EXHIBIT 10.29

MCMORAN EXPLORATION CO.

2004 DIRECTOR COMPENSATION PLAN

1.

Purpose of the Plan.

The purpose of the McMoRan Exploration Co. 2004 Director Compensation Plan is to
promote the interests of the Company and its stockholders by strengthening the
Company’s ability to attract, motivate and retain directors of experience and
ability, and to encourage the highest level of director performance by providing
directors with (i) a proprietary interest in the Company’s financial success and
growth through the annual grants of Options to purchase the Company's Common
Stock and the ability to elect to receive compensation in shares of Common Stock
and (ii) the ability to defer compensation.  In recognition of their continued
service to the Company and the Board, the Plan also provides for the issuance of
Options to each of the Advisory Directors to replace options that have or will
be terminated as a result of their resignations from the Board.  

2.

Definitions.

For purposes of this Plan, the following terms shall have the meanings
indicated:

2.1

“Advisory Director” means a person designated as such by the Board.

2.2

“Board” means the Board of Directors of the Company.

2.3

“Cash Compensation” means the annual cash retainer paid to an Eligible Director
and any meeting fees, but does not include any expense reimbursement paid to an
Eligible Director.

2.4

“Change of Control” means the earliest of the following events:  (i) any person
or any two or more persons acting as a group, and all affiliates of such person
or persons, shall acquire beneficial ownership of more than 25% of all classes
and series of the Company’s outstanding stock (exclusive of stock held in the
Company’s treasury or by the Company’s Subsidiaries), taken as a whole, that has
voting rights with respect to the election of directors of the Company (not
including any series of preferred stock of the Company that has the right to
elect directors only upon the failure of the Company to pay dividends) pursuant
to a tender offer, exchange offer, purchase or other acquisition or series of
purchases or other acquisitions, or any combination of those transactions (a
“25% Stock Acquisition”); provided, however, that any 25% Stock Acquisition
shall not constitute a Change in Control if all of the acquiring persons enter
into a standstill agreement with the Company in a form approved by the Board and
a majority of the members of the Board at the time of such approval were also
members of the Board immediately prior to the 25% Stock Acquisition, or (ii)
there shall be a change in the composition of the Board at any time within two
years after any tender offer, exchange offer, merger, consolidation, sale of
assets or contested election, or any combination of those transactions (a
“Transaction”), such that (A) the persons who were directors of the Company
immediately before the first such Transaction cease to constitute a majority of
the board of directors of the corporation that shall thereafter be in control of
the companies that were parties to or otherwise involved in such Transaction or
(B) the number of persons who shall thereafter be directors of such corporation
shall be fewer than two-thirds of the number of directors of the Company
immediately prior to such first Transaction.

2.5

“Committee” means the Corporate Personnel Committee of the Board or a
subcommittee thereof.  The Committee shall consist of not fewer than two members
of the Board of Directors, each of whom shall (a) qualify as a “non-employee
director” under Rule 16b-3 promulgated under the Securities Exchange Act of 1934
(the “1934 Act”), or any successor rule, and (b) qualify as an “outside
director” under Section 162(m) of the Internal Revenue Code of 1986, as amended
(the “Code”), and the regulations promulgated thereunder.

2.6

“Common Stock” means the common stock, $0.01 par value per share, of the
Company.

2.7

“Company” means McMoRan Exploration Co., a Delaware corporation.

2.8

“Director” means each member of the Board who is not employed by the Company or
any of its subsidiaries.

2.9

“Disability” shall occur if (a) a physical or mental illness renders the
Participant incapable of satisfactorily discharging his or her duties and
responsibilities as a Director for a period of 90 consecutive days, and (b) a
duly qualified physician chosen by the Company and reasonably acceptable to the
Participant or his or her legal representative certifies in writing that the
Participant has become disabled.

2.10

“Effective Date” means the date this Plan is approved by the Company’s
stockholders.

2.11

“Eligible Director” means each Director and Advisory Director, and includes, for
purposes of Section 6.6 hereof only, former Directors and Advisory Directors who
continue to provide services to the Company or a subsidiary of the Company
pursuant to a consulting or other arrangement.

