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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 September 30, 2007**  |
| **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 |
|                                                                                      |   |
| Report                of Independent Registered Public Accounting                Firm     | 15 |
|                                                                                      |   |
| Management's                Discussion and Analysis                                       |   |
| of                Financial Condition and Results of                Operations            | 16 |
|                                                                                      |   |
| Quantitative                and Qualitative Disclosures about Market                Risks | 30 |
|                                                                                      |   |
| Controls                and Procedures                                                    | 30 |
|                                                                                      |   |
| Part                II.  Other Information                                      | 31 |
|                                                                                      |   |
| Signature                                                                                 | 39 |
|                                                                                      |   |
| 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**)

|                                                                                                                                                                                                                     | September                30,  |      | December                31, |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------|-----------|-----------------------------|--------|
|                                                                                                                                                                                                                     | 2007                          |      | 2006                        |   |
|                                                                                                                                                                                                                     | (In                Thousands) |      |
| ASSETS                                                                                                                                                                                                                   |                          |      |                        |   |   |   |
| Cash                and cash equivalents                                                                                                                                                                                 | $                             | 16,319    |                        | $      | 17,830 |   |
| Restricted                investments                                                                                                                                                                                    |                          | 3,019     |                        |   | 5,930 |   |
| Accounts                receivable                                                                                                                                                                                       |                          | 121,734   |                        |   | 45,636 |   |
| Inventories                                                                                                                                                                                                              |                          | 14,461    |                        |   | 25,034 |   |
| Prepaid                expenses                                                                                                                                                                                          |                          | 22,053    |                        |   | 16,190 |   |
| Fair                value of oil & gas derivative contracts                                                                                                                                                          |                          | 9,872     |                        |   | - |   |
| Current                assets from discontinued operations, including restricted cash                of                                                                                                                  |                          |      |                        |   |   |   |
| $0.5                million and $0.4 million, respectively                                                                                                                                                               |                          | 3,007     |                        |   | 6,492 |   |
| Total                current assets                                                                                                                                                                                      |                          | 190,465   |                        |   | 117,112 |   |
| Property,                plant and equipment, net                                                                                                                                                                        |                          | 1,571,014 |                        |   | 282,538 |   |
| Sulphur                business assets                                                                                                                                                                                   |                          | 352       |                        |   | 362 |   |
| Restricted                investments and cash                                                                                                                                                                           |                          | 3,288     |                        |   | 3,288 |   |
| Fair                value of oil and gas derivative contracts                                                                                                                                                            |                          | 8,964     |                        |   | - |   |
| Other                assets, including unamortized deferred financing costs of $32.5                                   million at September 30, 2007 and $5.3 million at December 31,                2006 |                          | 32,507    |                        |   | 5,377 |   |
| Total                assets                                                                                                                                                                                              | $                             | 1,806,590 |                        | $      | 408,677 |   |
|                                                                                                                                                                                                                     |                          |      |                        |   |   |   |
| LIABILITIES                AND STOCKHOLDERS’ DEFICIT                                                                                                                                                               |                          |      |                        |   |   |   |
| Accounts                payable                                                                                                                                                                                          | $                             | 103,907   |                        | $      | 85,504 |   |
| Accrued                liabilities                                                                                                                                                                                       |                          | 103,475   |                        |   | 32,844 |   |
| 6%                convertible senior notes                                                                                                                                                                               |                          | 100,870   |                        |   | - |   |
| Other                short term borrowings                                                                                                                                                                               |                          | 18,664    |                        |   | - |   |
| Accrued                interest and dividends payable                                                                                                                                                                    |                          | 18,275    |                        |   | 5,479 |   |
| Current                portion of accrued oil and gas reclamation costs                                                                                                                                                  |                          | 52,456    |                        |   | 2,604 |   |
| Current                portion of accrued sulphur reclamation costs                                                                                                                                                      |                          | 11,490    |                        |   | 12,909 |   |
| Fair                value of oil and gas derivative contracts                                                                                                                                                            |                          | 2,154     |                        |   | - |   |
| Current                liabilities from discontinued operations                                                                                                                                                          |                          | 2,252     |                        |   | 3,678 |   |
| Total                current liabilities                                                                                                                                                                                 |                          | 413,543   |                        |   | 143,018 |   |
| Unsecured                bridge loan facility                                                                                                                                                                            |                          | 800,000   |                        |   | - |   |
| Senior                secured revolving credit facility                                                                                                                                                                  |                          | 313,000   |                        |   | 28,750 |   |
| 5¼%                convertible senior notes                                                                                                                                                                         |                          | 115,000   |                        |   | 115,000 |   |
| 6%                convertible senior notes                                                                                                                                                                               |                          | -         |                        |   | 100,870 |   |
| Accrued                oil and gas reclamation costs                                                                                                                                                                     |                          | 224,176   |                        |   | 23,272 |   |
| Accrued                sulphur reclamation costs                                                                                                                                                                         |                          | 11,489    |                        |   | 10,185 |   |
| Contractual                postretirement obligation                                                                                                                                                                     |                          | 10,633    |                        |   | 9,831 |   |
| Other                long-term liabilities                                                                                                                                                                               |                          | 18,686    |                        |   | 17,151 |   |
| Mandatorily                redeemable convertible preferred stock                                                                                                                                                        |                          | -         |                        |   | 29,043 |   |
| Stockholders'                deficit                                                                                                                                                                                     |                          | (99,937   | )                           |   | (68,443 | ) |
| Total                liabilities and stockholders' deficit                                                                                                                                                               | $                             | 1,806,590 |                        | $      | 408,677 |   |
|                                                                                                                                                                                                                     |                          |      |                        |   |   |   |

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Table      of      Contents

**McMoRan      EXPLORATION CO.**

**CONSOLIDATED      STATEMENTS OF OPERATIONS(Unaudited**

|                                                                 | Three                Months Ended                       |    | Nine                Months Ended |   |
|----------------------------------------------------------------------|---------------------------------------------------------|---------|----------------------------------|--------|
|                                                                 | September                30,                            |    | September                30,     |   |
|                                                                 | 2007                                                    |    | 2006                             |   | 2007 |   | 2006 |   |
| Revenues:                                                            | (In                Thousands, Except Per Share Amounts) |    |
| Oil                and gas                                           | $                                                       | 131,018 |                             | $      | 57,810 |   | $ | 227,381 |   | $ | 143,527 |   |
| Service                                                              |                                                    | 2,234   |                             |   | 2,605 |   |   | 2,916 |   |   | 9,964 |   |
| Total                revenues                                        |                                                    | 133,252 |                             |   | 60,415 |   |   | 230,297 |   |   | 153,491 |   |
| Costs                and expenses:                                   |                                                    |    |                             |   |   |   |   |   |   |   |   |   |
| Production                and delivery costs                         |                                                    | 38,197  |                             |   | 17,467 |   |   | 72,543 |   |   | 39,001 |   |
| Depreciation                and amortization                         |                                                    | 85,014  |                             |   | 26,030 |   |   | 127,579 |   |   | 44,304 |   |
| Exploration                expenses                                  |                                                    | 37,060  |                             |   | 23,399 |   |   | 52,163 |   |   | 50,776 |   |
| General                and administrative expenses                   |                                                    | 6,992   |                             |   | 4,078 |   |   | 17,804 |   |   | 16,624 |   |
| Gain                on oil & gas derivative contracts            |                                                    | (10,695 | )                                |   | - |   |   | (10,695 | ) |   | - |   |
| Start-up                costs for Main Pass Energy Hub™        |                                                    | 2,345   |                             |   | 3,160 |   |   | 7,802 |   |   | 7,911 |   |
| Insurance                recovery                                    |                                                    | -       |                             |   | - |   |   | - |   |   | (2,856 | ) |
| Total                costs and expenses                              |                                                    | 158,913 |                             |   | 74,134 |   |   | 267,196 |   |   | 155,760 |   |
| Operating                loss                                        |                                                    | (25,661 | )                                |   | (13,719 | ) |   | (36,899 | ) |   | (2,269 | ) |
| Interest                expense                                      |                                                    | (22,887 | )                                |   | (2,694 | ) |   | (34,296 | ) |   | (6,840 | ) |
| Other                income (expense), net                           |                                                    | (2,457  | )                                |   | 284 |   |   | (876 | ) |   | (2,315 | ) |
| Loss                from continuing operations before income taxes   |                                                    | (51,005 | )                                |   | (16,129 | ) |   | (72,071 | ) |   | (11,424 | ) |
| Provision                for income taxes                            |                                                    | -       |                             |   | - |   |   | - |   |   | - |   |
| Loss                from continuing operations                       |                                                    | (51,005 | )                                |   | (16,129 | ) |   | (72,071 | ) |   | (11,424 | ) |
| Income                (loss) from discontinued operations            |                                                    | (1,179  | )                                |   | (2,459 | ) |   | 50 |   |   | (5,752 | ) |
| Net                loss                                              |                                                    | (52,184 | )                                |   | (18,588 |   |   | (72,021 | ) |   | (17,176 | ) |
| Preferred                dividends and amortization of convertible   |                                                    |    |                             |   |   |   |   |   |   |   |   |   |
| preferred                stock issuance costs                        |                                                    | -       |                             |   | (404 | ) |   | (1,552 | ) |   | (1,211 | ) |
| Net                loss applicable to common stock                   | $                                                       | (52,184 | )                                | $      | (18,992 | ) | $ | (73,573 | ) | $ | (18,387 | ) |
|                                                                 |                                                    |    |                             |   |   |   |   |   |   |   |   |   |
| Basic                and diluted net loss per share of common stock: |                                                    |    |                             |   |   |   |   |   |   |   |   |   |
| Continuing                operations                                 |                                                    | $(1.47  | )                                |   | $(0.58 | ) |   | $(2.40 | ) |   | $(0.45 | ) |
| Discontinued                operations                               |                                                    | (0.03   | )                                |   | (0.09 | ) |   | 0.00 |   |   | (0.21 | ) |
| Net                loss per share of common stock                    |                                                    | $(1.50  | )                                |   | $(0.67 | ) |   | $(2.40 | ) |   | $(0.66 | ) |
|                                                                 |                                                    |    |                             |   |   |   |   |   |   |   |   |   |
| Basic                and diluted average common shares outstanding   |                                                    | 34,693  |                             |   | 28,302 |   |   | 30,644 |   |   | 27,805 |   |

