----

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|------------------------------------------------------------------------------------------|
| **UNITED                  STATES**                                                       |
| **SECURITIES                  AND EXCHANGE COMMISSION**                                  |
| **Washington,                  D.C. 20549**                                              |
|                                                                                     |
| **FORM                  10-Q**                                                           |
|                                                                                     |
| **(Mark                  One)**                                                          |
| **[X]**                                                                                  | **QUARTERLY                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE** |
| **SECURITIES                  EXCHANGE ACT OF 1934**                                     |
| **For                  the quarterly period ended March 31, 2006**                       |
| **OR**                                                                                   |
| **[                  ]**                                                                 | **TRANSITION                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE** |
| **SECURITIES                  EXCHANGE ACT OF 1934**                                     |
| **For                  the transition period from**                                      |   | **to** |
| **Commission                  File Number: 001-07791**                                   |
|                                                                                     |
|                                                                                          |
|                                                                                     |
| **McMoRan                  Exploration Co.**                                             |
| (Exact                  name of registrant as specified in its                  charter) |

| **Delaware**                                                                                    | **72-1424200**                                     |
|-------------------------------------------------------------------------------------------------|----------------------------------------------------|
| (State                  or other jurisdiction ofincorporation                  or organization) | (IRS                  Employer Identification No.) |
|                                                                                            |                                               |
| **1615                  Poydras Street**                                                        |                                               |
| **New                  Orleans, Louisiana***                                                    | **70112**                                          |
| (Address                  of principal executive offices)                                       | (Zip                  Code)                        |
|                                                                                            |
|                                                                                            |
| **(504)                  582-4000**                                                             |
| (Registrant's                  telephone number, including area code)                           |
|                                                                                            |

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|                                                                                      |
|-------------------------------------------------------------------------------------------|
| **McMoRan                Exploration Co.**                                                |
| **TABLE                OF CONTENTS**                                                      |
|                                                                                      |
|                                                                                      | Page |
|                                                                                      |   |
| Part                I. Financial Information                                              |   |
|                                                                                      |   |
| Financial                Statements:                                                      |   |
|                                                                                      |   |
| Condensed                Consolidated Balance Sheets                (Unaudited)           | 3 |
|                                                                                      |   |
| Consolidated                Statements of Operations                (Unaudited)           | 4 |
|                                                                                      |   |
| Consolidated                Statements of Cash Flow                (Unaudited)            | 5 |
|                                                                                      |   |
| Notes                to Consolidated Financial                Statements                  | 6 |
|                                                                                      |   |
| Remarks                                                                                   | 12 |
|                                                                                      |   |
| Report                of Independent Registered Public Accounting                Firm     | 12 |
|                                                                                      |   |
| Management's                Discussion and Analysis                                       |   |
| of                Financial Condition and Results of                Operations            | 13 |
|                                                                                      |   |
| Quantitative                and Qualitative Disclosures about Market                Risks | 25 |
|                                                                                      |   |
| Controls                and Procedures                                                    | 25 |
|                                                                                      |   |
| Part                II. Other Information                                                 | 25 |
|                                                                                      |   |
| Signature                                                                                 | 26 |
|                                                                                      |   |
| Exhibit                Index                                                              | E-1 |

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**TABLE        OF CONTENTS**

**McMoRan      Exploration Co.**

**Part      I. FINANCIAL INFORMATION**

**Item      1.** **Consolidated      Financial Statements.**

**McMoRan      EXPLORATION CO.**

**CONDENSED      CONSOLIDATED BALANCE SHEETS(Unaudited**

|                                                                              |   | March                31,      |    | December                31, |   |
|-----------------------------------------------------------------------------------|--------|-------------------------------|---------|-----------------------------|--------|
|                                                                              |   | 2006                          |    | 2005                        |   |
|                                                                              |   | (In                Thousands) |    |
| ASSETS                                                                            |   |                          |    |                        |   |   |   |
| Cash                and cash equivalents:                                         |   |                          |    |                        |   |   |   |
| Continuing                operations, includes restricted cash of $0.3 million at |   |                          |    |                        |   |   |   |
| December                31, 2005                                                  |   | $                             | 55,844  |                        | $      | 131,179 |   |
| Discontinued                operations, all restricted                            |   |                          | 548     |                        |   | 1,005 |   |
| Restricted                investments                                        |   |                          | 9,049   |                        |   | 15,155 |   |
| Accounts                receivable                                                |   |                          | 46,633  |                        |   | 36,954 |   |
| Inventories                                                                       |   |                          | 18,687  |                        |   | 7,980 |   |
| Prepaid                expenses                                                   |   |                          | 1,555   |                        |   | 1,348 |   |
| Current                assets from discontinued operations, excluding cash        |   |                          | 3,454   |                        |   | 2,550 |   |
| Total                current assets                                               |   |                          | 135,770 |                        |   | 196,171 |   |
| Property,                plant and equipment, net                                 |   |                          | 260,078 |                        |   | 192,397 |   |
| Discontinued                sulphur business assets                               |   |                          | 372     |                        |   | 375 |   |
| Restricted                investments and cash                                    |   |                          | 8,850   |                        |   | 10,475 |   |
| Other                assets                                                       |   |                          | 6,269   |                        |   | 8,218 |   |
| Total                assets                                                       |   | $                             | 411,339 |                        | $      | 407,636 |   |
|                                                                              |   |                          |    |                        |   |   |   |
| LIABILITIES                AND STOCKHOLDERS’ DEFICIT                        |   |                          |    |                        |   |   |   |
| Accounts                payable                                                   |   | $                             | 68,221  |                        | $      | 63,398 |   |
| Accrued                liabilities                                                |   |                          | 55,495  |                        |   | 49,817 |   |
| Accrued                interest                                                   |   |                          | 4,448   |                        |   | 5,635 |   |
| Current                portion of accrued sulphur reclamation cost                |   |                          | 4,205   |                        |   | 4,724 |   |
| Current                liabilities from discontinued operations                   |   |                          | 4,669   |                        |   | 5,462 |   |
| Total                current liabilities                                          |   |                          | 137,038 |                        |   | 129,036 |   |
| 6%                convertible senior notes                                        |   |                          | 100,895 |                        |   | 130,000 |   |
| 5¼%                convertible senior notes                                  |   |                          | 115,000 |                        |   | 140,000 |   |
| Accrued                oil and gas reclamation costs                              |   |                          | 22,161  |                        |   | 21,760 |   |
| Accrued                sulphur reclamation costs                                  |   |                          | 17,410  |                        |   | 17,062 |   |
| Contractual                postretirement obligation                              |   |                          | 11,779  |                        |   | 11,517 |   |
| Other                long-term liabilities                                        |   |                          | 16,014  |                        |   | 15,890 |   |
| 5%                mandatorily redeemable convertible preferred stock              |   |                          | 28,991  |                        |   | 28,961 |   |
| Stockholders'                deficit                                              |   |                          | (37,949 | )                           |   | (86,590 | ) |
| Total                liabilities and stockholders' deficit                        |   | $                             | 411,339 |                        | $      | 407,636 |   |
|                                                                              |   |                          |    |                        |   |   |   |

