<PAGE>
                                                               EXHIBIT 10.8
                                 EXHIBIT A

                          PARTICIPATION AGREEMENT
                     McMoRan 1997 Exploration Program

                                                           PAGE
I.        DEFINITIONS                                       4

II.       PURPOSE; OPERATIONS                               8
          2.1  Purpose                                      8
          2.2  McMoRan's Efforts                            9
          2.3  Operator                                     9

III.      INTERESTS OF THE PARTIES                          9
          3.1 Sharing of Exploration Expenditures           9
          3.2  Ownership Interests                            10
          3.3  McMoRan Group Participation               10

IV.       EXPLORATION EXPENDITURES                          10
          4.1  Exploration Expenditures                     10

V.        ACQUISITION OF LEASEHOLD INTERESTS                14
          5.1 Acquisition of Additional Leasehold Interests 14
          5.2  Excluded Areas                                 14
          5.3  Obligation                                     15

VI.       EXPLORATION FUND                                  15
          6.1  General                                      15
          6.2  Limitations on McMoRan's Authority to Commit
               Exploration Fund                             16
          6.3  Budget Meetings and Reports                  16

VII.      SCIENTIFIC STUDIES AND INFORMATION                17

VIII.     PROSPECTS                                         18
          8.1  Prospects                                      18
8.2  Designation of Prospects After Program Term  20

IX.       DRILLING OF EXPLORATORY WELLS                     21
          9.1  During Program Term                            21
9.2  After Program Term                           23

X.        FARMOUT OR PARTICIPATION AGREEMENTS               23
          10.1 Participation Agreements                     23
          10.2 Farmout Agreements                           24
          10.3 Trade Agreements                             24

XI.       BURDENS                                           25

XII.      OPERATING AGREEMENT                               26

XIII.     AREA OF MUTUAL INTEREST                           26
          13.1      Third Party Area of Mutual Interest
               Agreements                                   26
          13.2 Program Area of Mutual Interest Agreement    27
<PAGE>
XIV.      ASSUMPTION OF INTEREST                            30

XV.       OWNERSHIP OF PRODUCTION; GAS BALANCING AGREEMENT  30
          15.1 Ownership of Production                      30

XVI.      RELATIONSHIP OF THE PARTIES                       31
          16.1 Tax Partnerships                             31

XVII.     BILLINGS; NOTICES                                 32

XVIII.    SPECIAL NON-CONSENT ELECTIONS                     32
          18.1 Casing Point Election - Onshore Prospects    32
          18.2 Elections Prior to Platform Installation -   Offshore
          Prospects                          33
          18.3 Time Period                                  33
          18.4 Completion Attempt by Participant - Onshore  33

XIX.      PROGRAM TERM                                      34
          19.1 Program Term                                 34
          19.2 Unfunded Prospects                           34

XX.       OPERATIONS AFTER PROGRAM TERM                     35
          20.1 General                                      35
          20.2 Exploratory Wells                            35
          20.3 Development Expenditures                     35
          20.4 Provisions Which Do Not Survive the End of
               the Program Term                             35

XXI.      CONFIDENTIALITY                                   36

XXII.     INSURANCE                                         37
          22.1 Insurance for Program                        37

XXIII.    RECORD TITLE, ASSIGNMENT                          39
          23.1 Record Title                                 39
          23.2 Assignment                                   41

XXIV.     SUBSEQUENT INTERESTS                              41

XXV.      GENERAL                                           42
          25.1 Records                                      42
          25.2 Access                                       43
          25.3 Claims & Litigation                          43
          25.4 Good Faith                                   44
          25.5 Governing Law                                44
          25.6 Failure to Respond                           44
          25.7 Conflicts                                    45
          25.8      Reciprocal Rights                         45
25.9      Binding Effect                               45


<PAGE>
                                 EXHIBITS

         I)    PROGRAM OPERATING AGREEMENT (OFFSHORE)
        II)    PROGRAM OPERATING AGREEMENT (ONSHORE)
       III)    CERTAIN EXCLUDED AREAS
        IV)    PROVISIONS CONCERNING TAXATION
         V)    INITIAL LEASEHOLD INVENTORY
<PAGE>
                          PARTICIPATION AGREEMENT
                     McMoRan 1997 Exploration Program


           This Participation Agreement ("the Agreement") is made as of the
     15th  day  of December, 1997 between McMoRan Oil & Gas Co. ("McMoRan")
     and Freeport-McMoRan Resource Partners, Limited Partnership ("FRP").

                                WITNESSETH:

                                    I.
                                Definitions

           As  used  in this Agreement, the following terms shall have  the
     meanings set forth below:

1.1  Affiliate  means, with respect to any person, a person  that  directly
     or  indirectly  through  one or more intermediaries,  controls  or  is
     controlled  by, or is under common control with the person  specified.
     With  respect  to  a natural person, the term "Affiliate"  shall  also
     include  that  person's spouse or anyone related  to  such  person  by
     first  or second degree of consanguinity or affinity and any trust  or
     partnership beneficially owned by such persons.

1.2  Area  of  Mutual Interest or AMI means, with respect to any  Prospect,
     the geographic area more particularly described in Article XIII.

1.3  Casing Point means the point at which determination is made either  to
     run  production  string  of casing and attempt  a  completion,  or  to
     abandon the well.
1.4  Committed List means the list described in Paragraph 19.1 hereof.
1.5  Development  Expenditures  means  those  charges  applicable  to  each
     Prospect which are not Exploration Expenditures.

1.6  Development Well means any well which is not an Exploratory Well.

1.7  Excluded  Area  means  any  of the areas described  in  Paragraph  5.2
     hereof.

1.8  Exploration Expenditures means those charges described in Article IV.

1.9  Exploration  Fund means the fund created by McMoRan,  Participant  and
     the  other  members  of  the McMoRan Group  for  the  acquisition  and
     exploration  of  Leasehold Interests and the  other  purposes  of  the
     Exploration  Program as more fully described in Article  VI,  together
     with  any  cash  contributions received  by  the  Program  from  third
     parties.

1.10 Exploration  Program  or  Program means the McMoRan  operated  program
     pursuant  to  which the McMoRan Group has or will acquire and  explore
     Prospects  in  the  Program Area during the Program Term  pursuant  to
     this  Agreement  and  the  agreement between  McMoRan  and  the  other
     members of the McMoRan Group.

<PAGE>
1.11 Exploratory Well means any well drilled by the Program on  an  Onshore
     Prospect  prior  to the completion thereon by the Exploration  Program
     of  a  well capable of production in Paying Quantities or,  as  to  an
     Offshore  Prospect, means the first and/or second well  drilled  on  a
     Prospect  by  the Program prior to the first installation  thereon  by
     the Program of a drilling and/or production platform.

1.12 Initial  Leasehold Inventory means those Leasehold Interests described
     in Paragraph 2.1 hereof.

1.13 Leasehold  Interests means any right, title or interest  acquired  in,
     to  and  under any oil or gas lease or any other interest  in  oil  or
     gas,  including, without limitation, contractual rights, which  confer
     on  the  holder thereof the right to share, or acquire  the  right  to
     share, in the production or the proceeds of production of oil or gas.

1.14 Leasehold   Interests  Costs  means,  with  respect  to  a  particular
     Leasehold  Interests,  the actual cost incurred  by  the  Program  for
     acquisition  thereof, in each case including, without limitation,  all
     bonuses, delay rentals, brokerage fees, and outside attorney's fees.

1.15 McMoRan  Group  means  McMoRan, Participant and  those  other  parties
     participating  through  McMoRan  on  a  program  type   basis   in   a
     significant  portion  of McMoRan's exploration activities  in  all  or
     part of the Program Area.

1.16 Non-Operator  means,  as  to any Leasehold Interests  or  Prospect,  a
     working  interest  owner  therein who is  not  designated  to  act  as
     Operator.

1.17 OCS  means  the  outer continental shelf of the Gulf of  Mexico  under
     Federal leasing jurisdiction.

1.18 Offshore  Prospect means any Prospect located in the  OCS,  and/or  in
     that  portion of the Gulf of Mexico under the leasing jurisdiction  of
     the adjacent states.

1.19 Onshore  Prospect means a Prospect located in the Program  Area  which
     is not an Offshore Prospect.
1.20 Operator  means, as to any Leasehold Interests or Prospect, the  party
     hereto   designated  to  manage  and  supervise  the  drilling  and/or
     completion and operation of oil or gas wells thereon.

1.21 Participant   means   Freeport-McMoRan  Resource   Partners,   Limited
     Partnership.

1.22 Paying  Quantities  means production of oil and/or gas  in  quantities
     sufficient to yield a return in excess of operating cost.

