(Corrects second paragraph to say Freeport-McMoRan cut its bid
for McMoRan before announcing the deal on Dec. 5, not on Dec. 28
Jan 18 McMoRan Exploration Co reported
its fourth straight quarterly loss on higher costs resulting
from repeated failures to launch a key gas well, a delay that
has prompted bidder Freeport-McMoRan Copper & Gold Inc
to lower its offer.
Freeport-McMoRan cut its bid for McMoRan by about 5 percent
to $14.75 days before announcing plans to buy the oil and gas
company on Dec. 5, prompted by poor test results at McMoRan's
Davy Jones No.1 well, according to a regulatory
McMoRan's exploration costs shot up 80 percent to $5.2
million in the fourth quarter. The company has sunk in nearly $1
billion in the 29,000-foot Davy Jones No.1 well.
The company is evaluating plans to pump a mixture of fluids
including proppants, used to hold open fissures in wells, to
facilitate movement of gas into the well bore, the company said
McMoRan holds a 63.4 percent working interest in Davy Jones
field. Energy XXI (Bermuda) Ltd, Japan's JX Nippon Oil
Exploration (Gulf) Ltd and oil and gas tycoon William "Tex"
Moncrief Jr's Moncrief Offshore LLC own the rest.
The company said recent operations confirmed that
perforations were open. Mineral deposits clogging the well had
delayed the flow-test by more than a year, adding to the
company's costs and straining its balance sheet before
Freeport-McMoRan stepped in with its bid.
Freeport-McMoRan unveiled its deal to buy McMoRan and Plains
Exploration & Production Co for $9 billion in early
December. Plains owns nearly a third of McMoRan.
A deal would reunite Freeport-McMoRan and McMoRan
Exploration after more than two decades. Freeport-McMoRan and
the company now known as McMoRan Exploration Co were spun off in
the 1980s and 1990s from the former Freeport-McMoRan Inc.
McMoRan shares have risen about 8 percent since the deal was
announced on Dec. 5.
McMoRan reported net loss of $1.2 million, or 1 cent per
share, in the fourth quarter, compared with a profit of $28.4
million, or 16 cents per share, a year earlier.
Revenue fell 31 percent to $84.2 million.
Fourth-quarter production fell 30 percent to average 119
million cubic feet of natural gas equivalent per day.
(Reporting by Swetha Gopinath in Bangalore; Editing by Don