Q2 2012 Earnings Call Transcript

Transcript Call Date 07/17/2012

Operator: 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 additional follow-up questions, 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 second quarter 2012 conference call. Our results released earlier this morning and a copy of the press release is available on our website at

Our call today is being broadcast live on the Internet and anyone may listen to the conference call by accessing our website homepage and clicking on the webcast link for the conference call. As usual, we 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 on our website. 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 our comments today, we'd like to remind everyone that today's press release and certain of our comments on this call includes 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 McMoRan's 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 and Jim Bob who'll be reviewing our performance and outlook. As usual after our prepared remarks, we’ll open up the call for questions.

Today McMoRan reported net loss applicable to common stock of $75.5 million or $0.47 per share for the second quarter of 2012 compared with a net loss of $50.2 million or $0.32 per share for the second quarter of 2011.

Our second quarter 2012 results included a charge to exploration expense for non-commercial well cost, primarily associated with lease expiration on the Boudin Well totaling $56.3 million, $11.2 million in charges for adjustments in asset retirement obligations and $4.6 million charge for impairments to reduce certain fields’ net carrying values to fair value.

Our second quarter 2012 production averaged 140 million cubic feet of equivalent per day net to McMoRan as compared to 197 million cubic feet of equivalent in the second quarter of 2011. Our production in the second quarter of 2012 was slightly below our previously reported estimate of 145 million a day in April of 2012 because of some unplanned downtime for repairs to platforms and third-party pipelines and some weather-related shipping delays.

Our second quarter 2012 oil and gas revenues totaled $87.2 million compared to a $155 million in the second quarter of 2011. Our realized gas prices in the second quarter of 2012 were $2.44 per Mcf compared $4.71 in the year ago and our realized prices for oil and condensate averaged a $109 per barrel similar to the year ago period.

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