----

|                                                                                 |
|--------------------------------------------------------------------------------------|
| **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 June 30, 2007**                      |
| **OR**                                                                               |
| **[  ]**                                                                   | **TRANSITION                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE** |
| **SECURITIES                EXCHANGE ACT OF 1934**                                   |
| **For                the transition period from**                                    |   | **To** |
| **Commission                File Number: 001-07791**                                 |
|                                                                                 |
|                                                                                      |
|                                                                                 |
| **McMoRan                Exploration Co.**                                           |
| (Exact                name of registrant as specified in its                charter) |

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

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Table      of Contents

|                                                                                      |
|-------------------------------------------------------------------------------------------|
| **McMoRan                Exploration Co.**                                                |
| **TABLE                OF CONTENTS**                                                      |
|                                                                                      |
|                                                                                      | Page |
|                                                                                      |   |
| Part                I.  Financial Information                                   |   |
|                                                                                      |   |
| Financial                Statements:                                                      |   |
|                                                                                      |   |
| Condensed                Consolidated Balance Sheets                (Unaudited)           | 3 |
|                                                                                      |   |
| Consolidated                Statements of Operations                (Unaudited)           | 4 |
|                                                                                      |   |
| Consolidated                Statements of Cash Flow                (Unaudited)            | 5 |
|                                                                                      |   |
| Notes                to Consolidated Financial                Statements                  | 6 |
|                                                                                      |   |
| Report                of Independent Registered Public Accounting                Firm     | 14 |
|                                                                                      |   |
| Management's                Discussion and Analysis                                       |   |
| of                Financial Condition and Results of                Operations            | 15 |
|                                                                                      |   |
| Quantitative                and Qualitative Disclosures about Market                Risks | 27 |
|                                                                                      |   |
| Controls                and Procedures                                                    | 28 |
|                                                                                      |   |
| Part                II.  Other Information                                      | 28 |
|                                                                                      |   |
| Signature                                                                                 | 31 |
|                                                                                      |   |
| Exhibit                Index                                                              | E-1 |

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Table of Contents

**McMoRan      Exploration Co.**

**Part      I.  FINANCIAL INFORMATION**

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

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

**CONDENSED      CONSOLIDATED BALANCE SHEETS(Unaudited**

|                                                                                                             | June                30,       |         | December                31, |   |
|------------------------------------------------------------------------------------------------------------------|-------------------------------|--------------|-----------------------------|--------|
|                                                                                                             | 2007                          |         | 2006                        |   |
|                                                                                                             | (In                Thousands) |         |
| ASSETS                                                                                                           |                          |         |                        |   |   |   |
| Cash                and cash equivalents             |  $                       |  51,977 |                        |   | 17,830 |   |
| Restricted                investments                                                                            |                          | 2,998        |                        |   | 5,930 |   |
| Accounts                receivable                                                                               |                          | 44,981       |                        |   | 45,636 |   |
| Inventories                                                                                                      |                          | 14,554       |                        |   | 25,034 |   |
| Prepaid                expenses                                                                                  |                          | 1,640        |                        |   | 16,190 |   |
| Current                assets from discontinued operations, including restricted cash                of          |                          |         |                        |   |   |   |
| $0.5                million, and $0.4 million, respectively                                                      |                          | 3,004   |                        |   | 6,492  |   |
| Total                current assets                                                                              |                          | 119,154      |                        |   | 117,112 |   |
| Property,                plant and equipment, net                                                                |                          | 316,198      |                        |   | 282,538 |   |
| Sulphur                business assets                                                                           |                          | 355          |                        |   | 362 |   |
| Restricted                investments and cash                                                                   |                          | 3,288        |                        |   | 3,288 |   |
| Other                assets                                                                                      |                          | 6,995        |                        |   | 5,377 |   |
| Total                assets                                                                                      | $                             | 445,990      |                        | $      | 408,677 |   |
|                                                                                                             |                          |         |                        |   |   |   |
| LIABILITIES                AND STOCKHOLDERS’ DEFICIT                                                       |                          |         |                        |   |   |   |
| Accounts                payable                                                                                  | $                             | 66,928       |                        | $      | 85,504 |   |
| Accrued                liabilities                                                                               |                          | 28,804       |                        |   | 32,844 |   |
| Accrued                interest and dividends payable                                                            |                          | 4,941        |                        |   | 5,479 |   |
| Current                portion of accrued oil and gas reclamation costs                                          |                          | 2,598        |                        |   | 2,604 |   |
| Current                portion of accrued sulphur reclamation cost                                               |                          | 12,287       |                        |   | 12,909 |   |
| Current                liabilities from discontinued operations                                                  |                          | 2,108        |                        |   | 3,678 |   |
| Total                current liabilities                                                                         |                          | 117,666      |                        |   | 143,018 |   |
| 6%                convertible senior notes                                                                       |                          | 100,870      |                        |   | 100,870 |   |
| 5¼%                convertible senior notes                                                                 |                          | 115,000      |                        |   | 115,000 |   |
| Senior                secured term loan                                                                          |                          | 100,000      |                        |   | - |   |
| Senior                secured revolving credit facility                                                          |                          | -            |                        |   | 28,750 |   |
| Accrued                oil and gas reclamation costs                                                             |                          | 23,883       |                        |   | 23,272 |   |
| Accrued                sulphur reclamation costs                                                                 |                          | 11,054       |                        |   | 10,185 |   |
| Contractual                postretirement obligation                                                             |                          | 10,434       |                        |   | 9,831 |   |
| Other                long-term liabilities                                                                       |                          | 17,018       |                        |   | 17,151 |   |
| Mandatorily                redeemable convertible preferred stock                                                |                          | -            |                        |   | 29,043 |   |
| Stockholders'                deficit                                                                             |                          | (49,935      | )                           |   | (68,443 | ) |
| Total                liabilities and stockholders' deficit                                                       | $                             | 445,990      |                        | $      | 408,677 |   |
|                                                                                                             |                          |         |                        |   |   |   |

