McMoRan EXPLORATION CO. REPORTS SECOND-QUARTER AND SIX-MONTHS 2002 RESULTS.Business Editors NEW ORLEANS--(BUSINESS WIRE)--July 25, 2002 McMoRan Exploration Co. (NYSE NYSE See: New York Stock Exchange :MMR MMR measles-mumps-rubella (vaccine); see measles, mumps, and rubella vaccine live, under vaccine. MMR abbr. measles, mumps, rubella vaccine ): HIGHLIGHTS
-- Second-quarter 2002 net loss of $2.5 million ($0.16 per share) including a $5.0 million gain ($0.31 per share) on resolution of a reclamation obligation and a $2.8 million loss ($0.17 per share) on sale of sulphur transportation and terminaling assets; prior year second-quarter net loss was $19.0 million ($1.20 per share) including a $4.6 million charge to decrease its sulphur inventory to its then estimated net realizable value and $5.6 million of costs associated with unproductive exploratory wells. Six-month earnings of $21.5 million ($1.32 per share); prior year net loss was $63.8 million ($4.02 per share).
-- Entered into an oil and gas exploration program with a large independent industry participant covering four of McMoRan's shallow-water, high-potential, deep-gas prospects. McMoRan retains a potentially significant reversionary interest in any discoveries made on these prospects. Exploratory drilling is in progress on three of the four prospects:
-- The Hornung prospect (on Eugene Island Block 108 in 32 feet of water) commenced drilling on April 30, 2002 and has a planned total vertical depth (TVD) of 21,800 feet.
-- The JB Mountain prospect (on South Marsh Island Block 223 in 10 feet of water) commenced drilling on June 10, 2002 and has a TVD of 18,500 feet.
-- The Lighthouse Point-Deep prospect (on South Marsh Island Block 207 in 10 feet of water) commenced drilling on June 26, 2002 and has a TVD of 18,000 feet.
-- Completed $35 million public offering of 1.4 million shares of 5% convertible preferred stock.
-- Received $58 million in gross proceeds primarily from sale of assets comprising McMoRan's sulphur transportation and terminaling business; eliminated sulphur unit debt and terminated credit facility.
-- At June 30, 2002, McMoRan had $27 million in cash and no debt compared with $104 million of net debt at the beginning of 2002.
-- Completed reclamation work at the Caminada mine, which resulted in a $5.0 million non-cash gain; commencing dismantlement activities at Main Pass 299 sulphur facilities.
-- Entered into a $10 million revolving bank credit facility agreement providing up to $4.5 million of borrowing availability for working capital and other corporate purposes. No amount is currently drawn.
Second Quarter Six Months
----------------------------------------------
2002 2001 2002 2001
---- ---- ---- ----
(In thousands, except per share amounts)
Revenues $11,400 $ 16,093 $24,986 $ 31,891
Operating income
(loss) (1,163) (14,260) 23,373 (50,279)
Income (loss) from
continuing operations (1,149) (14,287) 22,882 (50,208)
Loss from discontinued
sulphur operations (1,324) (4,730) (1,316) (13,597)
Net income (loss)
applicable to
common stock (2,522) (19,017) 21,517 (63,805)
Diluted net income
(loss) per share from
continuing operations $ (0.08) $ (0.90) $ 1.40 $ (3.16)
Diluted net loss per
share from discontinued
sulphur operations (0.08) (0.30) (0.08) (0.86)
Diluted net income
(loss) per share $ (0.16) $ (1.20) $ 1.32 $ (4.02)
Diluted average shares
outstanding 15,977 15,861 16,349 15,856
McMoRan Exploration Co. (NYSE:MMR) today reported a net loss of $2.5 million, $0.16 per share, for the second quarter of 2002 compared with a net loss of $19.0 million, $1.20 per share, for the second quarter of 2001. McMoRan's net loss from its continuing oil and gas operations totaled $1.1 million during the second quarter of 2002, which includes a $0.8 million gain from the disposition Act of disposing; transferring to the care or possession of another. The parting with, alienation of, or giving up of property. The final settlement of a matter and, with reference to decisions announced by a court, a judge's ruling is commonly referred to as disposition, regardless of of its interest in the West Cameron Cam·er·on , Mount A peak, 4,342.6 m (14,238 ft) high, in the Rocky Mountains of central Colorado. Block 616 field, and reflects reduced exploration expenses as a result of a recent farm-out transaction (see below). During the second quarter of 2001, McMoRan's oil and gas operations resulted in a net loss of $14.3 million, which primarily reflected exploration costs, including $5.6 million of costs associated with unproductive exploratory wells. McMoRan's discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: sulphur Sulphur, city, United States Sulphur, city (1990 pop. 20,125), Calcasieu parish, SW La.; inc. 1914. It is a trade center for an area producing natural gas, oil, and timber as well as sorghum, soybeans, cattle, and crawfish. operations reflected a net loss of $1.3 million during the second quarter of 2002, which included a $5.0 million gain associated with the substantial completion of the reclamation Reclamation A claim for the right to return or the right to demand the return of a security that has been previously accepted as a result of bad delivery or other irregularities in the delivery and settlement process. work at the Caminada mine site and a $2.8 million loss from the sale of the sulphur transportation and terminaling assets. During the second quarter of 2001, McMoRan's sulphur operations reflected a loss of $4.7 million, including a $4.6 million charge to decrease its sulphur inventory to its then estimated net realizable value Net realizable value (NRV) is a commonly used method of evaluating an asset's worth in the field of inventory accounting. NRV is part of GAAP rules that apply to valuing inventory, so as to not overstate or understate the value of inventory goods. . For the six months ended June June: see month. 30, 2002, McMoRan's net income totaled $21.5 million, $1.32 per share, compared to a net loss of $63.8 million, $4.02 per share, for the comparable six-month period in 2001. McMoRan's income from its continuing oil and gas operations totaled $22.9 million, which includes a $29.2 million gain associated with the sale of three of its oil and gas properties in first-quarter 2002. During the six months ended June 30, 2001, McMoRan's oil and gas operations resulted in a net loss of $50.2 million, which included $36.7 million of exploratory drilling and related costs charged to expense and $11.2 million of geological ge·ol·o·gy n. pl. ge·ol·o·gies 1. The scientific study of the origin, history, and structure of the earth. 2. The structure of a specific region of the earth's crust. 3. A book on geology. and geophysical ge·o·phys·ics n. (used with a sing. verb) The physics of the earth and its environment, including the physics of fields such as meteorology, oceanography, and seismology. and other exploratory costs. McMoRan's discontinued sulphur operations resulted in a $1.3 million loss for the six months ended June 30, 2002 compared with a $13.6 million loss for the comparable period in 2001. The 2001 sulphur results include $10.0 million of charges to reduce the sulphur inventory to its then estimated net realizable values. James James, person in the Bible James, in the Gospel of St. Luke, kinsman of St. Jude. The original does not specify the relationship. James, rivers, United States James. R. Moffett Moffett may refer to:
Canadian hockey player. A right wing for the Montreal Canadiens (1942-1960), he led his team to eight Stanley Cup championships and was the first player to score 50 goals in a C. Adkerson, Co-Chairmen of McMoRan said, "The first half of 2002 was very important for McMoRan as we substantially completed our financial plan outlined in our most recent Annual Report. During this six month period, we completed asset sales totaling $118 million and a $35 million equity offering. We have also arranged for the reclamation of offshore sulphur platforms through the previously reported OSFI OSFI Office of the Superintendent of Financial Institutions (Canadian) OSFI Open Standards Fabric Initiative OSFI Open System File Interface transaction and the funding of four of our near-term near-term adj. Of, for, or involving a short period of time in the near future. oil and gas prospects. These actions have positioned McMoRan as a debt-free company focused on oil and gas exploration opportunities on our exploration rights to over 20 prospects on over 400,000 gross acres on the shelf of the Gulf of Mexico Noun 1. Gulf of Mexico - an arm of the Atlantic to the south of the United States and to the east of Mexico Golfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east . McMoRan's net unrisked potential exceeds 1.0 Tcfe for its interest on eight near-term prospects. Drilling of three of our high potential prospects is currently in progress." EXPLORATION PROGRAM: As previously announced in May 2002, McMoRan entered into an exploration program with a large industry participant Participant A party of a funding. It usually refers to the lowest rank or smallest level of funding. through a farm-out transaction covering four of McMoRan's shallow-water, high-potential Adj. 1. high-potential - operating on or powered by a high voltage; "a high-voltage generator" high-voltage high-tension - subjected to or capable of operating under relatively high voltage; "high-tension wire" , deep-gas prospects on 100,000 acres in the Gulf of Mexico. Under the program, the industry participant will fund all exploratory drilling and development costs and will own 100 percent of the program's interests in the four prospects until aggregate production to the program totals 100 billion cubic feet of gas equivalent (Bcfe). After aggregate production of 100 Bcfe, ownership of 50 percent of the program's interests would revert re·vert v. 1. To return to a former condition, practice, subject, or belief. 2. To undergo genetic reversion. back to McMoRan. The four prospects in the exploration program are "Hornung Hornung may refer to:
 ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. State Lease 340 (10-foot water
depth). Drilling commenced at the Hornung prospect in April 2002 and at
JB Mountain and Lighthouse Point-Deep in June 2002.The Hornung prospect, which is located in an area where the exploration program controls 20,000 acres with a 30-foot water depth, has a planned TVD TVD Tuvalu Dollar (ISO currency code) TVD True Vertical Depth (oil drilling) TVD Total-Variation-Diminishing TVD Total Vertical Depth (oil and gas) (total vertical depth) of 21,800 feet. The Hornung prospect is in the immediate area of McMoRan's discovery at Eugene Island Block 97 (Thunderbolt prospect) where three successful wells were drilled, the deepest to a TVD of 16,400 feet. The exploration program holds a 40.0-percent working interest and a 29.5-percent net revenue interest in the Hornung prospect. Ocean Energy, Inc. (NYSE: OEI OEI Organización de Estados Iberoamericanos (Spanish) OEI Office of Environmental Information OEI One Engine Inoperative OEI Outside Equity Interest OEI Organizational Environment for Integration ), the operator, holds a 32.8-percent working interest; Magnum Hunter Hun·ter , John 1728-1793. British surgeon who founded pathological anatomy in England. hunter a horse used for hunting. Resources, Inc. (NYSE: MHR MHR (US, Australia) n abbr (= Member of the House of Representatives) → Abgeordnete(r) f(m) des Repräsentantenhauses ) holds a 2.2-percent working interest; and another participant holds the remaining 25.0-percent working interest. The JB Mountain prospect, which is located in an area where the exploration program controls approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 6,500 acres with a 10-foot water depth, has a planned TVD of 18,500 feet. The exploration program holds a 100.0-percent working interest and a 38.8-percent net revenue interest in the JB Mountain prospect. The Lighthouse Point - Deep prospect, which is located in an area where the exploration program controls approximately 27,000 gross acres with a 10-foot water depth, has a planned TVD of 18,000 feet. The exploration program holds a 90.0-percent working interest and a 38.3-percent net revenue interest in the Lighthouse Point - Deep prospect. REVENUES / PRODUCTION: McMoRan's second-quarter 2002 oil and gas revenues totaled $11.4 million, including $5.4 million from Main Pass 299, compared to $16.1 million, including $6.6 million from Main Pass 299, during the second quarter of 2001. McMoRan's second-quarter 2002 production averaged approximately 18 million cubic feet of gas equivalent per day (Mmcfe/d), excluding oil production from Main Pass. Average net production rates for the remainder of 2002 are expected to approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. 17 Mmcfe/d. Sales volumes of approximately 1.5 Bcf of natural gas and 0.3 million barrels of oil represented a decrease of 16 percent for gas and 17 percent for oil from volumes sold during the second quarter of 2001. The decrease in gas sales volumes can primarily be attributed to the shut-in shut-in n. A person confined indoors by illness or disability. adj. 1. Confined to a home or hospital, as by illness. 2. Disposed to avoid social contact; excessively withdrawn or introverted. and subsequent disposition of the West Cameron Block 616 field and the decrease in oil sales volumes primarily reflects a decrease in Main Pass oil sales volumes that totaled approximately 237,200 barrels during the second quarter of 2002 compared to 282,300 barrels during the comparable period in 2001. Revenues were also adversely affected by lower average realizations for gas, which totaled $3.38 per thousand cubic feet (Mcf) in the second quarter of 2002 compared with $4.81 per Mcf in the second quarter of 2001. During the second quarter of 2002, McMoRan's average realizations from oil totaled $26.54 per barrel barrel: see English units of measurement. , excluding Main Pass, compared to $26.60 per barrel during the second