SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 31, 2001
McMoRan Exploration Co.
Delaware 001-07791 72-1424200
State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation or Number)
organization)
1615 Poydras Street
New Orleans, Louisiana 70112
Registrant's telephone number, including area code: (504) 582-4000
Item 5. Other Events and Regulation FD Disclosures
McMoRan Exploration Co. updates its recent development and
exploration activities:
Development of the Eugene Island Block 97 (Thunderbolt) No.
2 exploratory well is nearing completion with initial production
expected from the well by mid-June 2001, approximately two months
ahead of our initial expectations. The initial gross flow rate
at Thunderbolt No. 2 is expected to be approximately 20 million
cubic feet of natural gas per day (Mmcf/d). We have an
approximate 38.0 percent working interest and 27.4 percent net
revenue interest in the Thunderbolt prospect, which is located in
27 feet of water approximately 25 miles offshore Louisiana.
The development of Eugene Island Block 193 (North
Tern), Ship Shoal Block 296 (Raptor) and Vermilion Blocks
195/196/197 (Lombardi) are all proceeding on schedule, with
initial production expected from North Tern by late June 2001,
Raptor in July 2001 and Lombardi later in the third quarter of
2001. Initial gross flow rates for these new discoveries are
expected to be approximately 60 Mmcf/d at North Tern, 40 Mmcf/d
at Raptor and 20 Mmcf/d for Lombardi. Our working interest in
the North Tern Deep prospect, discovered in late-December 2000
and located in approximately 90 feet of water approximately 50
miles offshore Louisiana, currently totals approximately 42.2
percent and our net revenue interest currently totals 33.4
percent until payout, at which time our working interest will
increase to 50.1 percent and our net revenue interest will
increase to approximately 39.7 percent. We hold a 61.8 percent
working interest and a 43.5 percent net revenue interest in the
Raptor prospect, which was discovered in June 2000 and is
located in 260 feet of water approximately 62 miles offshore
Louisiana. We have a 47.5 percent working interest and a 34.2
percent net revenue interest in the Lombardi prospect, which
was discovered in August of 2000 and is located in 115 feet of
water approximately 50 miles offshore Louisiana. Development
of our Main Pass Blocks 86/97 (Shiner) discovery, which is
operated by a third party, is in progress and production is
expected to commence in the second half of 2001 with an initial
gross rate approximately 30 Mmcf/d. We have a 71.3 percent
working interest and a 51.3 percent net revenue interest in the
Shiner prospect located in 70 feet of water approximately 45
miles offshore Louisiana.
With the addition of the new discoveries referred to
above, we estimate that our net daily production will reach
approximately 100 Mmcfe/d during the third quarter of 2001.
Average production for the third and fourth quarters is
estimated to approximate 75 Mmcfe/d and 100 Mmcfe/d,
respectively. In addition, our net daily oil production from the
Main Pass 299 field is estimated to approximate 2,500 barrels
per day for the remainder of 2001.
In February 2001, drilling commenced on the Mound Point No.
2 exploratory well under a day-rate contract. The well is
currently drilling below 15,450 feet and has a planned total
depth of 18,500 feet. The Mound Point prospect is situated on
part of 62,000 acres previously held by Texaco and is located in
less than 10 feet of water. Existing production facilities
located in fields in the area could accommodate production from
this prospect. We have rights to earn an approximate 30.4
percent working interest and a 22.8 percent net revenue interest
in the unit for the No. 2 well.
Drilling commenced at our Vioska Knoll Block 863 (Margarita-
North) No. 1 exploratory well on May 9, 2001. The well reached
its total planned depth of 5,505 feet on May 19, 2001 and was
logged and evaluated. While log results indicated the presence
of hydrocarbons, the reserves found were determined to be non-
commercial. As a result, the well was plugged and abandoned.
McMoRan will charge its share of the drilling costs associated
with the No. 1 well, approximately $2.0 million, to exploration
expense in the second quarter of 2001. The drilling of the No. 1
well has resulted in the lease term being extended by three years
to August 31, 2004. McMoRan has a 47.5 percent working interest
and a 36.2 percent net revenue interest in Vioska Knoll Block
863, which is located in 1,155 feet of water approximately 42
miles offshore Louisiana. A second prospect on the block is
currently being evaluated.
As previously reported, we will continue to be very active
evaluating and drilling exploration projects for the remainder of
2001. We plan to commence drilling at West Cameron Block 624
(Barite) and Louisiana SL 340 (Lighthouse-shallow) during the
third quarter of 2001 and Eugene Island Block 108 (Hornung),
which is south of and adjacent to the Thunderbolt prospect,
during the second half of 2001. Additional prospects will be
added to our near-term exploration plans as we continue to
evaluate our 650,000-acre Gulf of Mexico lease position.
SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
McMoRan Exploration Co.
By: /s/ C. Donald Whitmire Jr.
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C. Donald Whitmire, Jr.
Vice President & Controller -
Financial Reporting
(authorized signatory and
Principal Accounting Officer)
Date: May 31, 2001