2.12

“Fair Market Value.”  Except as provided below in connection with a cashless
exercise through a broker, for any purpose relevant under the Plan, the fair
market value of a share of Common Stock or any other security shall be the
average of the high and low quoted per share or security sale prices on the
Composite Tape for New York Stock Exchange-Listed Stocks on the date in question
or, if there are no reported sales on such date, on the last preceding date on
which any reported sale occurred.  If on the date in question the shares of
Common Stock or other securities in question are not listed on such Composite
Tape, the fair market value shall be the average of the high and low quoted sale
prices on the New York Stock Exchange on such date or, if no sales occurred on
such date, on the last previous day on which a sale on the New York Stock
Exchange is reported.  In the context of a cashless exercise through a broker,
the fair market value shall be the price at which the shares of Common Stock are
actually sold.

2.13

“Grant Date” means June 1st of each year throughout the term of this Plan,
provided shares of Common Stock remain available for issuance hereunder.

2.14

“Option” means a stock option granted under the terms of the Plan that does not
satisfy the requirements of Section 422 of the Code.

2.15

 “Option Notice” means any written or electronic notice of grant, evidencing any
Option.

2.16

 “Participant” means any individual granted an Option under this Plan.

2.17

 “Plan” means the McMoRan Exploration Co. 2004 Director Compensation Plan as set
forth herein and as amended, restated, supplemented or otherwise modified from
time to time.

3.

Shares of Common Stock Subject to the Plan.

3.1

Subject to the adjustment provisions of Section 10, the aggregate number of
shares of Common Stock that may be issued pursuant to the terms of the Plan
shall be 175,000.  Shares issued or delivered upon the exercise of Options may
be either authorized but unissued shares or shares issued and thereafter
acquired by the Company.

3.2

To the extent any shares of Common Stock subject to an Option are not issued
because the Option is forfeited or cancelled, such shares shall again be
available for grant pursuant to Options granted under the Plan.  If the exercise
price of any Option granted under this Plan is satisfied by tendering shares of
Common Stock to the Company (by either actual delivery or by attestation), only
the number of shares of Common Stock issued net of the shares of Common Stock
tendered shall be deemed delivered for purposes of determining the maximum
number of shares of Common Stock available for delivery under the Plan.

4.

Administration of the Plan.

4.1

The Plan shall be administered by the Committee, which shall have the power to
interpret the Plan and, subject to its provisions, to prescribe, amend and
rescind Plan rules and to make all other determinations necessary for the Plan’s
administration.  

4.2

All action taken by the Committee in the administration and interpretation of
the Plan shall be final and binding upon all parties.  No member of the
Committee will be liable for any action or determination made in good faith by
the Committee with respect to the Plan or any Option.

4.3

The Committee does not have the authority to make discretionary grants of
Options under the Plan. Grants may be made only as provided in Section 5 hereof.

5.

Grant of Options.

5.1

Beginning at such time as shares of Common Stock are not available for grant
under the Company’s 1998 Stock Option Plan for Non-Employee Directors (the "1998
Plan"), on each Grant Date, each Eligible Director who is not granted options
under the 1998 Plan on that date will be automatically granted an Option to
acquire 3,500 shares of Common Stock.

5.2

While the Plan remains in effect and shares of Common Stock remain available for
issuance hereunder, upon any person’s initial election or appointment as an
Eligible Director, otherwise than at an annual meeting of stockholders, such
person shall be granted an Option as follows:

(a)

If less than six full calendar months have elapsed since the most recent Grant
Date, then the Eligible Director shall receive an Option to acquire 3,500 shares
of Common Stock; or

(b)

If six or more full calendar months have elapsed since the most recent Grant
Date, then the Eligible Director shall receive an Option to acquire 1,750 shares
of Common Stock.

5.3

On February 9, 2004, two Directors resigned from the Board and were named
Advisory Directors.  All outstanding incentive awards previously granted to such
directors under the Company’s 1998 Stock Option Plan for Non-Employee Directors
were or will be terminated under the terms of that plan as a result of such
individuals’ resignations from the Board.  Accordingly, on May 9, 2004, the
following Advisory Directors will receive a one-time grant of Options, as
described below, to replace the previously granted awards that have or will
terminate.

(a)

Gabrielle K. McDonald shall receive Options to acquire 7,592 shares of Common
Stock, which Options shall have the specific terms described on Annex A hereto.