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**TABLE      OF      CONTENTS**

**McMoRan      EXPLORATION CO.**

**CONSOLIDATED      STATEMENTS OF OPERATIONS(Unaudited**

|                                                                               |   | Three                Months Ended March                31, |                    |
|------------------------------------------------------------------------------------|--------|------------------------------------------------------------|-------------------------|
|                                                                               |   | 2006                                                       |                    | 2005 |   |
|                                                                               |   | (In                Thousands, Except Per Share Amounts)    |                    |
| Revenues:                                                                          |   |                                                       |                    |   |   |   |   |
| Oil                & Gas                                                       |   | $                                                          | 35,441                  |   | $ | 11,380 |   |
| Service                                                                            |   |                                                       | 4,305                   |   |   | 3,287 |   |
| Total                revenues                                                      |   |                                                       | 39,746                  |   |   | 14,667 |   |
| Costs                and expenses:                                                 |   |                                                       |                    |   |   |   |   |
| Production                and delivery costs                                       |   |                                                       | 10,759                  |   |   | 3,700 |   |
| Depletion,                depreciation and amortization                            |   |                                                       | 5,844                   |   |   | 3,916 |   |
| Exploration                expenses                                                |   |                                                       | 20,620                  |   |   | 7,536 |   |
| General                and administrative expenses                                 |   |                                                       | 8,224                   |   |   | 4,390 |   |
| Start-up                costs for Main Pass Energy Hub™                      |   |                                                       | 1,846                   |   |   | 2,284 |   |
| Insurance                recovery                                                  |   |                                                       | (1,169                  | ) |   | (5,043 | ) |
| Total                costs and expenses                                            |   |                                                       | 46,124                  |   |   | 16,783 |   |
| Operating                loss                                                      |   |                                                       | (6,378                  | ) |   | (2,116 | ) |
| Interest                expense                                                    |   |                                                       | (1,833                  | ) |   | (3,787 | ) |
| Other                (expense) income, net                                         |   |                                                       | (3,194                  | ) |   | 1,599 |   |
| Loss                from continuing operations                                     |   |                                                       | (11,405                 | ) |   | (4,304 | ) |
| Loss                from discontinued operations                                   |   |                                                       | (1,677                  | ) |   | (1,029 | ) |
| Net                loss                                                            |   |                                                       | (13,082                 | ) |   | (5,333 | ) |
| Preferred                dividends and amortization of convertible preferred stock |   |                                                       |                    |   |   |   |   |
| issuance                costs                                                      |   |                                                       | (403                    | ) |   | (411 | ) |
| Net                loss applicable to common stock                                 |   | $                                                          | (13,485                 | ) | $ | (5,744 | ) |
|                                                                               |   |                                                       |                    |   |   |   |   |
| Basic                and diluted net loss per share of common stock:               |   |                                                       |                    |   |   |   |   |
| Continuing                operations                                               |   |                                                       | $                (0.44  | ) |   | $ (0.20 | ) |
| Discontinued                operations                                             |   |                                                       |    (0.06 | ) |   |    (0.04 | ) |
| Net                loss per share of common stock                                  |   |                                                       | $                (0.50  | ) |   | $  (0.24 | ) |
|                                                                               |   |                                                       |                    |   |   |   |   |
| Basic                and diluted average shares outstanding                        |   |                                                       | 26,832                  |   |   | 24,385 |   |

**TABLE OF      CONTENTS**

**McMoRan      EXPLORATION CO.**

**CONSOLIDATED      STATEMENTS OF CASH FLOW (Unaudited**

|                                                                                 |   | Three                  Months Ended |    |
|--------------------------------------------------------------------------------------|--------|-------------------------------------|---------|
|                                                                                 |   | March                  31,          |    |
|                                                                                 |   | 2006                                |    | 2005 |   |
|                                                                                 |   | (In                  Thousands)     |    |
| **Cash                  flow from operating activities:**                            |   |                                |    |   |   |   |   |
| Net                  loss                                                            |   | $                                   | (13,082 | ) | $ | (5,333 | ) |
| Adjustments                  to reconcile net loss to net cash (used in) provided by |   |                                |    |   |   |   |   |
| operating                  activities:                                               |   |                                |    |   |   |   |   |
| Loss                  from discontinued operations                                   |   |                                | 1,677   |   |   | 1,029 |   |
| Depreciation                  and amortization                                       |   |                                | 5,844   |   |   | 3,916 |   |
| Exploration                  drilling and related expenditures                       |   |                                | 12,342  |   |   | 2,938 |   |
| Compensation                  expense associated with stock-based awards             |   |                                | 9,675   |   |   | 263 |   |
| Amortization                  of deferred financing costs                            |   |                                | 481     |   |   | 557 |   |
| Loss                  on induced conversion of convertible senior notes              |   |                                | 4,301   |   |   | - |   |
| Reclamation                  and mine shutdown expenditures                          |   |                                | -       |   |   | (4 | ) |
| Other                                                                                |   |                                | 470     |   |   | (202 | ) |
| (Increase)                  decrease in working capital:                             |   |                                |    |   |   |   |   |
| Accounts                  receivable                                                 |   |                                | 506     |   |   | 6,751 |   |
| Accounts                  payable and accrued liabilities                            |   |                                | (17,237 | ) |   | 18,525 |   |
| Prepaid                  expenses and inventories                                    |   |                                | (10,892 | ) |   | (46 | ) |
| Net                  cash (used in) provided by continuing operations                |   |                                | (5,915  | ) |   | 28,394 |   |
| Net                  cash used in discontinued operations                            |   |                                | (3,490  | ) |   | (1,021 | ) |
| Net                  cash (used in) provided by operating activities                 |   |                                | (9,405  | ) |   | 27,373 |   |
|                                                                                 |   |                                |    |   |   |   |   |
| **Cash                  flow from investing activities:**                            |   |                                |    |   |   |   |   |
| Exploration,                  development and other capital expenditures             |   |                                | (68,847 | ) |   | (40,223 | ) |
| Proceeds                  from restricted investments                                |   |                                | 7,400   |   |   | 3,900 |   |
| Decrease                  (increase) in restricted investments                       |   |                                | 69      |   |   | (154 | ) |
| Net                  cash used in continuing operations                              |   |                                | (61,378 | ) |   | (36,477 | ) |
| Net                  cash used in discontinued operations                            |   |                                | -       |   |   | - |   |
| Net                  cash used in investing activities                               |   |                                | (61,378 | ) |   | (36,477 | ) |
|                                                                                 |   |                                |    |   |   |   |   |
| **Cash                  flow from financing activities:**                            |   |                                |    |   |   |   |   |
| Payments                  for induced conversion of convertible senior notes         |   |                                | (4,301  | ) |   | - |   |
| Dividends                  paid on convertible preferred stock                       |   |                                | (747    | ) |   | (383 | ) |
| Proceeds                  from exercise of stock options and other                   |   |                                | 39      |   |   | 1,357 |   |
| Net                  cash (used in) provided by continuing operations                |   |                                | (5,009  | ) |   | 974 |   |
| Net                  cash from discontinued operations                               |   |                                | -       |   |   | - |   |
| Net                  cash (used in) provided by financing activities                 |   |                                | (5,009  | ) |   | 974 |   |
| Net                  decrease in cash and cash equivalents                           |   |                                | (75,792 | ) |   | (8,130 | ) |
| Cash                  and cash equivalents at beginning of year                      |   |                                | 132,184 |   |   | 204,015 |   |
| Cash                  and cash equivalents at end of period                          |   |                                | 56,392  |   |   | 195,885 |   |
| Less                  restricted cash from continuing operations                     |   |                                | (1      | ) |   | (3,180 | ) |
| Less                  restricted cash from discontinued operations                   |   |                                | (548    | ) |   | (984 | ) |
| Unrestricted                  cash and cash equivalents at end of period             |   | $                                   | 55,843  |   | $ | 191,721 |   |