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Table      of      Contents

**McMoRan      EXPLORATION CO.**

**CONSOLIDATED      STATEMENTS OF CASH FLOW(Unaudited**

|                                                                         |   | Nine                Months Ended |       |
|------------------------------------------------------------------------------|--------|----------------------------------|------------|
|                                                                         |   | September                30,     |       |
|                                                                         |   | 2007                             |       | 2006 |   |
|                                                                         |   | (In                Thousands)    |       |
| **Cash                flow from operating activities:**                      |   |                             |       |   |   |   |   |
| Net                loss                                                      |   | $                                | (72,021    | ) | $ | (17,176 | ) |
| Adjustments                to reconcile net loss to net cash provided by     |   |                             |       |   |   |   |   |
| operating                activities:                                         |   |                             |       |   |   |   |   |
| (Income)                loss from discontinued operations                    |   |                             | (50        | ) |   | 5,752 |   |
| Depreciation                and amortization                                 |   |                             | 127,579    |   |   | 44,304 |   |
| Exploration                drilling and related expenditures                 |   |                             | 21,663     |   |   | 32,941 |   |
| Compensation                expense associated with stock-based awards       |   |                             | 10,905     |   |   | 13,757 |   |
| Amortization                of deferred financing costs                      |   |                             | 4,441      |   |   | 1,417 |   |
| Gain                on commodity hedging contracts                           |   |                             | (10,695    | ) |   | - |   |
| Loss                on conversions of convertible senior notes               |   |                             | -          |   |   | 4,301 |   |
| Reclamation                expenditures                                      |   |                             | (4,186     | ) |   | (543 | ) |
| Purchase                of oil and gas derivative contracts and other        |   |                             | (4,716     | ) |   | 892 |   |
| Decrease                in restricted cash                                   |   |                             | -          |   |   | 278 |   |
| Decrease                (increase) in working capital:                       |   |                             |       |   |   |   |   |
| Accounts                receivable                                           |   |                             | (72,533    | ) |   | 6,656 |   |
| Accounts                payable, accrued liabilities and other               |   |                             | 78,632     |   |   | 16,472 |   |
| Inventories                and prepaid expenses                              |   |                             | 23,375     |   |   | (38,550 | ) |
| Net                cash provided by continuing operations                    |   |                             | 102,394    |   |   | 70,501 |   |
| Net                cash provided by (used in) discontinued operations        |   |                             | 673        |   |   | (5,805 | ) |
| Net                cash provided by operating activities                     |   |                             | 103,067    |   |   | 64,696 |   |
|                                                                         |   |                             |       |   |   |   |   |
| **Cash                flow from investing activities**:                      |   |                             |       |   |   |   |   |
| Exploration,                development and other capital expenditures       |   |                             | (109,165   | ) |   | (202,889 | ) |
| Acquisition                of Newfield properties, net                       |   |                             | (1,051,302 | ) |   | - |   |
| Property                insurance reimbursement                              |   |                             | -          |   |   | 3,947 |   |
| Proceeds                from restricted investments                          |   |                             | 3,037      |   |   | 13,463 |   |
| Proceeds                from sale of property, plant and equipment           |   |                             | -          |   |   | 50 |   |
| Increase                in restricted investments                            |   |                             | (126       | ) |   | (141 | ) |
| Net                cash used in continuing operations                        |   |                             | (1,157,556 | ) |   | (185,570 | ) |
| Net                cash from discontinued operations                         |   |                             | -          |   |   | - |   |
| Net                cash used in investing activities                         |   |                             | (1,157,556 | ) |   | (185,570 | ) |
|                                                                         |   |                             |       |   |   |   |   |
| **Cash                flow from financing activities:**                      |   |                             |       |   |   |   |   |
| Net                borrowings under senior secured revolving credit facility |   |                             | 284,250    |   |   | 5,000 |   |
| Proceeds                from unsecured bridge loan facility                  |   |                             | 800,000    |   |   | - |   |
| Financing                costs                                               |   |                             | (31,216    | ) |   | (531 | ) |
| Payments                for induced conversion of convertible senior notes   |   |                             | -          |   |   | (4,301 | ) |
| Dividends                paid on convertible preferred stock                 |   |                             | (1,121     | ) |   | (1,121 | ) |
| Proceeds                from exercise of stock options and other             |   |                             | 1,065      |   |   | 389 |   |
| Net                cash provided by (used in) continuing operations          |   |                             | 1,052,978  |   |   | (564 | ) |
| Net                cash from discontinued operations                         |   |                             | -          |   |   | - |   |
| Net                cash provided by (used in) financing activities           |   |                             | 1,052,978  |   |   | (564 | ) |
| Net                decrease in cash and cash equivalents                     |   |                             | (1,511     | ) |   | (121,438 | ) |
| Cash                and cash equivalents at beginning of year                |   |                             | 17,830     |   |   | 130,901 |   |
| Cash                and cash equivalents at end of period                    |   | $                                | 16,319     |   | $ | 9,463 |   |

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Table      of      Contents

**McMoRan      EXPLORATION CO.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**1.  BASIS      OF PRESENTATION**

**2.  ACQUISITION      OF GULF OF MEXICO SHELF PROPERTIES**

| Cash                paid for acquired assets at closing (August 6, 2007) | $      | 1,076,286 |   |
|--------------------------------------------------------------------------|--------|-----------|--------|
| Estimated                oil & gas reclamation costs                 |   | 255,000   |   |
| Net                assets acquired at closing                            |   | 1,331,286 |   |
| Post                closing adjustments                                  |   | (31,768   | )      |
| Other                acquisition related costs                           |   | 6,784     |   |
| Net                assets acquired                                       | $      | 1,306,302 |   |

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Table      of      Contents

|                                                               | Three                Months Ended |    |   | Nine                Months Ended |    |
|--------------------------------------------------------------------|-----------------------------------|---------|--------|----------------------------------|---------|
|                                                               | September                30,      |    |   | September                30,     |    |
|                                                               | 2007                              |    | 2006   |                             |    | 2007 |   | 2006 |   |
| Revenues                                                           | $                                 | 202,753 |   | $                                | 223,257 |   |   | $ | 637,680 |   | $ | 621,826 |   |
| Operating                income                                    |                              | 11,818  |   |                             | 72,743  |   |   |   | 68,811 |   |   | 248,390 |   |
| Net                income (loss)                                   |                              | (25,695 | )      |                             | 38,021  |   |   |   | (37,479 | ) |   | 140,699 |   |
| Basic                net income (loss) per share of common stock   |                              | $(0.74  | )      |                             | $1.34   |   |   |   | $(1.22 | ) |   | $5.06 |   |
| Diluted                net income (loss) per share of common stock |                              | $(0.74  | )      |                             | $0.79   |   |   |   | $(1.22 | ) |   | $2.90 |   |

**3.LONG      TERM      DEBT**

|                                                    | September                30,  |      | December                31, |   |
|---------------------------------------------------------|-------------------------------|-----------|-----------------------------|--------|
|                                                    | 2007                          |      | 2006                        |   |
|                                                    | (in                thousands) |      |
| Unsecured                bridge loan facility           | $                             | 800,000   |                        | $      | - |   |
| Senior                secured revolving credit facility |                          | 313,000   |                        |   | 28,750 |   |
| 5¼%                convertible senior notes        |                          | 115,000   |                        |   | 115,000 |   |
| 6%                convertible senior notes              |                          | 100,870   |                        |   | 100,870 |   |
| Other                                                   |                          | 18,664    |                        |   | - |   |
| Total                debt                               |                          | 1,347,534 |                        |   | 244,620 |   |
| Less                current maturities                  |                          | (119,534  | )                           |   | - |   |
| Long-term                debt                           | $                             | 1,228,000 |                        | $      | 244,620 |   |