(b)

Morrison C. Bethea shall receive Options to acquire 6,500 shares of Common
Stock, which Options shall have the specific terms described on Annex A hereto.

6.

Terms and Conditions of Options.

6.1

Unless exercisability is accelerated as provided in Section 11.1 hereof and
except for the grants described in Section 5.3 hereof, the Options shall become
exercisable in one-quarter increments on the first, second, third and fourth
anniversaries of the applicable Grant Date.

6.2

Unless terminated earlier as provided in Sections 5.3, 6.6 or 11.2, the Options
shall expire ten years following the applicable Grant Date.

6.3

Except for the grants described in Section 5.3, the exercise price of the
Options granted to Eligible Directors shall be equal to the Fair Market Value,
as defined herein, of a share of Common Stock on the applicable Grant Date.

6.4

Options must be exercised by delivering written notice to the Company or any
person or entity designated by the Company on forms approved by the Company and
payment of the purchase price thereof in full.  Any such exercise shall be
effective upon receipt by the Company or its designee of such notice and such
payment.  Unless the Committee shall determine otherwise in any particular case,
such payment may be made by (a) cash, (b) cash equivalent (which may be the
personal check of the exercising holder of the Option), (c) by tendering shares
of Common Stock, either by actual delivery or by attestation,  that are owned by
such holder and that have been held by the Participant or eligible transferee
for at least six months, or (d) instructing a broker approved by the Company to
sell shares of Common Stock acquired upon the exercise of the option and to
remit to the Company a sufficient portion of the cash proceeds to pay the
exercise price; or (e) a combination thereof, in each case having an aggregate
Fair Market Value equal to the aggregate exercise price of the portion of the
Option being exercised.

6.5

Any provision of this Plan or any Option Notice to the contrary notwithstanding,
the Committee may cause any Option granted hereunder to be canceled in
consideration of a cash payment or alternative Option made to the holder of such
canceled Option equal in value to such canceled Option.  Notwithstanding the
foregoing, except for adjustments permitted under Sections 10 and 11.2 hereof,
no action by the Committee shall cause a reduction in the exercise price of
Options granted under the Plan without the approval of the stockholders of the
Company.  The determinations of value under this subparagraph shall be made by
the Committee in its sole discretion.

6.6

For purposes of this Section 6.6, if a Participant continues to provide services
to the Company or a subsidiary of the Company pursuant to a consulting or other
arrangement, the Participant will not "cease to be an Eligible Director" until
such time as the Participant no longer provides such services.

(a)

If a Participant ceases to be an Eligible Director for any reason other than
death, Disability or retirement from the Board, all of the Options granted to
such Participant while serving as an Eligible Director shall be terminated
except that any Options, to the extent then exercisable, may be exercised by the
holder thereof within three months after such Participant ceases to be an
Eligible Director, but not later than the termination date of the Option.  

(b)

If a Participant ceases to be an Eligible Director by reason of the
Participant’s Disability or retirement from the Board, all of the Options
granted to such Participant while serving as an Eligible Director shall be
terminated except that any Options, to the extent then exercisable or
exercisable within one year thereafter, may be exercised by the holder thereof
within three years after such Participant ceases to be an Eligible Director, but
not later than the termination date of the Option.

(c)

If a Participant dies while serving as an Eligible Director, all Options granted
to such Participant shall be terminated, except that any Options, to the extent
exercisable by the holder thereof at the time of such death or exercisable
within one year thereafter, may be exercised until the third anniversary of the
date of such death, but not later than the termination date of the Option, by
the holder thereof, the Participant’s estate, or the person designated in the
Participant’s last will and testament, as appropriate.

(d)

If a Participant dies after ceasing to be an Eligible Director, all of the
Options granted to such Participant shall be terminated, except that any
Options, to the extent still outstanding and exercisable by the holder thereof
at the time of such death, may be exercised until the third anniversary of the
date the Participant ceased to be an Eligible Director, but not later than the
termination date of the Option, by the holder thereof, the Participant’s estate,
or the person designated in the Participant’s last will and testament, as
appropriate.

7.

Election to Have Annual Retainer Paid in Common Stock.

7.1

Each Eligible Director may make a stock purchase election on a form approved by
the Committee (the “Stock Purchase Election Form”) directing that up to one
hundred percent of his or her annual retainer, in twenty-five percent
increments, be allocated to the purchase of Common Stock on his or her behalf.  

