McMoRan Exploration swings to Q2 loss, sees increased well production in Q3
McMoRan Exploration Co. (NYSE: MMR) expects to significantly increase its natural gas production during the third quarter, executives said during a midday conference call. The New Orleans, La.-based oil and gas drilling company said well production averaged 54 million cubic feet of natural gas during the second quarter ended June 30. During the third quarter, McMoRan anticipates an average of 300 million cubic feet of natural gas production, including production from acquired properties.
“Our second quarter production was adversely affected by unexpected downtime for facility modifications,” CFO Nancy Parmelee said during the call.
McMoRan this morning posted a second-quarter net loss of $6.5 million, or $0.23 per share, compared with net income of $14.1 million, or $0.32 per share, a year earlier. Wall Street analysts were expecting a loss of $0.50 per share, according to Thomson Financial.
McMoRan recorded $5.3 million in exploration expenses and $2.8 million in start-up costs associated with a natural gas processing project during the quarter.
The company also reported positive drilling results from its exploration efforts at Flatrock, South Marsh Island, in the Gulf of Mexico. The company expects production from the well will begin soon.
“The important discovery at Flatrock is a good indicator of the nature of our exploration program and the potential we have for success in drilling,” Richard Adkerson, McMoRan’s co-chairman of the board, said.
McMoRan has four additional prospective locations for drilling, the company said in a morning release. For 2007, the company estimates it will have $225 million in capital expenses, with about $160 million for its deep gas exploration program, Adkerson said. He warned that expenses may increase as additional drilling opportunities become available or to fund additional development on successful wells.
The company expects to close on its acquisition of Newfield Exploration Co. (NYSE: NFX) in August. McMoRan late last month announced it is purchasing Newfield’s oil and gas properties and exploration rights for $1.1 billion.
During the call, McMoRan reported it has the second-highest gross acreage in the Gulf of Mexico, after Apache Exploration Energy (Pink: AENM).
In midday trading, McMoRan shares were down $0.67, or 3.83%, at $16.77. Over the last 52 weeks, the company’s shares have ranged in price between $11.36 and $19.42.
