<PAGE>
                         PARTICIPATION AGREEMENT
                    McMoRan 1997 Exploration Program

                                                           PAGE
I.        DEFINITIONS                                       4

II.       PURPOSE; OPERATIONS                               7
          2.1  Purpose                                      7
          2.2  McMoRan's Efforts                            8
          2.3  Operator                                     9

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

IV.       EXPLORATION EXPENDITURES                          10
          4.1  Exploration Expenditures                     10

V.        ACQUISITION OF LEASEHOLD INTERESTS                13
          5.1  Acquisition of Additional Leasehold Interest 13
          5.2  Excluded Areas                                 13
          5.3  Obligation                                     14

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

VII.      SCIENTIFIC STUDIES AND INFORMATION                16

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

IX.       DRILLING OF EXPLORATORY WELLS                     20
          9.1  During Program Term                            20
9.2  After Program Term                           22

X.        FARMOUT OR PARTICIPATION AGREEMENTS               22
          10.1 Participation Agreements                     22
          10.2 Farmout Agreements                           23
          10.3 Trade Agreements                             24

XI.       BURDENS                                           24

XII.      OPERATING AGREEMENT                               25

XIII.     AREA OF MUTUAL INTEREST                           26
          13.1      Third Party Area of Mutual Interest
               Agreements                                   26
          13.2 Program Area of Mutual Interest Agreement    26
<PAGE>
XIV.      OWNERSHIP OF PRODUCTION; GAS BALANCING AGREEMENT  28
          14.1 Ownership of Production                      28

XV.       RELATIONSHIP OF THE PARTIES                       29
          15.1 Tax Partnerships                             29

XVI.      BILLINGS; NOTICES                                 30

XVII.     SPECIAL NON-CONSENT ELECTIONS                     30
          17.1 Casing Point Election - Onshore Prospects    30
          17.2 Elections Prior to Platform Installation -
          Offshore Prospects                                31
          17.3      Time Period                               31
          17.4      Completion Attempt by Participant - Onshore    31

XVIII.    PROGRAM TERM                                      32
          18.1      Program Term                              32
18.2      Unfunded Prospects                           32

XIV.      OPERATIONS AFTER PROGRAM TERM                     33
          19.1      General                                   33
19.2      Exploratory Wells                            33
19.3      Development Expenditures                     33
19.4      Provisions Which Do Not Survive the End of
               the Program Term                             34

XX.       CONFIDENTIALITY                                   34

XXI.      INSURANCE                                         35
          21.1 Insurance for Program                        35

XXII.     RECORD TITLE, ASSIGNMENT                          37
          22.1 Record Title                                 37
          22.2 Assignment                                   38

XXIII.    SUBSEQUENT INTERESTS                              39

XXIV.     GENERAL                                           40
          24.1 Records                                      40
          24.2 Access                                       41
          24.3 Claims & Litigation                          41
          24.4 Good Faith                                   42
          24.5 Governing Law                                42
          24.6 Failure to Respond                           42
          24.7 Conflicts                                    43
          25.8      Binding Effect                                 43


<PAGE>
                                EXHIBITS

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


           This  Participation Agreement ("the Agreement") is made as  of
     the   1st  day  of  April,  1997  between  McMoRan  Oil  &  Gas  Co.
     ("McMoRan")   and   Freeport-McMoRan  Resources  Partners,   Limited
     Partnership ("Participant").

                               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.

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 18.1 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 and  Participant
     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 McMoRan and Participant have or will acquire  and
     explore  Prospects  in  the  Exploration  Program  Area  during  the
     Program Term pursuant to this Agreement.

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

1.13 Leasehold  Interest 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  Interest  Costs  means,  with  respect  to  a  particular
     Leasehold  interest, 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 Non-Operator  means,  as to any Leasehold Interest  or  Prospect,  a
     working  interest  owner therein who is not  designated  to  act  as
     Operator.

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

1.17 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.

1.18 Onshore Prospect means a Prospect located in the Program Area  which
     is not an Offshore Prospect.

1.19 Operator means, as to any Leasehold Interest or Prospect, the  party
     hereto  designated  to  manage  and supervise  the  drilling  and/or
     completion and operation of oil or gas wells thereon.