7.2

A stock purchase election will be effective on the first date that the portion
of the annual retainer subject to the election is paid that is at least five
business days after the date the Stock Purchase Election Form is filed with the
Company’s Human Resources Department in the manner required by the Company.
 Stock purchase elections may be revoked or modified effective on the first date
that the portion of the annual retainer is paid that is at least five business
days following the date the revocation or modified election is filed with the
Company in the manner required by the Company.

7.3

If an Eligible Director has timely submitted a satisfactory Stock Purchase
Election Form, the Eligible Director shall be issued that number of whole shares
of Common Stock, rounded down if necessary, equal to the amount of the
Director's retainer to be allocated to the purchase of Common Stock on that date
divided by the Fair Market Value of a share of Common Stock as of the trading
date immediately preceding the issue date.

8.

Deferral of Cash Compensation.

8.1

Each Eligible Director may elect to defer his or her Cash Compensation that is
not used to purchase Common Stock pursuant to Section 7 hereof, in twenty-five
percent increments, to a deferred compensation account (a “Deferred Compensation
Account”) established for the Eligible Director’s benefit.  An election to defer
Cash Compensation hereunder shall be made by means of a form approved by the
Company (the “Deferral Election Form”) and shall be effective only with respect
to Cash Compensation earned on or after January 1st of the fiscal year following
the receipt of the Deferral Election Form by the Company’s Human Resources
Department.  

8.2

An Eligible Director may revoke or modify an election made pursuant to Section
8.1 with respect to deferrals of Cash Compensation to be earned in the future
and such revocation or modification shall take effect one year following receipt
of the written revocation or modification by the Committee and subject to such
other rules as may be established by the Committee.

9.

Deferred Compensation Accounts.

9.1

A Deferred Compensation Account shall be established for each Eligible Director
who executes a Deferral Election Form.

9.2

An Eligible Director’s Deferred Compensation Account shall be credited with that
portion of the Eligible Director’s Cash Compensation that the Eligible Director
has elected to defer to his or her Deferred Compensation Account pursuant to
Section 8.1 as of the date such Compensation would otherwise have been paid to
the Eligible Director.

9.3

All amounts in an Eligible Director’s Deferred Compensation Account shall accrue
interest at a rate equal to the prime commercial lending rate announced from
time to time by JP Morgan Chase Bank (compounded quarterly) or by another major
national bank headquartered in New York, New York and designated by the
Committee.

9.4

Amounts credited to an Eligible Director's Deferred Compensation Account shall
be distributed in either a single lump sum or annual installments (not to exceed
ten), as designated by the Eligible Director in his or her applicable Deferral
Election Form.  Distribution of a Deferred Compensation Account shall be made
(in the case of a lump sum payment) or commence (in the case of installment
payments) within 45 days following the date the Eligible Director ceases to be
an Eligible Director and shall be completed within 10 years of such date.
 However, if the Eligible Director elects in his or her Deferral Election Form,
the distribution (in the case of a lump sum payment) or the commencement of the
distribution (in the case of installment payments) of the Eligible Director's
Deferred Compensation Account shall occur on any specified date at least two
years after the date the Deferral Election Form is received by the Committee.
 If an Eligible Director elects to have his or her Deferred Compensation Account
distributed in installments, the amount of the first installment shall be a
fraction of the value of the Eligible Director's Deferred Compensation Account,
the numerator of which is one and denominator of which is the total number of
installments elected, and the amount of each subsequent installment shall be a
fraction of the value (including income credited pursuant to Section 9.3) on the
date preceding each subsequent payment, the numerator of which is one and the
denominator of which is the total number of installments elected minus the
number of installments previously paid.

9.5

In the event of the death of an Eligible Director prior to the distribution of
his or her Deferred Compensation Account in full, the value of such Deferred
Compensation Account shall be determined as of the date of death and such amount
shall be distributed in a single lump sum payment to the Eligible Director's
estate or designated beneficiary as soon as administratively feasible
thereafter.

9.6

At least once per year, each Eligible Director who has executed a Deferral
Election Form shall be provided with a statement of his or her Deferred
Compensation Account.

9.7

The right of any Eligible Director to receive a distribution under the
provisions of this Section 9 shall constitute an unsecured claim against the
general assets of the Company.