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**TABLE OF CONTENTS**

**McMoRan      EXPLORATION CO.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**1.  **
**BASIS      OF PRESENTATION**

**2.      STOCK-BASED COMPENSATION**

**Accounting      for Stock-Based Compensation. **

----

**TABLE      OF      CONTENTS**

**Stock-Based      Compensation Cost.**

|                                                                         |   |   |   |   | Three                Months Ended March 31, |   |
|------------------------------------------------------------------------------|--------|--------|--------|--------|---------------------------------------------|--------|
|                                                                         |   |   |   |   | 2006                                        |   | 2005 |   |
| Stock                options awarded to employees (including directors)      |   |   |   |   | $                                           | 9,364  |   | $ | 70 | a |
| Stock                options awarded to non-employees and advisory directors |   |   |   |   |                                        | 259    |   |   | 55 |   |
| Restricted                stock units                                        |   |   |   |   |                                        | 52     |   |   | 138 |   |
| Total                compensation cost                                       |   |   |   |   | $                                           | 9,675  |   | $ | 263 |   |

| Net                loss applicable to common stock, as reported |   |   | $      | (5,744 | )      |
|-----------------------------------------------------------------|--------|--------|--------|--------|--------|
| Add:                Stock-based employee compensation expense   |   |   |   |   |   |
| included                in reported net loss for stock option   |   |   |   |   |   |
| conversions                and restricted stock units           |   |   |   | 208    |   |
| Deduct:                Total stock-based employee compensation  |   |   |   |   |   |
| expense                determined under fair value-based method |   |   |   |   |   |
| for                all awards                                   |   |   |   | (3,881 | )      |
| Pro                forma net loss applicable to common stock    |   |   | $      | (9,417 | )      |
|                                                            |   |   |   |   |   |
| Net                loss per share:                              |   |   |   |   |   |
| Basic                and diluted - as reported                  |   |   | $      | (0.24  | )      |
| Basic                and diluted - pro forma                    |   |   | $      | (0.39  | )      |
|                                                            |   |   |   |   |   |

| Fair                value (per share) per stock option |   | $      | 10.65 |   |   |
|--------------------------------------------------------|--------|--------|-------|--------|--------|
| Risk-free                interest rate                 |   |   | 4.0   | %      |   |
| Expected                volatility rate                |   |   | 61    | %      |   |
| Expected                life of options (in years)     |   |   | 7     |   |   |

**Stock-Based      Compensation Plans. **

----

**TABLE      OF      CONTENTS**

**Stock      Options.**

|                                     |      |   |     |   | Weighted                    |   |      |   |
|------------------------------------------|-----------|--------|----------|--------|-----------------------------|--------|-----------|--------|
|                                     |      |   | Weighted |   | Average                     |   | Aggregate |   |
|                                     | Number    |   | Average  |   | Remaining                   |   | Intrinsic |   |
|                                     | Of        |   | Option   |   | Contractual                 |   | Value     |   |
|                                     | Options   |   | Price    |   | Term                (years) |   | ($000)    |   |
| Balance                at January 1      | 5,845,416 |   | $        | 14.57  |                        |   |      |   |   |   |
| Granted                                  | 1,331,000 |   |     | 19.85  |                        |   |      |   |   |   |
| Exercised                                | (3,125    | )      |     | 12.51  |                        |   |      |   |   |   |
| Expired/Forfeited                        | -         |   |     | -      |                        |   |      |   |   |   |
| Balance                at March 31       | 7,173,291 |   |     | 15.55  |                        | 7.4    |      | $      | 20,959 |   |
| Vested                and exercisable at |      |   |     |   |                        |   |      |   |   |   |
| March                31                  | 5,238,206 |   |     | 14.85  |                        | 6.7    |      | $      | 18,507 |   |
|                                     |      |   |     |   |                        |   |      |   |   |   |

| Fair                value (per share) of stock option on grant date |   | $      | 11.91 | a |   |
|---------------------------------------------------------------------|--------|--------|-------|---|--------|
| Expected                and weighted average volatility             |   |   | 55.5  | % |   |
| Expected                life of options (in years)                  |   |   | 7     | a |   |
| Risk-free                interest rate                              |   |   | 4.5   | % |   |

| a.   | For                the stock options that were granted with immediate vesting (500,000                shares                granted to the Co-Chairmen in lieu of cash compensation for 2006)                the                expected life of the options is six years and the fair value of stock                options on grant date was $11.52 per                share. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Restricted      Stock Units.**

**3.      DEBT CONVERSION TRANSACTIONS AND CREDIT      FACILTY**

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**TABLE      OF      CONTENTS**

