a result of the September 2008 hurricanes in the Gulf of Mexico. An estimated 30 MMcfe/d of McMoRan's production continues to be shut-in because of pipeline restrictions.
McMoRan's production rates are dependent on the timing of restoring downstream pipelines and facilities damaged by the September 2008 hurricanes, the timing of planned recompletions and production performance. Following the Flatrock discovery in OCS 310 on South Marsh Island Block 212 in July 2007, McMoRan has drilled five additional successful wells in the field. In May 2009, the operator completed a planned facility expansion at the Tiger Shoal production facility and production from the Flatrock Nos. 5 and 6 wells commenced in July 2009 and June 2009, respectively. The field is currently producing at a gross rate of approximately 300 MMcfe/d (55 MMcfe/d net to McMoRan). McMoRan has a 25.0 percent working interest in Flatrock and Plains Exploration & Production Company holds a 30.0 percent working interest.
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