1.23 Program  Area  means the OCS, and that portion of the Gulf  of  Mexico
     under  the leasing jurisdiction of the adjacent states and the balance
     of  the  lower 48 states of the continental United States, except  the
     Excluded Areas.
<PAGE>
1.24 Program  Operating  Agreement  means  the  Joint  Operating  Agreement
     (Offshore) or the Joint Operating Agreement (Onshore) attached  hereto
     as  Exhibits  I  and  II  respectively,  depending  upon  whether  the
     relevant  operation  is  with respect to an Offshore  Prospect  or  an
     Onshore Prospect.

1.25 Program Term means the period beginning on the date hereof and  ending
     at the end of the Program Term as set forth in Article XIX.

1.26 Prospect means an area designated as such pursuant to Paragraph 8.1.

1.27 Technical  Consultants  means those geologists and  geophysicists  and
     related  personnel  working therewith who are  hired  or  retained  by
     McMoRan  as independent consultants some portion of whose efforts  are
     to develop or evaluate Prospects hereunder.

                                    II.
                            Purpose; Operations

           2.1   Purpose. This Agreement has been entered into  to  provide
Participant  along  with  other members of the McMoRan  Group  a  means  of
acquiring,  exploring and developing oil and gas Prospects in  the  Program
Area, including but not limited to the acquisition of the Initial Leasehold
Inventory, during the Program Term.

     Effective April 1, 1997, FRP and McMoRan established the McMoRan 1997
Exploration Program pursuant to the original Participation Agreement.
Prior to the effective date hereof, McMoRan and FRP evaluated by drilling
certain of the prospects subject to the original Exploration Program and,
effective as of the date hereof, McMoRan and FRP have agreed to expand said
Exploration Program for the remaining term of the Program by increasing the
budget for the Exploration Program and adding an additional participant.

     McMoRan, FRP and the additional participant will participate in the
properties and rights of  the Program, excluding only those properties and
assets associated with the properties which are located in the Excluded
Areas which exclusions include but are not limited to the prospects that
were evaluated prior to the effective date hereof ("Excluded Properties").
The Leasehold Interests of the Program as of the effective date hereof,
excluding those which are Excluded Properties, shall be the Initial
Leasehold Inventory hereunder, which are identified on Exhibit V hereto.
The Initial Leasehold Inventory shall be deemed to have an actual incurred
cost of $9,272,380.  The cost of the Initial Leasehold Inventory set out
above is intended to encompass all of the McMoRan and FRP expenditures
associated with such Leasehold Interests and for cost of leads and other
evaluation activities which have not materialized into a Leasehold
Interests but which are not part of the cost of an Excluded Property, all
of which costs shall be adjusted upon final accounting of such costs.

      2.2   McMoRan Efforts. McMoRan agrees to devote a substantial portion
of  its  oil and gas exploration effort to the operation and management  of
the  Program,  which  shall  include all prospects,  except  those  in  the
Excluded  Areas, acquired and to be acquired by McMoRan during the  Program
Term  within  the Program Area, including but not limited  to  the  Initial
Leasehold  Inventory.  McMoRan will at all times have a staff  adequate  in
number, experience and competence to perform its obligations hereunder  and
accomplish the purposes of the Exploration Program.
<PAGE>
     2.3  Operator. McMoRan shall be the overall manager of the Program.

                                   III.
                    Sharing of Exploration Expenditures
                        and Interest of the Parties

      3.1   Sharing  of  Exploration  Expenditures.  Except  as  other-wise
provided  in  this Agreement, Exploration Expenditures shall be  shared  as
follows:
       Participant             McMoRan & All Other Members             of
       McMoRan Group excluding                    Participant
          56.4%                               43.6%

If  more  than  one  Exploratory Well is drilled on  a  particular  Onshore
Prospect, Exploration Expenditures in connection with the drilling  of  any
second  and subsequent Exploratory Well on such particular onshore Prospect
shall not be shared in the percentages set forth in this Paragraph 3.1  but
shall  be  shared  in  the percentages set forth in Paragraph  3.2  hereof;
provided, however, if the first Exploratory Well in such particular Onshore
Prospect  fails to reach objective depth because it encounters impenetrable
substances, heaving shale, domal material, salt, excessive salt water  flow
or  other  formation or conditions or develops mechanical difficulty  which
would  render further drilling impractical and McMoRan elects  to  drill  a
substitute  for  such  well, the cost involved  in  the  drilling  of  such
substitute  well  shall  be shared in the percentages  set  forth  in  this
Paragraph 3.1 in the same manner as if such substitute well were the  first
Exploratory Well on the particular Onshore Prospect involved.

      3.2   Ownership  Interests.  Except as  otherwise  provided  in  this
Agreement,  the  ownership of all Leasehold Interests and other  properties
and production acquired by the Program shall be shared as follows:
           Participant         McMoRan & All Other Members   of
                   McMoRan Group excluding  Participant
               47%                         53%

     3.3  McMoRan Group Participation. Percentages are based upon the total
McMoRan Group, which in many cases is less than the entire working
interest.

                                    IV.
                         Exploration Expenditures

      4.1  Exploration Expenditures. Subject to the limitations provided in
this  Agreement, McMoRan shall be entitled to expend monies for Exploration
Expenditures of the Program on behalf of itself and Participant without the
prior  approval of Participant.  The term "Exploration Expenditures"  means
all  actual charges allocable to each Prospect established prior to the end
of  the  Program  Term,  determined in accordance with  generally  accepted
industry standards, which charges are incurred by the Program prior to  (i)
the  completion of the first Exploratory Well drilled by the Program on  an
Onshore  Prospect  that  is completed as a well capable  of  production  in
Paying Quantities or (ii) the plugging, or the temporary abandonment if not
plugged,  of the first two Exploratory Wells drilled by the Program  on  an
<PAGE>
Offshore  Prospect,  as  applicable, and such  other  costs  applicable  to
exploration activities in the Program Area prior to the expiration  of  the
Program Term or with respect to Prospects established prior to the  end  of
the Program Term, which charges, among others, shall include the following:

     (a)  The cost of acquisition of all Leasehold Interests in the Program
Area, including but not limited to the Initial Leasehold Inventory and  any
Leasehold  Interests Costs paid by McMoRan to third party program operators
in connection therewith;
      (b)   The  cost  of any geological, geophysical or other  scientific,
exploration or engineering work, services or data on the Prospect;

      (c)   The  cost  of  copies  of all seismic records,  geological  and
geophysical  maps and other exploration data and information  furnished  to
Participant;

      (d)   Rental  and other lease maintenance payments on  the  Leasehold
Interests;

      (e)   All  necessary independent legal expenses and  costs  of  title
searches  and  title investigation whether or not Leasehold  Interests  are
acquired,  together  with the costs of copies of title opinions  and  other
title reports furnished to Participant;
      (f)   The cost of drilling Exploratory Wells in a Prospect, including
the  cost  of  plugging and abandoning or capping same,  if  no  completion
attempt is made;

      (g)   Any  other  expenditures  properly  chargeable  as  Exploration
Expenditures under this Agreement, or as may be specified in the accounting
procedure attached to the applicable Program Operating Agreement and  which
are  attributable  to  exploration activities, but excluding  all  overhead
provided  for in such Program Operating Agreement until such  time  as  the
Exploration Fund has been fully committed;

      (h)   Notwithstanding  the  foregoing,  the  cost  of  completing  an
Exploratory Well shall not be considered an Exploration Expenditure; and

     (i)  In addition to the foregoing, McMoRan shall be entitled to charge
as Exploration Expenditures those expenditures that McMoRan incurs annually
for  salaries of employees, including but not limited to costs of  benefits
programs related thereto, cost of retained consultants, including  but  not
limited  to  its  Technical  Consultants,  office  rent,  office  supplies,
insurance  and other general  and administrative costs that McMoRan  incurs
in  the  conduct  of  its activities, including but not  limited  to  costs
allocated  to  MOXY  from  FM Services Company or its  Affiliates,  less  a
reasonable  portion of such costs that McMoRan allocates  to  the  Excluded
Areas.   Prior to committing to a material increase in the aggregate  costs
contemplated by this subparagraph (i) McMoRan shall confer with Participant
and in good faith consider any comments or suggestions that Participant may
offer in regard to such contemplated material change.  McMoRan shall not be
permitted  to  charge  any  items under this  subparagraph  (i)  after  the
expenditure  of  the  Program Budget, but will thereafter  be  entitled  to
receive such amounts as may be provided in the applicable Program Operating
Agreement.
<PAGE>
      The  term  Exploration Expenditures shall also  include  any  of  the
foregoing costs incurred by the Program in attempting to locate or  acquire
Leasehold  Interests  in  Prospects for the Program  in  the  Program  Area
whether  or  not the Program owns or acquires Leasehold Interests  in  such
area  or  subsequently designates a Prospect under Paragraph 8.1  for  such
area.

     Except as may be expressly provided to the contrary in this Agreement,
all  Exploration  Expenditures  shall be  invoiced  and  accounted  for  in
accordance with the accounting procedure attached to the Program  Operating
Agreement,  including  the  period of time set  forth  for  joint  interest
auditing and adjustment.