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Table      of      Contents

** **

**4.      EARNINGS PER SHARE**

|                                                 | Third                Quarter |   | Nine                Months |   |
|------------------------------------------------------|------------------------------|--------|----------------------------|--------|
|                                                 | 2007                         |   |                       | 2006   |   | 2007 |   |   | 2006 |   |
| In-the-money                stock options a,b        |                         | 709    |                       |   |   | 748 |   |   | 663 |   |   |   | 937 |   |
| Stock                warrants a,c                    |                         | 1,550  |                       |   |   | 1,781 |   |   | 1,538 |   |   |   | 1,785 |   |
| 6%                convertible senior notes d         |                         | 7,079  |                       |   |   | 7,079 |   |   | 7,079 |   |   |   | 7,079 |   |
| 5¼%                convertible senior notes e   |                         | 6,938  |                       |   |   | 6,938 |   |   | 6,938 |   |   |   | 6,938 |   |
| 5%                mandatorily redeemable convertible |                         |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| preferred                stock f                     |                         | -      |                       |   |   | 6,205 |   |   | - |   |   |   | 6,205 |   |

| a.   | McMoRan                uses the treasury stock method to determine the amount of in-the-money                stock options and stock warrants to include in its diluted earnings                per                share calculation. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table      of      Contents

| 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 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                2006 Form 10-K for additional                information. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| d.   | Net                interest expense on the 6% convertible senior notes totaled $1.6                million                during the third quarter of 2007, $1.2 million during the third quarter                of                2006 and $4.7 million and $3.3 million for the nine-month periods                ended                September 30, 2007 and 2006, respectively. For additional information                see                Note 3 above and Note 5 of McMoRan’s 2006 Form                10-K. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| e.   | Net                interest expense on the 5¼% convertible senior notes totaled $1.5 million                for the third quarter of 2007, $1.1 million during the third quarter                of                2006 and $4.4 million and $2.9 million for the nine months ended                September                30, 2007 and 2006, respectively. For additional information see Note                3                above and Note 5 of McMoRan’s 2006 Form                10-K. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| f.   | All                of the remaining shares of McMoRan convertible preferred stock were                converted into approximately 6.2 million common shares in the second                quarter of 2007 (see Note 3 of McMoRan’s Form 10-Q for the period ending                June 30, 2007).  For additional information see Note 6 of                McMoRan’s 2006 Form 10-K. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                              |   | Third                Quarter |   |   | Nine                Months |   |
|---------------------------------------------------|--------|------------------------------|--------|--------|----------------------------|--------|
|                                              |   | 2007                         |   |   | 2006                       |   |   | 2007 |   |   | 2006 |   |
| Outstanding                options (in thousands) |   |                         | 5,378  |   |                       |   | 2,133 |   |   |   | 5,378 |   |   |   | 2,133 |   |
| Average                exercise price             |   | $                            | 17.38  |   |                       | $      | 19.85 |   |   | $ | 17.38 |   |   | $ | 19.85 |   |

**5.  STOCK-BASED      COMPENSATION**

** **
** **

|                                                           | Three                Months Ended |   |   | Nine                Months Ended |   |
|----------------------------------------------------------------|-----------------------------------|--------|--------|----------------------------------|--------|
|                                                           | September                30,      |   |   | September                30,     |   |
|                                                           | 2007                              |   | 2006   |                             |   | 2007 |   | 2006 |   |
| Cost                of options awarded to employees (including |                              |   |   |                             |   |   |   |   |   |   |   |   |   |
| Directors)                                                     | $                                 | 2,007  |   | $                                | 1,912  |   |   | $ | 10,382 | a | $ | 13,174 | a |
| Cost                of options awarded to non-employees and    |                              |   |   |                             |   |   |   |   |   |   |   |   |   |
| advisory                directors                              |                              | 133    |   |                             | 112    |   |   |   | 492 |   |   | 495 |   |
| Cost                of restricted stock units                  |                              | 25     |   |                             | 18     |   |   |   | 31 |   |   | 88 |   |
| Total                compensation cost                         | $                                 | 2,165  |   | $                                | 2,042  |   |   | $ | 10,905 |   | $ | 13,757 |   |

| a.   | Includes                compensation charges associated with immediately vested stock options                totaling $4.4 million for the nine months ended September 30, 2007                and                $7.7 million for the nine months ended September 30,                2006.  These compensation costs include the stock options                granted to McMoRan’s Co-Chairmen in lieu of receiving any cash                compensation during the respective periods (see “Stock Options” below) and                the compensation costs related to stock options granted to                retiree-eligible employees, which resulted in one-year’s compensation                expense being immediately recognized at the date of the stock option                grant. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

** **

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Table      of      Contents

|                                     |      |   |     |   | Weighted                    |      |      |   |
|------------------------------------------|-----------|--------|----------|--------|-----------------------------|-----------|-----------|--------|
|                                     |      |   | Weighted |   | Average                     |      | Aggregate |   |
|                                     | Number    |   | Average  |   | Remaining                   |      | Intrinsic |   |
|                                     | Of        |   | Option   |   | Contractual                 |      | Value     |   |
|                                     | Options   |   | Price    |   | Term                (years) |      | ($000)    |   |
| Balance                at January 1      | 7,095,991 |   | $        | 15.50  |                        |      |      |   |   |   |
| Granted                                  | 1,353,250 |   |     | 12.29  |                        |      |      |   |   |   |
| Exercised                                | (213,695  | )      |     | 8.37   |                        |      |      |   |   |   |
| Expired/Forfeited                        | (383,633  | )      |     | 18.27  |                        |      |      |   |   |   |
| Balance                at September 30   | 7,851,913 |   |     | 15.01  |                        |  6.5 |      | $      | 117,836 |   |
| Vested                and exercisable at |      |   |     |   |                        |      |      |   |   |   |
| September                30              | 5,732,663 |   |     |   |                        | 5.7       |      | $      | 84,444 |   |
|                                     |      |   |     |   |                        |      |      |   |   |   |

|                                                                | Three                Months |   | Nine                Months |   |
|---------------------------------------------------------------------|-----------------------------|--------|----------------------------|--------|
|                                                                | 2007a                       |   | 2006                       |   | 2007 |   | 2006 |   |
| Fair                Value (per share) of stock option on grant date | $                           | n/a    |                       | $      | 10.77 |   | $ | 6.94 | b |   | 11.85 | c |
| Expected                and weighted average volatility             |                        | n/a    |                       |   | 55.5 | % |   | 52.23 | % |   | 55.5 | % |
| Expected                life of options (in years)                  |                        | n/a    |                       |   | 7 |   |   | 6.29 | b |   | 7 | c |
| Risk-free                interest rate                              |                        | n/a    |                       |   | 4.5 | % |   | 4.76 | % |   | 4.5 | % |

| a.   | McMoRan                did not grant stock options in the third quarter of                2007.  McMoRan granted 33,000 restricted stock units in the                third quarter of 2007 with an intrinsic value aggregating $0.5 million,                which will be amortized over their three-year vesting                period. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | Excludes                stock options that were granted with immediate vesting (445,000 shares,                including 400,000 shares granted to the Co-Chairmen in lieu of cash                compensation for 2007) with an expected life of 6.56 years and fair                value                of stock options on grant date of $7.02 per                share. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c.   | Excludes                stock options that were granted with immediately vested (500,000                shares                granted to the Co-Chairmen in lieu of any cash compensation for 2006)                with                an expected life of six years and a grant date fair value of $11.52                per                share. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**6.  **
**DERIVATIVE      CONTRACTS**

----

Table    of    Contents
|   | **Natural                Gas Positions (million MMbtu)**                          |
|--------|-----------------------------------------------------------------------------------|
|   | Open                Swap Positions(a)                                             |   | Put                Options(b) |   |   |
|   | Annual                                                                            |   | Average |   | Annual |   | Average |   | Total |
|   | Volumes                                                                           |   | Swap                Price(c) |   | Volumes |   | Floor(c) |   | Volumes |
| 2008   |            16.4            |   | $ |  8.60 |   |              6.6 |   | $ |  6.00 |   | 23.0 |
| 2009   |              7.3 |   | $ |  8.97 |   |              3.2 |   | $ |  6.00 |   | 10.5 |
| 2010   |              2.6 |   | $ |  8.63 |   |              1.2 |   | $ |  6.00 |   | 3.8 |

|   | **Oil                Positions (thousand bbls)**                            |
|--------|-----------------------------------------------------------------------------|
|   | Open                Swap Positions(a)                                       |   | Put                Options(b) |   |   |
|   | Annual                                                                      |   | Average |   | Annual |   | Average |   | Total |
|   | Volumes                                                                     |   | Swap                Price(d) |   | Volumes |   | Floor(d) |   | Volumes |
| 2008   |             693 |   | $ |  73.50 |   |             288 |   | $ |  50.00 |   | 981 |
| 2009   |             322 |   | $ |  71.82 |   |             125 |   | $ |  50.00 |   | 447 |
| 2010   |             118 |   | $ |  70.89 |   |               50 |   | $ |  50.00 |   | 168 |

| *(a)                Covering periods January-June and November-December of the respective                years* |
|-----------------------------------------------------------------------------------------------------------------|
| *(b)                Covering periods July-October of the respective years*                                      |   |   |   |
| *(c)                Price per MMbtu of natural gas*                                                             |   |   |   |
| *(d)                Price per barrel of oil*                                                                    |   |   |   |

|                                       | Puts   |   | Swaps  |   |   |   |   |
|--------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
|                                       | Gas    |   | Oil    |   | Gas    |   | Oil    |   | Total |   |
| Current                assets              | $      | 1,535  |   | $      | 88     |   | $      | 8,249 |   | $ | - |   | $ | 9,872 |   |
| Other                assets                |   | 2,183  |   |   | 260    |   |   | 6,521 |   |   | - |   |   | 8,964 |   |
| Current                liabilities         |   | -      |   |   | -      |   |   | - |   |   | (2,154 | ) |   | (2,154 | ) |
| Other                long-term liabilities |   | -      |   |   | -      |   |   | (281 | ) |   | (1,104 | ) |   | (1,385 | ) |
| Fair                value of contracts     | $      | 3,718  |   | $      | 348    |   | $      | 14,489 |   | $ | (3,258 | ) | $ | 15,297 |   |