quarter of 2001. McMoRan's average realization (specification) realization - A UML semantic relationship between a classifier that specifies a contract and another classifier that guarantees to carry it out. [Handout by Mr. David Gillibrand]. for oil sold from Main Pass totaled $22.81 per barrel during the second quarter of 2002 compared to $23.24 per barrel during the second quarter of 2001. EQUITY OFFERING: On June 21, 2002, McMoRan completed a $35 million public offering of 1.4 million shares of 5% convertible preferred stock Convertible Preferred Stock Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Also known as "convertible preferred shares". . A portion of the net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of $33.8 million from the offering, after issuance costs and expenses, was used to repay the remaining amounts outstanding and terminate Terminate (terminat.exe) was a shareware modem terminal and host program for MS-DOS and compatible operating systems developed from the early to the late 1990s by the Dane Bo Bendtsen. The last release (5. the sulphur credit facility (see "Sale of Sulphur Transportation and Terminaling Assets" below). The remaining amount ($27 million cash balance at June 30, 2002) will be used to fund McMoRan working capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. and for other corporate purposes. The 5% convertible preferred stock provides for a quarterly cash dividend of $0.3125 per share ($1.25 per share annually). Each preferred share is convertible at the option of the holder into 5.1975 shares of common stock, equivalent to $4.81 per share of McMoRan's common stock, a 20 percent premium over the MMR closing price on June 17, 2002. McMoRan may not call the preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. until June 30, 2007 and the shares have a mandatory Peremptory; obligatory; required; that which must be subscribed to or obeyed. Mandatory statutes are those that require, as opposed to permit, a particular course of action. redemption date Redemption date The date on which a bond matures or is redeemed. redemption date The date on which a debt security is scheduled to be redeemed by the issuer. The redemption date is the scheduled maturity date or, if applicable, a call date. of June 30, 2012. REVOLVING CREDIT Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. FACILITY: In July July: see month. 2002, McMoRan Oil & Gas LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control (MOXY Moxy may refer to:
A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of McMoRan, entered into a one-year adj. 1. completing its life cycle within a year. Adj. 1. one-year - completing its life cycle within a year; "a border of annual flowering plants" annual phytology, botany - the branch of biology that studies plants , $10 million-revolving bank credit facility. Amounts available for borrowing under this facility are subject to MOXY's borrowing base, which currently provides MOXY up to $4.5 million of borrowing capacity under the facility. The amount available under the facility will decrease by $0.5 million per month beginning in August 2002. The variable-rate loan Variable-rate loan Loan made at an interest rate that fluctuates depending on a base interest rate, such as the prime rate or LIBOR. is secured by all of MOXY's oil and gas producing properties and is guaranteed by McMoRan. MOXY has made no borrowings under this credit facility. SALE OF SULPHUR TRANSPORTATION AND TERMINALING ASSETS: On June 14, 2002, FSC FSC See: Foreign Sales Corporation , McMoRan's sulphur unit, sold substantially all the assets used in its sulphur transportation and terminaling business to Gulf Sulphur Services Ltd., LLP LLP - Lower Layer Protocol , a new sulphur joint venture owned equally by IMC (Internet Mail Consortium, Santa Cruz, CA, www.imc.org) An industry trade association founded in 1996 by Paul Hoffman and Dave Crocker that promotes Internet e-mail standards and features. Global Inc. (IMC) and Savage Savage may refer to:
