----

| 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, 2009     |
| 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 itscharter) |

| 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)               |
|                                                                    |

| Large      accelerated filer S                               | Accelerated      filer o         |
|--------------------------------------------------------------|----------------------------------|
| Non-accelerated      filer o (Do      not check if a smaller | Smaller      reporting company o |
| reporting      company)                                      |                             |

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|                                                                                |
|-------------------------------------------------------------------------------------|
| McMoRan      Exploration Co.                                                        |
| TABLE OF CONTENTS                                                                   |
|                                                                                |
|                                                                                | Page |
|                                                                                |   |
| Part      I.  Financial Information                                       |   |
|                                                                                |   |
| Item 1.  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      (Unaudited)                         | 6 |
|                                                                                |   |
|   Report of Independent Registered Public      Accounting Firm            | 25 |
|                                                                                |   |
| Item 2.  Management's Discussion and      Analysis                        |   |
| of Financial Condition and Results of      Operations                               | 26 |
|                                                                                |   |
| Item 3.  Quantitative and Qualitative Disclosures      about Market Risks | 37 |
|                                                                                |   |
| Item 4.  Controls and Procedures                                          | 37 |
|                                                                                |   |
| Part      II.  Other Information                                          |   |
|                                                                                |   |
| Item 1.  Legal Proceedings                                                | 37 |
|                                                                                |   |
| Item 1A.  Risk Factors                                                    | 37 |
|                                                                                |   |
| Item 2.  Unregistered Sales of Equity Securities      and Use of Proceeds | 37 |
|                                                                                |   |
| Item 6.  Exhibits                                                         | 38 |
|                                                                                |   |
| Signature                                                                           | 39 |
|                                                                                |   |
| Exhibit      Index                                                                  | E-1 |

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TABLE OF CONTENTS

Part I.  FINANCIAL INFORMATION

| Item 1. | Financial      Statements. |
|---------|----------------------------|

|   | McMoRan      EXPLORATION CO. |
|--------|------------------------------|

CONDENSED CONSOLIDATEDBALANCE SHEETS 

|                                                                           |   | September      30,  |      | December      31, |   |
|--------------------------------------------------------------------------------|--------|---------------------|-----------|-------------------|--------|
|                                                                           |   | 2009                |      | 2008              |   |
|                                                                           |   | (In      Thousands) |      |
| ASSETS                                                                         |   |                |      |              |   |   |   |
| Cash      and cash equivalents                                                 |   | $                   | 224,664   |              | $      | 93,486 |   |
| Accounts      receivable                                                       |   |                | 77,652    |              |   | 112,684 |   |
| Inventories                                                                    |   |                | 48,820    |              |   | 31,284 |   |
| Prepaid      expenses                                                          |   |                | 18,147    |              |   | 13,819 |   |
| Fair      value of oil and gas derivative contracts                            |   |                | 11,995    |              |   | 31,624 |   |
| Current      assets from discontinued operations, including restricted    cash |   |                |      |              |   |   |   |
| of      $0.5 million                                                           |   |                | 1,008     |              |   | 516 |   |
| Total      current assets                                                      |   |                | 382,286   |              |   | 283,413 |   |
| Property,      plant and equipment, net                                        |   |                | 821,288   |              |   | 992,563 |   |
| Restricted      cash                                                           |   |                | 41,083    |              |   | 29,789 |   |
| Deferred      financing costs and other assets                                 |   |                | 12,963    |              |   | 15,658 |   |
| Fair      value of oil and gas derivative contracts                            |   |                | 1,201     |              |   | 5,847 |   |
| Sulphur      business assets, net                                              |   |                | 3,002     |              |   | 3,012 |   |
| Total      assets                                                              |   | $                   | 1,261,823 |              | $      | 1,330,282 |   |
|                                                                           |   |                |      |              |   |   |   |
| LIABILITIES      AND STOCKHOLDERS’ EQUITY                                |   |                |      |              |   |   |   |
| Accounts      payable                                                          |   | $                   | 66,370    |              | $      | 77,009 |   |
| Accrued      liabilities                                                       |   |                | 64,082    |              |   | 89,565 |   |
| Accrued      interest and dividends payable                                    |   |                | 18,428    |              |   | 7,586 |   |
| Current      portion of accrued oil and gas reclamation costs                  |   |                | 108,609   |              |   | 103,550 |   |
| Current      portion of accrued sulphur reclamation cost                       |   |                | 5,000     |              |   | 785 |   |
| Fair      value of oil and gas derivative contracts                            |   |                | 221       |              |   | - |   |
| Current      liabilities from discontinued operations                          |   |                | 1,891     |              |   | 1,317 |   |
| Total      current liabilities                                                 |   |                | 264,601   |              |   | 279,812 |   |
| 5¼%      convertible senior notes                                         |   |                | 74,720    |              |   | 74,720 |   |
| 11.875%      senior notes                                                      |   |                | 300,000   |              |   | 300,000 |   |
| Accrued      oil and gas reclamation costs                                     |   |                | 303,050   |              |   | 317,651 |   |
| Accrued      sulphur reclamation costs                                         |   |                | 19,022    |              |   | 22,218 |   |
| Fair      value of oil and gas derivative contracts                            |   |                | 98        |              |   | - |   |
| Other      long-term liabilities                                               |   |                | 20,047    |              |   | 20,023 |   |
| Other      long-term liabilities from discontinued operations                  |   |                | 6,964     |              |   | 6,835 |   |
| Total      liabilities                                                         |   |                | 988,502   |              |   | 1,021,259 |   |
| Stockholders'      equity                                                      |   |                | 273,321   |              |   | 309,023 |   |
| Total      liabilities and stockholders' equity                                |   | $                   | 1,261,823 |              | $      | 1,330,282 |   |
|                                                                           |   |                |      |              |   |   |   |

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TABLE OF CONTENTS
CONSOLIDATED STATEMENTS OFOPERATIONS 

|                                                              | Three      Months Ended                       |    | Nine      Months Ended |   |
|-------------------------------------------------------------------|-----------------------------------------------|---------|------------------------|--------|
|                                                              | September      30,                            |    | September      30,     |   |
|                                                              | 2009                                          |    | 2008                   |   | 2009 |   | 2008 |   |
|                                                              | (In      Thousands, Except Per Share Amounts) |    |
| Revenues:                                                         |                                          |    |                   |   |   |   |   |   |   |   |   |   |
| Oil      and gas                                                  | $                                             | 105,822 |                   | $      | 282,688 |   | $ | 294,969 |   | $ | 946,955 |   |
| Service                                                           |                                          | 3,713   |                   |   | 2,557 |   |   | 8,494 |   |   | 9,274 |   |
| Total      revenues                                               |                                          | 109,535 |                   |   | 285,245 |   |   | 303,463 |   |   | 956,229 |   |
| Costs      and expenses:                                          |                                          |    |                   |   |   |   |   |   |   |   |   |   |
| Production      and delivery costs                                |                                          | 49,087  |                   |   | 69,923 |   |   | 146,933 |   |   | 195,074 |   |
| Depletion,      depreciation and amortization expense             |                                          | 75,980  |                   |   | 250,124 |   |   | 243,347 |   |   | 492,457 |   |
| Exploration      expenses                                         |                                          | 10,802  |                   |   | 15,092 |   |   | 86,064 |   |   | 49,385 |   |
| (Gain)      loss on oil and gas derivative contracts              |                                          | (738    | )                      |   | (80,399 | ) |   | (16,624 | ) |   | 35,607 |   |
| General      and administrative expenses                          |                                          | 9,621   |                   |   | 10,720 |   |   | 32,983 |   |   | 37,969 |   |
| Main      Pass Energy Hub™      costs                       |                                          | 297     |                   |   | 1,728 |   |   | 1,413 |   |   | 4,990 |   |
| Insurance      recoveries                                         |                                          | -       |                   |   | - |   |   | (18,742 | ) |   | (3,391 | ) |
| Total      costs and expenses                                     |                                          | 145,049 |                   |   | 267,188 |   |   | 475,374 |   |   | 812,091 |   |
| Operating      income (loss)                                      |                                          | (35,514 | )                      |   | 18,057 |   |   | (171,911 | ) |   | 144,138 |   |
| Interest      expense, net                                        |                                          | (10,930 | )                      |   | (10,870 | ) |   | (31,871 | ) |   | (40,501 | ) |
| Other      income (expense), net                                  |                                          | 298     |                   |   | 202 |   |   | 3,470 |   |   | (2,322 | ) |
| Income      (loss) from continuing operations before income taxes |                                          | (46,146 | )                      |   | 7,389 |   |   | (200,312 | ) |   | 101,315 |   |
| Income      tax benefit (expense)                                 |                                          | 177     |                   |   | (1,284 | ) |   | 144 |   |   | (3,149 | ) |
| Income      (loss) from continuing operations                     |                                          | (45,969 | )                      |   | 6,105 |   |   | (200,168 | ) |   | 98,166 |   |
| Loss from discontinued      operations                            |                                          | (1,575  | )                      |   | (1,356 | ) |   | (5,692 | ) |   | (2,960 | ) |
| Net      income (loss)                                            |                                          | (47,544 | )                      |   | 4,749 |   |   | (205,860 | ) |   | 95,206 |   |
| Preferred      dividends and inducement payments for early        |                                          |    |                   |   |   |   |   |   |   |   |   |   |
| conversion      of preferred stock                                |                                          | (4,388  | )                      |   | (10,881 | ) |   | (9,925 | ) |   | (19,604 | ) |
| Net      income (loss) applicable to common stock                 | $                                             | (51,932 | )                      | $      | (6,132 | ) | $ | (215,785 | ) | $ | 75,602 |   |
|                                                              |                                          |    |                   |   |   |   |   |   |   |   |   |   |
| Basic      net income (loss) per share of common stock:           |                                          |    |                   |   |   |   |   |   |   |   |   |   |
| Continuing      operations                                        |                                          | $(0.58  | )                      |   | $(0.08 | ) |   | $(2.76 | ) |   | $1.34 |   |
| Discontinued      operations                                      |                                          | (0.02   | )                      |   | (0.02 | ) |   | (0.07 | ) |   | (0.05 | ) |
| Net      income (loss) per share of common stock                  |                                          | $(0.60  | )                      |   | $(0.10 | ) |   | $(2.83 | ) |   | $1.29 |   |
|                                                              |                                          |    |                   |   |   |   |   |   |   |   |   |   |
| Diluted      net income (loss) per share of common stock:         |                                          |    |                   |   |   |   |   |   |   |   |   |   |
| Continuing      operations                                        |                                          | $(0.58  | )                      |   | $(0.08 | ) |   | $(2.76 | ) |   | $1.17 |   |
| Discontinued      operations                                      |                                          | (0.02   | )                      |   | (0.02 | ) |   | (0.07 | ) |   | (0.03 | ) |
| Net      income (loss) per share of common stock                  |                                          | $(0.60  | )                      |   | $(0.10 | ) |   | $(2.83 | ) |   | $1.14 |   |
|                                                              |                                          |    |                   |   |   |   |   |   |   |   |   |   |
| Average      common shares outstanding:                           |                                          |    |                   |   |   |   |   |   |   |   |   |   |
| Basic                                                             |                                          | 86,038  |                   |   | 64,446 |   |   | 76,152 |   |   | 58,617 |   |
| Diluted                                                           |                                          | 86,038  |                   |   | 64,446 |   |   | 76,152 |   |   | 87,718 |   |

