McMoRan Exploration Co. updated its exploration activities including a discovery at Liberty Canal and a successful drill-stem test at Pecos. McMoRan also updated three additional exploration prospects in progress, announced successful production tests on the Hurricane No. 2 and Dawson Deep wells and announced commencement of production at Cane Ridge and King Kong No. 3.

The Liberty Canal exploratory well located onshore in Vermilion Parish, Louisiana, has been drilled to 15,742 feet and evaluated with log-while-drilling tools and confirmed with wireline logs, which indicated two intervals totaling 199 gross feet with 125 net feet of hydrocarbon bearing sands.

The wireline log indicated excellent porosity with the potential for high flow rates. McMoRan plans to set a liner and drill deeper to evaluate additional targets. Following drilling activities, McMoRan will complete the well. Infrastructure near this onshore location would allow production to be established quickly.

The Liberty Canal discovery is located on a significant north-south ridge where McMoRan controls 13,000 acres and has a number of additional exploration prospects. The information gained from this well will be used to determine future drilling plans for the area. McMoRan and its private partner each have a 37.5 percent working interest and a 27.7 percent net revenue interest in the Liberty Canal prospect. The Liberty Canal well commenced drilling on March 5, 2006.

The Pecos exploratory well commenced drilling on January 5, 2006 and was drilled to a true vertical depth of 18,795 feet (19,625 feet measured depth). Uphole pay sands were evaluated with log-while-drilling tools and wireline logs, indicating two intervals of hydrocarbons.

The deeper zone encountered 31 net feet of hydrocarbon bearing sands over a 172 foot gross interval; the upper zone encountered 12 net feet of hydrocarbon bearing sands over a 14 foot gross interval. In May 2006, a drill-stem test over the deeper zone resulted in a gross test rate of approximately 15.5 Million cubic feet of natural gas per day (MMcf/d) and 600 barrels per day (bbls/d) of condensate (7 MMcfe/d net to McMoRan) and no water with a flowing tubing pressure of 2,700 pounds per square inch (psi) on a 31/64ths choke. Production is expected to commence quickly utilizing nearby infrastructure.

McMoRan and its private partner each own a 50 percent working interest and a 36.0 net revenue interest in the discovery. McMoRan has rights to approximately 3,500 acres comprising the Pecos and Platte deep gas exploration prospects at West Pecan Island located onshore in Vermilion Parish, Louisiana.

The Pecos prospect is was drilled as a directional well from an offshore location in less than 10 feet of water to a bottom hole location onshore.

Since inception in 2004 of a multi-year, $500 million exploration venture, McMoRan and its private partner have participated in eleven discoveries on the 22 prospects that have been drilled and evaluated. Five additional prospects are either in progress or not fully evaluated. The JB Mountain Deep exploration well commenced drilling on July 14, 2005 and was drilled to a measured depth of 24,600 feet (true vertical depth of 24,557 feet).