**7.  ACCUMULATED      COMPREHENSIVE LOSS**

----

Table      of      Contents

|                                                                | Three  |    |   | Nine   |   |
|---------------------------------------------------------------------|--------|---------|--------|--------|--------|
|                                                                | Months |    |   | Months |   |
| Net                loss                                             | $      | (52,184 | )      |   | $      | (73,573 | ) |
| Other                comprehensive income (loss):                   |   |    |   |   |   |   |   |
| Amortization                of minimum pension liability adjustment |   | 14      |   |   |   | 42 |   |
| Total                comprehensive loss                             | $      | (52,170 | )      |   | $      | (73,531 | ) |

**8.  NEW      ACCOUNTING STANDARDS**

**9.      OTHER MATTERS**

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Table      of      Contents

----

Table    of    Contents
|                                             |   |   | Third                Quarter |   |   | Nine                Months |   |
|--------------------------------------------------|--------|--------|------------------------------|--------|--------|----------------------------|--------|
|                                             |   |   | 2007                         |   |   | 2006                       |   |   | 2007 |   |   | 2006 |   |
| Interest                cost                     |   | $      | 97                           |   | $      | 17                         |   | $ | 126 |   | $ | 152 |   |
| Service                cost                      |   |   | -                            |   |   | -                          |   |   | - |   |   | - |   |
| (Return)                loss on plan assets      |   |   | (25                          | )      |   | (28                        | )      |   | (72 | ) |   | 9 |   |
| Change                in plan payout assumptions |   |   | -                            |   |   | -                          |   |   | - |   |   | - |   |
| Net                periodic expense (benefit)    |   | $      | 72                           |   | $      | (11                        | )      | $ | 54 |   | $ | 161 |   |

|                                               |   |   | Third                Quarter |   |   | Nine                Months |   |
|----------------------------------------------------|--------|--------|------------------------------|--------|--------|----------------------------|--------|
|                                               |   |   | 2007                         |   |   | 2006                       |   |   | 2007 |   |   | 2006 |   |
| Interest                cost                       |   | $      | 86                           |   | $      | 85                         |   | $ | 258 |   | $ | 255 |   |
| Service                cost                        |   |   | 5                            |   |   | 5                          |   |   | 14 |   |   | 15 |   |
| Return                on plan assetsa              |   |   | -                            |   |   | -                          |   |   | - |   |   | - |   |
| Amortization                of prior service costs |   |   | (10                          | )      |   | (12                        | )      |   | (30 | ) |   | (36 | ) |
| Recognition                of actuarial losses     |   |   | 24                           |   |   | 34                         |   |   | 72 |   |   | 102 |   |
| Net                periodic expense                |   | $      | 105                          |   | $      | 112                        |   | $ | 314 |   | $ | 336 |   |

|   | a  The                Other Benefits plan has no assets held in trust.  McMoRan pays                benefits under the plan as  payment is                required. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Oil                and Natural Gas                                  |   |    |   |
|---------------------------------------------------------------------|--------|---------|--------|
| Asset                retirement obligation at beginning of year     | $      | 25,876  |   |
| Liabilities                settled                                  |   | (10,613 | )a     |
| Accretion                expense                                    |   | 2,984   |   |
| Liabilities                assumed in Newfield property acquisition |   | 255,000 |   |
| Revision                for changes in estimates                    |   | 3,386   | b      |
| Asset                retirement obligations at September 30, 2007   | $      | 276,633 |   |
|                                                                |   |    |   |
| Sulphur                                                             |   |    |   |
| Asset                retirement obligations at beginning of year:   | $      | 23,094  |   |
| Liabilities                settled                                  |   | (1,419  | )      |
| Accretion                expense                                    |   | 1,303   |   |
| Revision                for changes in estimates                    |   | -       |   |
| Asset                retirement obligation at September 30, 2007    | $      | 22,978  |   |

| a.   | Includes                $6.4 million of costs included in accounts payable at September 30,                2007                for completed work. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | Reflects                increases in the estimated reclamation costs at two fields.  The                work associated with the increase at one field has been completed                ($0.7                million) and McMoRan expects all of the work at the other field to                be                completed over the next 12 months. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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Table      of      Contents

REPORT      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING      FIRM

----

Table      of      ContentsManagement'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, 2006 (2006 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.*

**GULF      OF MEXICO PROPERTY      ACQUISITION**

----

Table      of      Contents

|   | **Natural                Gas Positions (million MMbtu)**                          |
|--------|-----------------------------------------------------------------------------------|
|   | Open                Swap Positions(a)                                             |   | Put                Options(b) |   |   |
|   | Annual                                                                            |   | Average |   | Annual |   | Average |   | Total |
|   | Volumes                                                                           |   | Swap                Price(c) |   | Volumes |   | Floor(c) |   | Volumes |
| 2008   |            16.4            |   | $ |  8.60 |   |              6.6 |   | $ |  6.00 |   | 23.0 |
| 2009   |              7.3 |   | $ |  8.97 |   |              3.2 |   | $ |  6.00 |   | 10.5 |
| 2010   |              2.6 |   | $ |  8.63 |   |              1.2 |   | $ |  6.00 |   | 3.8 |

|   | **Oil                Positions (thousand bbls)**                            |
|--------|-----------------------------------------------------------------------------|
|   | Open                Swap Positions(a)                                       |   | Put                Options(b) |   |   |
|   | Annual                                                                      |   | Average |   | Annual |   | Average |   | Total |
|   | Volumes                                                                     |   | Swap                Price(d) |   | Volumes |   | Floor(d) |   | Volumes |
| 2008   |             693 |   | $ |  73.50 |   |             288 |   | $ |  50.00 |   | 981 |
| 2009   |             322 |   | $ |  71.82 |   |             125 |   | $ |  50.00 |   | 447 |
| 2010   |             118 |   | $ |  70.89 |   |               50 |   | $ |  50.00 |   | 168 |

| *(a)                Covering periods January-June and November-December of the respective                years* |
|-----------------------------------------------------------------------------------------------------------------|
| *(b)                Covering periods July-October of the respective years*                                      |   |   |   |
| *(c)                Price per MMbtu of natural gas*                                                             |   |   |   |
| *(d)                Price per barrel of oil*                                                                    |   |   |   |

----

Table      of      Contents

**OIL      & GAS ACTIVITIES**

*Cottonwood Point*

*Blackbeard*

*Laphroaig *

----

Table      of      Contents

*Hurricane      Deep*

*Mound Point South*

*Blueberry Hill*
** **

**MAIN      PASS ENERGY HUBTM      PROJECT**

**™**

**™**

**™**

**™**

----

Table      of      Contents

**™**

**RESULTS      OF OPERATIONS**

** **

| **Revenues:**                                      |   |   |   |
|----------------------------------------------------|--------|--------|--------|
| Oil                and natural gas                 | $      | 95,406 |   |
| Service                                            |   | 1,875  |   |
|   Total                revenues          |   | 97,281 |   |
| **Cost                and Expenses:**              |   |   |   |
| Production                and delivery costs       |   | 20,577 |   |
| Depreciation                and amortization       |   | 58,128 |   |
| Exploration                expenses                |   | 28     |   |
| General                and administrative expenses |   | 1,000  | a      |
| Total                costs and expenses            |   | 79,733 |   |
| Operating                income                    | $      | 17,548 |   |

| a. | Only                includes cost directly allocated to the Newfield properties and excludes                all compensation costs associated with newly hired employees, which                are                not allocated to the acquired                properties. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table      of      Contents

|                                                 | Three                Months Ended |   | Nine                Months Ended |   |
|------------------------------------------------------|-----------------------------------|--------|----------------------------------|--------|
|                                                 | September                30,      |   | September                30,     |   |
|                                                 | 2007a                             |   | 2006                             |   | 2007a |   | 2006 |   |
| Sales                volumes:                        |                              |   |                             |   |   |   |   |   |
| Gas                (thousand cubic feet, or Mcf)     | 12,645,100                        |   | 4,397,100                        |   | 19,401,900 |   | 10,423,600 |   |
| Oil                (barrels)b                        | 671,300                           |   | 379,100                          |   | 1,323,900 |   | 1,015,700 |   |
| Plant                products (equivalent barrels) c | 53,300                            |   | 70,400                           |   | 166,800 |   | 105,700 |   |
| Average                realizations:                 |                              |   |                             |   |   |   |   |   |
| Gas                (per Mcf)                         | $  6.17                 |   | $  6.51                |   | $  6.74 |   | $                6.99 |   |
| Oil                (per barrel)b                     | 75.08                             |   | 65.11                            |   | 66.80 |   | 62.73 |   |