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TABLE OF CONTENTS
CONSOLIDATED STATEMENTS OFCASH FLOW 

|                                                                    |   | Nine      Months Ended |     |
|-------------------------------------------------------------------------|--------|------------------------|----------|
|                                                                    |   | September      30,     |     |
|                                                                    |   | 2009                   |     | 2008 |   |
|                                                                    |   | (In      Thousands)    |     |
| Cash      flow from operating activities:                               |   |                   |     |   |   |   |   |
| Net      income (loss)                                                  |   | $                      | (205,860 | ) | $ | 95,206 |   |
| Adjustments      to reconcile net income (loss) to net cash provided by |   |                   |     |   |   |   |   |
| operating      activities:                                              |   |                   |     |   |   |   |   |
| Loss      from discontinued operations                                  |   |                   | 5,692    |   |   | 2,960 |   |
| Depletion,      depreciation and amortization                           |   |                   | 243,347  |   |   | 492,457 |   |
| Exploration      drilling and related expenditures, net                 |   |                   | 61,707   |   |   | 15,692 |   |
| Compensation      expense associated with stock-based awards            |   |                   | 11,966   |   |   | 25,546 |   |
| Amortization      of deferred financing costs                           |   |                   | 2,793    |   |   | 3,675 |   |
| Change      in fair value of oil and gas derivative contracts           |   |                   | 23,586   |   |   | 2,548 |   |
| Loss      on induced conversions of convertible senior notes            |   |                   | -        |   |   | 2,663 |   |
| Reclamation      expenditures, net of prepayments by third parties      |   |                   | (39,625  | ) |   | (6,500 | ) |
| Increase      in restricted cash                                        |   |                   | (11,293  | ) |   | (11,364 | ) |
| Payment      to fund terminated pension plan                            |   |                   | -        |   |   | (2,291 | ) |
| Other                                                                   |   |                   | (316     | ) |   | 83 |   |
| (Increase)      decrease in working capital:                            |   |                   |     |   |   |   |   |
| Accounts      receivable                                                |   |                   | 32,914   |   |   | 18,229 |   |
| Accounts      payable and accrued liabilities                           |   |                   | (14,219  | ) |   | 37,702 |   |
| Prepaid      expenses and inventories                                   |   |                   | (20,861  | ) |   | (35,299 | ) |
| Net      cash provided by continuing operations                         |   |                   | 89,831   |   |   | 641,307 |   |
| Net      cash used in discontinued operations                           |   |                   | (4,373   | ) |   | (5,144 | ) |
| Net      cash provided by operating activities                          |   |                   | 85,458   |   |   | 636,163 |   |
|                                                                    |   |                   |     |   |   |   |   |
| Cash      flow from investing activities:                               |   |                   |     |   |   |   |   |
| Exploration,      development and other capital expenditures            |   |                   | (113,375 | ) |   | (186,904 | ) |
| Other                                                                   |   |                   | -        |   |   | (613 | ) |
| Net      cash used in continuing operations                             |   |                   | (113,375 | ) |   | (187,517 | ) |
| Net      cash from discontinued operations                              |   |                   | -        |   |   | - |   |
| Net      cash used in investing activities                              |   |                   | (113,375 | ) |   | (187,517 | ) |
|                                                                    |   |                   |     |   |   |   |   |
| Cash flow from financing      activities:                               |   |                   |     |   |   |   |   |
| Net      proceeds from the sale of common stock                         |   |                   | 84,929   |   |   | - |   |
| Net      proceeds from the sale of 8% convertible perpetual             |   |                   |     |   |   |   |   |
| preferred      stock                                                    |   |                   | 83,228   |   |   | - |   |
| Payments      under senior secured revolving credit facility, net       |   |                   | -        |   |   | (274,000 | ) |
| Dividends      and inducement payments on preferred stock               |   |                   | (9,062   | ) |   | (20,883 | ) |
| Payments      for induced conversion of convertible senior notes        |   |                   | -        |   |   | (2,663 | ) |
| Proceeds      from exercise of stock options and other                  |   |                   | -        |   |   | 4,705 |   |
| Net      cash provided by (used in) continuing operations               |   |                   | 159,095  |   |   | (292,841 | ) |
| Net      cash from discontinued operations                              |   |                   | -        |   |   | - |   |
| Net      cash provided by (used in)  financing activities     |   |                   | 159,095  |   |   | (292,841 | ) |
| Net      increase in cash and cash equivalents                          |   |                   | 131,178  |   |   | 155,805 |   |
| Cash      and cash equivalents at beginning of year                     |   |                   | 93,486   |   |   | 4,830 |   |
| Cash      and cash equivalents at end of period                         |   | $                      | 224,664  |   | $ | 160,635 |   |

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TABLE OF CONTENTS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED

| 1.   | BASIS      OF PRESENTATION |
|----------------|----------------------------|

|                                            | September      30, |    | December      31, |   |
|-------------------------------------------------|--------------------|---------|-------------------|--------|
|                                            | 2009               |    | 2008              |   |
| Senior      secured revolving credit facility   | $                  | -       |              | $      | - |   |
| 11.875%      senior notes due 2014              |               | 300,000 |              |   | 300,000 |   |
| 5¼%      convertible senior notes due 2011 |               | 74,720  |              |   | 74,720 |   |
| Total      debt                                 |               | 374,720 |              |   | 374,720 |   |
| Less      current maturities                    |               | -       |              |   | - |   |
| Long-term      debt                             | $                  | 374,720 |              | $      | 374,720 |   |

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TABLE OFCONTENTS

|                                                           |   | Third   |   | Nine   |   | Third   |   |
|----------------------------------------------------------------|--------|---------|--------|--------|--------|---------|--------|
|                                                           |   | Quarter |   | Months |   | Quarter |   |
|                                                           |   | 2009    |   | 2008   |   |
| Stock      options a,      b                                   |   | -       |   | -      |   | 2,947   |   |
| Assumed      conversion of 6¾% preferred stock c          |   | 12,817  |   | 12,817 |   | 16,899  |   |
| Assumed      conversion of 8% preferred stock      d           |   | 12,605  |   | 4,617  |   | -       |   |
| Assumed      conversion of 5¼% convertible senior notes e |   | 4,508   |   | 4,508  |   | 4,508   |   |
| Assumed      conversion of 6% notes      f                     |   | -       |   | -      |   | 66      |   |

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TABLE OFCONTENTS

|                                                                                                         |   | Nine   |    |
|--------------------------------------------------------------------------------------------------------------|--------|--------|---------|
|                                                                                                         |   | Months |    |
|                                                                                                         |   | 2008   |    |
| Net      income from continuing operations                                                                   |   | $      | 98,166  |   |
| Preferred      dividends                                                                                     |   |   | (19,604 | ) |
| Net      income from continuing operations applicable to common    stock                                     |   |   | 78,562  |   |
| Add:  Preferred      dividends from assumed conversion of  6¾% preferred      stock |   |   | 19,604  |   |
| Add:  Net      interest from assumed conversion of 6% notes                                        |   |   | 1,514   |   |
| Add:  Net      interest from assumed conversion of 5¼% notes                                  |   |   | 3,484   |   |
| Diluted      net income from continuing operations                                                           |   |   | 103,164 |   |
| Loss      from discontinued operations                                                                       |   |   | (2,960  | ) |
| Diluted      net income applicable to common stock                                                           |   | $      | 100,204 |   |
|                                                                                                         |   |   |    |   |
| Weighted      average common shares outstanding for purpose of    calculating                                |   |   |    |   |
| basic      net income per share                                                                              |   |   | 58,617  |   |
| Assumed      exercise of dilutive stock options a,      b                                                    |   |   | 2,183   |   |
| Assumed      exercise of stock warrants a,      g                                                            |   |   | 368     |   |
| Assumed      conversion of 6¾% preferred stock      c                                                   |   |   | 17,187  |   |
| Assumed      conversion of 6% notes      f                                                                   |   |   | 3,520   |   |
| Assumed      conversion of 5¼% notes e                                                                  |   |   | 5,843   |   |
| Weighted      average common shares outstanding                                                              |   |   |    |   |
| for      purposes of calculating diluted net income per share                                                |   |   | 87,718  |   |
|                                                                                                         |   |   |    |   |
| Diluted      net income per share from continuing operations                                                 |   |   | $1.17   |   |
| Diluted      net loss per share from discontinued operations                                                 |   |   | (0.03   | ) |
| Diluted      net income per share                                                                            |   |   | $1.14   |   |

| a.   | McMoRan      uses the treasury stock method to determine total shares related to      in-the-money stock options and stock warrants for purposes of its diluted      earnings per share calculation. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| c.   | See      Note 10 of the 2008 Form 10-K for information regarding McMoRan’s 6¾%      preferred stock. |
|----------------|-----------------------------------------------------------------------------------------------------------------|

| d.   | Represents      the weighted average total equivalent common stock shares assuming      conversion of 8% preferred stock (Note 5).  The amount is      reduced from the 12.6 million equivalent shares issuable upon conversion      to reflect the number of days that the 8% preferred stock was outstanding      during the nine months ended September 30,2009. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| e.   | Net      interest expense on the 5¼% notes totaled $1.0 million during each of the      third quarters of 2009 and 2008, respectively, and $3.0 million and $3.5      million for the nine month periods ended September 30, 2009 and 2008,      respectively. Additional information regarding McMoRan’s 5¼% notes is      disclosed in Note 8 of the 2008 Form10-K. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| f.   | The      6% notes matured on July 2, 2008.  Net interest expense on the      6% notes totaled $1.5 million for the nine month period ended September      30, 2008.  Additional information regarding McMoRan’s 6% notes      is disclosed in Note 8 of the 2008 Form10-K. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| g.   | See      Note 6 of the 2008 Form 10-K for additional information regarding the      warrants. |
|----------------|-----------------------------------------------------------------------------------------------|

