McMoRan OIL & GAS CO. ANNOUNCES RESERVE ADDITIONS AS OF JUNE 30, 1998.NEW ORLEANS--(BUSINESS WIRE)--Sept. 1, 1998--McMoRan Oil & Gas Co. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : MOXY) today announced additions to proved oil and natural gas reserves for the first half of 1998 of 22.7 billion cubic feet of natural gas equivalents (BCFE BCFE Boundary Committee for England BCFE Ballyfermot College of Further Education (Dublin, Ireland) BCFE Board Certified Forensic Examiner Bcfe Billions of Cubic Feet Equivalent (Per Day; Gas Exploration) ), bringing its estimated 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. to approximately 60.3 BCFE at June 30, 1998, net of production, an increase of approximately 40 percent from proved reserves of 43.0 BCFE at December 31, 1997. The June 30, 1998 proved reserves of 60.3 BCFE consisted of approximately 57 billion cubic feet of natural gas (BCF BCF Billion Cubic Feet BCF Bioconcentration Factor BCF British Chess Federation BCF British Coatings Federation BCF Breast Cancer Fund BCF Bank Credit Facility BCF Bulked Continuous Filament BCF British Cycling Federation BCF Boeing Converted Freighter ) and approximately 0.5 million barrels of oil, using a ratio of 6 thousand cubic feet of natural gas (MCF) being equivalent to 1 barrel of oil based on an approximate energy content equivalency equivalency the combining power of an electrolyte. See also equivalent. . MOXY's reserve additions represent an approximate 420 percent replacement of production during the first half of 1998 which was approximately 5.4 BCFE. MOXY also announced estimates of probable reserves of approximately 21 BCFE. Probable reserves are less certain than proved reserves and can only be estimated with a degree of certainty sufficient to indicate they are more likely to be recovered than not. The June 30, 1998 proved and probable reserves are based on a mid-year reserve report prepared by independent reserve engineers. Reserve additions during the first half of 1998 were primarily attributable to successful exploration drilling at Brazos Block A-19, Vermilion vermilion, vivid red pigment of durable quality. It is a chemical compound of mercury and sulfur and is known as red sulfide of mercury; it was formerly obtained by grinding pure cinnabar but is now commonly prepared synthetically. Block 159 and West Cameron Block 617. On each of these blocks, a single successful exploration well has been drilled which provided the data for the current estimates of proved and probable reserves. MOXY anticipates that it will conduct future drilling on certain of these blocks and on certain adjacent blocks, which may add to the current estimates of proved and probable reserves for these properties. Using unescalated average realized prices of $2.13 per MCF and $12.28 per barrel of oil, future net revenues before income taxes at June 30, 1998 from proved reserves were estimated to be $63 million and the present value of estimated future net revenues from proved reserves using a 10 percent discount factor (PV-10 Value) were estimated to be $47 million. The current prices used in the PV-10 Value reflect seasonally low gas prices and depressed oil prices at June 30, 1998. However, using average prices for natural gas and oil futures contracts Futures Contract An exchange traded agreement to buy or sell a particular type and grade of commodity for delivery at an agreed upon place and time in the future. Futures contracts are transferable between parties. for delivery over the next five years of $2.30 per MCF and $16.26 per barrel of oil, applied to the June 30, 1998 proved reserves, the PV-10 Value would have been approximately $60 million. As previously announced, MOXY and Freeport-McMoRan Sulphur Inc. (NSYE:FSC FSC See: Foreign Sales Corporation ) have proposed plans for a business combination of the two companies. Preliminary proxy materials Proxy Materials Documents regulated by the Securities & Exchange Commission in which a public company outlines its methods and procedures. These documents are used to inform shareholders and solicit votes for corporate decisions, such as the election of directors and other have been filed with the Securities and Exchange Commission and the proposed transaction is subject to the approval of stockholders at a special meeting, expected to be held in the fourth quarter of 1998. MOXY is an independent oil and gas company engaged in the exploration, development and production of oil and natural gas reserves offshore in 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 and onshore in the Gulf Coast area. The company continues to generate prospects and evaluate farm-in opportunities utilizing its geological and geophysical expertise through the use of 3-D seismic data and state of the art technology. A copy of this release is available by calling 1-800-469-1256 or on our web site http://www.moxy.com.
CONTACT: McMoRan Oil & Gas Co., New Orleans
Financial: Chris D. Sammons, 504/582-4474
or
Craig E. Saporito, 504/582-4476
or
Media: Garland Robinette, 504/582-1627
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