      McMoRan  shall further be entitled to reimbursement as an Exploration
Expenditure  prior  to  the  end  of the  Program  Term,  or  as  a  proper
expenditure   under   the  applicable  Program  Operating   Agreement,   as
appropriate,  from Participant for its share of reasonable  inventories  of
pipe  and  equipment (it being the intention of the parties  to  keep  such
inventories at a minimum level consistent with the needs of the Program).

      McMoRan shall not have an obligation to spend a particular portion of
the  Program  Fund during any Program Year but rather McMoRan shall  commit
Exploration  Expenditures as the occasion arises to secure Prospects  which
McMoRan deems would be appropriate for the Exploration Program, subject  to
the provisions of Paragraph 6.1 hereof.

     McMoRan agrees to make available its entire geological and geophysical
data  base  for  use  in operations under the Program at  no  cost  to  the
Participant,  except  to the extent setforth in the  immediately  following
sentence.   The  amounts expended in acquiring seismic  data  from  Western
Geophysical pursuant to the Licensing Agreement between McMoRan and Western
Geophysical  dated  November 20, 1996 shall constitute  proper  charges  to
Exploration Expenditures, notwithstanding the  fact that some of the  costs
incurred pursuant to such agreement were incurred prior to the beginning of
the  Program  Term, except to the extent that any of such seismic  data  so
acquired relates to Excluded Areas.

      Participant agrees to bear its proportionate part of all  Exploration
Expenditures  of  the Program, subject to the limitations  hereinafter  set
forth under Article VI.

                                    V.
                    Acquisition of Leasehold Interests

      5.1  Acquisition of Leasehold Interests. On behalf of the Program and
subject  to the limitations and guidelines herein set forth, McMoRan  shall
evaluate  and  acquire Leasehold Interests in the Program Area  during  the
Program Term which it believes to be potentially productive of oil or gas.

      5.2  Excluded Areas. McMoRan and Participant agree that the following
areas  ("Excluded  Areas")  shall not be  subject  to  the  terms  of  this
Agreement  unless  any such area, or portion thereof, has been  recommended
for inclusion herein by McMoRan in writing and Participant has concurred in
writing in that recommendation:

     (a)  Any  Leasehold  Interests or prospect lying outside  the  Program
Area;
<PAGE>
      (b)   Any  Leasehold  Interests or Prospect  which  at  the  time  of
acquisition contains proven reserves unless (i) the then proven reserves do
not  constitute a material consideration in the acquisition, and  (ii)  the
primary  objective of the acquisition is to explore for oil and  gas  other
than the then proven reserves;


     (c)  Those areas identified on attached Exhibit III; and

      (d)   Any  Leasehold Interests or prospect acquired  through  merger,
acquisition, corporate reorganization or consolidation with or purchase  of
substantially  all  of  the assets of an individual,  a  corporation  or  a
partnership, provided that the primary purpose of such merger, acquisition,
reorganization,  consolidation or purchase is not  to  acquire  a  specific
Prospect  or Leasehold Interests which otherwise would be subject  to  this
Agreement; provided, however, if in such an acquisition McMoRan acquires an
inventory   of  exploratory  prospects  not  associated  with  any   proven
production   acquired  in  such  acquisition,  McMoRan  shall   meet   with
Participant  and, in good faith, attempt to have the exploratory  prospects
transferred to the Exploration Program.

     5.3  Obligation. Subject to the limitations otherwise provided in this
Agreement, Participant agrees to participate for its proportionate share of
Exploration  Expenditures  as  to  all  Leasehold  Interests  acquired   or
committed  to  by  McMoRan  in the Program Area during  the  Program  Term.
Without  limiting or altering the effect of the AMI provisions  of  Article
XIII hereof, from and after the end of the Program Term, McMoRan shall  not
be  obligated  to  search  for  and offer to Participant  any  interest  in
Leasehold Interests within the Program Area.

                                    VI.
                             Exploration Fund

      6.1   General.  The Program shall have a budget of  $165,000,000  for
Exploration  Expenditures to be incurred or committed  during  the  Program
Term  (the "Exploration Fund").  Notwithstanding that the Exploration  Fund
is  for  the  entire  Program Term, unless McMoRan  and  Participant  agree
otherwise  in  writing,  McMoRan  will  schedule  its  activities  so  that
Exploration Expenditures are not likely to exceed on a cumulative basis one
hundred fifty percent (150%) of $40,000,000 per twelve months
period  times  the number of twelve months periods that have elapsed  since
the Program Term commenced.

     6.2  Limitations on McMoRan's Authority to Commit Exploration Fund. In
addition  to  the  other  limitations imposed upon McMoRan's  authority  to
commit  Participant  hereunder, once the actual and  committed  Exploration
Expenditures  reach the budgeted total, it is understood  and  agreed  that
McMoRan  (i)  will  not  undertake any additional drilling  commitments  on
behalf of the Exploration Program, and (ii) will not acquire any additional
Leasehold  Interests  on behalf of the Exploration Program.   Additionally,
McMoRan  shall  not make any commitment on behalf of the  Program  for  the
drilling  of  any well which is anticipated to commence more than  six  (6)
months after the end of the Program Term.
<PAGE>
     6.3  Budget Meetings and Reports.

      (a)   On a quarterly basis, McMoRan shall hold a meeting in McMoRan's
offices  with  Participant to discuss the contemplated  activities  of  the
Program for the following period.  In such  meetings, McMoRan shall  advise
Participant  of  the  amounts  of  the Exploration  Fund  which  have  been
committed  to Prospects on which an Exploratory Well has not yet commenced.
Such  advise  shall  include the name of the Prospect, the  amount  of  the
Exploration  Fund  anticipated  to be spent  thereon  and  the  anticipated
commencement  date  of the Exploratory Well to be drilled  thereon.   On  a
monthly basis, McMoRan shall provide Participant with an accounting of  the
Exploration  Expenditures  of the prior month  and  Program  Term  to  date
reconciling prior billings and advance billings with expenditures.  McMoRan
will  promptly  advise  Participant  in  writing  when  McMoRan  reasonably
believes that actual and committed Exploration Expenditures of the  Program
equal the Exploration Fund and will furnish reasonable data supporting such
conclusion.  In addition to the foregoing, McMoRan will furnish Participant
on  request  and  at  Participant's expense any other data  or  information
needed  by  Participant  to comply with any governmental  laws,  rules  and
regulations,  including  those promulgated by the Securities  and  Exchange
Commission.

                                   VII.
                    Scientific Studies and Information

      7.1   Scientific  Studies and Information. During the  Program  Term,
McMoRan  shall  conduct  geological,  geophysical,  engineering  and  other
scientific  studies with respect to the acquisition and/or  exploration  of
Leasehold Interests ("Scientific Studies") in the Program Area and the cost
thereof shall be Exploration Expenditures.

     It is agreed that any seismic records, and other exploration data (not
including   any   interpretation  thereof  by  McMoRan  or  its   Technical
Consultants prior to the time a Prospect based thereon has been  designated
by  McMoRan hereunder) that may be acquired by McMoRan under the  terms  of
this  Agreement  shall  become and remain the joint  property  of  McMoRan,
Participant and other members of the McMoRan Group.  If McMoRan  designates
a Prospect under Paragraph 8.1 hereof affecting such acquired data, McMoRan
shall at such time furnish copies of all such data, upon written request of
Participant,  including  geological and geophysical  maps,  to  Participant
unless  McMoRan  is prohibited from furnishing a copy or disclosing  it  to
Participant  under  the  agreement by which  McMoRan  acquired  such  data.
Except  as  otherwise  provided  in this Agreement,  Participant  shall  be
permitted  full access to such data in McMoRan's offices unless  prohibited
from  doing  so  under the agreement by which McMoRan acquires  such  data.
McMoRan  shall not be precluded from entering into data exchange agreements
which McMoRan in good faith believes will benefit the Program and all  data
acquired  pursuant  to  any  such exchange agreement  shall  be  the  joint
property  of  McMoRan, Participant and other members of the McMoRan  Group.
During  and after the Program Term, McMoRan shall have the exclusive  right
to  sell any such data which McMoRan in good faith believes no longer  must
be  kept  confidential for the purposes of the Program and the proceeds  of
such sale shall be shared by the Participant, McMoRan and the other members
of  the McMoRan Group on the same basis as the said parties own such  data.
At  the end of the Program Term, McMoRan shall identify seismic records and
other pertinent acquired data (not including any interpretation thereof  by
McMoRan  or its Technical Consultants) as to which Prospects have not  been
<PAGE>
designated during the Program Term and McMoRan shall, upon written  request
by  Participant, provide it copies of all or any part of such data,  unless
prohibited from doing so under the agreement by which McMoRan acquired such
data.   Notwithstanding anything herein to the contrary, Participant  shall
not have or acquire any property interest in any interpretations by McMoRan
or  its  Technical  Consultants of any seismic or  other  exploration  data
unless  and  until a Prospect based thereon has been designated by  McMoRan
hereunder.