v. ter·mi·nat·ed, ter·mi·nat·ing, ter·mi·nates v.tr. 1. To bring to an end or halt: upon completion of the transactions. The transactions provided FSC with $58.0 million in gross proceeds, which it used to fund its remaining sulphur working capital requirements, transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). and to repay a substantial portion of its borrowings under the sulphur credit facility. On June 21, 2002, following the completion of the McMoRan's $35 million public equity offering (see "Equity Offering" above), FSC repaid the remaining amounts outstanding under the sulphur credit facility, which was then terminated. FSC recorded a $2.8 million loss in its second-quarter 2002 discontinued sulphur operations results as a result of these transactions. SULPHUR RECLAMATION ACTIVITIES: In the first quarter of 2002, FSC and Offshore Specialty Fabricators Inc. (OSFI) entered into contractual agreements for the dismantlement dis·man·tle tr.v. dis·man·tled, dis·man·tling, dis·man·tles 1. a. To take apart; disassemble; tear down. b. and removal (reclamation) of the Main Pass and Caminada sulphur mines and related facilities located offshore in the Gulf of Mexico. In late March 2002, OSFI commenced its reclamation activities at the Caminada mine and its operations at the site are now substantially complete. FSC's discontinued sulphur results during the second quarter of 2002 include a $5.0 million gain as a result of the substantial resolution of its Caminada sulphur reclamation obligations and the related conveyance The transfer of ownership or interest in real property from one person to another by a document, such as a deed, lease, or mortgage. conveyance n. of assets to OSFI, as further discussed below. OSFI will commence its initial reclamation work at Main Pass within 30 days following the completion of final site clearance CLEARANCE, com. law. The name of a certificate given by the collector of a port, in which is stated the master or commander (naming him) of a ship or vessel named and described, bound for a port, named, and having on board goods described, has entered and cleared his ship or vessel work at the Caminada mine, which McMoRan expects will occur in the third quarter of 2002. As payment of its share of these reclamation costs, FSC has conveyed certain assets to OSFI including a supply service boat, FSC's dock facilities in Venice, Louisiana Venice, Louisiana is a town in Plaquemines Parish, Louisiana. It is 75 miles south of New Orleans on the west bank of the Mississippi River at . , and certain assets previously salvaged by FSC during a prior reclamation phase at Main Pass. In addition to these conveyed assets, OSFI will be entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: to FSC's economic interest in the Main Pass oil operations and alternative use project as further discussed below. McMoRan and OSFI are in discussions with interested parties regarding the sale of the Main Pass oil facilities. These proceeds will be used to compensate OSFI for its services. In addition, McMoRan has agreed to share with OSFI its economic interest in future productive uses of the sulphur caverns and platforms. Because of the proximity PROXIMITY. Kindred between two persons. Dig. 38, 16, 8. of Main Pass 299 in relation to the activities ongoing in the Gulf of Mexico and the value of the platforms and caverns, a number of parties have expressed interest in acquiring the property or participating in a venture to pursue future uses of the facility. We continue to make progress with Minerals Management Service on the permitting of these alternative uses and based on their feedback, we believe we will obtain the necessary permits for these activities. SULPHUR OPERATIONS: As a result of McMoRan's exit from the sulphur business, its sulphur results have been presented as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. for all periods presented in the accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. financial statements. During the second quarter of 2002, the sulphur operations of Freeport-McMoRan Freeport-McMoRan Copper & Gold Inc., (NYSE: FCX) often called simply Freeport, is the world's lowest-cost copper producer and one of the world's largest producers of gold. Sulphur LLC (FSC), a wholly owned subsidiary of McMoRan, resulted in a net loss of $1.3 million compared to a net loss of $4.7 million during the second quarter of 2001. FSC sulphur revenues totaled $14.6 million during the second quarter of 2002 compared to $15.4 million during the comparable period in 2001. 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 on·shore adj. 1. Moving or directed toward the shore: an onshore wind. 2. Located on the shore: an onshore beacon; an onshore patrol. adv. in the Gulf Coast area. Additional information about McMoRan is available on its Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the web site "mcmoran.com" CAUTIONARY STATEMENT. This press release contains certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. regarding various oil and gas discoveries, oil and gas exploration, development and production activities, anticipated production rates and revenues. Important factors that might cause future results to differ from these projections include: 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; general exploration and development risks and hazards