**4.      EARNINGS PER SHARE**

|                                                          |   | First                Quarter  |   |
|---------------------------------------------------------------|--------|-------------------------------|--------|
|                                                          |   | 2006                          |   |   | 2005 |   |
|                                                          |   | (in                thousands) |   |
| In-the-money                stock options a                ,b |   |                          | 1,402  |   |   |   | 3,190 |   |
| Stock                warrants a,c                             |   |                          | 1,810  |   |   |   | 1,818 |   |
| 5%                convertible preferred stock d               |   |                          | 6,214  |   |   |   | 6,362 |   |
| 6%                convertible senior notes e                  |   |                          | 7,080  |   |   |   | 9,123 |   |
| 5¼%                convertible senior notes f            |   |                          | 6,938  |   |   |   | 8,446 |   |
|                                                          |   |                          |   |   |   |   |   |   |

| a.   | McMoRan                uses the treasury stock method to determine total shares relating                to                in-the-money stock options and stock warrants to include in its diluted                earning per share calculation. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | Represents                stock options with an exercise price less than the average market                price                for McMoRan’s common stock for the periods presented. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c.   | Includes                stock warrants issued to K1 USA Energy Production Corporation in                December                2002 (1.74 million shares) and September 2003 (0.76 million shares).                The                warrants are exercisable for McMoRan common stock at any time over                their                respective five-year terms at an exercise price of $5.25 per                share. See Note 4 of McMoRan’s 2005 Form 10-K for additional information                regarding the warrants. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| d.   | At                  the election of the holder, and before the shares mature on June                  30, 2012,                  each outstanding share of 5% mandatorily redeemable convertible                  preferred                  stock is convertible into 5.1975 shares of McMoRan common stock.                  For                  additional information regarding McMoRan’s convertible preferred stock see                  Note 6 of McMoRan’s 2005 Form 10-K. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| e.   | The                  notes, issued in July 2003, are convertible at the option of the                  holder at                  any time prior to their maturity on July 2, 2008 into shares of                  McMoRan                  common stock at a conversion price of $14.25 per share. Net interest                  expense on the 6% convertible senior notes totaled $1.0 million                  during the                  first quarter of 2006 and $2.0 million during the first quarter                  of 2005.                  Additional information regarding McMoRan’s 6% convertible senior notes is                  disclosed in Note 5 of its 2005 Form 10-K. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| f.   | The                  notes, issued in October 2004, are convertible at the option of                  the holder                  at any time prior to their maturity on October 6, 2011 into shares                  of                  McMoRan common stock at a conversion price of $16.575 per share.                  Net                  interest expense on the 5¼% convertible senior notes totaled $0.8 million |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**TABLE        OF CONTENTS**

|                                              |   | First                Quarter |   |
|---------------------------------------------------|--------|------------------------------|--------|
|                                              |   | 2006                         |   |   | 2005 |   |
| Outstanding                options (in thousands) |   |                         | 1,751  |   |   |   | 438 |   |
| Average                exercise price             |   | $                            | 20.30  |   |   | $ | 21.76 |   |

**5.      OTHER MATTERS**

** **

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**TABLE      OF      CONTENTS**

** **

|                                               | 2006   |   | 2005   |   |
|----------------------------------------------------|--------|--------|--------|--------|
| Service                  cost                      | $      | -      |   | $      | - |   |
| Interest                  cost                     |   | 84     |   |   | 33 |   |
| Return                  on plan assets             |   | (8     | )      |   | (18 | ) |
| Change                  in plan payout assumptions |   | -      |   |   | - |   |
| Net                  periodic benefit expense      | $      | 76     |   | $      | 15 |   |

**6.        RATIO OF EARNINGS TO FIXED CHARGES **

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**TABLE      OF      CONTENTS**

Remarks

REPORT        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING        FIRM

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**TABLE        OF        CONTENTS**

Item        2. Management's        Discussion and Analysis of Financial Condition and Results of        Operations.

**OVERVIEW**

*In        management’s discussion and analysis “we,” “us,” and “our” refer to McMoRan        Exploration Co. and its wholly owned consolidated subsidiaries, McMoRan Oil        & Gas LLC (MOXY) and Freeport-McMoRan Energy LLC (Freeport Energy). You        should read the following discussions in conjunction with our consolidated        financial statements, the related discussion and analysis of financial condition        and results of operations and our discussion of “Business and Properties” in our        Form 10-K for the year ended December 31, 2005 (2005 Form 10-K), filed with        the        Securities and Exchange Commission. The results of operations reported and        summarized below are not necessarily indicative of future operating results.        Unless otherwise specified, all references to Notes refers to Notes to        Consolidated Financial Statements included elsewhere in this Form 10-Q.*

**OIL        & GAS ACTIVITIES**

** **

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**TABLE      OF      CONTENTS**

|                                                                                         |  **Working****Interest** | **Net****Revenue****Interest** |  **Prospect                  Acreage****a** | **Water                  Depth** | **Proposed                  Total****Depth****b** |  **Current                  Depth****c** | **Spud                  Date**       |
|----------------------------------------------------------------------------------------------|-------------------------------|--------------------------------|--------------------------------------------------|----------------------------------|---------------------------------------------------|-----------------------------------------------|--------------------------------------|
|                                                                                         | %                             | %                              |                                             | Feet                             | feet                                              | Feet                                          |                                 |
| Onshore                  Vermilion Parish, LA“Liberty                  Canal” d  | 37.5                          | 27.7                           | 1,420                                            | n/ae                             | 16,500                                            | 15,685                                        | March                  5, 2006       |
| St.                  Mary Parish, LA“Laphroaig”                                  | 37.5                          | 27.8                           | 2,439                                            | <10                           | 19,000                                            | 11,300                                        | April                  8, 2006       |
| Louisiana                  State Lease 18091“Long                  Point Deep” d | 37.5                          | 26.8                           | 5,000                                            | 8                                | 23,000                                            | 4,000                                         | April                  27, 2006      |
| **Near-Term                  Exploration Well**                                              |                          |                           |                                             |                             |                                              |                                          |                                 |
|  Vermilion                  Block 54 f                                                  | 30.0                          | 24.2                           | 3,125                                            | 20                               | 15,400                                            | n/a                                           | Second-Quarter                  2006 |
| **Near-Term                  Development Well**                                              |                          |                           |                                             |                             |                                              |                                          |                                 |
| South                  Marsh Island Block 217“Hurricane                  No. 3”  | 27.5                          | 19.4                           | 7,700                                            | 10                               | 21,500                                            | n/a                                           | Second-Quarter                  2006 |

| a.                 | Gross                acres encompassing prospect to which we retain exploration                rights. |
|------------------------------|--------------------------------------------------------------------------------------------------------|
| b.                 | Planned                target measured depth, which is subject to                change. |
|------------------------------|------------------------------------------------------------------------------------------|
| c.                 | Approximate                depth of well on May 5, 2006. |
|------------------------------|----------------------------------------------------------|
| d.                 | Wells                in which we are the operator. |
|------------------------------|----------------------------------------------------|
| e.                 | Prospect                located onshore Louisiana. |
|------------------------------|----------------------------------------------------|
| f.                 | Prospect                will be eligible for deep gas royalty relief under current Minerals                Management Service (MMS) guidelines, which could result in an increased                net revenue interest for early production. If MMS approves the application                for royalty relief, each lease may be exempt from paying MMS royalties                on                up to the initial 25 Bcf of production. |
|------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**TABLE      OF      CONTENTS**

|                                                                                   | **Working****Interest** | **Net                  Revenue****Interest** | **Start-Up                  or Expected****Start-Up                  Date** |
|----------------------------------------------------------------------------------------|-------------------------|----------------------------------------------|-----------------------------------------------------------------------------|
| Onshore                  Vermilion Parish, LA“Cane                  Ridge” | 37.5%                   | 27.5%                                        | April                  21, 2006                                             |
| Vermilion                  Blocks 16/17 “King                  Kong No. 3” | 40.0%                   | 29.2%                                        | April                  27, 2006                                             |