                                   VIII.
                                 Prospects

     8.1  Prospects. From time to time McMoRan will obtain information upon
which it can determine and define a particular portion of the Program  Area
with  sufficient specificity as to be identified as a Prospect.   The  term
"Prospect" means a contiguous area which can reasonably be interpreted from
geological  and/or geophysical data as encompassing a geological structure,
stratigraphic  trap  or  other  common geologic  feature  which  makes  its
treatment  as  a  single  Prospect  for oil  and  gas  production  purposes
reasonable  and  some  portion  of  which  is  considered  prospective  for
commercial oil or gas production and is designated as such pursuant to this
Article  VIII.  Based on such information, McMoRan shall from time to  time
designate an area as a Prospect of the Program.  The size and configuration
of a Prospect, as well as all details incident thereto, shall be determined
by  McMoRan.   During the Program Term, McMoRan alone shall  determine  the
time  when  an  area is designated as a Prospect, whether or not  Leasehold
Interests  have previously been acquired therein.  After the  Program  Term
and  in  accordance with Paragraph 8.2 hereof, any member  of  the  McMoRan
Group shall have the right to designate a Prospect which includes Leasehold
Interests  theretofore  acquired through the Program.   Without  the  prior
consent  of  Participant,  McMoRan shall not  commit  to  the  Program  any
Prospects which (1) McMoRan's economic analysis indicates will not have  at
least a before taxes rate of return of twenty-five (25) percent, or (2) the
water  depth for the first expected platform location is greater than 1,000
feet.

      At  the  time that McMoRan designates a Prospect it shall furnish  to
Participant a land plat showing the approximate outline of the Prospect and
the proposed AMI therefor.  Subject to Paragraph 5.2, McMoRan shall as soon
as  possible  thereafter,  upon  written request  of  Participant,  furnish
Participant  (to  the extent not previously furnished) with  all  pertinent
data then available with respect to the evaluation of such Prospect for oil
or  gas development excluding only such data as McMoRan is prohibited  from
disclosing  by  reason  of confidentiality agreements  with  third  parties
respecting  such data.  Such data shall include a land and  geophysical  or
geological report on such Prospect, including with respect to the drillsite
for the first Exploratory Well proposed to be drilled thereon, a land plat,
farmin,  farmout  and  other trade agreements, copies of  leases,  drilling
title   opinions,  assignments,  unit  designation  agreements,   operating
agreements  and  other  documents necessary  for  Participant  to  maintain
adequate records relative to such Prospect and operations thereon, together
with such of the following, as and when available, which are applicable  to
each such Prospect:
      (a)  An itemized list of all Exploration Expenditures charged to such
Prospect;
      (b)  An itemized estimate of probable additional costs which may have
to be incurred in connection with such Prospect;
<PAGE>
      (c)   Any  other information in McMoRan's possession relevant  to  an
evaluation of such Prospect, including geological data, including  but  not
limited  to cross-sections, maps, key logs, and geophysical data, including
copies of proprietary reprocessed data, sepias of lines; and

      (d)   A description of the primary geologic objective and prospective
zone(s) for which the Prospect was acquired.

      At the time each such Prospect is designated, McMoRan will separately
allocate  to  it  all  Exploration Expenditures thereto-fore  incurred  and
properly attributable to such Prospect, including but not limited to  those
expenditures made pursuant to Paragraph 4.1 above.

      8.2   Designation of Prospects After Program Term. To the extent  any
Leasehold  Interests acquired by the Program are not included in  Prospects
designated  by  McMoRan on or prior to the end of the  Program  Term,  then
after  such  date  any  member of the McMoRan  Group  or  their  respective
successors  in interest shall have the right to propose a Prospect  at  the
time  that it proposes an Exploratory Well thereon.  The geographic  limits
of  such  Prospect  so  designated shall meet the  criteria  set  forth  in
Paragraph  8.1  and the AMI therefor shall be subject to the provisions  of
Article XIII hereof.

                                    IX.
                       Drilling of Exploratory Wells

     9.1  During Program Term. During the Program Term, at the same time as
McMoRan designates a Prospect under Paragraph 8.1 above or thereafter  when
it  commits  the  Exploration Fund to the drilling of an  Exploratory  Well
thereon  or  as soon as possible after McMoRan has received notice  from  a
third  party joint interest owner that it proposes the drilling of  a  well
thereon,  McMoRan shall provide to Participant (if not previously furnished
and requested in writing by Participant) the following information:

     (a)  An AFE for such well both as a dry hole and as a completed well;

      (b)   A  land plat depicting the Prospect, the proposed AMI for  such
Prospect  and  the Program's Leasehold Interests within the  AMI  for  such
prospect;

      (c)   A schedule of the Program's Leasehold Interests in the Prospect
AMI;

       (d)    Maps   depicting   McMoRan's   geological   and   geophysical
interpretations of the Prospect;

      (e)   McMoRan's  economic  analysis of the Prospect's  potential  and
timing  and estimated costs to develop, including description of facilities
to be used, if then known;

      (f)   Information as to whether any other third party joint  interest
owner has elected to join or not to join in the drilling of such well;

<PAGE>
      (g)   The  surface location, proposed bottom hole location,  proposed
depth  and well prognosis including casing program, mud program and logging
program for such well (to the extent available in those cases where a third
party  is  the operator of the well) and any other information in McMoRan's
possession relevant to an evaluation of such well; and

      (h)   Any  acreage  or cash contribution pledged in  support  of  the
proposed operation.

     Beginning with the permitting process for any Exploratory Well drilled
hereunder,  and  continuing through the drilling and completion,  temporary
abandonment  or  plugging  and abandonment for  such  well,  McMoRan  shall
provide  the  following information if requested in writing by  Participant
(to the extent available to McMoRan and not previously furnished):

     (a)  name of well, name of Prospect, and identification number;

     (b)  drilling permits, plugging and abandonment permits and permission
to produce;

      (c)   all  daily  drilling  reports, State completion  reports,  well
completion schematic diagram, stimulation reports and workover reports;

      (d)   all core analyses, fluid analyses, PVT. analyses, water  sample
analyses;

      (e)   all  pressure  survey, DST reports,  and  pressure  buildup  or
drawdown data;

     (f)  all well logs.

      9.2  After Program Term. Subject to Paragraph 19.2 hereof, after  the
Program  Term, McMoRan or Participant shall have the right to  propose  the
drilling of an Exploratory Well or a Development Well on any Prospect.  The
terms  and  provisions of the applicable Program Operating Agreement  shall
govern any such proposal.

                                    X.
                    Farmout or Participation Agreements

      10.1  Participation Agreements. During the Program Term,  if  in  the
process  of evaluation of a Prospect the data and information lead  McMoRan
to  the  good  faith  determination that because of the large  expenditures
required, the extraordinary risk involved or other facts deemed relevant by
McMoRan,  an outside venturer should be obtained in such Prospect,  McMoRan
shall  have the right to undertake to negotiate an agreement with  a  third
party  to join in the drilling of the Exploratory Well on the Prospect  and
thereby  acquire  a portion of the Exploration Program's interest  in  such
Prospect;  provided, however, that if any such agreement would  reduce  the
interest  of  the  Exploration Program by more than  fifty  percent  (50%),
McMoRan must obtain the prior approval of Participant.  McMoRan shall  give
notice  to Participant of its intention to negotiate an agreement  with  an
outside venturer which would reduce the interest of the Exploration Program
by  more  than  fifty  percent (50%), stating the  time  within  which  the
circumstances  require  an expression of approval  or  disapproval  by  the
Participant.  Failure of Participant to disapprove the proposed negotiation
within the stated period of time may be deemed by McMoRan to be approval by
<PAGE>
Participant.  Any agreement with an outside venturer shall be on the  basis
of  the outside venturer paying and bearing not less than the proportionate
part   of  all  drilling  costs  and  expenses  of  the  Exploratory   Well
attributable  to  the  undivided  interest  transferred  to  such   outside
venturer, and the interest in the Prospect transferred to or earned by such
outside  venturer  shall  reduce the respective interests  of  McMoRan  and
Participant proportionately.  Any promotion or other consideration received
by  McMoRan  incident to such agreement with an outside venturer  shall  be
held  for  the  benefit of the Exploration Program and the members  of  the
McMoRan  Group  shall be entitled to participate therein in  proportion  to
their  interest  in  the Prospect.  The foregoing provision  shall  not  be
applicable to McMoRan's transaction with other members of the McMoRan Group
so  long  as  the  interest  of Participant set forth  in  Article  III  is
maintained.