Hazards is an independent, union-friendly magazine based in Sheffield, England, which has won major international awards. ; and mine closure costs. Such factors and others are more fully described in more detail in McMoRan's 2001 Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. filed with the Securities and Exchange Commission. We also use certain phrases and terms, such as "unrisked potential" in terms of cubic feet of natural gas to indicate the relative size of the exploration prospects. The SEC's guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. prohibit pro·hib·it tr.v. pro·hib·it·ed, pro·hib·it·ing, pro·hib·its 1. To forbid by authority: Smoking is prohibited in most theaters. See Synonyms at forbid. 2. us from including any estimates of recoverable quantities other than proved oil and gas reserves that comply with the SEC's definitions in filing with the SEC. Estimates of proved reserves proved reserves The quantity of minerals expected to be recoverable under current economic and operating conditions. The amount of proved reserves is important in valuing the stock of a company with significant holdings in natural resources. meeting the SEC's requirements are included in McMoRan's Annual Report on Form 10-K for the year ended December December: see month. 31, 2001. Investors are urged to consider closely the disclosures in McMoRan's Form 10-K. A copy of this release is available on our web site at www.mcmoran.com. A conference call with securities analysts about the second-quarter 2002 results is scheduled for today at 9:00 AM Eastern Time. The conference call will be broadcast on the Internet. Interested parties may listen to the conference call live by accessing the call on "www.mcmoran.com" or the "www.ccbn.com". A replay of the call will be available through Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , August 9, 2002.
McMoRan EXPLORATION CO.
STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------------------------------
2002 2001 2002 2001
---------- ---------- ---------- ----------
(In Thousands, Except Per Share Amounts)
Revenues $ 11,400 $ 16,093 $ 24,986 $ 31,891
Costs and expenses:
Production and
delivery costs 6,272 9,452 12,690 19,236
Depreciation and
amortization 3,892 4,064 10,597 7,155
Exploration expenses 1,150 12,473(a) 4,553 47,899(a)
General and
administrative
expenses 2,135 4,364 3,857 7,880
Gain on disposition
of oil and gas
properties (886)(b) - (30,084)(b) -
--------- ---------- ---------- -----------
Total costs and
expenses 12,563 30,353 1,613 82,170
--------- ---------- ---------- -----------
Operating income
(loss) (1,163) (14,260) 23,373 (50,279)
Interest expense (22) (89) (543) (357)
Other income, net 36 62 59 428
Provision for income
taxes - - (7) -
--------- ---------- ---------- -----------
Income (loss) from
continuing operations (1,149) (14,287) 22,882 (50,208)
Loss from discontinued
sulphur operations (1,324) (4,730) (1,316) (13,597)
--------- ---------- ---------- -----------
Net income (loss) (2,473) (19,017) 21,566 (63,805)
Preferred dividends (49) - (49) -
--------- ---------- ---------- -----------
Net income (loss)
applicable to common
stock $ (2,522) $ (19,017) $ 21,517 $ (63,805)
========= ========== ========== ===========
Net income (loss) per
share of common stock:
Basic net income (loss)
from continuing
operations $(0.08) $(0.90) $1.43 $(3.16)
Basic net loss from
discontinued sulphur
operations (0.08) (0.30) (0.08) (0.86)
------ ------- ------ -------
Basic net income (loss)
per share of common
stock $(0.16) $(1.20) $1.35 $(4.02)
====== ====== ===== ======
Diluted net income
(loss) from continuing
operations $(0.08) $(0.90) $1.40 $(3.16)
Diluted net loss from
discontinued sulphur
operations (0.08) (0.30) (0.08) (0.86)
------ ------- ------ -------
Diluted net income
(loss) per share of
common stock $(0.16) $(1.20) $1.32 $(4.02)
====== ====== ===== ======
Average common shares
outstanding:
Basic 15,977 15,861 15,946 15,856
====== ====== ====== ======
Diluted 15,977 15,861 16,349(c) 15,856
====== ====== ====== ======
(a) Includes nonproductive exploratory drilling costs of $5.6 million
during the second quarter of 2001 and $36.7 million for the six months
ended June 30, 2001 compared to $1.5 million and $2.6 million of
nonproductive exploratory well drilling costs during the comparable
2002 periods. Also includes geological and geophysical (G&G) costs,
including purchases of seismic data, totaling $5.4 million during the
second quarter of 2001 and $9.4 million for the six months ended June
30, 2001 compared with G&G costs of $0.1 million and $1.7 million
during the comparable periods in 2002.