1.20 Participant  means  Freeport-McMoRan  Resources  Partners,   Limited
     Partnership.

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

1.22 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.

1.23 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.

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

1.25 Prospect  means  an  area designated as such pursuant  to  Paragraph
     8.1.
<PAGE>
1.26 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  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.

     On August 4, 1997, Participant acquired all of the interests of
MCNIC Oil & Gas Properties, Inc. and affiliates ("MCN") in the McMoRan
Participation & Exploration Program Agreement and McMoRan and Participant
entered into an amendment thereto dated the same date (as amended, the
"Prior Program").  McMoRan and Participant thereafter continued the Prior
Program on an interim basis until the date hereof.

     The parties hereto hereby contribute to the Program all of their
rights respecting each of the properties and assets of the Prior Program
excluding only those properties and assets associated with the properties
which are located in an Excluded Area ("Excluded Properties") and the
loan (the "Loan") paid the date hereof due Participant by McMoRan under
said Prior Program.  The Leasehold Interests owned by McMoRan and
Participant under the Prior Program, excluding those which are Excluded
Properties, shall be the Initial Leasehold Inventory hereunder.  The
costs incurred by McMoRan and Participant with respect to those Leasehold
Interests which are included in the Initial Leasehold Inventory and as to
which Participant acquired its interest from MCN shall be deemed to have
an initial cost as of April 1, 1997 of $8,333,333, $5,000,000 of which
was paid by Participant and $3,333,333 of which was paid by McMoRan,
which amount shall be deemed to have been expended from the Exploration
Fund.  All other expenditures under the Prior Program by McMoRan and
Participant together, other than with respect to the Excluded Areas and
the Loan, shall likewise be treated as having been expended from the
Exploration Fund.

     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.

     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
                        60%               40%
<PAGE>
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 Interest and other  properties
and production acquired by the Program shall be shared as follows:
                       Participant         McMoRan
                        50%              50%

                                   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 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 Offshore Prospect,  as
applicable, and such other costs applicable to exploration activities  in
the  Program Area as are otherwise provided for in this Agreement,  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 Interest 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;
<PAGE>
     (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.

      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  Interest  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  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
<PAGE>
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 Interest. 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 Interest or prospect lying outside  the  Program
Area;

      (b)   Any  Leasehold  Interest 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 Interest 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 Interest 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 Interest 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.
<PAGE>
                                   VI.
                            Exploration Fund

      6.1   General. The Program shall have a budget of $200,000,000  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.

     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  Interest ("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)  that  may be acquired by McMoRan under the  terms  of  this
Agreement  shall  become  and remain the joint property  of  McMoRan  and
<PAGE>
Participant.  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  and  Participant.  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  and McMoRan 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 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, McMoRan or Participant 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.

<PAGE>
      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;

      (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  theretofore
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 McMoRan or Participant 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:
<PAGE>
      (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;

      (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.

<PAGE>
      9.2   After  Program  Term.  After the  Program  Term,  McMoRan  or
Participant  shall  have  the  right  to  propose  the  drilling  of   an
Exploratory Well on any Prospect within which an Exploratory  Well  could
be  drilled consistent with the definition of "Exploratory Well" set  out
herein.   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 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 Participant shall be entitled to participate
therein in proportion to its interest in the Prospect.

      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 Interest 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.

<PAGE>
      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
Participants  (1) in the proportion that it 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 Participant  bears
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 McMoRan and Participant in proportion  to
their ownership interest in such Prospect.

                                   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 Interest (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  Interest  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 Interest acquired hereunder  as
well  as  to any Leasehold Interest 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  Interest  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   and
Participant.  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 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 in an effort to fix and determine the area to constitute  the
area of mutual interest.

      (c)  If McMoRan and Participant 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 Interest 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
Participant 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 shall be made  available
to  be  shared by McMoRan and Participant.  Subject to the rights of  any
third  party  under third party AMI agreements as described in  Paragraph
13.1,  the other party shall have the option to participate in  any  such
acquisition in the same proportion as such party's then interest in  such
Prospect,  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.   The  other
parties  shall  have a period of 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
<PAGE>
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 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 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.

