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| 8-K - MMR 8-K 12-29-09 - MCMORAN EXPLORATION CO /DE/ | mmr8-k122909.htm |
1615 Poydras Street New Orleans, LA 70112 Financial
Contact: Media
Contact:
David P.
Joint William
L. Collier
(504)
582-4203 (504)
582-1750
McMoRan
Exploration Co. Updates
Gulf
of Mexico Exploration Activities
NEW
ORLEANS, LA, December 29, 2009 – McMoRan Exploration Co. (NYSE: MMR) today
updated its Gulf of Mexico exploration activities, including updates on
in-progress wells at the Davy Jones ultra-deep prospect, the Blueberry Hill
offset appraisal well and the Hurricane Deep sidetrack well.
Ultra-deep
Exploration Activities
The Davy Jones ultra-deep prospect
on South Marsh Island Block 230 has been drilled to 28,112 feet and has a
proposed total depth of 29,000 feet. The objective of the well is to
test Eocene (Wilcox), Paleocene and possibly the Cretaceous (Tuscaloosa)
sections below the salt weld (i.e. listric fault) on the Shelf of the Gulf of
Mexico. Interim logging operations have indicated the presence of
multiple porous sand intervals in the Yegua/Sparta and Wilcox sections of the
Eocene as determined by paleo data from the well.
Wireline
logs have indicated several hundred feet of sand, some of which may be
hydrocarbon bearing, in the Yegua/Sparta section that will require further
evaluation. Wireline logs have also obtained gamma ray and
neutron/density information in an approximate interval from 26,900 feet to
28,000 feet which indicate that the Davy Jones well has encountered multiple
Wilcox sands, one of which could be possibly hydrocarbon bearing based on
interpretations of the available density/neutron information. Because of current
hole conditions McMoRan has been unable to obtain resistivity data through
numerous logging attempts below 26,900 feet; resistivity is a critical
measurement that indicates whether the prospective sand intervals are
hydrocarbon or water bearing. McMoRan is currently conditioning the
hole and plans to drill several hundred additional feet before undertaking
further logging to determine the resistivity of the identified sands in the
Wilcox section.
The data
received to date from ultra-deep drilling on the Shelf at Davy Jones and
Blackbeard West (South Timbalier Block 168) confirm our original geologic
modeling, which correlates our objective sections on the Shelf in the Miocene
and older age sections to those productive sections seen in deepwater
discoveries by other industry participants.
McMoRan’s
interpretation indicates that the Cretaceous (Tuscaloosa) section productive
onshore in the Tuscaloosa trend north of Baton Rouge, LA (i.e. the Port Hudson,
Judge Digby, Moore-Sams fields, etc.) could extend to offshore in deep horizons
on the Shelf, which would support drilling deeper at Davy Jones and other
ultra-deep prospects controlled by McMoRan and its partners. Future
prospective wells include an appraisal well to the southwest of the initial Davy
Jones well which would allow McMoRan to test similar sections approximately
1,000 feet shallower than in the initial exploratory well.
McMoRan
is one of the largest acreage holders on the Shelf of the Gulf of Mexico and
onshore in the Gulf Coast area with rights to approximately 1 million gross
acres including 150,000 gross acres associated with the ultra-deep gas play
below the salt weld. McMoRan is currently utilizing the Rowan Mississippi jack-up rig to
drill the Davy Jones ultra-deep well and has an option on Rowan Ralph Coffman, which is the
sister rig to the Rowan Mississippi. These
two rigs would allow McMoRan to maintain an active ultra-deep drilling program
in 2010.
McMoRan
operates the Davy Jones prospect, which involves a large ultra-deep structure
encompassing four OCS lease blocks located in 20 feet of water, and will fund
25.7 percent of the exploratory costs and holds a 32.7 percent working interest
and 25.9 percent net revenue interest. Other
working
interests owners in Davy Jones include: Plains Exploration & Production
Company (NYSE: PXP) (27.7%), Energy XXI (NASDAQ: EXXI) (15.8%), Nippon Oil
Exploration USA Limited (12%), and W.A. "Tex" Moncrief, Jr. (8.8%).
Deep
Gas Exploration Activities
The
Blueberry Hill offset
appraisal well on Louisiana State Lease 340 commenced drilling on November 8,
2009 and is currently drilling below 14,500 feet towards a proposed total depth
of 21,850 feet. The offset appraisal well is located in 10 feet of
water approximately 2,000 feet southeast of the sidetrack#2 well, which was
drilled to a total depth of 21,942 feet and encountered 45 net feet of pay in
October 2009. McMoRan believes the sands seen to date in the area
could thicken in the offset well as they are expected to be structurally high to
the sands in the sidetrack #1, by-pass and sidetrack #2 wells drilled earlier in
2009. The offset well is also expected to test deeper potential in
the area. McMoRan owns a 42.9 percent working interest and a 29.7
percent net revenue interest in the Blueberry Hill well. PXP holds a
47.9 percent working interest.
The Hurricane Deep sidetrack well
on South Marsh Island Block 217 commenced drilling on November 17, 2009 and is
currently drilling below 13,400 feet towards a proposed total depth of 21,750
feet. The Hurricane Deep sidetrack is located on the southern flank
of the Flatrock structure. This up dip test well is targeting the
significant Gyro sand
encountered in the Hurricane Deep well (No. 226) and deeper potential. As
previously reported, the No. 226 well was drilled to a true
vertical depth of 20,712 feet in the first quarter of 2007 and logs indicated an
exceptionally thick upper Gyro
sand totaling 900 gross feet, the top 40 feet of which was hydrocarbon
bearing. McMoRan believes an up dip well has the potential to contain a
thicker hydrocarbon column. McMoRan owns a 25.0 percent working
interest and 17.7 percent net revenue interest in the well. PXP holds
a 30.0 percent working interest.
A
conference call with securities analysts about McMoRan’s current exploration
activities is scheduled for Wednesday, December 30, 2009 at 10:00 a.m. Eastern
Time. The conference call will be broadcast on the
Internet. Interested parties may listen to the conference call live
by accessing the webcast on “www.mcmoran.com”. A replay of the
call will be available through Friday, January 15, 2010.
McMoRan
Exploration Co. is an independent public company engaged in the exploration,
development and production of oil and natural gas offshore in the Gulf of Mexico
and onshore in the Gulf Coast area. Additional information about
McMoRan is available on its internet website “www.mcmoran.com”.
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CAUTIONARY
STATEMENT: This press release contains certain
forward-looking statements regarding various oil and gas discoveries, oil and
gas exploration, development and production activities, capital expenditures,
and anticipated and potential production and flow rates. Accuracy of
these forward-looking statements depends on assumptions about events that change
over time and is thus susceptible to periodic change based on actual experience
and new developments. McMoRan cautions readers that it assumes no
obligation to update or publicly release any revisions to the forward-looking
statements in this press release and does not intend to update these statements
more frequently than quarterly. Important factors that might cause
future results to differ from these forward-looking statements include: adverse
conditions such as high temperature and pressure that could lead to mechanical
failures or increased costs; variations in the market prices of oil and natural
gas; drilling results; unanticipated fluctuations in flow rates of producing
wells; oil and natural gas reserves expectations; the ability to satisfy future
cash obligations and environmental costs; as well as other general exploration
and development risks and hazards. These and other factors are more
fully described in McMoRan’s 2008 Annual Report on Form 10-K on file with the
Securities and Exchange Commission (SEC), as updated by our subsequent filings
with the SEC.
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