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): January 28, 2002
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. today announced that its oil and gas
exploration and development subsidiary, McMoRan Oil & Gas LLC,
has signed a definitive agreement to sell three of its oil and
gas properties to a third party for $60 million. McMoRan will
use the proceeds from this transaction to repay outstanding
borrowings under its oil and gas bank credit facility, which
totaled $50.7 million as of January 25, 2002, and for other
general corporate purposes. In connection with the transaction
closing, expected in February 2002, McMoRan Oil & Gas LLC will
terminate its existing bank credit facility and is pursuing new
financing arrangements.
Under terms of the transaction, McMoRan will assign to the
third party its 47.5 percent working interest (WI) and 34.2
percent net revenue interest (NRI) in Vermilion Block 196
(Lombardi), its 71.3 percent WI and 51.3 percent NRI in Main Pass
Blocks 86/97 (Shiner) and 80 percent of its 61.8 percent WI and
43.5 percent NRI in Ship Shoal Block 296 (Raptor). McMoRan will
retain its interests in exploratory prospects lying 100 feet
below the stratigraphic equivalent of the deepest currently
producing interval at both Lombardi and Raptor. The properties
are being sold subject to a reversionary interest after "payout,"
which would occur at the point at which the purchaser receives
aggregate cumulative revenues from the properties of $60 million
plus an agreed upon rate of return. After payout, 75 percent of
the interests sold would revert to McMoRan.
The transaction will be effective January 1, 2002.
Following the transaction, McMoRan estimates its average net
daily production not attributed to the properties sold will
approximate 30 million cubic feet of natural gas equivalent
during the first quarter of 2002. In addition, McMoRan
estimates its average net daily production to approximate 3,000
barrels of oil from Main Pass 299.
McMoRan will continue its active deep gas exploration program in
the shallow waters on the shelf of the Gulf of Mexico, where it
holds approximately 500,000 gross acres of offshore exploration
leases.
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: January 29, 2002