----

**TABLE      OF      CONTENTS**

|  | **Working****Interest** | **Net                Revenue****Interest** | **Start-Up                or Expected****Start-Up                Date** |
|--|-------------------------|--------------------------------------------|-------------------------------------------------------------------------|

| West                  Cameron Block 43 “No.                  3”*                | 23.4% | 18.0% | May                  2006       |
|---------------------------------------------------------------------------------------------|-------|-------|---------------------------------|
| South                  Marsh Island Block 217“Hurricane                  No. 2” | 27.5% | 19.4% |  May                  2006 |

| Louisiana                      State Lease 18090“Long                      Point No. 1” | 37.5% | 26.8% | Mid-2006                                                                             |
|-----------------------------------------------------------------------------------------------------|-------|-------|--------------------------------------------------------------------------------------|
| Louisiana                      State Lease 18090“Long                      Point No. 2” | 37.5% | 26.8% | Mid-2006                                                                             |
| Garden                      Banks Block 625“Dawson                      Deep”           | 30.0% | 24.0% | Mid-2006                                                                             |
| Louisiana                      State Lease 340“Blueberry                      Hill”     | 35.3% | 24.2% | Completion                      Pending Third-Quarter                      2006 Test |

**            *
* *

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**TABLE      OF      CONTENTS**

**MAIN        PASS ENERGY HUB**
**™**

**        PROJECT**

**™**

**™**

----

**TABLE      OF      CONTENTS**

----

**TABLE      OF      CONTENTS**

**RESULTS          OF OPERATIONS**

** **

|                                                     | Three                    Months Ended March 31, |
|----------------------------------------------------------|-------------------------------------------------|
|                                                     | 2006                                            |   | 2005 |
| OPERATING                    DATA:                       |                                            |   |   |
| Sales                    Volumes                         |                                            |   |   |
| Gas                    (thousand cubic feet, or Mcf)     | 2,159,400                                       |   | 1,410,500 |
| Oil                    (barrels)                    | 296,900                                         | a | 17,000 |
| Plant                    products (equivalent barrels) b | 14,300                                          |   | 7,100 |
| Average                    Realization                   |                                            |   |   |
| Gas                    (per Mcf)                         | $                    8.12                       |   | $                    6.84 |
| Oil                    (per barrel)                      | 57.15                                           |   | 50.28 |

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**TABLE      OF      CONTENTS**

| a.                 | After                being shut-in in September 2004 as a result of damage to a third-party                facility and connecting pipelines caused by Hurricane Ivan, Main                Pass                resumed production in May 2005 following completion of modifications                to                existing facilities to allow transportation of oil from the field                by barge                (Note 5). In the first quarter of 2006, sales volumes from Main Pass                totaled approximately 199,300 barrels. Main Pass produces sour crude                oil,                which sells at a discount to other crude                oils. |
|------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.                 | We                received approximately $0.8 million and $0.3 million of revenues                associated with plant products (ethane, propane, butane, etc.) during                the                first quarters of 2006 and 2005, respectively (see “Oil and Gas                Operations” below). |
|------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Oil        and Gas Operations**

|                                                              | First                  Quarter |   |
|-------------------------------------------------------------------|--------------------------------|--------|
| Oil                  and natural gas revenues - prior year period | $                              | 11,380 |   |
| Increase                  (decrease)                              |                           |   |   |
| Price                  realizations:                              |                           |   |   |
| Oil                  and condensate                               |                           | 1,196  |   |
| Natural                  gas                                      |                           | 2,779  |   |
| Sales                  volumes:                                   |                           |   |   |
| Oil                  and condensate                               |                           | 14,918 |   |
| Natural                  gas                                      |                           | 5,120  |   |
| Plant                  products revenues                          |                           | 509    |   |
| Other                                                             |                           | (461   | ) |
| Oil                  and gas revenues - current year period       | $                              | 35,441 |   |

** **

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**TABLE      OF      CONTENTS**

|                                                         | Three                  Months Ended |   |
|--------------------------------------------------------------|-------------------------------------|--------|
|                                                         | March                  31,          |   |
|                                                         | 2006                                |   | 2005 |   |
| Geological                  and geophysical,                 |                                |   |   |   |   |   |
| including                  3-D seismic purchases             | $                                   | 7.0    | a | $ | 1.8 |   |
| Non                  productive exploratory costs, including |                                |   |   |   |   |   |
| related                  lease costs                         |                                | 12.3   | b |   | 2.9 | c |
| Other                                                        |                                | 1.3    |   |   | 2.8 |   |
|                                                         | $                                   | 20.6   |   | $ | 7.5 |   |

| a.   | Includes                  $5.0 million of compensation costs associated with outstanding                  stock-based                  awards following adoption of a new accounting standard (see “New                  Accounting Standard” below and Note                  2). |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | Includes                  nonproductive exploratory well drilling and related costs primarily                  associated with the “Denali” well at South Pass Block 26 ($8.1 million),                  and the costs incurred during the first quarter of 2006 for the“Cabin                  Creek” well at West Cameron Block 95 ($2.5 million) and “Elizabeth” well                  at South Marsh Island Block 230 ($1.7                  million). |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c.   | Includes                  nonproductive exploratory well drilling and related costs associated                  with                  the “Caracara” well at Vermilion Blocks 227/228 ($1.3 million), the “King                  of the Hill” well at High Island Block 131($0.3 million), the “Gandalf ”                  well at Mustang Island Block 829 ($0.1 million) and the deeper                  zones at                  both the “Hurricane Upthrown” well at South Marsh Island Block 217 ($0.4                  million) and the West Cameron Block 43 No. 3 exploratory well ($0.4                  million). Amount also includes the write-off of approximately $0.4                  million                  of leasehold costs associated with one onshore Louisiana prospect. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Other        Financial Results**

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**TABLE      OF      CONTENTS**

