McMoRan Exploration Co. (MMR) today reported on the status of its operations following Hurricane Isaac, which impacted Gulf of Mexico operations prior to making landfall on the coast of Louisiana on August 28, 2012. Prior to the storm, McMoRan was engaged in recompletion activities at Davy Jones No. 1 on South Marsh Island Block 230 and in exploratory activities at Blackbeard West No. 2 on Ship Shoal Block 188 and Lineham Creek onshore in Cameron Parish, Louisiana. These rigs, which were secured and evacuated for the storm, sustained no significant damage. Rig crews have been re-mobilized following the evacuation and operations have resumed.

Following the storm, McMoRan also completed initial assessments of the McMoRan-operated producing properties in the Gulf of Mexico and received reports from third-party operators on certain properties, including Flatrock at South Marsh Island Block 212. There was no significant damage to McMoRan’s producing properties resulting from Hurricane Isaac and efforts are under way to re-establish production.

At Davy Jones No. 1, McMoRan has made progress in operations required to test the well and is working expeditiously to conclude testing operations on the first shallow water, sub-salt ultra-deep well on the Gulf of Mexico Shelf. As previously reported McMoRan successfully perforated 165 feet of Wilcox sands in July 2012. Prior to removing the blow out preventer and installing the production tree, McMoRan performed a routine pressure test on the seal system, which indicated that the seal assembly needed to be replaced. Prior to evacuating for the storm, McMoRan successfully suppressed flow in the well, removed the production tubing and cleaned out the wellbore to approximately 27,500 feet. Remaining steps required before flow testing include cleaning out the bottom 900 feet of the hole, installing the seal assembly, packer and production tubing in the hole, removing the blowout preventer and installing the production tree. Operations have resumed following Hurricane Isaac to complete the remaining steps and McMoRan currently expects to conduct a measurable flow test during the month of September 2012. Timing estimates may vary depending on operating conditions in the well, weather and other factors.

As previously reported, McMoRan has drilled two successful ultra-deep sub-salt wells in the Davy Jones field. The Davy Jones No. 1 well logged 200 net feet of pay in multiple Wilcox sands, which were all full to base. The Davy Jones offset appraisal well (Davy Jones No. 2), which is located two and a half miles southwest of Davy Jones No. 1, confirmed 120 net feet of pay in multiple Wilcox sands, indicating continuity across the major structural features of the Davy Jones prospect, and also encountered 192 net feet of potential hydrocarbons in the Tuscaloosa and Lower Cretaceous carbonate sections.

Davy Jones involves a large ultra-deep structure encompassing four OCS lease blocks (20,000 acres). McMoRan is the operator and holds a 63.4 percent working interest and a 50.2 percent net revenue interest in Davy Jones. Other working interest owners in Davy Jones include: Energy XXI (EXXI) (15.8%), JX Nippon Oil Exploration (Gulf) Limited (12%) and Moncrief Offshore LLC (8.8%).

Offshore