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): September 1, 1998
McMoRan Oil & Gas Co.
Delaware 0-23870 72-1266477
(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.
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The following news release was made by McMoRan Oil & Gas Co. on
September 1,1998:
New Orleans, LA, September 1, 1998 - McMoRan Oil & Gas Co.
(NASDAQ: MOXY) today announced additions to proved oil and
natural gas reserves for the first half of 1998 of 22.7 billion
cubic feet of natural gas equivalents (BCFE), bringing its
estimated proved reserves to approximately 60.3 BCFE at June 30,
1998, net of production, an increase of approximately 40 percent
from proved reserves of 43.0 BCFE at December 31, 1997. The June
30, 1998 proved reserves of 60.3 BCFE consisted of approximately
57 billion cubic feet of natural gas (BCF) and approximately 0.5
million barrels of oil, using a ratio of 6 thousand cubic feet of
natural gas (MCF) being equivalent to 1 barrel of oil based on an
approximate energy content equivalency. MOXY's reserve additions
represent an approximate 420 percent replacement of production
during the first half of 1998 which was approximately 5.4 BCFE.
MOXY also announced estimates of probable reserves of
approximately 21 BCFE. Probable reserves are less certain than
proved reserves and can only be estimated with a degree of
certainty sufficient to indicate they are more likely to be
recovered than not. The June 30, 1998 proved and probable
reserves are based on a mid-year reserve report prepared by
independent reserve engineers.
Reserve additions during the first half of 1998 were
primarily attributable to successful exploration drilling at
Brazos Block A-19, Vermilion Block 159 and West Cameron Block
617. On each of these blocks, a single successful exploration
well has been drilled which provided the data for the current
estimates of proved and probable reserves. MOXY anticipates that
it will conduct future drilling on certain of these blocks and on
certain adjacent blocks, which may add to the current estimates
of proved and probable reserves for these properties.
Using unescalated average realized prices of $2.13 per MCF
and $12.28 per barrel of oil, future net revenues before income
taxes at June 30, 1998 from proved reserves were estimated to be
$63 million and the present value of estimated future net
revenues from proved reserves using a 10 percent discount factor
(PV-10 Value) were estimated to be $47 million. The current
prices used in the PV-10 Value reflect seasonally low gas prices
and depressed oil prices at June 30, 1998. However, using
average prices for natural gas and oil futures contracts for
delivery over the next five years of $2.30 per MCF and $16.26 per
barrel of oil, applied to the June 30, 1998 proved reserves, the
PV-10 Value would have been approximately $60 million.
As previously announced, MOXY and Freeport-McMoRan Sulphur
Inc. (NSYE: FSC) have proposed plans for a business combination
of the two companies. Preliminary proxy materials have been
filed with the Securities and Exchange Commission and the
proposed transaction is subject to the approval of stockholders
at a special meeting, expected to be held in the fourth quarter
of 1998.
MOXY is an independent oil and gas company engaged in the
exploration, development and production of oil and natural gas
reserves offshore in the Gulf of Mexico and onshore in the Gulf
Coast area. The company continues to generate prospects and
evaluate farm-in opportunities utilizing its geological and
geophysical expertise through the use of 3-D seismic data and
state of the art technology.
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 Oil & Gas Co.
By: /s/ C. Donald Whitmire
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C. Donald Whitmire
Controller
(authorized signatory and
Principal Accounting Officer)
Date: September 9, 1998