10.

Adjustment Provisions.

In the event of any recapitalization, reclassification, stock dividend, stock
split, combination of shares or other change in the Common Stock, all
limitations on numbers of shares of Common Stock provided in this Plan, and the
number of shares subject to outstanding Options and stock purchase elections,
shall be equitably adjusted in proportion to the change in outstanding shares of
Common Stock.  In addition, in the event of any such change in the Common Stock,
the Committee shall make any other adjustment that it determines to be
equitable, including without limitation adjustments to the exercise price of any
Option in order to provide Participants with the same relative rights before and
after such adjustment.  

11.

Change of Control.

11.1

Upon a Change of Control, or immediately prior to the closing of a transaction
that will result in a Change of Control if consummated, all outstanding Options
granted pursuant to this Plan shall automatically become fully vested and
exercisable.  

11.2

No later than 30 days after a Change of Control, the Committee, acting in its
sole discretion without the consent or approval of any Participant (and
notwithstanding any removal or attempted removal of some or all of the members
thereof as directors or Committee members), may act to effect one or more of the
alternatives listed below, which may vary among individual Participants and
which may vary among Options held by any individual Participant:

(a)

require that all outstanding Options be exercised on or before a specified date
(before or after such Change of Control) fixed by the Committee, after which
specified date all unexercised Options and all rights of Participants thereunder
shall terminate,

(b)

make such equitable adjustments to Options then outstanding as the Committee
deems appropriate to reflect such Change of Control (provided, however, that the
Committee may determine in its sole discretion that no adjustment is necessary),

(c)

provide for mandatory conversion or exchange of some or all of the outstanding
Options held by some or all Participants as of a date, before or after such
Change of Control, specified by the Committee, in which event such Options shall
be deemed automatically cancelled and the Company shall pay, or cause to be
paid, to each such Participant an amount of cash per share equal to the excess,
if any, of the Change of Control Value of the shares subject to such Option, as
defined and calculated below, over the per share exercise price of such Options
or, in lieu of such cash payment, the issuance of Common Stock or securities of
an acquiring entity having a Fair Market Value equal to such excess, or

(d)

provide that thereafter, upon any exercise of an Option that entitles the holder
to receive Common Stock, the holder shall be entitled to purchase or receive
under such Option, in lieu of the number of shares of Common Stock then covered
by such Option, the number and class of shares of stock or other securities or
property (including, without limitation, cash) to which the holder would have
been entitled pursuant to the terms of the agreement providing for the
reorganization, share exchange, merger, consolidation or asset sale, if,
immediately prior to such Change of Control, the holder had been the record
owner of the number of shares of Common Stock then covered by such Option.

11.3

For the purposes of any conversions or exchanges under paragraph (c) of Section
11.2, the “Change of Control Value” shall equal the amount determined by
whichever of the following items is applicable:

(a)

the per share price to be paid to holders of Common Stock in any such merger,
consolidation or other reorganization,

(b)

the price per share offered to holders of Common Stock in any tender offer or
exchange offer whereby a Change of Control takes place, or

(c)

in all other events, the Fair Market Value of a share of Common Stock, as
determined by the Committee as of the date determined by the Committee to be the
date of conversion or exchange.

11.4

In the event that the consideration offered to stockholders of the Company in
any transaction described in this Section 11 consists of anything other than
cash, the Committee shall determine the fair cash equivalent of the portion of
the consideration offered that is other than cash.

12.

General Provisions.

12.1

Nothing in the Plan or in any instrument executed pursuant to the Plan will
confer upon any Eligible Director any right to continue as an Eligible Director
or affect the right of the Board to remove any Eligible Director.

12.2

No shares of Common Stock will be issued or transferred pursuant to an Option
unless and until all then-applicable requirements imposed by federal and state
securities and other laws, rules and regulations and by any regulatory agencies
having jurisdiction, and by any stock exchanges upon which the Common Stock may
be listed, have been fully met to the Company’s satisfaction.  As a condition
precedent to the issuance of shares pursuant to an Option, the Company may
require the Participant to take any reasonable action to meet such requirements.
 

12.3

No Participant and no beneficiary or other person claiming under or through such
Participant will have any right, title or interest in or to any shares of Common
Stock allocated or reserved under the Plan or subject to any Option except as to
such shares of Common Stock, if any, that have been issued or transferred to
such Participant.