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Table of Contents

**McMoRan      EXPLORATION CO.**

**CONSOLIDATED      STATEMENTS OF OPERATIONS(Unaudited**

|                                                                | Three                Months Ended                       |   | Six                Months Ended |   |
|---------------------------------------------------------------------|---------------------------------------------------------|--------|---------------------------------|--------|
|                                                                | June                30,                                 |   | June                30,         |   |
|                                                                | 2007                                                    |   | 2006                            |   | 2007 |   | 2006 |   |
| Revenues:                                                           | (In                Thousands, Except Per Share Amounts) |   |
| Oil                and gas                                          | $                                                       | 44,988 |                            | $      | 50,276 |   | $ | 96,363 |   | $ | 85,717 |   |
| Service                                                             |                                                    | 360    |                            |   | 3,054 |   |   | 682 |   |   | 7,359 |   |
| Total                revenues                                       |                                                    | 45,348 |                            |   | 53,330 |   |   | 97,045 |   |   | 93,076 |   |
| Costs                and expenses:                                  |                                                    |   |                            |   |   |   |   |   |   |   |   |   |
| Production                and delivery costs                        |                                                    | 16,618 |                            |   | 10,775 |   |   | 34,346 |   |   | 21,534 |   |
| Depreciation                and amortization                        |                                                    | 15,530 |                            |   | 12,430 |   |   | 42,565 |   |   | 18,274 |   |
| Exploration                expenses                                 |                                                    | 5,348  |                            |   | 6,757 |   |   | 15,103 |   |   | 27,377 |   |
| General                and administrative expenses                  |                                                    | 4,415  |                            |   | 4,322 |   |   | 10,812 |   |   | 12,546 |   |
| Start-up                costs for Main Pass Energy Hub™       |                                                    | 2,752  |                            |   | 2,905 |   |   | 5,457 |   |   | 4,751 |   |
| Insurance                recovery                                   |                                                    | -      |                            |   | (1,687 | ) |   | - |   |   | (2,856 | ) |
| Total                costs and expenses                             |                                                    | 44,663 |                            |   | 35,502 |   |   | 108,283 |   |   | 81,626 |   |
| Operating                income (loss)                              |                                                    | 685    |                            |   | 17,828 |   |   | (11,238 | ) |   | 11,450 |   |
| Interest                expense                                     |                                                    | (5,755 | )                               |   | (2,313 | ) |   | (11,409 | ) |   | (4,146 | ) |
| Other                income (expense), net                          |                                                    | 833    |                            |   | 595 |   |   | 1,581 |   |   | (2,599 | ) |
| Income                (loss) from continuing operations             |                                                    | (4,237 | )                               |   | 16,110 |   |   | (21,066 | ) |   | 4,705 |   |
| Income                (loss) from discontinued operations           |                                                    | (1,102 | )                               |   | (1,616 | ) |   | 1,229 |   |   | (3,293 | ) |
| Net                income (loss)                                    |                                                    | (5,339 | )                               |   | 14,494 |   |   | (19,837 | ) |   | 1,412 |   |
| Preferred                dividends and amortization of convertible  |                                                    |   |                            |   |   |   |   |   |   |   |   |   |
| preferred                stock issuance costs                       |                                                    | (1,147 | )                               |   | (404 | ) |   | (1,552 | ) |   | (807 | ) |
| Net                income (loss) applicable to common stock         | $                                                       | (6,486 | )                               | $      | 14,090 |   | $ | (21,389 | ) | $ | 605 |   |
|                                                                |                                                    |   |                            |   |   |   |   |   |   |   |   |   |
| Basic                net income (loss) per share of common stock:   |                                                    |   |                            |   |   |   |   |   |   |   |   |   |
| Continuing                operations                                |                                                    | $(0.19 | )                               |   | $0.56 |   |   | $(0.79 | ) |   | $0.14 |   |
| Discontinued                operations                              |                                                    | (0.04  | )                               |   | (0.06 | ) |   | 0.04 |   |   | (0.12 | ) |
| Net                income (loss) per share of common stock          |                                                    | $(0.23 | )                               |   | $0.50 |   |   | $(0.75 | ) |   | $0.02 |   |
|                                                                |                                                    |   |                            |   |   |   |   |   |   |   |   |   |
| Diluted                net income (loss) per share of common stock: |                                                    |   |                            |   |   |   |   |   |   |   |   |   |
| Continuing                operations                                |                                                    | $(0.19 | )                               |   | $0.35 |   |   | $(0.79 | ) |   | $0.13 |   |
| Discontinued                operations                              |                                                    | (0.04  | )                               |   | (0.03 | ) |   | 0.04 |   |   | (0.11 | ) |
| Net                income (loss) per share of common stock          |                                                    | $(0.23 | )                               |   | $0.32 |   |   | $(0.75 | ) |   | $0.02 |   |
|                                                                |                                                    |   |                            |   |   |   |   |   |   |   |   |   |
| Average                common shares outstanding:                   |                                                    |   |                            |   |   |   |   |   |   |   |   |   |
| Basic                                                               |                                                    | 28,882 |                            |   | 28,280 |   |   | 28,620 |   |   | 27,556 |   |
| Diluted                                                             |                                                    | 28,882 |                            |   | 51,341 |   |   | 28,620 |   |   | 30,585 |   |