                                  XIV.
                         Ownership of Production

      14.1  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 and Participant 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.

                                   XV.
                       Relationship of the Parties

      15.1 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.
<PAGE>
       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.

                                  XVI.
                            Billings; Notices

      16.1  Billings;   Notices. All billings and  notices  shall  be  as
provided in the applicable Program Operating Agreement.

                                  XVII.
                      Special Non-Consent Elections

      17.1 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.

<PAGE>
      17.2 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.

     17.3      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.

     17.4      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 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.

                                 XVIII.
                              Program Term

     18.1      Program Term. The Program Term shall commence on April 1, 1997
and  shall  terminate,  except for completion of  operations  which  were
theretofore commenced or committed, on the earlier of five (5) years from
the  date  hereof, 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.

     18.2      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
<PAGE>
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.

                                  XIX.
                      Operations After Program Term

     19.1 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  18.2 and this Article XIX.  Any Leasehold  Interest
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 XIX after the drilling of such committed well.

      19.2  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.

     19.3 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.

      19.4  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 Interest 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.

                                   XX.
                            Confidentiality.

      20.1 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 20.1; (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,
<PAGE>
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  McMoRan  and/or  Participant.   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.

                                  XXI.
                                Insurance

      21.1  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's
          Compensation 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.
<PAGE>
     (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.

     (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.

                                  XXII.
                        Record Title, Assignment

      22.1  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 17.1,  Paragraph
17.2  or  Paragraph  18.2, as applicable.  In addition,  at  the  end  of
Program  Term  McMoRan  shall  execute  and  deliver  to  Participant   a
recordable assignment of Participant's interest in any Leasehold Interest
not  included  in  a  Prospect 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
<PAGE>
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
Interest prohibiting McMoRan as nominee for the Program from transferring
interests in such Prospect or Leasehold Interest, 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.

     22.2       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 XVII 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 Interest acquired pursuant to the Program shall be bound by
all of the assignor's obligations with respect to such Leasehold Interest
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.  Notwithstanding the foregoing, if  a  Prospect
involves the acquisition of a Leasehold interest 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.


                                 XXIII.
                          Subsequent Interests

      23.1  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
Interest  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 Interest  to
any  other  party, such assignment shall convey and vest  title  to  such
interest in such assignee free and clear of any such burden.

<PAGE>
                                  XXIV.
                                 General

      24.1  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  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.

     24.2 Access. Participant or its duly authorized representative 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.

      24.3  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 McMoRan and Participant  in
the  Program  Area in connection with the Program shall  be  carried  on,
conducted  and  defended  for and on behalf of McMoRan  and  Participant.
Each  party shall notify the other 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 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 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
<PAGE>
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  McMoRan
and  Participant  (with such party 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  24.3  shall  be
shared and borne solely by the parties who participated in such operation
or  Leasehold Interest in proportion to their respective participation in
the  applicable operation or Leasehold Interest.  McMoRan agrees to  keep
Participant  advised  as to claims for which Participant  may  be  partly
responsible hereunder.

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

      24.5  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.

      24.6  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.
      24.7  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.

      24.8 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.

<PAGE>
      IN  WITNESS WHEREOF, this Agreement is executed in multiple  copies
each of which shall be deemed to be an original on November 14, 1997  but
effective as of the date first above written.

                                   McMoRan Oil & Gas Co.


                                   By:/s/ Glenn A. Kleinert______
                                      Glenn A. Kleinert
                                      Senior Vice President


                                   Freeport-McMoRan Resource Partners,
                                   Limited Partnership

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


                                   By:/s/ Rene L. Latiolais______
                                      Rene L. Latiolais
                                      President


     The remainder of the Exhibits to the Amendment to Participation
Agreement McMoRan 1997 Exploration Program dated as of April 1, 1997
between McMoRan Oil & Gas Co. and Freeport-McMoRan Resource Partners,
Limited Partnership, have been intentionally omitted and will be provided
upon request.