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|        TABLE OF      CONTENTS  |   | Third      Quarter |   |   | Nine      Months |   |
|------------------------------------------|--------|--------------------|--------|--------|------------------|--------|
|                                     |   | 2009               |   |   | 2008             |   |   | 2009 |   |   | 2008 |   |
| Outstanding      options (in thousands)  |   |               | 8,457  |   |             |   | 40 |   |   |   | 8,457 |   |   |   | 45 |   |
| Average      exercise price              |   | $                  | 15.36  |   |             | $      | 31.92 |   |   | $ | 15.36 |   |   | $ | 31.08 |   |

|   | Natural      Gas Positions (million MMbtu)                                        |   |
|--------|-----------------------------------------------------------------------------------|--------|
|   | Open      Swap Positions a                                                        |   | Put      Options b |   |
|   |                                                                              |   | Average |   |   |   | Average |   |
|   | Volumes                                                                           |   | Swap      Price      c |   | Volumes |   | Floor      Price c |   |
| 2009   | 1.1                                                                               |   | $ |  8.97 |   |              0.7 |   | $ |  6.00 |   |
| 2010   |              2.6 |   | $ |  8.63 |   |              1.2 |   | $ |  6.00 |   |
|   | Oil      Positions (thousand bbls)                                                |   |
|   | Open      Swap Positions a                                                        |   | Put      Options b |   |
|   |                                                                              |   | Average |   |   |   | Average |   |
|   | Volumes                                                                           |   | Swap      Price      d |   | Volumes |   | Floor      Price d |   |
| 2009   |             45        |   | $ |  71.16 |   | 29 |   | $ |  50.00 |   |
| 2010   |             118       |   | $ |  70.89 |   |               50 |   | $ |  50.00 |   |
|   |                                                                              |   |   |   |   |   |   |   |   |   |

| a.   | Remaining      2009 swaps cover periods November-December 2009; 2010 swaps cover periods      January-June and November-December. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------|

| b.   | Remaining      2009 puts cover October 2009; 2010 puts cover periods      July-October. |
|----------------|-----------------------------------------------------------------------------------------|

| c.   | Price      per MMbtu of natural gas. |
|----------------|--------------------------------------|

| d.   | Price      per barrel of oil. |
|----------------|-------------------------------|

|                                                 | Third      Quarter |   | Nine      Months |   |
|------------------------------------------------------|--------------------|--------|------------------|--------|
|                                                 | 2009               |   | 2008             |   | 2009 |   | 2008 |   |
| Realized      (gain) loss                            |               |   |             |   |   |   |   |   |   |   |   |   |
| Gas      puts                                        | $                  | (5,521 | )                | $      | 1,579 |   | $ | (5,521 | ) | $ | 1,579 |   |
| Oil      puts                                        |               | 183    |             |   | 274 |   |   | 183 |   |   | 274 |   |
| Gas      swaps                                       |               | -      |             |   | - |   |   | (28,887 | ) |   | 10,777 |   |
| Oil      swaps                                       |               | -      |             |   | 3 |   |   | (5,985 | ) |   | 20,429 |   |
| Total      realized (gain) loss                      |               | (5,338 | )                |   | 1,856 |   |   | (40,210 | ) |   | 33,059 |   |
|                                                 |               |   |             |   |   |   |   |   |   |   |   |   |
| Unrealized      (gain) loss                          |               |   |             |   |   |   |   |   |   |   |   |   |
| Gas      puts                                        |               | 4,568  |             |   | (2,356 | ) |   | 101 |   |   | (32 | ) |
| Oil      puts                                        |               | (157   | )                |   | (357 | ) |   | 893 |   |   | (304 | ) |
| Gas      swaps                                       |               | 405    |             |   | (58,752 | ) |   | 14,979 |   |   | 7,048 |   |
| Oil      swaps                                       |               | (216   | )                |   | (20,790 | ) |   | 7,613 |   |   | (4,164 | ) |
| Total      unrealized (gain) loss                    |               | 4,600  |             |   | (82,255 | ) |   | 23,586 |   |   | 2,548 |   |
| (Gain)      loss on oil and gas derivative contracts | $                  | (738   | )                | $      | (80,399 | ) | $ | (16,624 | ) | $ | 35,607 |   |

----

TABLE OFCONTENTS

|                             | September      30, 2009 |   |
|----------------------------------|-------------------------|--------|
|                             | Puts                    |   | Swaps |   |   |   |   |
|                             | Gas                     |   | Oil |   | Gas |   | Oil |   | Total |   |
| Current      assets              | $                       | 2,251  |   | $ | 101 |   | $ | 9,640 |   | $ | 3 |   | $ | 11,995 |   |
| Other      assets                |                    | 248    |   |   | 35 |   |   | 918 |   |   | - |   |   | 1,201 |   |
| Current      liabilities         |                    | -      |   |   | - |   |   | - |   |   | (221 | ) |   | (221 | ) |
| Other      long-term liabilities |                    | -      |   |   | - |   |   | - |   |   | (98 | ) |   | (98 | ) |
| Fair      value of contracts     | $                       | 2,499  |   | $ | 136 |   | $ | 10,558 |   | $ | (316 | ) | $ | 12,877 |   |

|                             | December      31, 2008 |   |
|----------------------------------|------------------------|--------|
|                             | Puts                   |   | Swaps |   |   |   |   |
|                             | Gas                    |   | Oil |   | Gas |   | Oil |   | Total |   |
| Current      assets              | $                      | 2,659  |   | $ | 915 |   | $ | 21,701 |   | $ | 6,349 |   | $ | 31,624 |   |
| Other      assets                |                   | 765    |   |   | 297 |   |   | 3,837 |   |   | 948 |   |   | 5,847 |   |
| Current      liabilities         |                   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Other      long-term liabilities |                   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Fair      value of contracts     | $                      | 3,424  |   | $ | 1,212 |   | $ | 25,538 |   | $ | 7,297 |   | $ | 37,471 |   |

----

| TABLE OF      CONTENTS           | Preferred      stock |    | Common      stock |   |  Capital  in      excess of par value |   | Accumulated      deficit |      | Accumulated other      comprehensive loss |   | Common      stock held in treasury |   | Total      Stockholders’ Equity |   |
|-------------------------------------------------|----------------------|---------|-------------------|--------|------------------------------------------------------|--------|--------------------------|-----------|------------------------------------------------|--------|------------------------------------|--------|---------------------------------------|--------|
| Balance      as of January 1, 2009              | $                    | 158,934 |              | $      | 730                                                  |   | $                        | 971,977   |                                           | $      | (776,153                           | )      | $                                     | (22    | ) | $ | (46,443 | ) | $ | 309,023 |   |
| Common      stock offering,                     |                 |    |              |   |                                                 |   |                     |      |                                           |   |                               |   |                                  |   |   |   |   |   |   |   |   |
|    15,547,400      shares issued |                 | -       |              |   | 155                                                  |   |                     | 84,774    |                                           |   | -                                  |   |                                  | -      |   |   | - |   |   | 84,929 |   |
| Preferred      stock offering,                  |                 |    |              |   |                                                 |   |                     |      |                                           |   |                               |   |                                  |   |   |   |   |   |   |   |   |
|    86,250      shares issued     |                 | 86,250  |              |   | -                                                    |   |                     | (3,022    | )                                              |   | -                                  |   |                                  | -      |   |   | - |   |   | 83,228 |   |
| Stock-based      compensation                   |                 |    |              |   |                                                 |   |                     |      |                                           |   |                               |   |                                  |   |   |   |   |   |   |   |   |
|    expense                       |                 | -       |              |   | -                                                    |   |                     | 11,966    |                                           |   | -                                  |   |                                  | -      |   |   | - |   |   | 11,966 |   |
| Preferred      stock dividends                  |                 | -       |              |   | -                                                    |   |                     | (9,925    | )                                              |   | -                                  |   |                                  | -      |   |   | - |   |   | (9,925 | ) |
| Net      loss                                   |                 | -       |              |   | -                                                    |   |                     | -         |                                           |   | (205,860                           | )      |                                  | -      |   |   | - |   |   | (205,860 | ) |
| Stock      tendered for taxes                   |                 | -       |              |   | -                                                    |   |                     | -         |                                           |   | -                                  |   |                                  | -      |   |   | (10 | ) |   | (10 | ) |
| Other      comprehensive loss                   |                 | -       |              |   | -                                                    |   |                     | -         |                                           |   | -                                  |   |                                  | (30    | ) |   | - |   |   | (30 | ) |
| Balance      as of September 30, 2009           | $                    | 245,184 |              | $      | 885                                                  |   | $                        | 1,055,770 |                                           | $      | (982,013                           | )      | $                                     | (52    | ) | $ | (46,453 | ) | $ | 273,321 |   |