| a.   | Sales                volumes associated with the properties acquired from Newfield totaled                9,694 million cubic feet of natural gas and approximately 498,000                barrels                of oil and condensate. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | Sales                volumes from Main Pass totaled 111,000 barrels in the third quarter                of                2007 and 432,000 barrels for the nine months ended September 30,                2007                compared with 195,800 barrels in the third quarter and 598,600 barrels                for                nine months ended September 30, 2006.  Main Pass produces sour                crude oil, which sells at a discount to other crude                oils. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c.   | We                received approximately $2.4 million and $7.7 million of revenues                associated with plant products (ethane, propane, butane, etc.) during                the                third quarter of 2007 and nine months ending September 30, 2007,                respectively, compared with $4.2 million and $6.1 million of plant                product                revenues in the comparable periods last                year. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Oil      and Gas Operations**

|                                                                    |  Third |    |   | Nine   |    |
|-------------------------------------------------------------------------|-------------|---------|--------|--------|---------|
|                                                                    | Quarter     |    |   | Months |    |
| Oil                and natural gas revenues – prior year period   | $           | 57,810  |   | $      | 143,527 |   |
| Increase                (decrease) in:                                  |        |    |   |   |    |   |
| Sales                volumes:                                           |        |    |   |   |    |   |
| Natural                gas                                              |        | (9,413  | )      |   | (5,002  | ) |
| Oil                and condensate                                       |        | (11,149 | )      |   | (9,080  | ) |
| Price                realizations:                                      |        |    |   |   |    |   |
| Natural                gas                                              |        | 380     |   |   | 4,439   |   |
| Oil                and condensate                                       |        | 1,243   |   |   | (1,800  | ) |
| Properties                acquired from Newfield                        |        | 95,406  |   |   | 95,406  |   |
| Plant                products revenues                                  |        | (3,232  | )      |   | 277     |   |
| Other                                                                   |        | (27     | )      |   | (386    | )  |
| Oil                and natural gas revenues – current year period | $           | 131,018 |   | $      | 227,381 |   |

----

Table      of      Contents

** **
** **

----

Table      of      Contents

|                                                      | Third                Quarter |   | Nine                Months |   |
|-----------------------------------------------------------|------------------------------|--------|----------------------------|--------|
|                                                      | 2007                         |   | 2006                       |   | 2007 |   | 2006 |   |
| Geological                and geophysical a               | $                            | 15.9   | b                          | $      | 2.8 |   | $ | 25.7 | b | $ | 12.2 |   |
| Nonproductive                exploratory costs, including |                         |   |                       |   |   |   |   |   |   |   |   |   |
| related                lease costs                        |                         | 20.3   | c                          |   | 18.5 | d |   | 21.7 | c,e |   | 32.9 | d,f |
| Other                                                     |                         | 0.9    |                       |   | 2.1 | d |   | 4.8 |   |   | 5.7 |   |
|                                                      | $                            | 37.1   |                       | $      | 23.4 |   | $ | 52.2 |   | $ | 50.8 |   |

| a.   | Includes                compensation costs associated with outstanding stock-based awards                totaling                $1.0 million in the third quarter of 2007 and $5.3 million for the                nine                months ended September 30, 2007 compared with $1.0 million and $7.1                million of compensation costs during comparable periods in 2006 (see                “Stock Based Compensation” below and Note                5). |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | Includes                $12.5 million of seismic data purchases for the exploration acreage                acquired from Newfield. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------|

| c.   | Primarily                reflects the nonproductive exploratory well costs primarily associated                with the “Cas” well at South Timbalier Block                98. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| d.   | Includes                nonproductive exploratory drilling and related costs for the wells                at                Vermilion Block 54 ($6.1 million), Long Point Deep at Louisiana State                Lease 18091 ($11.5 million) and the costs incurred through September                30,                2006 for the drilling and evaluation of the deeper objective at Zigler                Canal in Vermilion Parish,                Louisiana. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| e.   | Amount                also includes the nonproductive exploratory well drilling and related                costs associated with the well at Grand Isle Block 18 that was evaluated                to be nonproductive in January                2007. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| f.   | Includes                nonproductive exploratory well drilling and related costs associated                with                the well at South Pass Block 26 ($8.2 million), and the costs incurred                during the first half of 2006 for the wells at West Cameron Block                95 ($2.7                million) and at South Marsh Island Block 230 ($2.5                million). |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Other      Financial Results**

----

Table      of      Contents

** **

**CAPITAL      RESOURCES AND LIQUIDITY**

|                                 | Nine                Months Ended |     |
|--------------------------------------|----------------------------------|----------|
|                                 | September                30,     |     |
|                                 | 2007                             |     |   | 2006 |   |
| Continuing                operations |                             |     |   |   |   |   |   |
| Operating                            | $                                | 102.4    |   |   | $ | 70.5 |   |
| Investing                            |                             | (1,157.6 | ) |   |   | (185.6 | ) |
| Financing                            |                             | 1,053.0  |   |   |   | (0.6 | ) |

| Discontinued                operations |   |   |   |   |   |   |   |
|----------------------------------------|--------|--------|--------|--------|--------|--------|--------|
| Operating                              |   | 0.7    |   |   |   | (5.8   | )      |
| Investing                              |   | -      |   |   |   | -      |   |
| Financing                              |   | -      |   |   |   | -      |   |

| Total                cash flow |   |     |   |   |   |   |   |
|--------------------------------|--------|----------|--------|--------|--------|--------|--------|
| Operating                      |   | 103.1    |   |   |   | 64.7   |   |
| Investing                      |   | (1,157.6 | )      |   |   | (185.6 | )      |
| Financing                      |   | 1,053.0  |   |   |   | (0.6   | )      |

**Nine-Month      2007 Cash Flows Compared with Nine-Month 2006**

----

Table      of      Contents

**Senior      Secured Revolving Credit Facility**

----

Table      of      Contents

**Unsecured      Bridge Loan Facility**

**Senior      Term Loan Agreement**

**Convertible      Senior Notes**

**Debt      Conversion Transactions**

----

Table      of      Contents

**Contractual      Obligations and Commitments**

|       | Long                Term    |    |                      |   |                         |   |      |   |                      |   |   |
|------------|-----------------------------|---------|---------------------------|--------|------------------------------|--------|-----------|--------|---------------------------|--------|--------|
|       | Debt                and     |    |                      |   |                         |   |      |   |                      |   |   |
|       | Convertible                 |    | Retirement                |   | Oil                & Gas |   | Lease     |   | Interest                  |   |   |
|       | Securities                a |    | Benefits                b |   | Obligationsc                 |   | Paymentsd |   | Payments                e |   | Total  |
| 2007       | $                           | -       |                      | $      | 1.4                          |   | $         | 27.0   |                      | $      | 0.3    |   | $ | 30.2 |   | $ | 58.9 |
| 2008       |                        | 119.5   |                      |   | 2.1                          |   |      | 0.4    |                      |   | 1.3    |   |   | 121.1 |   |   | 244.4 |
| 2009       |                        | -       |                      |   | 2.1                          |   |      | -      |                      |   | 1.2    |   |   | 115.0 |   |   | 118.3 |
| 2010       |                        | -       |                      |   | 2.1                          |   |      | -      |                      |   | 1.1    |   |   | 115.0 |   |   | 118.2 |
| 2011       |                        | 115.0   |                      |   | 2.0                          |   |      | -      |                      |   | 1.1    |   |   | 115.0 |   |   | 233.1 |
| Thereafter |                        | 1,113.0 |                      |   | 12.4                         |   |      | -      |                      |   | 2.8    |   |   | 223.6 |   |   | 1,351.8 |
| Total      | $                           | 1,347.5 |                      | $      | 22.1                         |   | $         | 27.4   |                      | $      | 7.8    |   | $ | 719.9 |   | $ | 2,124.7 |

| a.   | Amounts                due upon maturity of convertible senior notes subject to change based                on                future conversions by the holders of the securities.  For                purposes of this table it is assumed the bridge loan facility is                for its                current seven year term; although it is our intention to refinance                the                bridge loan facility in the fourth quarter of 2007 through debt,                equity                and/or equity linked securities. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | Includes                anticipated payments under our employee retirement health care plan                through 2016 (Note 8 of our 2006 Form 10-K) and our future reimbursements                associated with the contractual liability covering certain of our                former                sulphur retiree’s medical costs (Note 11 of our 2006 Form                10-K).  Amounts shown in 2007 are included within our accrued                liabilities at September 30, 2007. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c.   | These                oil & gas obligations primarily reflect our net working interest share                of authorized exploration and development project costs at September                30,                2007 (see below for total estimated exploration and development                expenditures for the remainder of                2007). |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| d.   | Amounts                primarily reflect leases for two office locations in Houston, Texas,                which                terminate in April 2009 and July 2014,                respectively. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| e.   | Reflects                interest on the debt balances as September 30, 2007.  Assumes a                10 percent effective annual interest rate on our unsecured bridge                loan                facility and its maturity to August 2014.  Also assumes and an 8                percent effective annual interest rate on credit facility and a 2.5                percent and 0.5 percent interest on the letters of credit ($100 million)                and unused commitment fee. Interest on the convertible senior notes                is                fixed.  If interest rates on the credit facility and bridge loan                facility change by 50 basis points our cumulative interest would                change by                approximately $44.3.million. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**STOCK-BASED      COMPENSATION**

|                                                      | Three                Months Ended |   | Nine                Months Ended |   |
|-----------------------------------------------------------|-----------------------------------|--------|----------------------------------|--------|
|                                                      | September                30,      |   | September                30,     |   |
|                                                      | 2007                              |   | 2006                             |   | 2007 |   | 2006 |   |
| General                and administrative expenses        | $                                 | 1,084  |                             | $      | 932 |   | $ | 5,228 |   | $ | 6,184 |   |
| Exploration                expenses                       |                              | 1,003  |                             |   | 1,031 |   |   | 5,279 |   |   | 7,052 |   |
| Main                Pass Energy Hub™ start-up costs |                              | 78     |                             |   | 79 |   |   | 398 |   |   | 521 |   |
| Total                stock-based compensation cost        | $                                 | 2,165  |                             | $      | 2,042 |   | $ | 10,905 |   | $ | 13,757 |   |

