McMoRan updates GoM drilling activites

A production test at Flatrock No. 4 indicated a gross flow rate of approximately 109 MMcf/d of natural gas and 2,500 b/d of condensate, according to McMoRan Exploration.

Offshore staff

NEW ORLEANS -- A production test at Flatrock No. 4 indicated a gross flow rate of approximately 109 MMcf/d of natural gas and 2,500 b/d of condensate, according to McMoRan Exploration. McMoRan and its partners will use the results of the production test to determine the optimal flow rate for the well, which is expected to begin production by year-end using the Tiger Shoal facilities in the immediate area.

Since the initial discovery in July 2007, McMoRan has drilled five successful wells at Flatrock on South Marsh Island block 212. The first three wells are currently producing at an aggregate gross rate of approximately 170 MMcfe/d. Wireline logs indicated 100 net ft (30 m) of pay (based on new data) in the Rob-L section of the Flatrock No. 5 development well in October 2008.

The No. 5 well is drilling ahead at 15,800 ft (4,816 m) towards a proposed total depth of 18,400 ft (5,608 m) and is targeting deeper Rob-L and Operc sands. The No. 6 delineation well, located on South Marsh Island block 217 is expected to begin drilling in this quarter. The well will target the deeper Operc and possibly penetrate the upper Gyro section of the Flatrock/Hurricane Deep structure, according to the company.

McMoRan also plans to complete and test the South Timbalier block 168 No. 1 ultra-deep exploratory well (formerly known as Blackbeard West No. 1). The well was drilled to a total depth of 32,997 ft (10,057 m) in October 2008 and logs indicated four potential hydrocarbon bearing zones below 30,067 ft (9,164 m) that require further evaluation, McMoRan says.

The well will be temporarily abandoned while completion equipment is secured for high pressure testing. McMoRan will continue to review additional drilling opportunities on the flanks of the structure and on other acreage it holds in the ultra-deep trend. The South Timbalier block 168 well is located on the top of the targeted structure. Seismic data on the prospect indicates the potential for significantly thicker sands on the flanks of the structure as confirmed in recent major deepwater discoveries. Based on information obtained to date in the South Timbalier Block 168 well, the company believes additional drilling on the flanks could result in significant reserve potential.

10/23/2008

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