----

TABLE OFCONTENTS

----

|        TABLE OF      CONTENTS            | Oil      and     |    |    |   |
|---------------------------------------------------------|------------------|---------|---------|--------|
|                                                    | Natural      Gas |    | Sulphur |   |
| Asset      retirement obligation at December 31, 2008   | $                | 421,201 |    | $      | 23,003 |   |
| Liabilities      settled                                |             | (36,881 | )       |   | (482 | ) |
| Accretion      expense                                  |             | 23,398  |    |   | 1,501 |   |
| Reclamation      costs assumed from third parties       |             | 842     |    |   | - |   |
| Incurred      liabilities                               |             | 1,608   |    |   | - |   |
| Revision      for changes in estimates                  |             | 1,491   |    |   | - |   |
| Asset      retirement obligations at September 30, 2009 | $                | 411,659 |    | $      | 24,022 |   |

|                                   | Third      Quarter |   | Nine      Months |   |
|----------------------------------------|--------------------|--------|------------------|--------|
|                                   | 2009               |   | 2008             |   | 2009 |   | 2008 |   |
| Interest      cost                     | $                  | -      |             | $      | 81 |   | $ | - |   | $ | 65 |   |
| Service      cost                      |               | -      |             |   | - |   |   | - |   |   | - |   |
| Return      on plan assets             |               | -      |             |   | (5 | ) |   | - |   |   | (23 | ) |
| Change      in plan payout assumptions |               | -      |             |   | - |   |   | - |   |   | - |   |
| Net      periodic expense              | $                  | -      |             | $      | 76 |   | $ | - |   | $ | 42 |   |

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TABLE OFCONTENTS

|                                     | Third      Quarter |   | Nine      Months |   |
|------------------------------------------|--------------------|--------|------------------|--------|
|                                     | 2009               |   | 2008             |   | 2009 |   | 2008 |   |
| Service      cost                        | $                  | 13     |             | $      | 7 |   | $ | 38 |   | $ | 20 |   |
| Interest      cost                       |               | 72     |             |   | 84 |   |   | 215 |   |   | 251 |   |
| Return      on plan assets               |               | -      |             |   | - |   |   | - |   |   | - |   |
| Amortization      of prior service costs |               |   |             |   |   |   |   |   |   |   |   |   |
| and      actuarial gains                 |               | (10    | )                |   | (1 | ) |   | (30 | ) |   | (4 | ) |
| Net      periodic expense                | $                  | 75     |             | $      | 90 |   | $ | 223 |   | $ | 267 |   |

|                                                 | Third      Quarter |   |   | Nine      Months |   |
|------------------------------------------------------|--------------------|--------|--------|------------------|--------|
|                                                 | 2009               |   | 2008   |             |   | 2009 |   | 2008 |   |
| Cost      of options awarded to employees (including |               |   |   |             |   |   |   |   |   |   |   |   |   |
| directors)      a                                    | $                  | 2,553  |   | $                | 4,329  |   |   | $ | 11,168 |   | $ | 24,389 |   |
| Cost      of options awarded to non-employees        |               | 143    |   |             | 261    |   |   |   | 543 |   |   | 991 |   |
| Cost      of restricted stock units                  |               | 90     |   |             | 81     |   |   |   | 255 |   |   | 166 |   |
| Total      compensation cost                         | $                  | 2,786  |   | $                | 4,671  |   |   | $ | 11,966 |   | $ | 25,546 |   |

| a.   | Includes      compensation charges associated with immediately vested stock options      totaling $2.9 million and $16.2 million, respectively, for the nine months      ended September 30, 2009 and 2008.  These charges included the      compensation costs associated with the immediately exercisable options 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 effective date of the stock      option grant. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                 | Third      Quarter |    |   | Nine      Months |   |
|------------------------------------------------------|--------------------|---------|--------|------------------|--------|
|                                                 | 2009               |    | 2008   |             |   | 2009 |   | 2008 |   |
| Net      income (loss)                               | $                  | (51,932 | )      | $                | (6,132 | ) |   | $ | (215,785 | ) | $ | 75,602 |   |
| Other      comprehensive income (loss)               |               |    |   |             |   |   |   |   |   |   |   |   |   |
| Amortization      of previously unrecognized pension |               |    |   |             |   |   |   |   |   |   |   |   |   |
| components,      net                                 |               | (10     | )      |             | (1     | ) |   |   | (30 | ) |   | (4 | ) |
| Comprehensive      income (loss)                     | $                  | (51,942 | )      | $                | (6,133 | ) |   | $ | (215,815 | ) | $ | 75,598 |   |

----

TABLE OFCONTENTS

| ·   | allow      the use of new technologies to determine proved  reserves; |
|--------------------|-----------------------------------------------------------------------|

| ·   | permit      the optional disclosure of probable and possible  reserves; |
|--------------------|-------------------------------------------------------------------------|

| ·   | modify      the prices used to estimate reserves for SEC disclosure purposes to a      12-month average price instead of a period-end price;  and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | require      that if a third party is primarily responsible for preparing or auditing      the reserve estimates, the company make disclosures relating to the      independence and qualifications of the third party, including filing as an      exhibit any report received from the third  party. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

TABLE OFCONTENTS

| ·   | The      period after the balance sheet date during which management of a reporting      entity should evaluate events or transactions that may occur for potential      recognition or disclosure in the financial  statements; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The      circumstances under which an entity should recognize events or      transactions occurring after the balance sheet date in its financial      statements; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The      disclosures that an entity should make about events or transactions that      occurred after the balance sheetdate. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------|

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TABLE OF CONTENTS

|                                                  |   |                |    |   |   | Freeport  |   |         |    | Consolidated |   |
|-------------------------------------------------------|--------|---------------------|---------|--------|--------|-----------|--------|--------------|---------|--------------|--------|
|                                                  |   | Parent              |    | MOXY   |   | Energy    |   | Eliminations |    | McMoRan      |   |
|                                                  |   | (In      Thousands) |    |
| ASSETS                                                |   |                |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| Current      assets:                                  |   |                |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| Cash      and cash equivalents                        |   | $                   | 23      |   | $      | 224,635   |   | $            | 6       |         | $      | - |   | $ | 224,664 |   |
| Accounts      receivable                              |   |                | -       |   |   | 77,652    |   |         | -       |         |   | - |   |   | 77,652 |   |
| Inventories                                           |   |                | -       |   |   | 48,820    |   |         | -       |         |   | - |   |   | 48,820 |   |
| Prepaid      expenses                                 |   |                | 570     |   |   | 17,577    |   |         | -       |         |   | - |   |   | 18,147 |   |
| Fair      value of derivative contracts               |   |                | -       |   |   | 11,995    |   |         | -       |         |   | - |   |   | 11,995 |   |
| Current      assets from discontinued                 |   |                |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| operations                                            |   |                | -       |   |   | -         |   |         | 1,008   |         |   | - |   |   | 1,008 |   |
| Total      current assets                             |   |                | 593     |   |   | 380,679   |   |         | 1,014   |         |   | - |   |   | 382,286 |   |
| Property,      plant and equipment, net               |   |                | -       |   |   | 821,257   |   |         | 31      |         |   | - |   |   | 821,288 |   |
| Discontinued      sulphur assets                      |   |                | -       |   |   | -         |   |         | 3,002   |         |   | - |   |   | 3,002 |   |
| Investment      in subsidiaries                       |   |                | 687,257 |   |   | -         |   |         | -       |         |   | (687,257 | ) |   | - |   |
| Amounts      due from affiliates                      |   |                | -       |   |   | 26,260    |   |         | -       |         |   | (26,260 | ) |   | - |   |
| Deferred      financing costs and other assets        |   |                | 10,031  |   |   | 45,216    |   |         | -       |         |   | - |   |   | 55,247 |   |
| Total      assets                                     |   | $                   | 697,881 |   | $      | 1,273,412 |   | $            | 4,047   |         | $      | (713,517 | ) | $ | 1,261,823 |   |
|                                                  |   |                |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| LIABILITIES      AND STOCKHOLDERS’ EQUITY       |   |                |    |   |   |      |   |         |    |         |
| Currentliabilities:                                   |   |                |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| Accounts      payable                                 |   | $                   | 247     |   | $      | 65,914    |   | $            | 209     |         | $      | - |   | $ | 66,370 |   |
| Accrued      liabilities                              |   |                | 906     |   |   | 63,346    |   |         | (170    | )            |   | - |   |   | 64,082 |   |
| Current      portion of oil and gas accrued           |   |                |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| reclamation      costs                                |   |                | -       |   |   | 108,609   |   |         | -       |         |   | - |   |   | 108,609 |   |
| Other      current liabilities                        |   |                | 17,585  |   |   | 1,064     |   |         | -       |         |   | - |   |   | 18,649 |   |
| Current      liabilities from discontinued            |   |                |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| operations                                            |   |                | -       |   |   | -         |   |         | 6,891   |         |   | - |   |   | 6,891 |   |
| Total      current liabilities                        |   |                | 18,738  |   |   | 238,933   |   |         | 6,930   |         |   | - |   |   | 264,601 |   |
| Long-term      debt                                   |   |                | 374,720 |   |   | -         |   |         | -       |         |   | - |   |   | 374,720 |   |
| Amounts      due to affiliates                        |   |                | 22,142  |   |   | -         |   |         | 4,118   |         |   | (26,260 | ) |   | - |   |
| Accrued      oil and gas reclamation costs            |   |                | -       |   |   | 303,050   |   |         | -       |         |   | - |   |   | 303,050 |   |
| Accrued      sulphur reclamation costs                |   |                | -       |   |   | -         |   |         | 19,022  |         |   | - |   |   | 19,022 |   |
| Other      long-term liabilities                      |   |                | 8,960   |   |   | 9,569     |   |         | 8,580   |         |   | - |   |   | 27,109 |   |
| Total      liabilities                                |   |                | 424,560 |   |   | 551,552   |   |         | 38,650  |         |   | (26,260 | ) |   | 988,502 |   |
| Commitments      and contingencies                    |   |                |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| Stockholders’      equity (deficit)             |   |                | 273,321 |   |   | 721,860   |   |         | (34,603 | )            |   | (687,257 | ) |   | 273,321 |   |
| Total      liabilities and stockholders’ equity |   | $                   | 697,881 |   | $      | 1,273,412 |   | $            | 4,047   |         | $      | (713,517 | ) | $ | 1,261,823 |   |

