Q4 2011 Earnings Call Transcript

Transcript Call Date 01/17/2012

Operator: Ladies and gentlemen, thank you for standing by. Welcome to the McMoRan Exploration Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. Participants will be limited to one question in the Q&A session. If you have an additional follow-up question, please re-enter the queue after your question has been answered.

I would now like to turn the conference over to Ms. Kathleen Quirk, Senior Vice President and Treasurer. Please go ahead, ma'am.

Kathleen L. Quirk - SVP and Treasurer: Thank you and good morning, everyone, Welcome to the McMoRan Exploration fourth quarter 2011 conference call. Our results were released earlier this morning and a copy of the press release is available on our website at

Our conference call today is being broadcast live on the Internet and anyone may listen to the call by accessing our website homepage and clicking on the webcast link for the call. We also have several slides to supplement our comments this morning, and we'll be referring to the slides during the call. The slides are also accessible using the webcast link on In addition to analysts and investors, the financial press has been invited to listen to today's call and a replay of the webcast will be available on our website later today.

Before we begin today's comments, we'd like to remind everyone that our press release and certain of our comments on this call include forward-looking statements. We'd like to refer everyone to the cautionary language included in our press release and presentation materials and to the risk factors described in our SEC filings.

On the call today are our Co-Chairman, Jim Bob Moffett and Richard Adkerson. I'll start by briefly summarizing the financial results and then turn the call over to Richard who'll be referring to the slides materials on our website.

Today, McMoRan reported net income applicable to common stock of $28.4 million, $0.16 per diluted share, for the fourth quarter of 2011 compared with a net loss applicable to common stock of $84.3 million or $0.83 per share for the fourth quarter of 2010. Our fourth quarter 2011 results included $39.1 million in insurance proceeds. During the fourth quarter, McMoRan settled claims from the 2008 hurricane events and recorded gains associated with the final settlement and other insurance reimbursements. Since 2009, we recorded a $155 million in gains associated with the 2008 hurricane events.

Our fourth quarter results also included $9.1 million impairment charges to reduce certain fields' net carrying value to fair values, and $11.4 million in charges for adjustments for asset retirement obligations associated with certain of our oil and gas properties.

Our production during the fourth quarter of 2011 averaged 170 million cubic feet of natural gas equivalent per day net to McMoRan, that compared with 144 million cubic feet of natural gas equivalent per day in the fourth quarter of 2010. Our production in the fourth quarter was in line with the estimates that we reported in October of 2011.

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