**CAPITAL        RESOURCES AND LIQUIDITY**

|                                   | Three                  Months Ended |   |
|----------------------------------------|-------------------------------------|--------|
|                                   | March                  31,          |   |
|                                   | 2006                                |   |   | 2005 |   |
| Continuing                  operations |                                |   |   |   |   |   |   |
| Operating                              | $                                   | (5.9   | ) |   | $ | 28.4 |   |
| Investing                              |                                | (61.4  | ) |   |   | (36.5 | ) |
| Financing                              |                                | (5.0   | ) |   |   | 1.0 |   |
|                                   |                                |   |   |   |   |   |   |

| Discontinued                  operations |   |   |   |   |   |   |   |
|------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
| Operating                                |   | (3.5   | )      |   |   | (1.0   | )      |
| Investing                                |   | -      |   |   |   | -      |   |
| Financing                                |   | -      |   |   |   | -      |   |
|                                     |   |   |   |   |   |   |   |
| Total                  cash flow         |   |   |   |   |   |   |   |
| Operating                                |   | (9.4   | )      |   |   | 27.4   |   |
| Investing                                |   | (61.4  | )      |   |   | (36.5  | )      |
| Financing                                |   | (5.0   | )      |   |   | 1.0    |   |

**First-Quarter        2006 Cash Flows Compared with First-Quarter 2005**

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**TABLE      OF      CONTENTS**

**Debt        Conversion Transactions and Credit Facility**

**NEW        ACCOUNTING STANDARD**

----

**TABLE      OF      CONTENTS**

|                                                 |   | Three                  Months Ended March                  31, |   |
|------------------------------------------------------|--------|----------------------------------------------------------------|--------|
|                                                 |   | 2006                                                           |   | 2005 |   |
| General                  and administrative expenses |   | $                                                              | 4,651  |   | $ | 86 |   |
| Exploration                  expenses                |   |                                                           | 4,999  |   |   | 177 |   |
| Main                  Pass Energy Hub start-up costs |   |                                                           | 25     |   |   | - |   |
| Total                  stock-based compensation cost |   | $                                                              | 9,675  |   | $ | 263 |   |
|                                                 |   |                                                           |   |   |   |   |   |

**DISCONTINUED        OPERATIONS**

|                                               |   | First                  Quarter |   |
|----------------------------------------------------|--------|--------------------------------|--------|
|                                               |   | 2006                           |   | 2005 |   |
| Sulphur                  retiree costs             |   | $                              | 460    |   | $ | 218 |   |
| Legal                  expenses                    |   |                           | 50     |   |   | 236 |   |
| Caretaking                  costs                  |   |                           | 430    |   |   | 190 |   |
| Accretion                  expense - sulphur       |   |                           |   |   |   |   |   |
| reclamation                  obligations           |   |                           | 348    |   |   | 240 |   |
| Insurance                                          |   |                           | 418    |   |   | 90 |   |
| General                  and administrative        |   |                           | 31     |   |   | 19 |   |
| Other                                              |   |                           | (60    | ) |   | 36 |   |
| Loss                  from discontinued operations |   | $                              | 1,677  |   | $ | 1,029 |   |

**CAUTIONARY        STATEMENT**

----

**TABLE      OF      CONTENTS**

Item        3.Quantitative        and Qualitative Disclosures about Market Risk.

Item        4.Controls        and Procedures.

PART        II--OTHER INFORMATION

----

**TABLE      OF      CONTENTS**

|                                                                          | Votes                  Cast For | Authority                  Withheld |
|-------------------------------------------------------------------------------|---------------------------------|-------------------------------------|
| 1.                  Election of Directors:                                    |                            |                                |
| Richard                  C. Adkerson                                          | 24,439,347                      | 459,103                             |
|                          Robert A. Day     | 24,429,423                      | 469,027                             |
| Gerald                  J. Ford                                               | 24,633,647                      | 264,803                             |
| H.                  Devon Graham, Jr.                                         | 24,556,974                      | 341,476                             |
| James                  R. Moffett                                             | 24,435,841                      | 462,609                             |
| B.                  M. Rankin, Jr.                                            | 24,320,911                      | 577,539                             |
|                          J. Taylor Wharton | 24,557,021                      | 341,429                             |

|                                                                              | For        | Against | Abstentions |
|-----------------------------------------------------------------------------------|------------|---------|-------------|
| 2.                  Ratification of Ernst & Young LLP as independent auditors | 24,853,225 | 22,472  | 22,753      |

SIGNATURE

**TABLE OF      CONTENTS**

**McMoRan      Exploration Co.**

**Exhibit      Index**

**Exhibit      Number**

| 2.1    | Agreement                  and Plan of Merger dated as of August 1, 1998. (Incorporated by                  reference                  to Annex A to McMoRan’s Registration Statement on Form S-4 (Registration                  No. 333-61171) filed with the SEC on October 6, 1998 (the McMoRan                  S-4)).                                                                                                                                                                                                                                                                       |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.1    | Amended                  and Restated Certificate of Incorporation of McMoRan. (Incorporated                  by                  reference to Exhibit 3.1 to McMoRan’s 1998 Annual Report on Form 10-K (the                  McMoRan 1998 Form 10-K)).                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.2    | Certificate                  of Amendment to the Amended and Restated Certificate of Incorporation                  of                  McMoRan. (Incorporated by reference to Exhibit 3.2 of McMoRan’s                  First-Quarter 2003 Form 10-Q).                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 3.3    | Amended                  and Restated By-Laws of McMoRan as amended effective January 30,                  2006.                  (Incorporated by reference to Exhibit 3.3 to McMoRan’s Current Report on                  Form 8-K dated January 30, 2006 (filed February 3, 2006).                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 4.1    | Form                  of Certificate of McMoRan Common Stock (Incorporated by reference                  to                  Exhibit 4.1 of the McMoRan S-4).                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 4.2    | Rights                  Agreement dated as of November 13, 1998. (Incorporated by reference                  to                  Exhibit 4.2 to McMoRan 1998 Form 10-K).                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 4.3    | Amendment                  to Rights Agreement dated December 28, 1998. (Incorporated by reference                  to                  Exhibit 4.3 to McMoRan 1998 Form 10-K).                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 4.4    | Standstill                  Agreement dated August 5, 1999 between McMoRan and Alpine Capital,                  L.P.,                  Robert W. Bruce III, Algenpar, Inc, J. Taylor Crandall, Susan C.                  Bruce,                  Keystone, Inc., Robert M. Bass, the Anne T. and Robert M. Bass                  Foundation,                  Anne T. Bass and The Robert Bruce Management Company, Inc. Defined                  Benefit                  Pension Trust. (Incorporated by reference to Exhibit 4.4 to McMoRan’s                  Third Quarter 1999 Form 10-Q). |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 4.5    | Form                  of Certificate of McMoRan 5% Convertible Preferred Stock (McMoRan                  Preferred Stock). (Incorporated by reference to Exhibit 4.5 to                  McMoRan’s                  Second Quarter 2002 Form 10-Q).                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 4.6    | Certificate                  of Designations of McMoRan Preferred Stock. (Incorporated by reference                  to                  Exhibit 4.6 to McMoRan’s Third-Quarter 2002 Form 10-Q).                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 4.7    | Warrant                  to Purchase Shares of Common Stock of McMoRan dated December 16,                  2002.                  (Incorporated by reference to Exhibit 4.7 to McMoRan’s 2002 Form                  10-K).                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 4.8    | Warrant                  to Purchase Shares of Common Stock of McMoRan dated September 30,                  2003.                  (Incorporated by reference to Exhibit 4.8 to McMoRan’s 2003 Form                  10-K),                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 4.9    | Registration                  Rights Agreement dated December 16, 2002 between McMoRan and K1                  USA Energy                  Production Corporation. (Incorporated by reference to Exhibit 4.8                  to                  McMoRan’s 2002 Form 10-K).                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 4.10   | Indenture                  dated as of July 2, 2003 by and between McMoRan and The Bank of                  New York,                  as trustee. (Incorporated by reference to Exhibit 4.9 to McMoRan’s                  Second-Quarter 2003 Form 10-Q).                                                                                                                                                                                                                                                                                                                                       |