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TABLE OF CONTENTS
|                                                  |   |                |    |   |   | Freeport  |   |         |    | Consolidated |   |
|-------------------------------------------------------|--------|---------------------|---------|--------|--------|-----------|--------|--------------|---------|--------------|--------|
|                                                  |   | Parent              |    | MOXY   |   | Energy    |   | Eliminations |    | McMoRan      |   |
|                                                  |   | (In      Thousands) |    |
| ASSETS                                                |   |                |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| Current      assets:                                  |   |                |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| Cash      and cash equivalents                        |   | $                   | 35      |   | $      | 93,442    |   | $            | 9       |         | $      | - |   | $ | 93,486 |   |
| Accounts      receivable                              |   |                | -       |   |   | 112,684   |   |         | -       |         |   | - |   |   | 112,684 |   |
| Inventories                                           |   |                | -       |   |   | 31,284    |   |         | -       |         |   | - |   |   | 31,284 |   |
| Prepaid      expenses                                 |   |                | 12,794  |   |   | 1,025     |   |         | -       |         |   | - |   |   | 13,819 |   |
| Fair      value of derivative contracts               |   |                | -       |   |   | 31,624    |   |         | -       |         |   | - |   |   | 31,624 |   |
| Current      assets from discontinued                 |   |                |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| operations                                            |   |                | -       |   |   | -         |   |         | 516     |         |   | - |   |   | 516 |   |
| Total      current assets                             |   |                | 12,829  |   |   | 270,059   |   |         | 525     |         |   | - |   |   | 283,413 |   |
| Property,      plant and equipment, net               |   |                | -       |   |   | 992,532   |   |         | 31      |         |   | - |   |   | 992,563 |   |
| Discontinued      sulphur assets                      |   |                | -       |   |   | -         |   |         | 3,012   |         |   | - |   |   | 3,012 |   |
| Investment      in subsidiaries                       |   |                | 841,882 |   |   | -         |   |         | -       |         |   | (841,882 | ) |   | - |   |
| Amounts      due from affiliates                      |   |                |    |   |   | 168,004   |   |         | -       |         |   | (168,004 | ) |   | - |   |
| Deferred      financing costs and other assets        |   |                | 11,122  |   |   | 40,172    |   |         | -       |         |   | - |   |   | 51,294 |   |
| Total      assets                                     |   | $                   | 865,833 |   | $      | 1,470,767 |   | $            | 3,568   |         | $      | (1,009,886 | ) | $ | 1,330,282 |   |
|                                                  |   |                |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| LIABILITIES      AND STOCKHOLDERS’ EQUITY       |   |                |    |   |   |      |   |         |    |         |
| Currentliabilities:                                   |   |                |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| Accounts      payable                                 |   | $                   | 512     |   | $      | 76,491    |   | $            | 6       |         | $      | - |   | $ | 77,009 |   |
| Accrued      liabilities                              |   |                | 705     |   |   | 88,329    |   |         | 531     |         |   | - |   |   | 89,565 |   |
| Current      portion of oil and gas                   |   |                |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| accrued      reclamation costs                        |   |                | -       |   |   | 103,550   |   |         | -       |         |   | - |   |   | 103,550 |   |
| Other      current liabilities                        |   |                | 6,835   |   |   | 751       |   |         | -       |         |   | - |   |   | 7,586 |   |
| Current      liabilities from discontinued            |   |                |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| operations                                            |   |                | -       |   |   | -         |   |         | 2,102   |         |   | - |   |   | 2,102 |   |
| Total      current liabilities                        |   |                | 8,052   |   |   | 269,121   |   |         | 2,639   |         |   | - |   |   | 279,812 |   |
| Long-term      debt                                   |   |                | 374,720 |   |   | -         |   |         | -       |         |   | - |   |   | 374,720 |   |
| Amounts      due to affiliates                        |   |                | 165,011 |   |   | -         |   |         | 2,993   |         |   | (168,004 | ) |   | - |   |
| Accrued      oil and gas reclamation costs            |   |                | -       |   |   | 317,651   |   |         | -       |         |   | - |   |   | 317,651 |   |
| Accrued      sulphur reclamation costs                |   |                | -       |   |   | -         |   |         | 22,218  |         |   | - |   |   | 22,218 |   |
| Other      long-term liabilities                      |   |                | 9,027   |   |   | 9,380     |   |         | 8,451   |         |   | - |   |   | 26,858 |   |
| Total      liabilities                                |   |                | 556,810 |   |   | 596,152   |   |         | 36,301  |         |   | (168,004 | ) |   | 1,021,259 |   |
| Commitments      and contingencies                    |   |                |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| Stockholders’      equity (deficit)             |   |                | 309,023 |   |   | 874,615   |   |         | (32,733 | )            |   | (841,882 | ) |   | 309,023 |   |
| Total      liabilities and stockholders’ equity |   | $                   | 865,833 |   | $      | 1,470,767 |   | $            | 3,568   |         | $      | (1,009,886 | ) | $ | 1,330,282 |   |

----

TABLE OF CONTENTS
|                                          |   |                |    |   |   | Freeport |   |         |   | Consolidated |   |
|-----------------------------------------------|--------|---------------------|---------|--------|--------|----------|--------|--------------|--------|--------------|--------|
|                                          |   | Parent              |    | MOXY   |   | Energy   |   | Eliminations |   | McMoRan      |   |
|                                          |   | (In      Thousands) |    |
| Revenues:                                     |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| Oil      and gas                              |   | $                   | -       |   | $      | 105,822  |   | $            | -      |         | $      | - |   | $ | 105,822 |   |
| Service                                       |   |                | -       |   |   | 3,713    |   |         | -      |         |   | - |   |   | 3,713 |   |
| Total      revenues                           |   |                | -       |   |   | 109,535  |   |         | -      |         |   | - |   |   | 109,535 |   |
| Costs      and expenses:                      |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| Production      and delivery costs            |   |                | -       |   |   | 49,104   |   |         | (17    | )            |   | - |   |   | 49,087 |   |
| Depletion,      depreciation and amortization |   |                | -       |   |   | 75,980   |   |         | -      |         |   | - |   |   | 75,980 |   |
| Exploration      expenses                     |   |                | -       |   |   | 10,802   |   |         | -      |         |   | - |   |   | 10,802 |   |
| Gain      on oil and gas derivative contracts |   |                | -       |   |   | (738     | )      |         | -      |         |   | - |   |   | (738 | ) |
| General      and administrative expenses      |   |                | 1,189   |   |   | 8,435    |   |         | (3     | )            |   | - |   |   | 9,621 |   |
| Main      Pass Energy Hub™      costs   |   |                | -       |   |   | -        |   |         | 297    |         |   | - |   |   | 297 |   |
| Insurance      recoveries                     |   |                | -       |   |   | -        |   |         | -      |         |   | - |   |   | - |   |
| Total      costs and expenses                 |   |                | 1,189   |   |   | 143,583  |   |         | 277    |         |   | - |   |   | 145,049 |   |
| Operating      loss                           |   |                | (1,189  | )      |   | (34,048  | )      |         | (277   | )            |   | - |   |   | (35,514 | ) |
| Interest      expense                         |   |                | (10,283 | )      |   | (647     | )      |         | -      |         |   | - |   |   | (10,930 | ) |
| Equity      in earnings of consolidated       |   |                |    |   |   |     |   |         |   |         |   |   |   |   | - |   |
| subsidiaries                                  |   |                | (36,243 | )      |   | -        |   |         | -      |         |   | 36,243 |   |   | - |   |
| Other      income (expense), net              |   |                | (6      | )      |   | 304      |   |         | -      |         |   | - |   |   | 298 |   |
| Loss      from continuing operations before   |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| income      taxes                             |   |                | (47,721 | )      |   | (34,391  | )      |         | (277   | )            |   | 36,243 |   |   | (46,146 | ) |
| Income      tax benefit                       |   |                | 177     |   |   | -        |   |         | -      |         |   | - |   |   | 177 |   |
| Loss      from continuing operations          |   |                | (47,544 | )      |   | (34,391  | )      |         | (277   | )            |   | 36,243 |   |   | (45,969 | ) |
| Loss      from discontinued operations        |   |                | -       |   |   | -        |   |         | (1,575 | )            |   | - |   |   | (1,575 | ) |
| Net      loss                                 |   |                | (47,544 | )      |   | (34,391  | )      |         | (1,852 | )            |   | 36,243 |   |   | (47,544 | ) |
| Preferred      dividends and inducement       |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| payments                                      |   |                | (4,388  | )      |   | -        |   |         | -      |         |   | - |   |   | (4,388 | ) |
| Net      loss applicable to common stock      |   | $                   | (51,932 | )      | $      | (34,391  | )      | $            | (1,852 | )            | $      | 36,243 |   | $ | (51,932 | ) |
|                                          |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |

----

TABLE OF CONTENTS

|                                          |   |                |     |   |   | Freeport |   |         |   | Consolidated |   |
|-----------------------------------------------|--------|---------------------|----------|--------|--------|----------|--------|--------------|--------|--------------|--------|
|                                          |   | Parent              |     | MOXY   |   | Energy   |   | Eliminations |   | McMoRan      |   |
|                                          |   | (In      Thousands) |     |
| Revenues:                                     |   |                |     |   |   |     |   |         |   |         |   |   |   |   |   |   |
| Oil      and gas                              |   | $                   | -        |   | $      | 294,969  |   | $            | -      |         | $      | - |   | $ | 294,969 |   |
| Service                                       |   |                | -        |   |   | 8,494    |   |         | -      |         |   | - |   |   | 8,494 |   |
| Total      revenues                           |   |                | -        |   |   | 303,463  |   |         | -      |         |   | - |   |   | 303,463 |   |
| Costs      and expenses:                      |   |                |     |   |   |     |   |         |   |         |   |   |   |   |   |   |
| Production      and delivery costs            |   |                | -        |   |   | 146,977  |   |         | (44    | )            |   | - |   |   | 146,933 |   |
| Depreciation      and amortization            |   |                | -        |   |   | 243,347  |   |         | -      |         |   | - |   |   | 243,347 |   |
| Exploration      expenses                     |   |                | -        |   |   | 86,064   |   |         | -      |         |   | - |   |   | 86,064 |   |
| Gain      on oil and gas derivative contracts |   |                | -        |   |   | (16,624  | )      |         | -      |         |   | - |   |   | (16,624 | ) |
| General      and administrative expenses      |   |                | 4,474    |   |   | 28,484   |   |         | 25     |         |   | - |   |   | 32,983 |   |
| Main      Pass Energy Hub™      costs   |   |                | -        |   |   | -        |   |         | 1,413  |         |   | - |   |   | 1,413 |   |
| Insurance      recoveries                     |   |                | -        |   |   | (18,742  | )      |         | -      |         |   | - |   |   | (18,742 | ) |
| Total      costs and expenses                 |   |                | 4,474    |   |   | 469,506  |   |         | 1,394  |         |   | - |   |   | 475,374 |   |
| Operating      loss                           |   |                | (4,474   | )      |   | (166,043 | )      |         | (1,394 | )            |   | - |   |   | (171,911 | ) |
| Interest      expense                         |   |                | (30,851  | )      |   | (1,020   | )      |         | -      |         |   | - |   |   | (31,871 | ) |
| Equity      in earnings of consolidated       |   |                |     |   |   |     |   |         |   |         |   |   |   |   | - |   |
| subsidiaries                                  |   |                | (170,656 | )      |   | -        |   |         | -      |         |   | 170,656 |   |   | - |   |
| Other      income (expense), net              |   |                | (23      | )      |   | 3,493    |   |         | -      |         |   | - |   |   | 3,470 |   |
| Loss      from continuing operations before   |   |                |     |   |   |     |   |         |   |         |   |   |   |   |   |   |
| income      taxes                             |   |                | (206,004 | )      |   | (163,570 | )      |         | (1,394 | )            |   | 170,656 |   |   | (200,312 | ) |
| Income      tax benefit                       |   |                | 144      |   |   | -        |   |         | -      |         |   | - |   |   | 144 |   |
| Loss      from continuing operations          |   |                | (205,860 | )      |   | (163,570 | )      |         | (1,394 | )            |   | 170,656 |   |   | (200,168 | ) |
| Loss      from discontinued operations        |   |                | -        |   |   | -        |   |         | (5,692 | )            |   | - |   |   | (5,692 | ) |
| Net      loss                                 |   |                | (205,860 | )      |   | (163,570 | )      |         | (7,086 | )            |   | 170,656 |   |   | (205,860 | ) |
| Preferred      dividends and inducement       |   |                |     |   |   |     |   |         |   |         |   |   |   |   |   |   |
| payments                                      |   |                | (9,925   | )      |   | -        |   |         | -      |         |   | - |   |   | (9,925 | ) |
| Net      loss applicable to common stock      |   | $                   | (215,785 | )      | $      | (163,570 | )      | $            | (7,086 | )            | $      | 170,656 |   | $ | (215,785 | ) |
|                                          |   |                |     |   |   |     |   |         |   |         |   |   |   |   |   |   |

----

TABLE OF CONTENTS

|                                          |   |                |    |   |   | Freeport |   |         |   | Consolidated |   |
|-----------------------------------------------|--------|---------------------|---------|--------|--------|----------|--------|--------------|--------|--------------|--------|
|                                          |   | Parent              |    | MOXY   |   | Energy   |   | Eliminations |   | McMoRan      |   |
|                                          |   | (In      Thousands) |    |
| Revenues:                                     |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| Oil      and gas                              |   | $                   | -       |   | $      | 282,688  |   | $            | -      |         | $      | - |   | $ | 282,688 |   |
| Service                                       |   |                | -       |   |   | 2,557    |   |         | -      |         |   | - |   |   | 2,557 |   |
| Total      revenues                           |   |                | -       |   |   | 285,245  |   |         | -      |         |   | - |   |   | 285,245 |   |
| Costs      and expenses:                      |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| Production      and delivery costs            |   |                | -       |   |   | 69,936   |   |         | (13    | )            |   | - |   |   | 69,923 |   |
| Depreciation      and amortization            |   |                | -       |   |   | 250,124  |   |         | -      |         |   | - |   |   | 250,124 |   |
| Exploration      expenses                     |   |                | -       |   |   | 15,092   |   |         | -      |         |   | - |   |   | 15,092 |   |
| Gain      on oil and gas derivative contracts |   |                | -       |   |   | (80,399  | )      |         | -      |         |   | - |   |   | (80,399 | ) |
| General      and administrative expenses      |   |                | 2,049   |   |   | 8,605    |   |         | 66     |         |   | - |   |   | 10,720 |   |
| Main      Pass Energy Hub™      costs   |   |                | -       |   |   | -        |   |         | 1,728  |         |   | - |   |   | 1,728 |   |
| Insurance      recoveries                     |   |                | -       |   |   | -        |   |         | -      |         |   | - |   |   | - |   |
| Total      costs and expenses                 |   |                | 2,049   |   |   | 263,358  |   |         | 1,781  |         |   | - |   |   | 267,188 |   |
| Operating      income (loss)                  |   |                | (2,049  | )      |   | 21,887   |   |         | (1,781 | )            |   | - |   |   | 18,057 |   |
| Interest      expense                         |   |                | (10,284 | )      |   | (586     | )      |         | -      |         |   | - |   |   | (10,870 | ) |
| Equity      in earnings of consolidated       |   |                |    |   |   |     |   |         |   |         |   |   |   |   | - |   |
| subsidiaries                                  |   |                | 18,362  |   |   | -        |   |         | -      |         |   | (18,362 | ) |   | - |   |
| Other      income, net                        |   |                | 4       |   |   | 198      |   |         | -      |         |   | - |   |   | 202 |   |
| Income      (loss) from continuing operations |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| before      income taxes                      |   |                | 6,033   |   |   | 21,499   |   |         | (1,781 | )            |   | (18,362 | ) |   | 7,389 |   |
| Income      tax expense                       |   |                | (1,284  | )      |   | -        |   |         | -      |         |   | - |   |   | (1,284 | ) |
| Income      (loss) from continuing operations |   |                | 4,749   |   |   | 21,499   |   |         | (1,781 | )            |   | (18,362 | ) |   | 6,105 |   |
| Loss      from discontinued operations        |   |                | -       |   |   | -        |   |         | (1,356 | )            |   | - |   |   | (1,356 | ) |
| Net      income (loss)                        |   |                | 4,749   |   |   | 21,499   |   |         | (3,137 | )            |   | (18,362 | ) |   | 4,749 |   |
| Preferred      dividends and inducement       |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| payments                                      |   |                | (10,881 | )      |   | -        |   |         | -      |         |   | - |   |   | (10,881 | ) |
| Net      income (loss) applicable to          |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| common      stock                             |   | $                   | (6,132  | )      | $      | 21,499   |   | $            | (3,137 | )            | $      | (18,362 | ) | $ | (6,132 | ) |
|                                          |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |

----

TABLE OF CONTENTS
|                                          |   |                |    |   |   | Freeport |   |         |   | Consolidated |   |
|-----------------------------------------------|--------|---------------------|---------|--------|--------|----------|--------|--------------|--------|--------------|--------|
|                                          |   | Parent              |    | MOXY   |   | Energy   |   | Eliminations |   | McMoRan      |   |
|                                          |   | (In      Thousands) |    |
| Revenues:                                     |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| Oil      and gas                              |   | $                   | -       |   | $      | 946,955  |   | $            | -      |         | $      | - |   | $ | 946,955 |   |
| Service                                       |   |                | -       |   |   | 9,274    |   |         | -      |         |   | - |   |   | 9,274 |   |
| Total      revenues                           |   |                | -       |   |   | 956,229  |   |         | -      |         |   | - |   |   | 956,229 |   |
| Costs      and expenses:                      |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| Production      and delivery costs            |   |                | -       |   |   | 195,113  |   |         | (39    | )            |   | - |   |   | 195,074 |   |
| Depreciation      and amortization            |   |                | -       |   |   | 492,457  |   |         | -      |         |   | - |   |   | 492,457 |   |
| Exploration      expenses                     |   |                | -       |   |   | 49,385   |   |         | -      |         |   | - |   |   | 49,385 |   |
| Loss      on oil and gas derivative contracts |   |                | -       |   |   | 35,607   |   |         | -      |         |   | - |   |   | 35,607 |   |
| General      and administrative expenses      |   |                | 5,712   |   |   | 32,020   |   |         | 237    |         |   | - |   |   | 37,969 |   |
| Main      Pass Energy Hub™      costs   |   |                | -       |   |   | -        |   |         | 4,990  |         |   | - |   |   | 4,990 |   |
| Insurance      recoveries                     |   |                | -       |   |   | (3,391   | )      |         | -      |         |   | - |   |   | (3,391 | ) |
| Total      costs and expenses                 |   |                | 5,712   |   |   | 801,191  |   |         | 5,188  |         |   | - |   |   | 812,091 |   |
| Operating      income (loss)                  |   |                | (5,712  | )      |   | 155,038  |   |         | (5,188 | )            |   | - |   |   | 144,138 |   |
| Interest      expense                         |   |                | (33,422 | )      |   | (7,079   | )      |         | -      |         |   | - |   |   | (40,501 | ) |
| Equity      in earnings of consolidated       |   |                |    |   |   |     |   |         |   |         |   |   |   |   | - |   |
| subsidiaries                                  |   |                | 140,122 |   |   | -        |   |         | -      |         |   | (140,122 | ) |   | - |   |
| Other      income (expense), net              |   |                | (2,633  | )      |   | 311      |   |         | -      |         |   | - |   |   | (2,322 | ) |
| Income      (loss) from continuing operations |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| before      income taxes                      |   |                | 98,355  |   |   | 148,270  |   |         | (5,188 | )            |   | (140,122 | ) |   | 101,315 |   |
| Income      tax expense                       |   |                | (3,149  | )      |   | -        |   |         | -      |         |   | - |   |   | (3,149 | ) |
| Income      (loss) from continuing operations |   |                | 95,206  |   |   | 148,270  |   |         | (5,188 | )            |   | (140,122 | ) |   | 98,166 |   |
| Loss      from discontinued operations        |   |                | -       |   |   | -        |   |         | (2,960 | )            |   | - |   |   | (2,960 | ) |
| Net      income (loss)                        |   |                | 95,206  |   |   | 148,270  |   |         | (8,148 | )            |   | (140,122 | ) |   | 95,206 |   |
| Preferred      dividends and inducement       |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| payments                                      |   |                | (19,604 | )      |   | -        |   |         | -      |         |   | - |   |   | (19,604 | ) |
| Net      income (loss) applicable to          |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| common      stock                             |   | $                   | 75,602  |   | $      | 148,270  |   | $            | (8,148 | )            | $      | (140,122 | ) | $ | 75,602 |   |
|                                          |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |

----

TABLE OF CONTENTS
|                                              |   |                |     |   |   | Freeport |   | Consolidated |   |
|---------------------------------------------------|--------|---------------------|----------|--------|--------|----------|--------|--------------|--------|
|                                              |   | Parent              |     | MOXY   |   | Energy   |   | McMoRan      |   |
|                                              |   | (In      Thousands) |     |
|                                              |   |                |     |   |   |     |   |         |   |   |   |   |   |
| Cash      flow from operating activities:         |   |                |     |   |   |     |   |         |   |   |   |   |   |
| Net      cash provided by (used in) continuing    |   |                |     |   |   |     |   |         |   |   |   |   |   |
| operations                                        |   | $                   | (154,182 | )      | $      | 244,568  |   | $            | (555   | ) | $ | 89,831 |   |
| Net      cash used in discontinued operations     |   |                | -        |   |   | -        |   |         | (4,373 | ) |   | (4,373 | ) |
| Net      cash provided by (used in) operating     |   |                |     |   |   |     |   |         |   |   |   |   |   |
| activities                                        |   |                | (154,182 | )      |   | 244,568  |   |         | (4,928 | ) |   | 85,458 |   |
|                                              |   |                |     |   |   |     |   |         |   |   |   |   |   |
| Cash      flow from investing activities:         |   |                |     |   |   |     |   |         |   |   |   |   |   |
| Exploration,      development and other           |   |                |     |   |   |     |   |         |   |   |   |   |   |
| capital      expenditures                         |   |                | -        |   |   | (113,375 | )      |         | -      |   |   | (113,375 | ) |
| Net      cash used in investing activities        |   |                | -        |   |   | (113,375 | )      |         | -      |   |   | (113,375 | ) |
|                                              |   |                |     |   |   |     |   |         |   |   |   |   |   |
| Cash      flow from financing activities:         |   |                |     |   |   |     |   |         |   |   |   |   |   |
| Proceeds      from the sale of common stock       |   |                | 84,929   |   |   | -        |   |         | -      |   |   | 84,929 |   |
| Proceeds      from the sale of 8% preferred stock |   |                | 83,228   |   |   | -        |   |         | -      |   |   | 83,228 |   |
| Dividends      and inducement payments on         |   |                |     |   |   |     |   |         |   |   |   |   |   |
| convertible      preferred stock                  |   |                | (9,062   | )      |   | -        |   |         | -      |   |   | (9,062 | ) |
| Investment      from parent                       |   |                | (4,925   | )      |   | -        |   |         | 4,925  |   |   | - |   |
| Net      cash provided by financing activities    |   |                | 154,170  |   |   | -        |   |         | 4,925  |   |   | 159,095 |   |
|                                              |   |                |     |   |   |     |   |         |   |   |   |   |   |
| Net      increase (decrease) in cash and cash     |   |                |     |   |   |     |   |         |   |   |   |   |   |
| equivalents                                       |   |                | (12      | )      |   | 131,193  |   |         | (3     | ) |   | 131,178 |   |
| Cash      and cash equivalents at beginning       |   |                |     |   |   |     |   |         |   |   |   |   |   |
| of      year                                      |   |                | 35       |   |   | 93,442   |   |         | 9      |   |   | 93,486 |   |
| Cash      and cash equivalents at end of year     |   | $                   | 23       |   | $      | 224,635  |   | $            | 6      |   | $ | 224,664 |   |
|                                              |   |                |     |   |   |     |   |         |   |   |   |   |   |

----

TABLE OF CONTENTS

|                                              |   |                |    |   |   | Freeport |   | Consolidated |   |
|---------------------------------------------------|--------|---------------------|---------|--------|--------|----------|--------|--------------|--------|
|                                              |   | Parent              |    | MOXY   |   | Energy   |   | McMoRan      |   |
|                                              |   | (In      Thousands) |    |
|                                              |   |                |    |   |   |     |   |         |   |   |   |   |   |
| Cash      flow from operating activities:         |   |                |    |   |   |     |   |         |   |   |   |   |   |
| Net      cash provided by continuing operations   |   | $                   | 20,519  |   | $      | 618,661  |   | $            | 2,127  |   | $ | 641,307 |   |
| Net      cash used in discontinued operations     |   |                | -       |   |   | -        |   |         | (5,144 | ) |   | (5,144 | ) |
| Net      cash provided by (used in) operating     |   |                |    |   |   |     |   |         |   |   |   |   |   |
| activities                                        |   |                | 20,519  |   |   | 618,661  |   |         | (3,017 | ) |   | 636,163 |   |
|                                              |   |                |    |   |   |     |   |         |   |   |   |   |   |
| Cash      flow from investing activities:         |   |                |    |   |   |     |   |         |   |   |   |   |   |
| Exploration,      development and other capital   |   |                |    |   |   |     |   |         |   |   |   |   |   |
| expenditures                                      |   |                | -       |   |   | (186,904 | )      |         | -      |   |   | (186,904 | ) |
| Other                                             |   |                | -       |   |   | (613     | )      |         | -      |   |   | (613 | ) |
| Net      cash used in investing activities        |   |                | -       |   |   | (187,517 | )      |         | -      |   |   | (187,517 | ) |
|                                              |   |                |    |   |   |     |   |         |   |   |   |   |   |
| Cash      flow from financing activities:         |   |                |    |   |   |     |   |         |   |   |   |   |   |
| Net      payments under revolving credit facility |   |                | -       |   |   | (274,000 | )      |         | -      |   |   | (274,000 | ) |
| Dividends      and inducement payments on         |   |                |    |   |   |     |   |         |   |   |   |   |   |
| convertible      preferred stock                  |   |                | (20,883 | )      |   | -        |   |         | -      |   |   | (20,883 | ) |
| Payments      for induced conversion of           |   |                |    |   |   |     |   |         |   |   |   |   |   |
| convertible      senior notes                     |   |                | (2,663  | )      |   | -        |   |         | -      |   |   | (2,663 | ) |
| Proceeds      from exercise of stock options,     |   |                |    |   |   |     |   |         |   |   |   |   |   |
| warrants      and other                           |   |                | 4,705   |   |   | -        |   |         | -      |   |   | 4,705 |   |
| Investment      from parent                       |   |                | (1,802  | )      |   | -        |   |         | 1,802  |   |   | - |   |
| Net      cash provided by (used in) financing     |   |                |    |   |   |     |   |         |   |   |   |   |   |
| activities                                        |   |                | (20,643 | )      |   | (274,000 | )      |         | 1,802  |   |   | (292,841 | ) |
|                                              |   |                |    |   |   |     |   |         |   |   |   |   |   |
| Net      increase (decrease) in cash and cash     |   |                |    |   |   |     |   |         |   |   |   |   |   |
| equivalents                                       |   |                | (124    | )      |   | 157,144  |   |         | (1,215 | ) |   | 155,805 |   |
| Cash      and cash equivalents at beginning       |   |                |    |   |   |     |   |         |   |   |   |   |   |
| of      year                                      |   |                | 143     |   |   | 3,446    |   |         | 1,241  |   |   | 4,830 |   |
| Cash      and cash equivalents at end of year     |   | $                   | 19      |   | $      | 160,590  |   | $            | 26     |   | $ | 160,635 |   |
|                                              |   |                |    |   |   |     |   |         |   |   |   |   |   |

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTINGFIRM

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Management'sDiscussion and Analysis of Financial Condition and Results ofOperations

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|                                       | Third      Quarter |   | Nine      Months |   |
|--------------------------------------------|--------------------|--------|------------------|--------|
|                                       | 2009               |   | 2008             |   | 2009 |   | 2008 |   |
| Sales      volumes:                        |               |   |             |   |   |   |   |   |
| Gas      (thousand cubic feet, or Mcf)     | 13,619,300         |   | 13,537,100       |   | 36,990,900 |   | 49,637,500 |   |
| Oil      (barrels)                         | 761,600            |   | 811,900          |   | 2,262,300 |   | 3,027,800 |   |
| Plant      products (per Mcf equivalent) a | 1,568,300          |   | 2,288,100        |   | 3,988,100 |   | 6,959,300 |   |
| Average      realizations b                |               |   |             |   |   |   |   |   |
| Gas      (per Mcf)                         | $      3.39        |   | $      10.67     |   | $      4.04 |   | $      10.62 |   |
| Oil      (per barrel)                      | 66.81              |   | 124.05           |   | 55.39 |   | 114.07 |   |

| a.   | Results      include approximately $8.6 million and $19.8 million of revenues      associated with plant products (ethane, propane, butane, etc.) during the      third quarter and nine months ended September 30, 2009,      respectively.  Plant product revenues for the comparable prior      year periods totaled $27.8 million and $73.6 million.  One Mcf      equivalent is determined using the ratio of six Mcf of natural gas to one      barrel of crude oil, condensate or natural gas  liquids. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | Excludes      the impact of realized gains (losses) resulting from settlements under our      commodity derivative contracts which we report as a component of “Gains      (losses) on oil and gas derivative contracts” in our accompanying      consolidated statements of operations.  We received cash of $6.3      million and $41.2 million, respectively, associated with the settlement of      contracts in the third quarter and nine months ended September 30,      2009.  We paid cash of $31.2 million associated with the      settlement of contracts in the nine months ended September 30,      2008.  We did not pay any additional amounts associated with the      loss on our puts during the third quarter ended September 30,      2009. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                          |  Third |    |   | Nine   |     |
|---------------------------------------------------------------|-------------|---------|--------|--------|----------|
|                                                          | Quarter     |    |   | Months |     |
| Oil      and natural gas revenues – prior year period   | $           | 282,688 |   | $      | 946,955  |   |
| Increase      (decrease)                                      |        |    |   |   |     |   |
| Price      realizations:                                      |        |    |   |   |     |   |
| Natural      gas                                              |        | (99,285 | )      |   | (243,400 | ) |
| Oil      and condensate                                       |        | (43,564 | )      |   | (132,752 | ) |
| Sales      volumes:                                           |        |    |   |   |     |   |
| Natural      gas                                              |        | (6,587  | )      |   | (134,307 | ) |
| Oil      and condensate                                       |        | (6,411  | )      |   | (87,321  | ) |
| Plant      products revenues                                  |        | (20,922 | )      |   | (53,808  | ) |
| Other                                                         |        | (97     | )      |   | (398     | ) |
| Oil      and natural gas revenues – current year period | $           | 105,822 |   | $      | 294,969  |   |