      10.2  Farmout Agreements. During the Program Term McMoRan shall  have
the right to enter into farmout agreements with unrelated third parties  on
such  terms  as  it  deems  appropriate respecting Leasehold  Interests  or
portions thereof which are not anticipated to be drilled or committed to be
drilled  by  the  Exploration Program during the  Program  Term;  provided,
however,  McMoRan  shall keep Participant advised as to  any  such  farmout
proposals  or  plans  and shall honor the request of Participant  that  its
interest  in  such  Leasehold Interests or Prospect not be  farmed  out  if
Participant advises McMoRan within ten (10) days, or forty-eight (48) hours
if a drilling rig is on location with stand-by rig charges accumulating, of
McMoRan's notice of intention to farmout that it will participate as to its
ownership interest in the drilling of the anticipated farmout well.

      McMoRan shall not farmout any of Participant's Interest in a Prospect
on  which  the  Program has a producing well without the prior  consent  of
Participant.

     10.3 Trade Agreements. During the Program Term, in connection with the
drilling  of an Exploratory Well on a Prospect, McMoRan shall have complete
authority  to  enter into unit agreements, acreage swap agreements,  bottom
hole  and dry hole contribution agreements and any similar agreements  with
unrelated  third  parties.  The cost or proceeds of  any  of  the  forgoing
agreements shall be credited or charged to the members of the McMoRan Group
(1) in the proportion that such parties participated in the drilling of the
affected Exploratory Well, or (2) if the costs relate to the payment by the
Exploratory Program of a dry hole or bottom hole contribution  to  a  third
party,  in  the proportion that such parties bear Exploration  Expenditures
hereunder,  and  any  interest in leases or oil or  gas  thus  acquired  by
exchange  shall constitute Leasehold Interests subject hereto and be  owned
by  the  members  of  the McMoRan Group in proportion  to  their  ownership
interest in such Prospect.

<PAGE>
                                    XI.
                                  Burdens

      11.1  Burdens. The Leasehold Interests to be acquired by the  Program
shall  be  subject  to  and McMoRan and Participant  each  shall  bear  its
proportionate  part  of  all  third party overriding  royalties  and  other
burdens  on Leasehold Interests (including subsequently acquired  Leasehold
Interests  in  the Prospect AMI) which McMoRan contracts for incidental  to
the  acquisition  or  evaluation of such Leasehold Interests.   Participant
acknowledges that McMoRan has heretofore entered into a retainer  agreement
with  a  Technical  Consultant and may enter into similar  agreements  with
others  during  the  Program  Term.  Without the  consent  of  Participant,
McMoRan agrees not to subject any Leasehold Interests to overriding royalty
burdens  to  its Technical Consultants which exceed the amounts deliverable
to  its current Technical Consultant, CLK Company, L.L.C.(CLK),under  their
existing agreement as described in the letter to Participant dated the date
hereof.   McMoRan  has  provided Participant with a  copy  of  its  current
consulting agreement with CLK  and Participant agrees that it will bear its
proportionate  part of the overriding royalties to which  CLK  is  entitled
pursuant  to  the  terms of said consulting agreement as to  any  Leasehold
Interests  acquired  hereunder as well as to any Leasehold  Interests  that
Participant may acquire pursuant to an AMI agreement subject hereto.

                                   XII.
                            Operating Agreement

      12.1  Operating  Agreement.  Except as  otherwise  provided  in  this
Agreement,  all  operations  on  each  Prospect  will  be  carried  out  in
accordance with the provisions of the Program Operating Agreement, Offshore
or  Onshore as applicable, with charges and credits to the join account  to
be  made in accordance therewith, including all overhead as to the drilling
of  Development Wells.  In the event of conflict between the terms  of  the
Program Operating Agreement and the terms of this Agreement, this Agreement
shall control.  A particular Leasehold Interests or Prospect may be subject
to  a  different form of operating agreement (third party) with one or more
third  parties  not  related to McMoRan, which operating  agreement  (third
party)  shall  apply and control at the time it becomes  effective  in  the
event  of conflict therewith and the Program Operating Agreement.   In  the
event of conflict between such operating agreement (third party)  and  this
Agreement  (other  than  the Program Operating Agreement),  this  Agreement
shall control as between McMoRan and Participant.

<PAGE>
                                   XIII.
                          Area of Mutual Interest

      13.1  Third Party Area of Mutual Interest Agreements. McMoRan may  be
obligated to enter into third party AMI agreements in connection  with  the
acquisition of additional Prospects for the Program.  Participant agrees to
be bound by the provisions of such AMI agreements.

     13.2 Program Area of Mutual Interest Agreement. At the time a Prospect
is  identified by McMoRan pursuant to Paragraph 8.1 hereof, there shall  be
created an Area of Mutual Interest among McMoRan, Participant and the other
members  of  the  McMoRan  Group.  The lands within  such  Area  of  Mutual
Interest  shall  include  the involved Prospect  and  shall  be  fixed  and
determined in the following manner:

      (a)  McMoRan shall submit to Participant and the other members of the
McMoRan  Group a plat delineating the area which it determines on  a  sound
geological  basis  should  be considered as the  area  which,  even  though
outside  the boundaries of the Prospect, should be considered  an  area  of
mutual interest in connection with the Prospect.

      (b)   In the event that Participant does not accept the proposed area
of   mutual  interest,  consultation  shall  be  had  between  McMoRan  and
Participant and the other members of the McMoRan Group in an effort to  fix
and determine the area to constitute the area of mutual interest.

     (c)  If McMoRan and the other members of the McMoRan Group are able to
agree  on  such  area, the area agreed upon shall constitute  the  Area  of
Mutual  Interest,  or  if  agreement cannot be reached,  the  area  of  the
Leasehold Interests as to a Prospect all of which is under Federal  leasing
jurisdiction,  or as to any other Prospect the area within  one-half  (1/2)
mile surrounding the outer perimeter of the Prospect, shall constitute  the
Area  of  Mutual Interest; provided however, any such AMI shall not include
any portion of an Excluded Area.

      The AMI shall be effective so long as any Leasehold Interests in such
AMI is owned by any of the parties or is subject to this Agreement, but  in
no  event longer than the earlier of (i) December 31, 2006 or (ii) one  (1)
year  after  the  plugging  and abandoning of an Exploratory  Well  thereon
unless  another  Exploratory  Well has been commenced  thereon  or  McMoRan
and/or  another  member(s) of the McMoRan Group have agreed  to  install  a
drilling and production platform on such Prospect within such one (1)  year
period.

      Any  acquisition  of Leasehold Interests within such  AMI  after  the
establishment thereof by McMoRan or Participant or any other member of  the
McMoRan  Group shall be made available to be shared by McMoRan, Participant
and  the other members of the McMoRan Group.  Subject to the rights of  any
third  party  under  third party AMI agreements as described  in  Paragraph
13.1,  each  party  shall  have  the option  to  participate  in  any  such
acquisition  in  the  proportion  as such party's  then  interest  in  such
Prospect  as  compared  to the total interest of the McMoRan  Group,  which
option  is  to  be  exercised in the following manner: the acquiring  party
shall notify each of the other parties of such acquisition, furnish a  copy
thereof and such title information as the acquiring party has, stating  the
cost  of  such  acquisition and/or obligations  that  must  be  assumed  in
connection  therewith.  Each of the other parties shall have  a  period  of
<PAGE>
fifteen  (15) days with respect to the interests not related to a  drilling
well, and forty-eight (48) hours (or such lesser period as required by  the
circumstances  and stated in the notice) with respect to interests  related
to  a drilling well, after receipt of such notice within which to elect and
notify the acquiring party whether or not such party desires to participate
in such acquisition.  Failure to respond shall be deemed an election on the
part  of  such party not to participate in such acquisition.  Upon election
and  payment to the acquiring party of such other party's share of the cost
of  such acquisition and assumption of its share of such obligations,  such
other  party  shall be entitled to an assignment of its pro rata  share  of
such party's interest in such acquisition.  The foregoing provision of this
paragraph shall not apply nor shall they alter Participant's obligation  to
purchase  its  proportionate part of any Leasehold  Interests  acquired  by
McMoRan  hereunder  in  those  cases where  the  costs  of  acquiring  such
interests are Exploration Expenditures.

      In  the  event any party does not elect to participate in an interest
tendered  to  it under this Paragraph 13.2 the participating  parties  may,
within  twenty-four (24) hours after notice thereof, elect  to  take  their
proportionate  shares  of  the non-participating  party's  interest.   Time
periods  expressed  in  this  Paragraph 13.2 are  inclusive  of  Saturdays,
Sundays and legal holidays.

      The  provisions  of this Paragraph 13.2 shall not  be  applicable  to
acquisitions  by any party hereto of an interest acquired  from  any  other
member of the McMoRan Group or through merger, corporate reorganization  or
consolidation with or purchase of all or substantially all of the assets of
a  corporation, an individual or a partnership; provided, however, that the
primary purpose of such merger, corporate reorganization, consolidation  or
purchase is not to acquire Leasehold Interests in a specific Prospect which
otherwise would be subject to this Agreement.