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**TABLE OF        CONTENTS**

| 4.11   | Collateral                  Pledge and Security Agreement dated as of July 2, 2003 by and among                  McMoRan, as pledgor, The Bank of New York, as trustee, and the                  Bank of New                  York, as collateral agent. (Incorporated by reference to Exhibit                  4.11 to                  McMoRan’s Second-Quarter 2003 Form 10-Q).                                                                                                             |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 4.12   | Indenture                  dated October 6, 2004 by and among McMoRan and the Bank of New                  York, as                  trustee. (Incorporated by reference to Exhibit 99.3 to McMoRan’s Current                  Report on Form 8-K dated October 6, 2004 (filed October 7,                  2004).                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 4.13   | Collateral                  Pledge and Security Agreement dated October 6, 2004 by and among                  McMoRan,                  as pledgor, The Bank of New York, as trustee and the Bank of New                  York, as                  collateral agent. (Incorporated by reference to Exhibit 99.4 to                  McMoRan’s                  Current Report on Form 8-K dated October 6, 2004 (filed October                  7,                  2004).                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 4.14   | Registration                  Rights Agreement dated October 6, 2004 by and among McMoRan, as                  issuer and                  Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan                  Securities Inc. and Jefferies & Company, Inc. as Initial Purchasers.                  (Incorporated by reference to Exhibit 99.5 to McMoRan’s Current Report on                  Form 8-K dated October 6, 2004 (filed October 7,                  2004)). |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.1   | Main                  Pass 299 Sulphur and Salt Lease, effective May 1, 1988. (Incorporated                  by                  reference to Exhibit 10.1 to McMoRan’s 2001 Annual Report on Form 10-K                  (the McMoRan 2001 Form 10-K)).                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.2   | IMC                  Global/FSC Agreement dated as of March 29, 2002 among IMC Global                  Inc., IMC                  Global Phosphate Company, Phosphate Resource Partners Limited Partnership,                  IMC Global Phosphates MP Inc., MOXY and McMoRan. (Incorporated                  by                  reference to Exhibit 10.10 to McMoRan’s Second Quarter 2002 Form                  10-Q).                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.3   | Amended                  and Restated Services Agreement dated as of January 1, 2002 between                  McMoRan and FM Services Company. (Incorporated by reference to                  Exhibit                  10.3 to McMoRan’s Second-Quarter 2003 Form 10-Q).                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.4   | Letter                  Agreement dated August 22, 2000 between Devon Energy Corporation                  and                  Freeport Sulphur. (Incorporated by reference to Exhibit 10.36 to                  McMoRan’s                  Third-Quarter 2000 Form 10-Q).                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.5   | Asset                  Purchase Agreement dated effective December 1, 1999 between SOI                  Finance                  Inc., Shell Offshore Inc. and MOXY. (Incorporated by reference                  to Exhibit                  10.33 in the McMoRan 1999 Form 10-K).                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.6   | Employee                  Benefits Agreement by and between Freeport-McMoRan Inc. and Freeport                  Sulphur (Incorporated by reference to Exhibit 10.29 to McMoRan’s 2001 Form                  10-K).                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.7   | Purchase                  and Sales agreement dated January 25, 2002 but effective January                  1, 2002                  by and between MOXY and Halliburton Energy Services, Inc. (Incorporated                  by                  reference to Exhibit 10.1 to McMoRan’s Current Report on Form 8-K dated                  February 22, 2002).                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.8   | Purchase                  and Sale Agreement dated as of March 29, 2002 by and among Freeport                  Sulphur, McMoRan, MOXY and Gulf Sulphur Services Ltd., LLP. (Incorporated                  by reference to Exhibit 10.37 to McMoRan’s First-Quarter 2002 Form 10-Q.)                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.9   | Purchase                  and Sale Agreement dated May 9, 2002 by and between MOXY and El                  Paso                  Production Company. (Incorporated by reference to Exhibit 10.28                  to                  McMoRan’s Second Quarter 2002 Form 10-Q).                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |

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**TABLE OF        CONTENTS**

| 10.10  | Amendment                  to Purchase and Sale Agreement dated May 22, 2002 by and between                  MOXY and                  El Paso Production Company. (Incorporated by reference to Exhibit                  10.29 to                  McMoRan’s Second Quarter 2002 Form 10-Q).                                                                                                                                                           |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.11  | Master                  Agreement dated October 22, 2002 by and among Freeport-McMoRan                  Sulphur                  LLC, K-Mc Venture LLC, K1 USA Energy Production Corporation and                  McMoRan                  (Incorporated by reference to Exhibit 10.18 to McMoRan’s 2002 Form                  10-K).                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 10.12  | Credit                  Agreement dated as of April 19, 2006 among McMoRan Oil & Gas LLC as                  borrower, JP Morgan Chase Bank, N.A., as administrative agent,                  Toronto-Dominion (Texas) LLC, as syndication agent and the Lenders                  Party                  Hereto. (Incorporated by reference to Exhibit 10.1 of McMoRan Current                  Report on Form 8-K dated April 19,                  2006). |