12.4

No Options granted hereunder may be transferred, pledged, assigned or otherwise
encumbered by a Participant except: (i) by will; (ii) by the laws of descent and
distribution; (iii) pursuant to a domestic relations order, as defined in the
Code, if permitted by the Committee and so provided in the Option Notice or an
amendment thereto; or (iv) if permitted by the Committee and so provided in the
Option Notice or an amendment thereto, Options may be transferred or assigned
(w) to Immediate Family Members, (x) to a partnership in which Immediate Family
Members, or entities in which Immediate Family Members are the owners, members
or beneficiaries, as appropriate, are the partners, (y) to a limited liability
company in which Immediate Family Members, or entities in which Immediate Family
Members are the owners, members or beneficiaries, as appropriate, are the
members, or (z) to a trust for the benefit of Immediate Family Members;
provided, however, that no more than a de minimus beneficial interest in a
partnership, limited liability company or trust described in (x), (y) or (z)
above may be owned by a person who is not an Immediate Family Member or by an
entity that is not beneficially owned solely by Immediate Family Members.
 “Immediate Family Members” shall be defined as the spouse and natural or
adopted children or grandchildren of the Participant and their spouses.  Any
attempted assignment, transfer, pledge, hypothecation or other disposition of
Options, or levy of attachment or similar process upon Options not specifically
permitted herein, shall be null and void and without effect.  The designation of
a designated beneficiary shall not be a violation of this Section 12.4.

12.5

Each Option shall be evidenced by an Option Notice.

13.

Amendment, Discontinuance or Termination of the Plan.

13.1

The Board may amend or discontinue the Plan at any time; provided, however, that
no such amendment may

(a)

without the approval of the stockholders,  increase, subject to adjustments
permitted herein, the maximum number of shares of Common Stock that may be
issued through the Plan,  materially increase the benefits accruing to
Participants under the Plan,  materially expand the classes of persons eligible
to participate in the Plan,  expand the types of awards available under the
Plan,  materially extend the term of the Plan,  materially change the method for
determining the exercise price of an Option, or  amend Section 6.5 to permit a
reduction in the exercise price of Options; or

(b)

materially impair, without the consent of the recipient, an Option previously
granted.

13.2

Term of the Plan.  Subject to Section 13.1, no Options may be granted under the
Plan later than May 6, 2014, which is ten years after the Effective Date of the
Plan; provided, however, that Options granted prior to such date shall remain in
effect until all such Options have either been satisfied, expired or canceled
under the terms of the Plan.

ANNEX A to 2004 Director Compensation Plan

Special Awards to be Granted May 9, 2004

Gabrielle K. McDonald, Advisory Director, shall receive the following Options:

Number of Options

Exercise Price

Vesting Schedule

Termination Date*

364 options

$12.0954

May 9, 2004

May 1, 2005

364 options

$22.1411

May 9, 2004

May 1, 2006

364 options

$17.6902

May 9, 2004

May 1, 2007

1,000 options

$15.7813

75% on May 9, 2004, 25% on June 1, 2004

June 1, 2010

1,000 options

$13.075

50% on May 9, 2004, 25% on June 1, 2004, and on the next anniversary thereof

June 1, 2011

1,000 options

$  4.275

25% on May 9, 2004, 25% on June 1, 2004, and on each of the next two
anniversaries thereof

June 1, 2012

3,500 options

$12.71

25% on June 1, 2004, and on each of the next three anniversaries thereof

June 1, 2013

Morrison C. Bethea, Advisory Director, shall receive the following Options:

Number of Options

Exercise Price

Vesting Schedule

Termination Date*

1,000 options

$15.7813

75% on May 9, 2004, 25% on June 1, 2004

June 1, 2010

1,000 options

$13.075

50% on May 9, 2004, 25% on June 1, 2004, and on the next anniversary thereof

June 1, 2011

1,000 options

$  4.275

25% on May 9, 2004, 25% on June 1, 2004, and on each of the next two
anniversaries thereof

June 1, 2012

3,500 options

$12.71

25% on June 1, 2004, and on each of the next three anniversaries thereof

June 1, 2013

_______________

*Unless terminated earlier pursuant to the terms of the Plan.