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): August 31, 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.
Operations Update - Main Pass sulphur mine
On August 30, 2000 we decided to cease sulphur production at our
Main Pass sulphur mine. The discontinuation of drilling
activities and a planned phased discontinuation of our sulphur
production activities was previously announced on July 20, 2000.
At that time residual production was expected to continue at
declining rates through approximately year-end.
The North American sulphur market remains depressed.
Additionally, the price of natural gas, the most significant cost
in the sulphur mining process, continues to increase with record
high levels experienced in August 2000. The major negative effect
on Main Pass operating results from these conditions, together
with the results of a recently completed geologic and tectonic
study of a brine well required in the sulphur mining process,
caused us to cease sulphur production at the Main Pass mine
rather than to continue with the plan to phase-out production
over time. The brine well provides a saturated salt solution used
in the sulphur mining process. The recently completed geologic
and tectonic study concludes that the subsurface brine cavity
created from operation of the well would not be sufficiently
stable to continue production operations. Any remedial
alternative to enable continuing production operations would be
prohibitively expensive in the current circumstances.
The accelerated discontinuation of sulphur production may result
in incurring certain expenditures for previously anticipated
reclamation costs earlier than planned. These costs have been
appropriately reflected as liabilities on our June 30, 2000
balance sheet and will be funded from our cash flows and
currently available credit facilities.
We will continue to meet our obligations to sulphur customers
with purchases of recovered sulphur and from inventories, which
we expect to accomplish with no significant adverse financial
consequence. Additionally, the accelerated discontinuation of
sulphur production is not expected to affect gross oil production
at Main Pass, currently producing approximately 5,000 barrels of
oil per day. We have a 69.5 percent net revenue interest in Main
Pass' oil production, subject to an approximate 50 percent net
profits interest.
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: August 31, 2000