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**CRITICAL      ACCOUNTING POLICIES AND ESTIMATES**

**Derivative        Contracts**

**Estimate      of Purchase Price Allocation**

**DISCONTINUED      OPERATIONS**

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Table    of    Contents
|                                                        | Third                Quarter |   | Nine                Months |   |
|-------------------------------------------------------------|------------------------------|--------|----------------------------|--------|
|                                                        | 2007                         |   | 2006                       |   | 2007 |   | 2006 |   |
| Sulphur                retiree costs                        | $                            | 397    |                       | $      | 392 |   | $ | 1,121 |   | $ | 1,327 |   |
| Caretaking                costs                             |                         | 221    |                       |   | 271 |   |   | 655 |   |   | 944 |   |
| Accretion                expense – sulphur            |                         |   |                       |   |   |   |   |   |   |   |   |   |
| reclamation                obligations                      |                         | 434    |                       |   | 348 |   |   | 1,303 |   |   | 1,044 |   |
| Insurance                                                   |                         | 27     |                       |   | 15 |   |   | 438 |   |   | 849 |   |
| General                and administrative , legal and other |                         | 54     |                       |   | 67 |   |   | 139 |   |   | 186 |   |
| Other                                                       |                         | 46     |                       |   | 1,366 |   |   | (3,706 | )a |   | 1,402 |   |
| Loss                (income) from discontinued operations   | $                            | 1,179  |                       | $      | 2,459 |   | $ | (50 | ) | $ | 5,752 |   |

| a. | Includes                the $4.2 million of finalized insurance recoveries associated with                the                Port Sulphur property damage claims resulting from the 2005 hurricanes                and                $0.3 million of proceeds from discontinued oil and gas                operations. |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**NEW      ACCOUNTING STANDARDS**

**Accounting      for Uncertainty in Income Taxes.**

**Fair      Value Measurements.**

**CAUTIONARY      STATEMENT**

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Quantitative and Qualitative Disclosures      about Market Risk.

Controls and Procedures.

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PART      II––OTHER INFORMATION

**Factors      Relating to Financial Matters**

**Our      substantial indebtedness, including the indebtedness incurred in connection      with      our recent acquisition of certain property interests and related assets from      Newfield, could adversely affect our operating results and financial      condition.**

| ·   | make                it difficult for us to satisfy our debt                obligations; |
|--------------------|-----------------------------------------------------------------------------------------|

| ·   | increase                our vulnerability to general adverse economic and industry                conditions; |
|--------------------|---------------------------------------------------------------------------------------------------------------|

| ·   | require                us to dedicate a substantial portion of our cash flow from operations                and                proceeds of equity issuances or asset sales to payments on our                indebtedness, thereby reducing the availability of cash flows to                fund                working capital, capital expenditures, acquisitions, investments                and other                general corporate purposes; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | limit                our flexibility in planning for, or reacting to, changes in our businesses                and the markets in which we                operate; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | place                us at a competitive disadvantage to our competitors that have less                debt;                and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------|

| ·   | limit                our ability to borrow money or sell stock to fund our working capital,                capital expenditures, acquisitions, and debt service requirements                and                other financing needs. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Acquisitions      involve risks, including unanticipated liabilities and expenses associated      with      acquired properties, difficulties in integrating acquired properties into our      business, diversion of management attention, and increasing the scope and      complexity of our operations.**

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**We      are responsible for reclamation, environmental and other obligations relating      to      (1) our former sulphur operations, including Main Pass and Port Sulphur and      (2)      our acquisition of certain property interests and related assets from      Newfield.**

**We      are subject to indemnification obligations with respect to (1) the sulphur      transportation and terminaling assets that we sold in June 2002, including      sulphur and oil and gas obligations arising under environmental laws and (2)      our      acquisition of the Newfield properties.**

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**The      high-rate production characteristics of our Gulf of Mexico properties and our      ownership interests in prospects subject to farm-out arrangements subject us      to      high reserve replacement needs.**

**Factors      Relating to Our Operations**

**Hedging      our production may result in losses.**

| ·   | production                is less than expected; |
|--------------------|--------------------------------------------------|

| ·   | the                other party to the contract defaults on its obligations;                or |
|--------------------|-----------------------------------------------------------------------------------------------|

| ·   | there                is a change in the expected differential between the underlying price                in                the hedging agreement and actual prices                received. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                |   |                             |   |                           |   |                                |                               |                                  | (d)                Maximum Number      |
|-------------------------------------|--------|----------------------------------|--------|--------------------------------|--------|-------------------------------------|------------------------------------|---------------------------------------|----------------------------------------|
|                                |   |                             |   |                           |   |                                | (c)                Total Number of |                                  | (or                Approximate         |
|                                |   | (a)                Total         |   |                           |   |                                | Shares                (or Units)   |                                  | Dollar                Value) of Shares |
|                                |   | Number                of         |   | (b)                Average     |   | Purchased                as Part of |                               | (or                Units) That May    |
|                                |   | Shares                (or Units) |   | Price                Paid Per  |   | Publicly                Announced   |                               | Yet                Be Purchased Under |
| Period                              |   | Purchased                        |   | Share                (or Unit) |   | Plans                or Programs    |                               | the                Plans or Programs  |
| July                1-31, 2007      |   | -                                |   | $                              | -      |                                | -                                  |                                  | -                                      |
| August                1-31, 2007    |   | -                                |   |                           | -      |                                | -                                  |                                  | -                                      |
| September                1-30, 2007 |   | -                                |   |                           | -      |                                | -                                  |                                  | -                                      |
| Total                               |   | -                                |   | $                              | -      |                                | -                                  |                                  | -                                      |
|                                |   |                             |   |                           |   |                                |                               |                                  |                                   |

**McMoRan      EXPLORATION CO.**

**UNAUDITED      PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS**

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| **McMoRan                Exploration Co.**                                                                                                                                                                         |       |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|
| **Unaudited                Pro Forma Consolidated Statement of                Operations**                                                                                                                    |       |
| **For                Year Ending December 31, 2006**                                                                                                                                                               |       |
| **(amounts                in thousands)**                                                                                                                                                                          |       |
|                                                                                                                                                                                                               |       |
|                                                                                                                                                                                                               | McMoRan    |   | Newfield |   |   |   |   |   |   |   |
|                                                                                                                                                                                                               | Historical |   | Properties |   | Adjustments |   | Pro                Forma |   |
| **Revenues:**                                                                                                                                                                                                      |       |   |   |   |   |   |   |   |   |   |   |   |
| Oil                & Gas                                                                                                                                                                                       | $          | 196,717 |   | $ | 619,307 |   | $ | (15,560 | )                a | $ | 800,464 |   |
| Service                                                                                                                                                                                                            |       | 13,021 |   |   | - |   |   | 9,306 | b |   | 22,327 |   |
|    Total                revenues                                                                                                                                                                    |       | 209,738 |   |   | 619,307 |   |   | (6,254 | ) |   | 822,791 |   |
|                                                                                                                                                                                                               |       |   |   |   |   |   |   |   |   |   |   |   |
| **Costs                and expenses:**                                                                                                                                                                             |       |   |   |   |   |   |   |   |   |   |   |   |
| Production                and delivery costs                                                                                                                                                                       |       | 53,134 |   |   | 152,383 |   |   | 5,766 | a,b |   | 211,283 |   |
| Revenues                in excess of direct operating expenses                                                                                                                                                     |       | 156,604 |   |   | 466,924 |   |   | (12,020 | ) |   | 611,508 |   |
| Depletion,                depreciation and amortization                                                                                                                                                            |       | 104,724 |   |   |   |   |   |     149,549 | c |   | 264,173 |   |
|                                                                                                                                                                                                               |       |   |   |   |   |   |   |       9,900 | d |   |   |   |
| Exploration                expenses                                                                                                                                                                                |       | 67,737 |   |   |   |   |   | - |   |   |  67,737 |   |
| General                and administrative expenses                                                                                                                                                                 |       | 20,727 |   |   |   |   |   |         16,800 | e |   | 37,527 |   |
| Start-up                costs for Main Pass Energy Hub™                                                                                                                                                      |       | 10,714 |   |   |   |   |   | - |   |   | 10,714 |   |
| Exploration                expense reimbursement                                                                                                                                                                   |       | (10,979 | ) |   |   |   |   | - |   |   | (10,979 | ) |
| Litigation                settlement, net of insurance proceeds                                                                                                                                                    |       | (446 | ) |   |   |   |   | - |   |   | (446 | ) |
| Insurance                recovery                                                                                                                                                                                  |       | (3,306 | ) |   |   |   |   | - |   |   | (3,306 | ) |
| Operating                income (loss)                                                                                                                                                                             |       | (32,567 | ) |   |   |   |   |    (188,269 | ) |   | 246,088 |   |
| Interest                expense, net                                                                                                                                                                               |       | (10,203 | ) |   |   |   |   |    (121,080 | )f |   | (136,126 | ) |
|                                                                                                                                                                                                               |       |   |   |   |   |   |   |         (4,843 | )g |   |   |   |
| Other expense,                net                                                                                                                                                                             |       | (1,946 | ) |   |   |   |   | - |   |   | (1,946 | ) |
| Income                (loss) from continuing operations before                                                                                                                                                     |       |   |   |   |   |   |   |   |   |   |   |   |
| income                taxes                                                                                                                                                                                        |       | (44,716 | ) |   |   |   |   |     (314,192 | ) |   | 108,016 |   |
| Income                tax provision                                                                                                                                                                                |       | - |   |   |   |   |   |         (2,160 | )h |   | (2,160 | ) |
| Income                (loss) from continuing operations before                      preferred dividends and amortization of related                    issuance costs |       | (44,716 | ) |   |   |   |   | (316,352 | ) |   | 105,856 |   |
| Preferred                dividends and amortization of                                                                                                                                                             |       |   |   |   |   |   |   |   |   |   |   |   |
| convertible                preferred stock issuance costs                                                                                                                                                          |       | (1,615 | ) |   |   |   |   | - |   |   | (1,615 | ) |
| Income                (loss) from continuing operations                                                                                                                                                            | $          | (46,331 | ) |   |   |   | $ | (316,352 | ) | $ | 104,241 |   |
|                                                                                                                                                                                                               |       |   |   |   |   |   |   |   |   |   |   |   |
| Income                (loss) per share of common stock from continuing                operations:                                                                                                                  |       |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                                                                                                                              |       | $(1.66 | ) |   |   |   |   |   |   |   | $3.73 |   |
| Diluted                                                                                                                                                                                                            |       | $(1.66 | ) |   |   |   |   |   |   |   | $2.04 |   |
|                                                                                                                                                                                                               |       |   |   |   |   |   |   |   |   |   |   |   |
| Average                common shares outstanding:                                                                                                                                                                  |       |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                                                                                                                              |       | 27,930 |   |   |   |   |   |   |   |   | 27,930 |   |
| Diluted                                                                                                                                                                                                            |       | 27,930 |   |   |   |   |   |   |   |   | 50,992 |   |

