64279--3/15/2006--MCMORAN_EXPLORATION_CO

related topics

{gas, price, oil}

{cost, regulation, environmental}

{financial, litigation, operation}

{cost, contract, operation}

{acquisition, growth, future}

{operation, natural, condition}

{debt, indebtedness, cash}

{condition, economic, financial}

{control, financial, internal}

{personnel, key, retain}

{product, candidate, development}

Factors Relating to Financial Matters We will require additional capital to fund our future drilling activities and to pursue development of the MPEH . If we fail to obtain additional capital, we may not be able to continue our operations or develop MPEH Our future revenues will be reduced as a result of agreements that we have entered into and may enter into in the future with third parties. We have incurred losses from our operations in the past and may continue to do so in the future. Our failure to achieve profitability in the future could adversely affect the trading price of our common stock and our other securities and our ability to raise additional capital. We are responsible for reclamation, environmental and other obligations relating to our former sulphur operations, including Main Pass and Port Sulphur. We have incurred losses from our operations in the past and may continue to do so in the future. Our failure to achieve profitability in the future could adversely affect the trading price of our common stock and our other securities and our ability to raise additional capital. We are responsible for reclamation, environmental and other obligations relating to our former sulphur operations, including Main Pass and Port Sulphur. We are subject to indemnification obligations with respect to the sulphur transportation and terminaling assets that we sold in June 2002, including sulphur and oil and gas obligations arising under environmental laws. We are subject to indemnification obligations with respect to the sulphur transportation and terminaling assets that we sold in June 2002, including sulphur and oil and gas obligations arising under environmental laws. We are subject to indemnification obligations with respect to the sulphur transportation and terminaling assets that we sold in June 2002, including sulphur and oil and gas obligations arising under environmental laws. Factors Relating to Our Operations Our future performance depends on our ability to add reserves. Our exploration and development activities may not be commercially successful. Our exploration and development activities may not be commercially successful. The future results of our oil and natural gas business are difficult to forecast, primarily because the results of our exploration strategy are unpredictable. The future results of our oil and natural gas business are difficult to forecast, primarily because the results of our exploration strategy are unpredictable. The future results of our oil and natural gas business are difficult to forecast, primarily because the results of our exploration strategy are unpredictable. The marketability of our production depends mostly upon the availability, proximity and capacity of natural gas gathering systems, pipelines and processing facilities. Because our reserves and production are concentrated in a small number of offshore properties, production problems or significant changes in reserve estimates related to any property could have a material impact on our business. We are vulnerable to risks associated with the Gulf of Mexico because we currently explore and produce exclusively in that area The amount of oil and natural gas that we produce and the net cash flow that we receive from that production may differ materially from the amounts reflected in our reserve estimates. Because our reserves and production are concentrated in a small number of offshore properties, production problems or significant changes in reserve estimates related to any property could have a material impact on our business. We are vulnerable to risks associated with the Gulf of Mexico because we currently explore and produce exclusively in that area The amount of oil and natural gas that we produce and the net cash flow that we receive from that production may differ materially from the amounts reflected in our reserve estimates. Financial difficulties encountered by our partners or third-party operators could adversely affect the exploration and development of our prospects. We cannot control the activities on properties we do not operate. Financial difficulties encountered by our partners or third-party operators could adversely affect the exploration and development of our prospects. We cannot control the activities on properties we do not operate. Our revenues, profits and growth rates may vary significantly with fluctuations in the market prices of oil and natural gas Our revenues, profits and growth rates may vary significantly with fluctuations in the market prices of oil and natural gas If oil and natural gas prices decrease or our exploration efforts are unsuccessful, we may be required to write down the capitalized cost of individual oil and natural gas properties. Shortages of supplies, equipment and personnel may adversely affect our operations. The loss of key personnel could adversely affect our ability to operate. If oil and natural gas prices decrease or our exploration efforts are unsuccessful, we may be required to write down the capitalized cost of individual oil and natural gas properties. Shortages of supplies, equipment and personnel may adversely affect our operations. The loss of key personnel could adversely affect our ability to operate. The oil and natural gas exploration business is very competitive, and most of our competitors are much larger and financially stronger than we are The oil and natural gas exploration business is very competitive, and most of our competitors are much larger and financially stronger than we are Offshore operations are hazardous, and the hazards are not fully insurable at commercially reasonable costs. Offshore operations are hazardous, and the hazards are not fully insurable at commercially reasonable costs. Hedging our production may result in losses. Hedging our production may result in losses. Hedging our production may result in losses. Compliance with environmental and other government regulations could be costly and could negatively affect production. Factors Relating to the Potential Main Pass Energy Hub We may not be able to obtain the approvals and permits from regulatory agencies necessary to use our Main Pass facilities as an LNG terminal. Compliance with environmental and other government regulations could be costly and could negatively affect production. Factors Relating to the Potential Main Pass Energy Hub We may not be able to obtain the approvals and permits from regulatory agencies necessary to use our Main Pass facilities as an LNG terminal. Even if we obtain the approvals and permits from regulatory agencies necessary to use our Main Pass facilities as an LNG terminal, we may not be able to obtain the necessary financing to complete the project. Our interest in the proposed LNG terminal project will be reduced if either or both K1 USA or OSFI exercises its option to acquire a passive equity interest in our Main Pass Energy Hub project, and may be further reduced by any financing arrangements that may be entered into with respect to the project. Failure of LNG to compete successfully in the United States natural gas market could have a detrimental effect on our ability to pursue alternative uses of our Main Pass facilities. We face competition in the LNG receipt and processing terminal business from competitors with greater resources and the potential for overcapacity in the LNG receipt and processing terminal marketplace. If we were to develop an LNG terminal at our Main Pass facilities, fluctuations in energy prices or the supply of natural gas could be harmful to those operations. If we were to develop an LNG terminal at our Main Pass facilities, fluctuations in energy prices or the supply of natural gas could be harmful to those operations. If we were to develop an LNG terminal at our Main Pass facilities, fluctuations in energy prices or the supply of natural gas could be harmful to those operations. Our proposed LNG terminal would be subject to significant operating hazards and uninsured risks, one or more of which may create significant liabilities for us. The inability to import LNG into the United States due to, among other things, governmental regulation or political instability in countries that supply natural gas could materially adversely affect our business plans and results of operations. The U.S military intervention in Iraq, the terrorist attacks in the United States on September 11, 2001, and the potential for future terrorist acts have created economic, political and social uncertainties that could materially and adversely affect our business.

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64279--3/15/2006--MCMORAN_EXPLORATION_CO_/DE/