McMoRan updates Gulf of Mexico E&P

McMoRan Exploration Co. has begun exploratory drilling at its Louisiana State Lease 340 well. The well has a planned total depth of 18,700 ft and is drilling at 6,000 ft. The Mound Point Offset well is within 1 mi of an exploratory well that McMoRan drilled during 2001 and flow tested in 2002. That well flowed at various rates from 10 to 20 MMcf/d before mechanical problems required it to be shut-in and temporarily abandoned.

McMoRan Exploration Co. has begun exploratory drilling at its Louisiana State Lease 340 well. The well has a planned total depth of 18,700 ft and is drilling at 6,000 ft. The Mound Point Offset well is within 1 mi of an exploratory well that McMoRan drilled during 2001 and flow tested in 2002. That well flowed at various rates from 10 to 20 MMcf/d before mechanical problems required it to be shut-in and temporarily abandoned. Existing production facilities in the immediate area could accommodate production from these prospects.

Completion of the South Marsh Island block 223 exploratory well is progressing with initial production expected from the well in 2Q 2003. The well was drilled to 22,000 ft measured depth and evaluated with wireline logs and formation tests, which have indicated significant intervals of hydrocarbon pay. Initial production from this well is expected in 2Q 2003. Plans for a second JB Mountain well are being developed.

The South Marsh Island block 207 exploratory well was drilled to 17,874 ft measured depth. Evaluation of the drilling results determined that the well did not contain commercial quantities of hydrocarbons. As a result, the well is being plugged and abandoned. Results of the well are being reviewed to determine if future drilling in the area is warranted.

The JB Mountain, Lighthouse Point-Deep, and Mound Point deep-gas prospects are in 10 ft of water in an area where McMoRan is a participant in an exploration program that controls a 80,000-acre exploratory position, including portions of OCS lease 310 and portions of the adjoining Louisiana State Lease 340.

The program holds a 30.4% working interest in the Mound Point prospect and a 21.6% new revenue interest. The program holds a 55% working interest in the JB Mountain prospect and a 38.8% revenue interest.

McMoRan also announced that three development wells have been re-completed at Vermilion 160 AJ. These wells are producing at 9.2 MMcf/d of natural gas and 320 b/d of condesate. McMoRan's net share of production is 3.3 MMcf/d of natural gas and 115 b/d of condesate. McMoRan has a 41.8% working interest and a 35.8% net revenue interest in the Vermilion 160 field, in 100 ft of water.

Drilling began on an exploratory well at Garden Banks block 228 on Dec 22, 2002 in 800 ft water depth. The Cyprus well was drilled to 16,900 ft total measured depth. Evaluation of the drilling results determined that the well did not contain commercial hydrocarbons. As a result, the well is being plugged and abandoned.

03/03/03

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