(b) Includes an $0.8 million gain from the disposition of McMoRan's
interests in the West Cameron Block 616 field in June 2002. Included
in the six months ended June 30, 2002 is a $29.2 million gain on three
oil and gas properties McMoRan sold in February 2002.
(c) Assumes the conversion of 1.4 million shares of 5% convertible
preferred stock into 7.3 million shares of MMR common stock from
issuance (June 21, 2002) to June 30, 2002. Effect of the assumed
conversion equals approximately 0.4 million shares of MMR's common
stock for the six months ended June 30, 2002.
McMoRan EXPLORATION CO.
OPERATING DATA (Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- ----------------------
2002 2001 2002 2001
---------- ---------- ---------- ---------
Sales volumes:
Gas (thousand cubic
feet, or Mcf) 1,449,200 1,716,900 4,223,400(a) 3,372,500
Oil, excluding Main
Pass (barrels) 31,600 42,000 90,100(b) 75,500
Oil from Main Pass
(barrels) 237,200 282,300 527,700 425,600
Plant products
(equivalent barrels) (c) 7,500 - 15,400 -
Average realizations:
Gas (per Mcf) $3.38 $4.81 $2.76 $5.84
Oil, excluding Main
Pass (per barrel) 26.54 26.60 22.83 27.57
Oil from Main Pass
(per barrel) 22.81 23.24 20.19 22.93
(a) Sales volumes include 856,000 Mcf of gas associated with oil and
gas properties sold in February 2002.
(b) Sales volumes include 18,500 barrels of oil associated with the
oil and gas properties sold in February 2002.
(c) Results include approximately $0.2 million and $0.5 million of
revenues associated with plant products (ethane, propane, butane,
etc.) during the second quarter of 2002 and six months ending June 30,
2002, respectively.
McMoRan EXPLORATION CO.
CONDENSED BALANCE SHEETS (Unaudited)
June 30, December 31,
2002 2001
---------------- ------------------
(In Thousands)
ASSETS
Cash and cash equivalents,
continuing operations $ 27,201 $ -
Cash and cash equivalents from
discontinued sulphur operations,
entire amount restricted at
June 30, 2002 9,055 500
Accounts receivable 5,773 10,892
Inventories 598 690
Prepaid expenses 1,049 270
Current assets from discontinued
sulphur operations, excluding
cash 2,021 12,477
---------------- ------------------
Total current assets 45,697 24,829
Property, plant and equipment, net 60,185(a) 98,519
Sulphur business assets, net 355(b) 54,607
Other assets, including restricted
cash of $3.5 million 4,078(c) 11,731
---------------- ------------------
Total assets $ 110,315 $ 189,686
================ ==================
LIABILITIES AND STOCKHOLDERS' DEFICIT
Accounts payable $ 10,642 $ 20,862
Accrued liabilities 8,224 15,192
Borrowings outstanding on sulphur
credit facility - 55,000
Current portion of oil and gas
credit facility - 2,000
Current portion of accrued oil and
gas reclamation costs 702 398
Current liabilities from
discontinued sulphur operations 15,810 15,753
Other 764 305
---------------- ------------------
Total current liabilities 36,142 109,510
Accrued sulphur reclamation costs 48,706(c) 63,876
Accrued oil and gas reclamation
costs 17,524 18,278
Long-term borrowings on oil and
gas credit facility - 47,657
Contractual postretirement
obligation 21,344 21,122
Other long-term liabilities 18,518 17,015
Mandatorily redeemable convertible
preferred stock 33,777(d) -
Stockholders' deficit (65,696) (87,772)
---------------- ------------------
Total liabilities and
stockholders' deficit $ 110,315 $ 189,686
================ ==================
(a) Decrease primarily reflects the sale of oil and gas properties in
February 2002.