     McMoRan agrees to furnish Participant with a list of names, addresses,
persons designated to receive notices and the proportional interest of each
of  the  other members of the McMoRan Group who have a right to participate
in  acquisitions made by Participant within an AMI.  Additionally,  McMoRan
agrees  to secure reciprocal obligations in favor of Participant from  each
of the other members of the McMoRan Group.

                                   XIV.
                          Assumption of Interest

      14.1  Assumption  of  Interest. If any member of  the  McMoRan  Group
exercises its right (where it has such right) to decline to participate  in
an  acquisition  of Leasehold Interests, the members of the  McMoRan  Group
participating therein may, within five (5) days after notice thereof, elect
to  take  their  proportionate  share (i.e. in  the  proportion  which  the
ownership  interest of each such participating party bears to the ownership
interest  of  all  such  participating parties)  of  the  non-participating
party's interest.  If the participating party(s) do not agree to assume all
of  the  interest  which  would have been assumed by the  non-participating
party(s), then the acquisition shall not be carried out.

<PAGE>
                                    XV.
                          Ownership of Production

      15.1  Ownership  of Production. All the oil, gas and  casinghead  gas
produced for the account of the Leasehold Interests from any well shall  be
owned by McMoRan, Participant and by the other members of the McMoRan Group
severally, in proportion to the respective interests of each therein as set
forth  in  Paragraph  3.2.  above, except as  otherwise  provided  in  this
Agreement, and subject to the right, if any, that others may have under the
terms  of this Agreement or any operating agreement relating to such  well.
Anything  to the contrary herein notwithstanding, each party shall  at  all
times  have the right to take in kind or separately dispose of such party's
share  of  the production from any such well, subject to the provisions  of
the  applicable  Program  Operating  Agreement.   McMoRan  shall,  however,
attempt to give Participant at least seven (7) days advance written  notice
of  the  anticipated  date of first deliveries of  any  production  from  a
Prospect.
                                   XVI.
                        Relationship of the Parties

      16.1 Tax Partnership. This Agreement is not intended and shall not be
considered to create a partnership within the meaning of the federal common
law  or  under the applicable laws of any state or under the  laws  of  the
state  in  which any party hereto is incorporated, organized or  conducting
business  or to create a relationship whereby any of the parties  shall  be
held  liable for the acts, either of omission or commission, of  any  other
party thereto; provided, however, that in the event a party should suffer a
loss by reason of an unauthorized act of the other party hereto, the latter
shall indemnify and save harmless the former.

      The parties expressly agree that no party hereto shall be responsible
for  the  obligations  of  any  other party,  each  party  being  severally
responsible only for its obligations arising hereunder and liable only  for
its  allocated share of the costs and expenses incurred hereunder.   It  is
not  the  purpose  or  intention  of this Agreement  to  create,  and  this
Agreement should never be construed as creating, a relationship whereby any
of  the  parties  shall  be held liable for acts,  either  of  omission  or
commission, of any other party hereto.  Notwithstanding the foregoing, each
party  hereto agrees that this Agreement creates a partnership for  Federal
and  State income tax reporting purposes only, which tax partnership  shall
function  and exist in accordance with the terms and provisions of  Exhibit
IV attached hereto.  McMoRan agrees to provide to the Participant on a best
efforts basis, by April 30th of each year, any information available to  it
relating  to operations conducted pursuant to the Program that is necessary
for Participant to prepare Schedule K-1 of its federal income tax return.


                                   XVII.
                             Billings; Notices

     17.1 Billings;  Notices. All billings and notices shall be as provided
in the applicable Program Operating Agreement.
<PAGE>
                                  XVIII.
                       Special Non-Consent Elections

      18.1  Casing Point Election - Onshore Prospects. At such time  as  an
Exploratory  Well has been drilled to the final total depth on  an  Onshore
Prospect, McMoRan shall notify Participant that the Casing Point  has  been
reached on such well, and whether or not McMoRan recommends that an attempt
be made to complete such well.  McMoRan shall also furnish, if requested in
writing by Participant, the estimated costs of completing and equipping the
well  and  plugging and abandoning same if the completion is  unsuccessful,
and  all  well logs, core analyses and other information in its  possession
not  theretofore furnished relevant to evaluation of a completion  attempt.
Within  forty-eight  (48) hours (inclusive of Saturday,  Sunday  and  legal
holidays)  of  receipt  of  such recommendation, Participant  shall  advise
McMoRan  whether  or  not  it  desires to participate  in  the  recommended
completion attempt. If McMoRan and Participant agree to attempt completion,
McMoRan  shall  thereupon  be  authorized to proceed  with  the  completion
attempt  and  to  charge  the  cost thereof as a  Development  Expenditure;
provided,  however, the cost of plugging and abandoning the well  shall  be
charged  as  an  Exploration  Expenditure  if  the  completion  attempt  is
unsuccessful.   If  Participant  does not  elect  to  participate  in  such
completion  attempt, it shall have no further rights hereunder  as  to  the
Prospect  involved.  If McMoRan recommends abandonment without a completion
attempt,  McMoRan shall have the well plugged and abandoned,  charging  the
cost  thereof as an Exploration Expenditure.  Additionally, if  Participant
does not elect to participate in a second or subsequent Exploratory Well in
a  particular Prospect, Participant shall have no further rights  hereunder
as to the Prospect involved.

     18.2 Elections Prior to Platform Installation - Offshore Prospects. If
Participant does not elect to participate in (a) the drilling of  any  well
on  an  Offshore  Prospect  proposed by McMoRan to  be  drilled  after  the
drilling  of the first two (2) Exploratory Wells thereon and prior  to  the
installation  of  the  first drilling and/or production  platform  on  such
Prospect  or  (b)  Participant  does  not  elect  to  participate  in   the
installation  of  the  first drilling and/or production  platform  on  such
Prospect, the Participant shall have no further rights hereunder as to  the
Prospect involved.

     18.3  Time Periods. Whenever an election right is provided in the body
of  this  Agreement and no time period for response is stipulated then  the
applicable  time  periods  provided  in the  applicable  Program  Operating
Agreement shall apply.

     18.4 Completion Attempt by Participant - Onshore. If McMoRan does  not
recommend  the  completion of an Onshore Exploratory Well  and  Participant
advises  McMoRan  within  forty-eight (48) hours  (inclusive  of  Saturday,
Sunday  and  legal  holidays)  of  the  receipt  by  Participant  of   such
recommendation from McMoRan that Participant elects to attempt to  complete
such  well,  McMoRan  shall  undertake  the  completion  thereof,  and  any
subsequent  plugging and abandoning thereof, for the account of Participant
and Participant shall bear all costs, risks and expenses of such completion
attempt  and  abandonment thereof and Participant agrees to  indemnify  and
hold  McMoRan harmless therefrom.  If such completion attempt is successful
McMoRan will assign Participant all of its interest in the borehole of such
<PAGE>
well and any production therefrom, but such assignment shall not confer any
additional  interest to the Participant in the balance  of  the  particular
Prospect involved.

                                   XIX.
                               Program Term

           19.1  Program Term. The Program Term shall commence on  December
15,  1997  and  shall terminate, except for completion of operations  which
were  theretofore commenced or committed, on the earlier of March 31, 2002,
or  the  date that all of the Exploration Fund has been spent or committed.
At  the  end of the Program Term, McMoRan shall provide Participant with  a
list  (the "Committed List") of the undrilled wells, Prospects and  farmout
agreements  as to which it has committed the Exploration Fund.   Once  such
Committed List has been provided to Participant, no substitution  shall  be
made by McMoRan without the consent of Participant.

      19.2  Unfunded  Prospects. At the same time as  McMoRan  submits  the
Committed List, McMoRan shall also submit a listing of all Prospects  which
would  have been committed to the Exploration Program except for  the  fact
that the Exploration Fund had been fully expended and/or committed.  Within
fifteen (15) days of receipt of such listing from McMoRan, Participant will
have the option to commit additional funds to the Exploration Fund for  the
drilling of the first Exploratory Well on any such Prospect or Prospects or
to  advise  MOXY  that it does not elect to so commit any  such  additional
funds.   If  the  Participant does so commit, the drilling  of  such  first
Exploratory  Well on a Prospect where Participant commits  such  additional
funds  shall  be  charged as Exploration Expenditures and shall  be  deemed
included  in  the Committed List.  If the Participant does not commit  such
addi-tional funds for a Prospect on such listing, MOXY shall have the right
to  acquire  Participant's interest in such Prospect, free  of  any  liens,
burdens, or overriding royalties not provided for by Article XI hereof,  by
reimbursing  Participant for any direct costs incurred  by  Participant  in
acquiring  Leasehold  Interests in such Prospect;  if  MOXY  so  reimburses
Participant,  such  Prospect  shall be excluded  from  this  Agreement  and
Participant shall have no further right hereunder as to such Prospect.

