SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 4, 2000
McMoRan Exploration Co.
Delaware 001-07791 72-1424200
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation or Number)
organization)
1615 Poydras Street
New Orleans, Louisiana 70112
Registrant's telephone number, including area code: (504) 582-4000
Item 5. Other Events.
McMoRan Exploration Co. today announced the following information
regarding the settlement of an insurance claim associated with
the loss at Brazos Block A-19:
We have reached an agreement in principle with our insurance
underwriters to settle our business interruption claim caused by
the shut-in and loss of the Brazos A-19 JC#1 well. We expect to
receive our $23.3 million share of the settlement within the next
several weeks. We expect to record the settlement as a gain in
the fourth quarter of 2000.
As previously reported, we sold our interest in the Brazos A-19
field earlier this year for $66.5 million, which along with this
insurance claim settlement, brings the total that we have
realized in 2000 from this property to approximately $90 million.
The Brazos A-19 well was damaged in November 1999 during its
early production phase, after producing approximately 84 million
cubic feet of natural gas per day for approximately one month.
Attempts to repair the well were unsuccessful, and subsequently
the well was plugged and abandoned. We held an approximate 33.3
percent working interest in the Brazos A-19 field at the time of
the shut-in.
Since acquiring 660,000 acres of exploration acreage from Shell
and Texaco earlier this year, we have raised over $230 million
from our public offering of common stock, the Halliburton-
guaranteed bank credit facility, sale of oil and gas property
interests and previously reported exploration alliances. In
addition, we anticipate receiving in excess of $80 million in
potential near-term proceeds associated with our sulphur business
(including the expected sale of our sulphur transportation and
marketing assets) and, separately, we have signed a letter of
intent for an alternative use of our Main Pass sulphur facility
which would generate cash flow which would serve to offset and
defer a significant portion of the long-term abandonment
obligations associated with the facility. Although there can be
no assurance as to the timing or the completion of these
transactions, we anticipate these transactions could be completed
in the next few months. The $230 million reflected above, the
anticipated near-term sulphur business transactions and the cash
flows from our oil and gas production activities provide us with
a solid capital base to fund our aggressive oil and gas
exploration and development activities. As of December 1, 2000,
we have $21 million in cash and two credit facilities, a $64.5
million sulphur bank credit facility of which $50 million was
drawn and the Halliburton-guaranteed $50 million oil and gas bank
credit facility which is currently undrawn and available.
Cautionary Statement: This press release contains forward
looking statements that may affect our future financial
performance and cash flow. Forward looking statements are all
statements other than historical facts such as the timing of the
receipt of an insurance claim settlement; future oil and gas
income; the sale of the sulphur transportation and marketing
assets; and other transactions. Important factors that might
cause these results to be different than disclosed herein include
a potential delay in finalizing and closing the definitive
settlement agreement; the market value of oil and gas; and other
factors described in our most recent Form 10-K and subsequent
Forms 10-Q filed with the SEC.
SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
McMoRan Exploration Co.
By: /s/ C. Donald Whitmire Jr.
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C. Donald Whitmire, Jr.
Vice President & Controller -
Financial Reporting
(authorized signatory and
Principal Accounting Officer)
Date: December 5, 2000