(b) Reflects the sale of McMoRan's sulphur transportation and
terminaling assets to Gulf Sulphur Services Ltd., LLP and the
conveyance of certain assets to Offshore Specialty Fabricators Inc.
(OSFI) as compensation for their reclamation work at the Caminada
sulphur facilities.
(c) Reflects amounts reduced in connection with OFSI substantially
completing their sulphur reclamation work at the Caminada site.
McMoRan recorded a $5.0 million gain during the second quarter of 2002
upon the substantial resolution of this reclamation obligation. The
gain is reflected within the caption "loss from discontinued sulphur
operations" in the accompanying statements of operations.
(d) Amount represents the proceeds from the sale of 1.4 million shares
of 5% convertible preferred stock, par value $25 per share, net of
issuance costs of $1.2 million.
McMoRan EXPLORATION CO.
STATEMENTS OF CASH FLOWS (Unaudited)
Six Months Ended
June 30,
-----------------------------
2002 2001
------------- -------------
(In Thousands)
Cash flow from operating activities:
Net income (loss) $ 21,517 $ (63,805)
Adjustments to reconcile net loss to
net cash provided by (used in)
operating activities:
Loss from discontinued sulphur
operations 1,316 13,597
Depreciation and amortization 10,597 7,155
Exploration drilling and related
expenditures 2,568 36,680
Gain on disposition of oil and gas
properties (30,084) -
Change in assets and liabilities:
Reclamation and mine shutdown
expenditures (174) -
Other (686) 902
(Increase) decrease in working
capital:
Accounts receivable 3,947 (1,621)
Accounts payable and accrued
liabilities (8,661) 2,142
Inventories and prepaid expenses (686) (477)
------------- -------------
Net cash used in continuing
operations (346) (5,427)
Net cash provided by (used in)
discontinued sulphur operations 1,979 (15,243)
------------- -------------
Net cash provided by (used in)
operating activities 1,633 (20,670)
------------- -------------
Cash flow from investing activities:
Exploration, development and other
capital expenditures (13,695) (64,498)
Proceeds from disposition of oil and
gas properties 60,000 1,291
------------- -------------
Net cash provided by (used in)
continuing operations 46,305 (63,207)
Net cash provided by discontinued
sulphur operations 58,576(a) 3,243
------------- -------------
Net cash provided by (used in)
investing activities 104,881 (59,964)
------------- -------------
Cash flow from financing activities:
Net proceeds from equity offering 33,777 -
Repayment of borrowings on oil and
gas credit facility (49,657) -
Net borrowings on oil and gas credit
facility - 23,000
Other 122 328
------------- -------------
Net cash (used in) provided by
continuing operations (15,758) 23,328
Net cash (used in) provided by
discontinued sulphur operations (55,000)(b) 12,000
------------- -------------
Net cash (used in) provided by
financing activities (70,758) 35,328
------------- -------------
Net increase (decrease) in cash and
cash equivalents 35,756 (45,306)
Restricted cash of discontinued
sulphur operations (9,055) -
------------- -------------
Net increase (decrease) in
unrestricted cash and cash
equivalents 26,701 (45,306)
Cash and cash equivalents at
beginning of year 500 48,906
------------- -------------
Cash and cash equivalents at end
of period $ 27,201 $ 3,600
============= =============
(a) Includes the $58.0 million of gross proceeds received from the
sale of the sulphur transportation and terminaling assets and the
settlement of certain pending litigation matters between McMoRan, IMC
Global and the companies' respective subsidiaries. McMoRan recorded a
$2.8 million loss in connection with these transactions during the
second quarter of 2002, which is reflected within the caption "loss
from discontinued sulphur operations" in the accompanying statements
of operations.
(b) Reflects the repayment and termination of the sulphur credit
facility in June 2002, following the sulphur asset sale and the
completion of the equity offering.
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