|   | Executive                    and Director Compensation Plans and Arrangements (Exhibits 10.13                    through                    10.34).                                                                                                                                                                 |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                |
| 10.13  | McMoRan                    Adjusted Stock Award Plan, as amended and restated. (Incorporated                    by                    reference to Exhibit 10.6 to McMoRan’s Current Report on Form 8-K dated                    May 1, 2006 (May 1, 2006 Form 8-K).                                          |
|   |                                                                                                                                                                                                                                                                                                                |
| 10.14  | McMoRan                    1998 Stock Option Plan, as amended and restated. (Incorporated                    by                    reference to Exhibit 10.5 to McMoRan’s May 1, 2006 Form                    8-K).                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                |
| 10.15  | McMoRan                    1998 Stock Option Plan for Non-Employee Directors. (Incorporated                    by                    reference to Exhibit 10.14 to McMoRan’s Second-Quarter 2005 Form                    10-Q).                                                                               |
|   |                                                                                                                                                                                                                                                                                                                |
| 10.16  | McMoRan                    Form of Notice of Grant of Nonqualified Stock Options and Limited                    Rights                    under the 1998 Stock Option Plan. (Incorporated by reference                    to Exhibit                    10.15 to McMoRan’s Second-Quarter 2005 Form 10-Q).    |
|   |                                                                                                                                                                                                                                                                                                                |
| 10.17  | McMoRan                    2000 Stock Incentive Plan, as amended and restated. (Incorporated                    by                    reference to Exhibit 10.4 to McMoRan’s May 1, 2006 Form                    8-K).                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                |
| 10.18  | McMoRan                    Form of Notice of Grant of Nonqualified Stock Options and Limited                    Rights                    under the 2000 Stock Incentive Plan. (Incorporated by reference                    to Exhibit                    10.17 to McMoRan’s Second-Quarter 2005 Form 10-Q). |
|   |                                                                                                                                                                                                                                                                                                                |
| 10.19  | McMoRan                    2001 Stock Incentive Plan, as amended and restated. (Incorporated                    by                    reference to Exhibit 10.3 to McMoRan’s May 1, 2006 Form                    8-K).                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                |
| 10.20  | McMoRan                    2003 Stock Incentive Plan, as amended and restated. (Incorporated                    by                    reference to Exhibit 10.2 to McMoRan’s May 1, 2006 Form                    8-K).                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                |
| 10.21  | McMoRan’s                    Performance Incentive Awards Program as amended effective February                    1,                    1999. (Incorporated by reference to Exhibit 10.18 to McMoRan’s 1998 Form                    10-K).                                                             |
|   |                                                                                                                                                                                                                                                                                                                |
| 10.22  | McMoRan                    Form of Notice of Grant of Nonqualified Stock Options and Limited                    Rights                    under the 2001 Stock Incentive Plan. (Incorporated by reference                    to Exhibit                    10.21 to McMoRan’s Second-Quarter 2005 Form 10-Q). |
|   |                                                                                                                                                                                                                                                                                                                |
| 10.23  | McMoRan                    Form of Restricted Stock Unit Agreement Under the 2001 Stock                    Incentive                    Plan. (Incorporated by reference to Exhibit 10.22 to McMoRan’s                    Second-Quarter 2005 Form 10-Q).                                                     |
|   |                                                                                                                                                                                                                                                                                                                |
| 10.24  | McMoRan                    Exploration Co. Executive Services Program (Incorporated by reference                    to                    Exhibit 10.8 to McMoRan’s May 1, 2006 Form                    8-K).                                                                                                 |

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**TABLE OF        CONTENTS**

| 10.25  | McMoRan                    Form of Notice of Grants of Nonqualified Stock Options and Limited                    Rights                    under the 2003 Stock Incentive Plan. (Incorporated by reference                    to Exhibit                    10.24 to McMoRan’s Second-Quarter 2005 Form 10-Q).                                                                                                                                                            |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.26  | McMoRan                    Form of Restricted Stock Unit Agreement Under the 2003 Stock                    Incentive                    Plan. (Incorporated by reference to Exhibit 10.25 to McMoRan’s                    Second-Quarter 2005 Form 10-Q).                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.27  | McMoRan                    2004 Director Compensation Plan. (Incorporated by reference to                    Exhibit                    10.29 to McMoRan’s Second-Quarter 2004 Form 10-Q).                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.28  | Form                    of Amendment No. 1 to Notice of Grant of Nonqualified Stock Options                    under                    the 2004 Director Compensation Plan.  (Incorporated by reference to                    Exhibit 10.7 to McMoRan's May 1, 2006 Form 8-K).                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.29  | Agreement                    for Consulting Services between Freeport-McMoRan Inc. and B.                    M. Rankin,                    Jr. effective as of January 1, 1991)(assigned to FM Services                    Company as of                    January 1, 1996); as amended on December 15, 1997 and on December                    7, 1998.                    (Incorporated by reference to Exhibit 10.32 to McMoRan’s 1998 Form                    10-K). |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.30  | Supplemental                    Letter Agreement between FM Services Company and B.M. Rankin,                    Jr.                    effective as of January 1, 2006. (Incorporated by reference to                    Exhibit                    10.28 to McMoRan’ 2005 Form 10-K).                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.31  | McMoRan                    Director Compensation. (Incorporated by reference to Exhibit                    10.27 to                    McMoRan’s 2004 Form 10-K).                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.32  | McMoRan                    Exploration Co. 2005 Stock Incentive Plan. (Incorporated by reference                    to                    Exhibit 10.1 to McMoRan’s May 1, 2006 Form 8-K).                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.33  | Form                    of Notice of Grant of Nonqualified Stock Options under the 2005                    Stock                    Incentive Plan. (Incorporated by reference to Exhibit 10.2 to                    McMoRan’s                    Current Report on Form 8-K filed May 6, 2005).                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.34  | Form                    of Restricted Stock Unit Agreement under the 2005 Stock Incentive                    Plan.                    (Incorporated by reference to Exhibit 10.3 to McMoRan’s Current Report on                    Form 8-K filed May 6, 2005).                                                                                                                                                                                                           |

| 15.1   | Letter                  dated May 1, 2006 from Ernst & Young LLP regarding unaudited interim                  financial statements. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                    |
| 31.1   | Certification                  of Principal Executive Officer pursuant to Rule                  13a-14(a)/15d-14(a).                    |
|   |                                                                                                                                    |
| 31.2   | Certification                  of Principal Financial Officer pursuant to Rule                  13a-14(a)/15d-14(a).                    |
|   |                                                                                                                                    |
| 32.1   | Certification                  of Principal Executive Officer pursuant to 18 U.S.C. Section                  1350.                      |
|   |                                                                                                                                    |
| 32.2   | Certification                  of Principal Financial Officer pursuant to 18 U.S.C. Section                  1350.                      |
|   |                                                                                                                                    |

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