                                    XX.
                       Operations After Program Term

      20.1 General. After the Program Term, all Leasehold Interests of  the
Program  will  be  subject  to the provisions  of  the  applicable  Program
Operating  Agreement  and the provisions of this Agreement  except  as  set
forth in Paragraph 19.2 and this Article XX.  Any Leasehold Interests which
is  included in a Prospect on which an Exploratory Well has been  committed
as  shown  on  the Committed List shall become subject to this  Article  XX
after the drilling of such committed well.

      20.2  Exploratory  Wells.  After the  Program  Term,  McMoRan  and/or
Participant  shall have the right to propose the drilling of an Exploratory
Well on a Prospect in accordance with Paragraph 9.2 hereof.

      20.3 Development Expenditures. All Development Expenditures shall  be
borne  by  the  parties  according to their interest  and  subject  to  the
provisions of the applicable Program Operating Agreement, whether  incurred
before or after the Program Term.
<PAGE>
     20.4 Provisions Which Do Not Survive the End of the Program Term. From
and  after  the  end of the Program Term, McMoRan shall have  no  right  to
commit  Participant  to  any expenditures except  in  accordance  with  the
applicable  Program Operating Agreement and with respect to the  conclusion
of then drilling or committed operations.  McMoRan shall have no obligation
thereafter  to  offer  Participant  the  right  to  acquire  any  Leasehold
Interests  unless  such  acquisition is subject to an  AMI  agreement  with
Participant.   Further,  McMoRan  shall  have  no  further  right  to  bind
Participant's  interest to any trade agreement except as may  be  expressly
authorized by Participant.

                                   XXI.
                             Confidentiality.

      21.1  Confidentiality. Except to the extent provided to the  contrary
hereunder  and  subject to any agreements with third parties  entered  into
pursuant to the Program, each party agrees that at all times prior to,  but
not  after,  December 31, 2007, it will take all reasonable steps  to  keep
secret and confidential and not disclose to any third party, geological  or
geophysical  data,  progress  reports or other  information  which  it  may
receive  as  a  result  of  operations carried out  under  this  Agreement;
provided,  however, that these restrictions shall not apply to  information
which  (i) is in, or has entered into, the public domain without breach  of
the provisions of this Paragraph 21.1; (ii) is in the possession of a party
receiving same as a result of prior receipt thereof from another party (not
a  party  to  this Agreement) prior to the time of such receipt under  this
Agreement, (iii) may lawfully be obtained as a matter of right by the party
receiving same from another source, (iv) is required to be disclosed by law
or the rules of any governmental agency or an applicable stock exchange, by
McMoRan or Participant, or (v) is furnished to Affiliates, or to bona  fide
prospective   purchasers,  mortgagees,  prospective  mortgagees,   lenders,
prospective lenders, prospective joint program participants and consultants
for  evaluation  purposes  provided that any person  furnished  information
pursuant  to this clause (v) agrees not to communicate such information  to
any  other party or to use it for their own benefit in a manner adverse  to
the  interests  of the McMoRan Group.  Notwithstanding the  foregoing,  the
parties recognize that from time to time information (such as logs) may  be
acquired by the Program which should not be disclosed to anyone other  than
those  persons who must have such information.  Each party shall  take  all
reasonable  steps to require its employees and consultants to be  bound  by
the  provisions  of  this  paragraph in the same  manner  as  it  is  bound
hereunder.   News  releases concerning discoveries  or  operations  of  the
Program  shall only be made in accordance with guidelines attached  to  the
applicable  Program  Operating Agreement, subject to  the  requirements  of
applicable  laws  and  regulations  and requirements  of  applicable  stock
exchanges.
<PAGE>
                                   XXII.
                                 Insurance

      22.1  Insurance  for Program. McMoRan shall, at the  expense  of  the
Exploration  Program,  procure  and  maintain  with  responsible  companies
insurance in the amounts and covering the risks set forth below:

     (a)  Worker's Compensation:
          Such insurance shall be in full compliance with the law in the
          state where the work is to take place and shall contain a
          voluntary compensation endorsement and a waiver of subrogation as
          to Participant.  Where applicable, coverage shall also be
          provided to comply with the:

          (i)  U.S. Longshoremen's and Harbor Worker'sCompensation Act, and
          the
          (ii) Outer Continental Shelf Lands Act.


     (b)  Employer's Liability:
          Such insurance shall have a limit of liability of $500,000 per
          accident and shall be endorsed, where applicable, to provide:

          (i)  Maritime (Amendment to Coverage B), to include
          transportation, wages, maintenance and cure.
          (ii) A claim "in rem" will be treated as a claim "in personam".

          (iii)A waiver of subrogation as to Participant.

     (c)  Comprehensive General Liability Insurance:
          Such insurance shall have a limit of $1,000,000 per occurrence
          and shall be endorsed, where applicable, to provide:
          (i)  Deletion of the watercraft exclusion.
          (ii) Contractual liability coverage.
          (iii)That Participant be named as an additional insured.

     (d)  Control of Well Insurance in the minimum amount of
$50,000,000 for the total loss, endorsed to name
          Participant as an additional insured.

     (e)  All vessels owned or chartered by McMoRan shall be adequately
     covered by Hull and Protection and Indemnity Insurance.

     (f)  No insurance other than as specified above shall be provided by
     McMoRan.

     (g)  McMoRan shall require contractors and subcontractors performing
     work for the Program to provide such insurance as deemed reasonable by
     McMoRan in relation to the work to be performed by said contractors or
     subcontractors.

     (h)  Upon request, certificates of insurance evidencing the insurance
          obtained by McMoRan hereunder shall be furnished to Participant.

<PAGE>
     (i)Unless otherwise agreed in writing, McMoRan and Participant shall
        separately carry their own policies of the following insurance:
        (i) Where applicable, Blanket Charters' Legal Liability and Cargo
        Legal Liability with a limit of liability of $500,000.
     (ii)    Umbrella liability Insurance in the amount of$25,000,000
        excess of all primary limits.
     (iii)   Above insurance coverages including, but not limited to, any
        and all deductibles, self-insured retentions or primary layers,
        shall contain waivers of subrogation as to McMoRan and
        Participant.

                                  XXIII.
                         Record Title, Assignment

      23.1  Record  Title.  For convenience, McMoRan shall  initially  hold
record  title  to  the  Leasehold Interests  acquired  hereunder;  provided
however, upon written request by Participant, McMoRan will, within 120 days
following  the completion by the Program on an Onshore Prospect of  a  well
capable of producing in paying quantities, or within 120 days following the
installation  of  the  first  drilling and/or  production  platform  on  an
Offshore  Prospect by the Program, as applicable, execute  and  deliver  to
Participant  a  recordable  assignment of  Participant's  interest  in  all
Leasehold  Interests in such Prospect, unless Participant  has  no  further
rights  hereunder as to a particular Prospect as the result of  a  decision
not  to participate pursuant to Paragraph 18.1, Paragraph 18.2 or Paragraph
19.2,  as applicable. Notwithstanding the foregoing, if a Prospect involves
the  acquisition  of a Leasehold Interests from a third party,  the  period
hereinabove provided for the delivery of assignments shall be extended,  if
required, until 60 days following the receipt of an assignment of  interest
by  McMoRan from such third party; provided however, in the event that such
an  assignment requires the approval of a governmental authority then  such
period will be extended for 60 days following the receipt by McMoRan of the
required approval from the governmental authority.  In addition, at the end
of  Program  Term  McMoRan  shall execute  and  deliver  to  Participant  a
recordable  assignment  of Participant's interest in  any  other  Leasehold
Interests  not previously conveyed to Participant during the  Program  Term
pursuant to any provision of this Agreement.  Such assignment shall warrant
title  against all parties claiming by, through or under McMoRan,  but  not
otherwise;  but  McMoRan shall assign to Participant, with  full  right  of
subrogation, to the extent so transferable, the benefit of and the right to
enforce the covenants and warranties, if any, which McMoRan is entitled  to
enforce  with  respect to the interest assigned or any part thereof.   Each
assignment shall be subject to this Agreement and shall be charged with and
burdened  by the proportionate part of the royalties provided for  in  each
lease  covered  thereby, any overriding royalty or  similar  interest  with
which such Leasehold Interests are burdened as authorized by Paragraph 11.1
hereof  and  any  other contracts or agreements with which  such  Leasehold
Interests  are  burdened  by  McMoRan  as  expressly  authorized  by  other
provisions  of  this Agreement and which continue to burden such  Leasehold
Interests  at  the  time  of  such  assignment.   If,  however,  there  are
restrictions  on  assignability with respect to  a  Prospect  or  Leasehold
Interests  prohibiting McMoRan as nominee for the Program from transferring
interests  in such Prospect or Leasehold Interests, McMoRan shall  continue
to  hold record title in its name on behalf of the parties owning interests
therein  rather  than for the Program, and at the request of  such  parties
will execute a mutually acceptable nominee agreement.
<PAGE>
      23.2 Assignment. Except as permitted below, without the prior written
consent  of  the other party, neither McMoRan nor Participant shall  assign
any  rights  in  this Agreement.  Until the Program has  completed  a  well
capable of production in Paying Quantities on an Onshore Prospect or  prior
to  the  election  provided in Paragraph XVIII hereof  as  to  an  Offshore
Prospect, or the end of the Program Term, whichever first occurs, no  party
hereto  may  assign  its  interest in the Leasehold Interests  within  said
Prospect  acquired  pursuant  to the Program without  first  obtaining  the
consent  of the other party hereto (which approval will not be unreasonable
withheld);  provided that granting of a lien or security  interest  by  any
party  shall  not  require such consent.  The assignees  of  any  Leasehold
Interests  acquired pursuant to the Program shall be bound by  all  of  the
assignor's obligations with respect to such Leasehold Interests as  to  the
interest  assigned.  Notwithstanding the foregoing, either  Participant  or
McMoRan without the necessity of obtaining consent may transfer all or  any
part  of  its interests and rights in this Agreement or in any Prospect  to
any  Affiliate  provided  that  the assigning  party  shall  remain  liable
hereunder.

