Oil and gas producer McMoRan Exploration Co (MMR) said Friday that its third quarter loss widened from last year, as exploration costs rose sharply and production was disrupted due to Hurricane Isaac.
The New Orleans, Louisiana-based company reported a net loss for the third quarter of $64.0 million, $0.40 per share, compared to a net loss of $9.4 million, $0.06 per share, for the year-ago quarter.
The latest quarter results include $37.2 million of charges to exploration expense mainly resulting from the write-off of allocated carrying value of leasehold from the December 2010 property acquisition no longer being pursued.
On average, 9 analysts polled by Thomson Reuters expected the company to report a loss of $0.13 per share for the third quarter. Analysts' estimates typically exclude special items.
Revenues for the third quarter fell 34% to $91.78 million from $138.18 million in the same quarter last year. Six analysts had a consensus revenue estimate of $85.92 million for the third quarter.
Exploration costs for the quarter more than doubled to $48.9 million, including the $37.2 million charges, from $18.2 million a year earlier.
Third quarter production averaged 134 Mmcfe/d, down from 187 MMcfe/d in the prior year quarter, reflecting unplanned downtime associated with Hurricane Isaac, which impacted GOM operations prior to making landfall on the coast of Louisiana on August 28.
McMoRan's third quarter sales volumes totaled 7.7 Bcf of gas, 534,800 barrels of oil and condensate and 241,500 barrels of natural gas liquids, compared to 11.4 Bcf of gas, 674,700 barrels of oil and condensate and 292,700 barrels of natural gas liquids in the third quarter of 2011.
Capital expenditures was $103.4 million for the third quarter and $415.6 million for the first nine months. McMoRan raised its 2012 capital expenditure estimate by $50 million to about $550 million, of which about 50% will be on exploration. At September 30, the company had $191.9 million in cash.
The company said the Davy Jones No. 1 well has been successfully cleaned out following delays associated with removing residual barite material in the bottom of the wellbore. McMoRan said it is preparing to re-install production tubing before flow testing the well. Completion and testing of Davy Jones No. 2 is expected to commence following review of results from Davy Jones No. 1.
McMoRan,which holds a 63.4% working interest in the 20,000 acres Davy Jones property, has invested $961.0 million in the property as of September 30.
Looking forward, the company said it continues to expect full year 2012 production to average about 137 Mmcfe/d, excluding potential production from Davy Jones. Fourth quarter production is expected to average 120 Mmcfe/d.
McMoRan shares are currently trading at $11.78, down 99 cents or 7.72%.
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