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**McMoRan      Exploration Co.**

**Unaudited      Pro Forma Consolidated Statement of Operations**

**For      the Nine Months Ending September 30, 2007**

**(amounts      in thousands)**

|                                                                           |       |          | Newfield                Properties |   |                        |   |        |   |
|--------------------------------------------------------------------------------|------------|---------------|------------------------------------|--------|-----------------------------|--------|-------------|--------|
|                                                                           |       |          |                               |   | Period                      |   |        |   |   |   |
|                                                                           |       |          | Six                Months          |   | From                July 1, |   |        |   |   |   |
|                                                                           |       |          | Ended                              |   | 2007                through |   |        |   |   |   |
|                                                                           | McMoRan    |          | June                30,            |   | August                5,    |   |        |   |   |   |
|                                                                           | Historical |          | 2007                               |   | 2007                        |   | Adjustments |   | Pro                Forma |   |
| **Revenues:**                                                                  |       |          |                               |   |                        |   |        |   |   |   |   |   |   |   |   |
| Oil                & Gas                                                   | $          | 227,381       |                               | $      | 342,158                     |   | $           | 68,857 |   | $ | (11,423 | )                a | $ | 626,973 |   |
| Service                                                                        |       | 2,916         |                               |   | -                           |   |        | 644    |   |   |         7,147 | b |   | 10,707 |   |
| Total                revenues                                                  |       | 230,297       |                               |   | 342,158                     |   |        | 69,501 |   |   | (4,276 | ) |   | 637,680 |   |
|                                                                           |       |          |                               |   |                        |   |        |   |   |   |   |   |   |   |   |
| **Costs                and expenses:**                                         |       |          |                               |   |                        |   |        |   |   |   |   |   |   |   |   |
| Production                and delivery costs                                   |       | 72,543        |                               |   | 121,536                     |   |        | 17,375 |   |   | 4,912 | a,b |   | 216,366 |   |
| Revenues                in excess of direct operating                          |       |          |                               |   |                        |   |        |   |   |   |   |   |   |   |   |
| expenses                                                                       |       | 157,754       |                               |   | 220,622                     |   | $           | 52,126 |   |   | (9,188 | ) |   | 421,314 |   |
| Depletion,                depreciation and amortization                        |       | 127,579       |                               |   |                        |   |        |   |   |   | 123,646 | c |   | 257,000 |   |
|                                                                           |       |          |                               |   |                        |   |        |   |   |   |   5,775 | d |   |   |   |
| Exploration                expenses                                            |       | 52,163        |                               |   |                        |   |        |   |   |   | - |   |   | 52,163 |   |
| General                and administrative expenses                             |       | 17,804        |                               |   |                        |   |        |   |   |   | 9,907 |  e |   | 27,711 |   |
| Gain                on oil & gas derivative contracts                      |       | (10,695       | )                                  |   |                        |   |        |   |   |   | - |   |   | (10,695 | ) |
| Start-up                costs for Main Pass Energy Hub™                  |       | 7,802         |                               |   |                        |   |        |   |   |   | - |   |   | 7,802 |   |
| Operating                income (loss)                                         |       | (36,899       | )                                  |   |                        |   |        |   |   |   | (148,516 | ) |   | 87,333 |   |
| Interest                expense, net                                           |       | (34,296       | )                                  |   |                        |   |        |   |   |   | (72,648 | )f |   | (103,862 | ) |
|                                                                           |       |          |                               |   |                        |   |        |   |   |   | (2,826 | )g |   |   |   |
|                                                                           |       |          |                               |   |                        |   |        |   |   |   |      5,908 |  i |   |   |   |
| Other expense,                net                                         |       | (876          | )                                  |   |                        |   |        |   |   |   | - |   |   | (876 | ) |
| Loss                from continuing operations                                 |       |          |                               |   |                        |   |        |   |   |   |   |   |   |   |   |
| before                income taxes                                             |       | (72,071       | )                                  |   |                        |   |        |   |   |   | (218,082 | ) |   | (17,405 | ) |
| Income                tax provision                                            |       | -             |                               |   |                        |   |        |   |   |   | - |   |   | - |   |
| Loss                from continuing operations                                 |       |          |                               |   |                        |   |        |   |   |   |   |   |   |   |   |
| before                preferred dividends and                                  |       |          |                               |   |                        |   |        |   |   |   |   |   |   |   |   |
| amortization                of related issuance costs                          |       |  (72,071 | )                                  |   |                        |   |        |   |   |   | (218,082 | ) |   | (17,405 | ) |
| Preferred                dividends and amortization of                         |       |          |                               |   |                        |   |        |   |   |   |   |   |   |   |   |
| convertible                preferred stock issuance costs                      |       | (1,552        | )                                  |   |                        |   |        |   |   |   | - |   |   | (1,552 | ) |
| Loss                from continuing operations                                 | $          | (73,623       | )                                  |   |                        |   |        |   |   | $ | (218,082 | ) | $ | (18,957 | ) |
|                                                                           |       |          |                               |   |                        |   |        |   |   |   |   |   |   |   |   |
| Basic                and diluted net loss per share of                         |       |          |                               |   |                        |   |        |   |   |   |   |   |   |   |  |
|                   common stock from continuing operations: |       | $(2.40        | )                                  |   |                        |   |        |   |   |   |   |   |   |  $(0.62 |  ) |
|                                                                           |       |          |                               |   |                        |   |        |   |   |   |   |   |   |   |   |
| Basic                and diluted average common shares outstanding:            |       | 30,644        |                               |   |                        |   |        |   |   |   |   |   |   | 30,644 |   |

|   | See                accompanying notes. |
|--------|----------------------------------------|

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|   | ** McMoRan                Exploration Co.** |
|--------|--------------------------------------------------|