                                   XXIV.
                           Subsequent Interests

      24.1 Subsequent Interest. Except with respect to burdens described in
Paragraph  11.1, or as otherwise provided in this Agreement,  a  party  who
creates any burden against such party's interest in any Leasehold Interests
shall be solely responsible for such burden; and in the event such party is
required,  pursuant  to  other provisions of this Agreement  including  the
applicable   Program  Operating  Agreement  or  a  third  party   operating
agreement, to assign its interest in any Leasehold Interests to  any  other
party, such assignment shall convey and vest title to such interest in such
assignee free and clear of any such burden.

                                   XXV.
                                  General

      25.1 Records. McMoRan shall maintain complete and accurate records of
all  Leasehold  Interests acquired and held hereunder, the acquisition  and
disposition  of  all  equipment hereunder, and  of  all  expenditures  made
hereunder   in  accordance  with  generally  accepted  industry  standards.
McMoRan  will  maintain complete and accurate records of all correspondence
with  any  operator  who may be operating properties in which  the  parties
hereto have an interest under this Agreement, and will retain a copy of all
statements,  bills and other instruments furnished by any such operator  in
accordance  with  generally  accepted industry  standards.   Such  records,
together  with receipts, vouchers and other supporting evidence thereof  in
McMoRan's possession and control, will be available for inspection, copying
and  audit  by  Participant  or  its  duly  authorized  representatives  on
reasonable notice at McMoRan's office during regular business hours then in
effect.  Participant's right to audit McMoRan's records for the purpose  of
challenging  the correctness of any charge made by McMoRan hereunder  shall
terminate  as provided in the accounting procedure attached to the  Program
Operating Agreement.  Participant shall be entitled to join McMoRan in  any
audit made by McMoRan of the records of third party operators of properties
in  which  Participant acquired an interest under this Agreement.   At  the
request  of Participant, McMoRan shall conduct or cause to be conducted  an
audit of the records of any such third party operator hereunder, said audit
right  to  be  as  specified in such third party  agreement  including  the
<PAGE>
polling  of other non-operators to determine if they desire to participate,
at which time McMoRan may decline to participate and therefore not bear any
cost  related to such audit.  In addition, Participant shall have the  same
audit rights as held by McMoRan under third party agreements including  the
right to elect participation in any audit performed by another non-operator
if  McMoRan  elects not to participate in such audit and Participant  shall
receive copies of all reports of joint venture audits which are conducted.

      25.2 Access. Participant or its duly authorized represen-tative shall
have  access  at  all reasonable times, at its expense  and  risk,  to  the
derrick  floor of any well being drilled hereunder in which Participant  is
participating;  and  Participant  shall  have  the  right  to  inspect  all
materials  on hand for the account of the Program and to observe  any  such
operations conducted hereunder.

      25.3 Claims and Litigation. Except as to matters arising with respect
to  a  particular Prospect after the Program Operating Agreement has become
applicable  as  to all further operations thereon under the  provisions  of
this  Agreement  (as  to  which the provisions of  such  Program  Operating
Agreement  will  govern), all investigation, litigation and settlements  in
connection with titles, claims and causes of action of every kind and joint
rights  and  interests of the members of the McMoRan Group in  the  Program
Area  in  connection with the Program shall be carried  on,  conducted  and
defended  for  and on behalf of all members of the McMoRan Group  involved.
Each  party shall notify the others of any process served upon  it  in  any
such  suit or claim.  Where a claim has been made or a suit has been  filed
against McMoRan or Participant or any other member of the McMoRan Group for
damages  caused  by or arising out of operations the expense  of  which  is
charged to the Exploration Fund as authorized herein, McMoRan shall  retain
legal  counsel  to  handle the defense of such suit  or  claim  and  notify
Participant  and  other  members  of the  McMoRan  Group  involved  of  the
retention of such legal counsel.  The cost of such legal services shall  be
charged  in  the  same  manner  as Exploration  Expenditures  are  charged.
Participant  may, if it so chooses, elect to retain its own  legal  counsel
(at  Participant's expense) to defend its interests in  any  such  suit  or
claim; and in such event the claim or suit shall be defended by a committee
of  attorneys  selected by and representing the separate interests  of  the
respective  members of the McMoRan Group (with each member of  the  McMoRan
Group being responsible for the fees and expenses of its own counsel), with
McMoRan's  counsel  as chairperson.  All settlements of  suits  and  claims
shall  be  subject to the approval of Participant; except that McMoRan  may
settle  any  claim  under  $100,000 without first  receiving  Participant's
approval,  provided the payment is in complete settlement.  The  costs  and
expenses  involved in those matters which are subject to the provisions  of
this  Paragraph  25.3 shall be shared and borne solely by the  parties  who
participated  in  such operation or Leasehold Interests  in  proportion  to
their  respective  participation in the applicable operation  or  Leasehold
Interests.   McMoRan agrees to keep Participant advised as  to  claims  for
which Participant may be partly responsible hereunder.

      25.4  Good Faith. McMoRan and Participant agree to act in good  faith
with respect to their respective activities under this Agreement.

      25.5  Governing  Law. This Agreement and the documents  provided  for
herein shall be deemed to be governed by, and construed in accordance with,
the laws of the State of Louisiana.
<PAGE>
      25.6 Failure to Respond. Except as provided in Paragraph 10.1 hereof,
whenever  under  this  Agreement  (exclusive  of  the  applicable   Program
Operating  Agreement)  Participant  is  given  the  right  to  approve   or
disapprove or participate or decline to participate in a proposed operation
or acquisition, failure to respond shall be deemed a response to disapprove
or  decline to participate in the proposed operation or acquisition  unless
McMoRan  is recommending and electing to plug and abandon a well, in  which
event failure to respond shall be an election to plug and abandon.

      25.7 Conflicts. Should there be any conflict between the body of this
Agreement and any Exhibit hereto, the provisions contained in the  body  of
this Agreement shall control.

     25.8  Reciprocal  Rights. All rights granted by  Participant  in  this
Agreement to the other members of the McMoRan Group who are not parties  to
this  Agreement shall be reciprocal and McMoRan has entered or shall  enter
into  agreements which shall cause such other members of the McMoRan  Group
to  grant  such reciprocal rights to Participant.  To the extent  necessary
for  Participant and such other members of the McMoRan Group to enforce the
aforesaid  reciprocal rights, Participant shall be designated  as  a  third
party  beneficiary in such other agreements and such other members  of  the
McMoRan  Group are hereby designated as third party beneficiaries  of  this
Agreement.

     25.9 Binding Effect. This Agreement shall be binding upon and inure to
the  benefit  of  the  parties hereto and their respective  successors  and
assigns; provided, however, nothing herein contained shall be construed  as
permitting  an  assignment contrary to the terms  and  provisions  of  this
Agreement.

     IN WITNESS WHEREOF, this Agreement is executed in multiple copies each
of  which  shall  be  deemed to be an original on  December  19,  1997  but
effective as of the date first above written.

                                   McMoRan Oil & Gas Co.


                                   By:__________________________
                                      Glenn A. Kleinert
                                      Senior Vice President



                                   Freeport-McMoRan Resource Partners,
                                   Limited Partnership

                                   By:  Freeport-McMoRan Inc.,
                                       its Administrative Managing General
                                       Partner


                                   By:_________________________
                                      Robert M. Wohleber
                                      Senior Vice President
<PAGE>

     The remainder of the Exhibits to the Amendment to Participation
Agreement McMoRan 1997 Exploration Program between McMoRan Oil & Gas Co.
and Freeport-McMoRan Resource Partners, Limited Partnership dated as of
December 15, 1997 have been intentionally omitted and will be provided upon
request.