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|                                     | Third      Quarter |   | Nine      Months |
|------------------------------------------|--------------------|--------|------------------|
|                                     |               |   | Per              |   |   |   | Per |   |   |   | Per |   |   |   | Per |
|                                     | 2009               |   | Mcfe             |   | 2008 |   | Mcfe |   | 2009 |   | Mcfe |   | 2008 |   | Mcfe |
| Lease      operating expense             | $31.5              |   | $1.59            |   | $37.7 |   | $1.82 |   | $87.4 |   | $1.59 |   | $106.4 |   | $1.42 |
| Workover      costs                      | 5.5                |   | 0.27             |   | 10.7 |   | 0.52 |   | 12.5 |   | 0.23 |   | 31.7 |   | 0.43 |
| Hurricane      related expenses          | (0.5               | )      | (0.02            | ) | 6.3 |   | 0.30 |   | 14.2 |   | 0.26 |   | 6.3 |   | 0.08 |
| Insurance                                | 6.5                |   | 0.33             |   | 4.7 |   | 0.23 |   | 17.8 |   | 0.33 |   | 17.6 |   | 0.23 |
| Transportation      and production taxes | 5.8                |   | 0.29             |   | 10.4 |   | 0.50 |   | 15.1 |   | 0.28 |   | 31.4 |   | 0.42 |
| Other                                    | 0.3                |   | 0.02             |   | 0.1 |   | 0.01 |   | (0.1 | ) | - |   | 1.7 |   | 0.02 |
| Total      production and delivery costs | $49.1              |   | $2.48            |   | $69.9 |   | $3.38 |   | $146.9 |   | $2.69 |   | $195.1 |   | $2.60 |

|                           | Third      Quarter |   | Nine      Months |
|--------------------------------|--------------------|--------|------------------|
|                           |               |   | Per              |   |   |   | Per |   |   |   | Per |   |   |   | Per |
|                           | 2009               |   | Mcfe             |   | 2008 |   | Mcfe |   | 2009 |   | Mcfe |   | 2008 |   | Mcfe |
| DD&A      expense          | $56.4              |   | $2.86            |   | $81.1 |   | $3.92 |   | $153.6 |   | $2.82 |   | $302.8 |   | $4.05 |
| Accretion      expense         | 8.4                |   | 0.42             |   | 135.6 |   | 6.55 |   | 24.9 |   | 0.45 |   | 148.9 |   | 2.00 |
| Impairment      charges/losses | 11.2               |   | 0.57             |   | 33.4 |   | 1.61 |   | 64.8 |   | 1.19 |   | 40.8 |   | 0.55 |
| Total                          | $76.0              |   | $3.85            |   | $250.1 |   | $12.08 |   | $243.3 |   | $4.46 |   | $492.5 |   | $6.60 |

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|                                            | Third      Quarter |   | Nine      Months |   |
|-------------------------------------------------|--------------------|--------|------------------|--------|
|                                            | 2009               |   | 2008             |   | 2009 |   | 2008 |   |
| Geological      and geophysical                 |               |   |             |   |   |   |   |   |   |   |   |   |
| including      3-D seismic purchases a          | $                  | 2.6    |             | $      | 8.6 |   | $ | 19.4 |   | $ | 26.5 |   |
| Nonproductive      exploratory costs, including |               |   |             |   |   |   |   |   |   |   |   |   |
| related      lease costs                        |               | 7.3    |             |   | 4.4 |   |   | 61.7 | b |   | 16.8 |   |
| Other                                           |               | 0.9    |             |   | 2.1 |   |   | 5.0 |   |   | 6.1 |   |
|                                            | $                  | 10.8   |             | $      | 15.1 |   | $ | 86.1 |   | $ | 49.4 |   |

| a.   | Includes      compensation costs associated with outstanding stock-based awards totaling      $1.3 million in the third quarter of 2009 and $5.6 million in the nine      months ended September 30, 2009 compared with $2.2 million and $12.2      million of compensation costs during comparable periods in 2008 (see      “Stock-Based Compensation” below). |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | Includes      non-productive well costs of $6.3 million related to the Sherwood well,      $25.5 million related to the Ammazzo well, $11.0 million related to the      Cordage well, $11.1 million related to the Tom Sauk well and $6.2 million      related to the Gladstone East well. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                  | Nine      Months Ended |   |
|-----------------------|------------------------|--------|
|                  | September      30,     |   |
|                  | 2009                   |   | 2008 |   |
| Continuing operations |                   |   |   |   |   |   |
| Operating             | $                      | 89.8   |   | $ | 641.3 |   |
| Investing             |                   | (113.4 | ) |   | (187.5 | ) |
| Financing             |                   | 159.1  |   |   | (292.8 | ) |

| Discontinued operations |   |                                        |   |   |                                        |   |
|-------------------------|--------|---------------------------------------------|--------|--------|---------------------------------------------|--------|
| Operating               |   | (4.4                                        | )      |   | (5.1                                        | )      |
| Investing               |   |        - |   |   |        - |   |
| Financing               |   |       -       |   |   |       -       |   |
|                    |   |                                        |   |   |                                        |   |
| Total cash flow         |   |                                        |   |   |                                        |   |
| Operating               |   | 85.4                                        |   |   | 636.2                                       |   |
| Investing               |   | (113.4                                      | )      |   | (187.5                                      | )      |
| Financing               |   | 159.1                                       |   |   | (292.8                                      | )      |

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|                                        | Third      Quarter |   | Nine      Months |   |
|---------------------------------------------|--------------------|--------|------------------|--------|
|                                        | 2009               |   | 2008             |   | 2009 |   | 2008 |   |
| General      and administrative expenses    | $                  | 1,432  |             | $      | 2,359 |   | $ | 5,998 |   | $ | 12,480 |   |
| Exploration      expenses                   |               | 1,278  |             |   | 2,151 |   |   | 5,633 |   |   | 12,198 |   |
| Main      Pass Energy Hub™      costs |               | 76     |             |   | 161 |   |   | 335 |   |   | 868 |   |
| Total      stock-based compensation cost    | $                  | 2,786  |             | $      | 4,671 |   | $ | 11,966 |   | $ | 25,546 |   |
|                                        |               |   |             |   |   |   |   |   |   |   |   |   |

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Item 3.  Quantitative and QualitativeDisclosures about Market Risk.

Item4.   Controlsand Procedures.

PART II––OTHER INFORMATION

Item1.  LegalProceedings

Item 1A.  
RiskFactors

Item 2.  Unregistered Sales of EquitySecurities and Use of Proceeds.

| Period                    | (a)  Total      Number of Shares Purchased | (b)  Average      Price Paid Per Share               | (c)  Total      Number of Shares Purchased as Part of Publicly Announced Plans or      Programs | (d)  Maximum      Number of Shares That May Yet Be Purchased Under the Plans or      Programsa |
|---------------------------|------------------------------------------------------|----------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------|
|                      |                                                 |                                                           |                                                                                                      |                                                                                                     |
| July      1-31, 2009      | -                                                    | $          - | -                                                                                                         | 300,000                                                                                                  |
| August      1-31, 2009    | -                                                    | -                                                              | -                                                                                                         | 300,000                                                                                                  |
| September      1-30, 2009 | -                                                    | -                                                              | -                                                                                                         | 300,000                                                                                                  |
|                      |                                                 |                                                           |                                                                                                      |                                                                                                     |
| Total                     | -                                                    | $         -       | -                                                                                                         | 300,000                                                                                                  |

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| a. | Our      Board of Directors has approved an open market share purchase program for      up to 2.5 million shares.  The program does not have an      expiration date.  No shares were purchased during the      three-month period ended September 30, 2009, and 0.3 million shares remain      available for purchase. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Item 6.    
Exhibits

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SIGNATURE

|                                   | McMoRan      Exploration Co.                        |
|----------------------------------------|-----------------------------------------------------|
|                                   |                                                |
|                                   | By:  /s/      Nancy D. Parmelee           |
|                                   | Nancy      D. Parmelee                              |
|                                   | Senior      Vice President, Chief Financial Officer |
|                                   | and      Secretary                                  |
|                                   | (authorized      signatory and Principal            |
|                                   | Financial      Officer)                             |
|                                   |                                                |
|                                   |                                                |
|                                   |                                                |
| Date:  November      6, 2009 |                                                |

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Exhibit Index

|    |                                                                                                                | Filed          |                           |          |            |
|---------|---------------------------------------------------------------------------------------------------------------------|----------------|--------------------------------|---------------|-----------------|
| Exhibit |                                                                                                                | with      this | Incorporated      by Reference |
| Number  | Exhibit      Title                                                                                                  | Form      10-Q | Form                           | File      No. | Date      Filed |
| 3.1     | Composite      Certificate of Incorporation of McMoRan                                                              |           | 10-Q                           | 001-07791     | 08/07/2009      |
| 3.2     | Amended      and Restated By-Laws of McMoRan as amended effective January 30,      2006                             |           | 8-K                            | 001-07791     | 02/03/2006      |
| 15.1    | Letter      dated November 6, 2009 from Ernst & Young LLP regarding unaudited      interim financial statements | X              |                           |          |            |
| 31.1    | Certification      of Principal Executive Officer pursuant to Rule      13a–14(a)/15d-14(a)                   | X              |                           |          |            |
| 31.2    | Certification      of Principal Financial Officer pursuant to Rule      13a–14(a)/15d-14(a)                   | X              |                           |          |            |
| 32.1    | Certification      of Principal Executive Officer pursuant to 18 U.S.C. Section      1350                           | X              |                           |          |            |
| 32.2    | Certification      of Principal Financial Officer pursuant to 18 U.S.C. Section      1350                           | X              |                           |          |            |

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