McMoRan, Samedan Oil form exploration alliance

McMoRan Exploration Co., New Orleans, said Friday it formed an alliance with Samedan Oil Corp., a wholly owned subsidiary of Noble Affiliates Inc., Ardmore, Okla., to conduct exploration on McMoRan's oil and gas acreage in the Gulf of Mexico.


McMoRan Exploration Co., New Orleans, said Friday it formed an alliance with Samedan Oil Corp., a wholly owned subsidiary of Noble Affiliates Inc., Ardmore, Okla., to conduct exploration on McMoRan's oil and gas acreage in the Gulf of Mexico.

Samedan has committed to participate with a 25% working interest in six of seven specified prospects in the Vermilion, Eugene Island, West Delta Grand Isle, Garden Banks, and Louisiana state lease area.

In addition, Samedan has agreed to work with McMoRan in identifying additional future prospects from the acreage position accumulated by McMoRan in its previously announced transactions with Shell Offshore Inc. (OGJ Online, July 19, 2000) and Texaco Exploration and Production Inc. (OGJ, Jan. 3, 2000, Newsletter). Samedan has the right to participate in future prospects.

"In addition to Samedan's participation in the financial investment provided by our near-term exploration prospects, McMoRan will benefit from Samedan's exploration expertise in identifying and drilling future prospects from our exploration acreage inventory,'' James R. Moffett and Richard C. Adkerson, co-chairmen of McMoRan, said in a joint statement.

Samedan's share of estimated costs for the specified exploration projects is $25 million. This Samedan commitment ensures McMoRan $50 million in current availability under its bank credit facility, which is guaranteed by Dallas-based Halliburton Co. and secured by McMoRan's producing properties. No amounts are currently outstanding under this facility.

Under McMoRan's alliance with Halliburton, an integrated team of McMoRan, Halliburton, and McMoRan contractor personnel has been established to conduct McMoRan's exploration, development, and production activities; Halliburton services are used in these activities when applicable.

McMoRan is obligated to raise specified levels of additional capital by Dec. 31, 2000, and Dec. 31, 2001. The commitment by Samedan, together with $50 million raised by McMoRan in a common stock offering in April 2000, will serve to substantially fulfill the Dec. 31, 2000 obligation. In addition, Halliburton has an option to participate in McMoRan's interests in the development of its exploration discoveries.

Halliburton has the right to participate by paying 20% of McMoRan's acquisition, exploration and development costs and receiving 20% of McMoRan's net revenues until payout, after which Halliburton receives 6% of McMoRan's interest. Samedan will share costs on a disproportionate basis to earn these working interests and net revenue interests.

Since acquiring its exploration rights to the Shell and Texaco acreage positions in early 2000, McMoRan has raised $200 million through its public offering, the Halliburton-guaranteed bank credit facility, the sale of property interests including the previously announced sale of Brazos Blocks A-19/A-26, and the Samedan arrangements.

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