McMoRan Makes Ultra-Deep Discovery at Davy Jones

McMoRan has made a discovery on its Davy Jones ultra-deep prospect located on South Marsh Island Block 230 in approximately 20 feet of water. Drilled by the Rowan Mississippi jackup, the well reached a measured depth of 28,263 feet and has been logged with pipe-conveyed wireline logs to 28,134 feet.

The wireline log results indicated a total of 135 net feet of hydrocarbon bearing sands in four zones in the Wilcox section of the Eocene/Paleocene. All of the zones were full to base with two of the zones containing a combined 90 net feet. The Eocene/Paleocene (Wilcox) suite of sands logged below 27,300 feet appears to be of exceptional quality. Flow testing will be required to confirm the ultimate hydrocarbon flow rates from the four separate zones. The resistivity log obtained on January 10th was the last data needed to confirm hydrocarbons in South Marsh Island Block 230.

McMoRan's Co-Chairman, James R. Moffett, said, "Davy Jones log results confirm our geologic model and indicate that the previously identified sands in the Wilcox section on this large ultra-deep structure encompassing four OCS lease blocks (20,000 acres) provides significant additional development potential which, upon confirmation development drilling, could make Davy Jones one of the largest discoveries on the Shelf of the Gulf of Mexico in decades. The geologic results from this well are important and are redefining the subsurface geologic landscape below 20,000 feet on the Shelf of the Gulf of Mexico. The results from this well will be incorporated into our models as we continue to define the potential of this promising new exploration frontier."

McMoRan plans to deepen the well to 29,000 feet to test additional objectives.

McMoRan is one of the largest acreage holders on the Shelf of the Gulf of Mexico and onshore in the Gulf Coast area with rights to approximately one million gross acres including 150,000 gross acres associated with the ultra-deep gas play below the salt weld. Prospects on this acreage have multi-Tcfe gross unrisked potentials and target objective sections on the Shelf in the Miocene and older age sections that have been correlated to those productive sections seen in deepwater discoveries by other industry participants.

McMoRan operates the Davy Jones prospect and is funding 25.7 percent of the exploratory costs and holds a 32.7 percent working interest and 25.9 percent net revenue interest. Other working interests owners in Davy Jones include: Plains Exploration & Production Company (NYSE: PXP - News) (27.7%), Energy XXI (NASDAQ: EXXI - News) (15.8%), Nippon Oil Exploration USA Limited (12%), W.A. "Tex" Moncrief, Jr. (8.8%) and a private investor (3%).