**Unaudited      Notes to Pro Forma Consolidated Statement of Operations**

**Pro      Forma Financial Information Assumptions**

**The      unaudited pro forma condensed consolidated statement of operations for the      year      ended December 31, 2006 and the nine months ended September 30, 2007 reflect      the      following adjustments.**

| a.   | Reflects                elimination of the revenues and direct operating expenses for one                field                where a third party working interest owner exercised its preferential                rights prior to closing of the transaction resulting in the property                not                being sold to McMoRan as originally                planned. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | Reflects                reimbursement of standard industry operating overhead costs attributable                to the acquired properties, which are not included in the statements                of                revenues and direct operating expenses, totaling $3.1 million for                the year                ended December 31, 2006 and $2.0 million for the nine months ended                September 30, 2007.  Also reflects reclassification of amounts                recorded in the Newfield Properties financial statements for production                and handling fees to conform to historical McMoRan                presentation.  Reclassified amounts from direct operating                expenses to service revenues totaled $6.2 million for the year ended                December 31, 2006 and $7.8 million for the nine months ended September                30,                2007. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c.**  ** | McMoRan                follows the successful efforts method of                accounting.  Accordingly its depletion, depreciation and                amortization expense is calculated on a field by field basis using                the                units of production method.** ** Production for the                Newfield Properties totaled approximately 81.0 Bcfe for 2006 and                64.8 Bcfe                for the nine months ended September 30, 2007.  Based on                preliminary valuation estimates of the fair value of the assets acquired                and liabilities assumed in the transaction, McMoRan allocated                approximately $38 million of its approximate $1.3 billion purchase                price                to unproven properties, which are currently not subject to depreciation,                depletion and amortization charges. McMoRan expects to substantially                complete its valuation of the assets acquired and liabilities assumed                by                year end 2007**,**which may result in changes in the amount                of the purchase price allocated not only to unproved properties but                also                to well equipment and facilities, which will be depreciated on a                units of                production basis over the related proved developed oil and gas                reserves**.** |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| d.   | Represents                accretion of discount on asset retirement obligation associated with                Newfield properties. With respect to the year ended December 31,                2006, the                accretion adjustment amount presented herein differs from that which                was                previously filed with McMoRan’s Form 8-K/A dated August 6, 2007 based upon                updated information as to current estimated timing of estimated                reclamation work to be performed related to the acquired                properties.  McMoRan has not yet fully completed its evaluation                of its assumed reclamation obligations associated with the transaction                and                expects additional changes may be required upon finalizing its reclamation                obligation assessments.   McMoRan anticipates finalizing                these assessments by year end 2007. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| e.   | Represents                continuing annualized incremental general and administrative costs                directly relating to the acquisition for compensation expense associated                with former Newfield and newly-hired personnel retained by McMoRan                that                are required to administer the operation of the Newfield properties                and                facility costs associated with establishing a new office location                in                Houston, Texas. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| f.   | Represents                interest expense on $800 million bridge loan facility at an assumed                annual                average interest rate of 11 percent.   McMoRan intends to                refinance the bridge loan with long term notes, equity and equity-linked                securities.   Interest on the $394 million of borrowings                under the senior secured revolving credit facility is based on an                assumed                average annual interest rate of 7.5 percent.  The $100 million                drawn under the letter of credit provision of the revolving credit                facility accrues interest at an annual rate of 2.5 percent, and there                is                an annual 0.5 percent unused commitment                fee. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| g.   | Represents                the current amortization of debt issuance costs associated with the                five-year senior secured revolving credit facility and the seven-year                bridge loan facility. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| h.   | There                were no pro forma adjustments for the income tax effects of the purchase                price allocation reflected in the accompanying pro forma financial                statements because of McMoRan’s substantial net deferred tax asset                position prior to and after the effects of the acquisition of the                Newfield                Properties which, for historical and pro forma reporting purposes,                has                been reduced to zero by a full valuation allowance reserve.  A                full valuation allowance has been established against such net deferred                tax assets because of McMoRan’s history of operating losses and the                related limitations imposed against recognizing deferred tax assets                under                generally accepted accounting principles when a company has a history                of                cumulative operating losses generated in recent                years. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| i.   | Represents                removal of the related interest costs associated with the senior                secured                term loan that was finalized on January 19, 2007, repayment of which                was                required under the financing arrangements used to fund the acquisition                of                the Newfield Properties. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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SIGNATURE

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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    | Certificate                of Designations of McMoRan Preferred Stock.  (Incorporated by                reference to Exhibit 4.6 to McMoRan’s Third Quarter 2002 Form                10-Q).                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 4.6    | 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).                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 4.7    | 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).                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 4.8    | 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).                                                                                                                                                                                                                                                                                            |

| 4.9 | 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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| 4.10   | 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).                                                                                                                      |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.11   | Purchase                Agreement dated September 30, 2004, by and among McMoRan Exploration                Co.,                Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith                Incorporated, and J.P. Morgan Securities Inc.  (Incorporated by                reference to Exhibit 99.2 to McMoRan’s Current Report on Form 8-K dated                October 6, 2004 (filed October 7, 2004).                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 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 to McMoRan’s 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.)                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

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Table    of    Contents
| 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).                                                                                                                                                                                                           |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 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 to McMoRan’s Current                Report on Form 8-K dated April 19, 2006).                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.13  | First                Amendment to Credit Agreement effective January 19, 2007 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 10.14 to McMoRan’s 2006                Form 10-K) .                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.14  | Amended                and Restated Credit Agreement dated as of August 6, 2007,                among McMoRan Exploration Co., as parent, McMoRan Oil & Gas LLC,                as borrower, JPMorgan Chase Bank, N.A., Merrill Lynch Capital, a                division of Merrill Lynch Business Financial Services, Inc., as                syndication agent, BNP Paribas, as documentation agent, and the lenders                party thereto. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.15  | Credit                Agreement dated as of August 1, 2007, among McMoRan Exploration Co.,                as                borrower, JPMorgan Chase Bank, N.A., as administrative agent, and                the                lenders party thereto.** **                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | Executive                and Director Compensation Plans and Arrangements (Exhibits 10.16                through                10.37).                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.16  | McMoRan                Adjusted Stock Award Plan, as amended and restated. (Incorporated                by                reference to Exhibit 10.15 to McMoRan’s First-Quarter 2007 Form                10-Q).                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.17  | McMoRan                1998 Stock Option Plan, as amended and restated. (Incorporated by                reference to Exhibit 10.16 to McMoRan’s First-Quarter 2007 Form                10-Q).                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.18  | McMoRan                1998 Stock Option Plan for Non-Employee Directors, as amended and                restated. (Incorporated by reference to Exhibit 10.17 to McMoRan’s                First-Quarter 2007 Form 10-Q).                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.19  | McMoRan                Form of Notice of Grant of Nonqualified Stock Options under the 1998                Stock                Option Plan.  (Incorporated by reference to Exhibit 10.15 to                McMoRan’s Second Quarter 2005 Form 10-Q).                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.20  | McMoRan                2000 Stock Incentive Plan, as amended and restated. (Incorporated                by                reference to Exhibit 10.19 to McMoRan’s First-Quarter 2007 Form                10-Q).                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.21  | McMoRan                Form of Notice of Grant of Nonqualified Stock Options under the 2000                Stock                Incentive Plan.  (Incorporated by reference to Exhibit 10.17 to                McMoRan’s Second Quarter 2005 Form 10-Q).                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.22  | McMoRan                2001 Stock Incentive Plan, as amended and restated. (Incorporated                by                reference to Exhibit 10.21 to McMoRan’s First-Quarter 2007 Form                10-Q).                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

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| 10.23  | McMoRan                2003 Stock Incentive Plan, as amended and restated. (Incorporated                by                reference to Exhibit 10.22 to McMoRan’s First-Quarter 2007 Form                10-Q).                                         |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                          |
| 10.24  | 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).            |
|   |                                                                                                                                                                                                                                                          |
| 10.25  | McMoRan                Form of Notice of Grant of Nonqualified Stock Options under the 2001                Stock                Incentive Plan. (Incorporated by reference to Exhibit 10.21 to McMoRan’s                Second Quarter 2005 Form 10-Q). |

| 10.26  | McMoRan                Form of Restricted Stock Unit Agreement Under the 2001 Stock Incentive                Plan.                                                                                                                                                                                                                                                                                                                           |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.27  | McMoRan                Exploration Co. Executive Services Program (Incorporated by reference                to                Exhibit 10.8 to McMoRan’s May 1, 2006 Form 8-K).                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.28  | McMoRan                Form of Notice of Grants of Nonqualified Stock Options under the                2003                Stock Incentive Plan. (Incorporated by reference to Exhibit 10.24                to                McMoRan’s Second Quarter 2005 Form 10-Q).                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.29  | McMoRan                Form of Restricted Stock Unit Agreement Under the 2003 Stock Incentive                Plan.                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.30  | McMoRan                2004 Director Compensation Plan, as amended and restated. (Incorporated                by                reference to Exhibit 10.29 to McMoRan’s First-Quarter 2007 Form                10-Q).                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.31  | 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).                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.32  | 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). |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.33  | Supplemental                Letter Agreement between FM Services Company and B.M. Rankin, Jr.                effective as of January 1, 2007 (Incorporated by reference to Exhibit                10.32 to McMoRan’s 2006 Form 10-K).                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.34  | McMoRan                Director Compensation. (Incorporated by reference to Exhibit 10.27                to                McMoRan’s 2004 Form 10-K).                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.35  | McMoRan                Exploration Co. 2005 Stock Incentive Plan, as amended and restated.                (Incorporated by reference to Exhibit 10.34 to McMoRan’s First-Quarter                2007 Form 10-Q).                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.36  | 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).                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.37  | Form                of Restricted Stock Unit Agreement under the 2005 Stock Incentive                Plan.                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.38  | Purchase                and Sale Agreement dated June 20, 2007 by and between Newfield Exploration                Company as Seller and McMoRan Oil & Gas LLC as Buyer effective July 1,                2007.  (Incorporated by reference to Exhibit 99.1 to McMoRan’s                Current Report on Form 8-K dated June 21, 2007 (filed on June 22,                2007)).                                           |

| 15.1   | Letter                dated October 30, 2007 from Ernst & Young LLP regarding unaudited                interim financial statements. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                     |

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| 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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