McMoRan Exploration Co. Reports Fourth-Quarter/Twe McMoRan Exploration Co. Reports Fourth-Quarter/Twelve-Month 2012 Results
HIGHLIGHTS
o On December 5, 2012, McMoRan entered into an agreement whereby Freeport-McMoRan
Copper & Gold Inc. (FCX) would acquire McMoRan for per-share consideration consisting of $14.75
in cash and 1.15 units of a royalty trust, which will hold a 5 percent overriding royalty interest in future
production from McMoRan’s existing ultra-deep exploration prospects. The transaction, which is
subject to McMoRan shareholder approval, is expected to close in the second quarter of 2013.
o McMoRan currently has two onshore ultra-deep exploration prospects in-progress:
o Lineham Creek prospect – Encountered positive results above 24,000 feet in November
2012; currently drilling below 26,500 feet to proposed total depth of 29,000 feet to evaluate
primary targets.
o Lomond North prospect in Highlander area – Currently drilling below 13,500 feet with a
proposed total depth of 30,000 feet.
o Ultra-Deep development opportunities include:
o Blackbeard West No. 2 reached total depth of 25,584 feet in January 2013. Initial
completion efforts are expected to focus on the development of laminated sands in the Middle
Miocene located at approximately 24,000 feet.
o Operations to flow test Davy Jones No. 1 are ongoing. Completion and testing of Davy
Jones No. 2 expected to commence following review of results from Davy Jones No. 1.
o Development plans for Blackbeard East and Lafitte are pending approval by the Bureau of
Safety and Environmental Enforcement (BSEE).
o Fourth-quarter 2012 production averaged 119 million cubic feet of natural gas equivalents per day
(MMcfe/d) net to McMoRan, and 137 MMcfe/d for the twelve months ended December 31, 2012.
o Operating cash flows totaled $(28.9) million for the fourth quarter of 2012, including $31.0 million in
working capital uses and $28.4 million in abandonment expenditures, and $33.7 million for the twelve
months of 2012.
o Capital expenditures totaled $89.5 million in the fourth quarter of 2012 and $505.1 million for the
twelve months of 2012.
o Cash at December 31, 2012 totaled $114.9 million.
o In January 2013 completed sale of the Laphroaig field for $80 million. After closing
adjustments, the combined cash proceeds from the Laphroaig transaction and the two transactions
completed in the fourth quarter of 2012 totaled $135.9 million.
o Year-end 2012 proved reserves of oil, natural gas and natural gas liquids totaled 206.9 billion
cubic feet of natural gas equivalents (Bcfe) based on independent reservoir engineers’ preliminary
estimates. Amounts exclude pending results from ultra-deep activities.
NEW ORLEANS, LA, January 18, 2013 – McMoRan Exploration Co. (NYSE: MMR) today reported a net loss
applicable to common stock of $1.2 million, $0.01 per share, for the fourth quarter of 2012 compared with
net income of $28.4 million, $0.16 per share, for the fourth quarter of 2011. Fourth quarter 2012 results
include $39.7 million in net gains associated with the sale of two traditional Gulf of Mexico (GOM) property
packages. For the year 2012, McMoRan reported a net loss attributable to common stock of $145.6 million,
$0.90 per share, compared with $58.8 million, $0.37 per share, for the year 2011.
James R. Moffett and Richard Adkerson, McMoRan’s Co-Chairmen, said, “The geologic
data from our drilling results on seven wells associated with the ultra-deep sub-salt trend
indicate significant resource potential on the Shelf of the Gulf of Mexico and onshore in the
Gulf Coast area. These results, combined with advances in proprietary technologies required
to develop and produce these large structures, establish a multi-year program to unlock a
significant long-term natural gas resource. Through the proposed acquisition transaction,
McMoRan shareholders will receive cash compensation for the value potential of this emerging
new trend and an ongoing participation through the distribution of royalty trust units.”
https://www.mcmoran.com/pdf/2013/011813.pdf
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