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Table of Contents

**McMoRan      EXPLORATION CO.**

**CONSOLIDATED      STATEMENTS OF CASH FLOW(Unaudited**

|                                                                              |   | Six                Months Ended |    |
|-----------------------------------------------------------------------------------|--------|---------------------------------|---------|
|                                                                              |   | June                30,         |    |
|                                                                              |   | 2007                            |    | 2006 |   |
|                                                                              |   | (In                Thousands)   |    |
| **Cash                flow from operating activities:**                           |   |                            |    |   |   |   |   |
| Net                income (loss)                                                  |   | $                               | (19,837 | ) | $ | 1,412 |   |
| Adjustments                to reconcile net income (loss) to net cash provided by |   |                            |    |   |   |   |   |
| operating                activities:                                              |   |                            |    |   |   |   |   |
| (Income)                loss from discontinued operations                         |   |                            | (1,229  | ) |   | 3,293 |   |
| Depreciation                and amortization                                      |   |                            | 42,565  |   |   | 18,274 |   |
| Exploration                drilling and related expenditures                      |   |                            | 1,335   |   |   | 14,458 |   |
| Compensation                expense associated with stock-based awards            |   |                            | 8,740   |   |   | 11,715 |   |
| Loss                on induced conversion of convertible senior notes             |   |                            | -       |   |   | 4,301 |   |
| Reclamation                and mine shutdown expenditures                         |   |                            | (2,858  | ) |   | - |   |
| Amortization                of deferred financing costs                           |   |                            | 1,192   |   |   | 940 |   |
| Other                                                                             |   |                            | (448    | ) |   | 732 |   |
| Decrease                in restricted cash                                        |   |                            | -       |   |   | 278 |   |
| Decrease                (increase) in working capital:                            |   |                            |    |   |   |   |   |
| Accounts                receivable                                                |   |                            | (2,651  | ) |   | 2,652 |   |
| Accounts                payable, accrued liabilities and other                    |   |                            | (13,774 | ) |   | (13,719 | ) |
| Inventories                and prepaid expenses                                   |   |                            | 25,032  |   |   | (20,298 | ) |
| Net                cash provided by continuing operations                         |   |                            | 38,067  |   |   | 24,038 |   |
| Net                cash provided by (used in) discontinued operations             |   |                            | 576     |   |   | (4,417 | ) |
| Net                cash provided by operating activities                          |   |                            | 38,643  |   |   | 19,621 |   |
|                                                                              |   |                            |    |   |   |   |   |
| **Cash                flow from investing activities**:                           |   |                            |    |   |   |   |   |
| Exploration,                development and other capital expenditures            |   |                            | (76,576 | ) |   | (142,545 | ) |
| Property                insurance reimbursement                                   |   |                            | -       |   |   | 3,947 |   |
| Proceeds                from restricted investments                               |   |                            | 3,019   |   |   | 10,419 |   |
| Proceeds                from sale of property, plant and equipment                |   |                            | -       |   |   | 50 |   |
| Increase                in restricted investments                                 |   |                            | (87     | ) |   | (40 | ) |
| Net                cash used in continuing operations                             |   |                            | (73,644 | ) |   | (128,169 | ) |
| Net                cash used in discontinued operations                           |   |                            | -       |   |   | - |   |
| Net                cash used in investing activities                              |   |                            | (73,644 | ) |   | (128,169 | ) |
|                                                                              |   |                            |    |   |   |   |   |
| **Cash                flow from financing activities:**                           |   |                            |    |   |   |   |   |
| Proceeds                from senior secured term loan                             |   |                            | 100,000 |   |   | - |   |
| Payments                under senior secured revolving credit facility            |   |                            | (28,750 | ) |   | - |   |
| Payments                for induced conversion of convertible senior notes        |   |                            | -       |   |   | (4,301 | ) |
| Dividends                paid on convertible preferred stock                      |   |                            | (747    | ) |   | (1,121 | ) |
| Financing                costs                                                    |   |                            | (2,635  | ) |   | (531 | ) |
| Proceeds                from exercise of stock options and other                  |   |                            | 1,280   |   |   | 365 |   |
| Net                cash provided by (used in) continuing operations               |   |                            | 69,148  |   |   | (5,588 | ) |
| Net                cash used in discontinued operations                           |   |                            | -       |   |   | - |   |
| Net                cash provided by (used in) financing activities                |   |                            | 69,148  |   |   | (5,588 | ) |
| Net                decrease in cash and cash equivalents                          |   |                            | 34,147  |   |   | (114,136 | ) |
| Cash                and cash equivalents at beginning of year                     |   |                            | 17,830  |   |   | 130,901 |   |
| Cash                and cash equivalents at end of period                         |   | $                               | 51,977  |   | $ | 16,765 |   |

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Table of Contents

**McMoRan      EXPLORATION CO.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**1.  BASIS      OF PRESENTATION**

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

| **Natural                Gas Positions (million MMbtu)**                                                        |
|-----------------------------------------------------------------------------------------------------------------|
|                                                                                                            |   | Open                Swap Positions(1) |   | Put                Options(2) |   |   |
|                                                                                                            |   | Annual | Average |   | Annual | Average |   | Total |
|                                                                                                            |   | Volumes | Swap                Price |   | Volumes | Floor |   | Volumes |
| 2008                                                                                                            |   |            16.4 |  $        8.60 |   |              6.6 |  $        6.00 |   | 23.0 |
| 2009                                                                                                            |   |              7.3 |  $        8.97 |   |              3.2 |  $        6.00 |   | 10.5 |
| 2010                                                                                                            |   |              2.6 |  $        8.63 |   |              1.2 |  $        6.00 |   | 3.8 |
|                                                                                                            |   |   |   |   |   |   |   |   |
| *(1)                Covering periods January-June and November-December of the respective                years* |   |   |   |
| *(2)                Covering periods July-October of the respective years*                                      |   |   |   |

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Table of Contents

| **Oil                Positions (thousand bbls)**                                                                |
|-----------------------------------------------------------------------------------------------------------------|
|                                                                                                            |   | Open                Swap Positions(1) |   | Put                Options(2) |   |   |
|                                                                                                            |   | Annual | Average |   | Annual | Average |   | Total |
|                                                                                                            |   | Volumes | Swap                Price |   | Volumes | Floor |   | Volumes |
| 2008                                                                                                            |   |             693 |  $      73.50 |   |             288 |  $      50.00 |   | 981 |
| 2009                                                                                                            |   |             322 |  $      71.82 |   |             125 |  $      50.00 |   | 447 |
| 2010                                                                                                            |   |             118 |  $      70.89 |   |               50 |  $      50.00 |   | 168 |
|                                                                                                            |   |   |   |   |   |   |   |   |
| *(1)                Covering periods January-June and November-December of the respective                years* |   |   |   |
| *(2)                Covering periods July-October of the respective years*                                      |   |   |   |   |   |

**3.  MANDATORILY      REEDEEMABLE PREFERRED STOCK**

**4.      EARNINGS PER SHARE**

|                                                 |   | Second                Quarter |   |   | Six                Months |   |
|------------------------------------------------------|--------|-------------------------------|--------|--------|---------------------------|--------|
|                                                 |   | 2007                          |   |   | 2006                      |   |   | 2007 |   |   | 2006 |   |
| In-the-money                stock options a,b        |   |                          | 725    |   |                      |   | - | c |   |   | 657 |   |   |   | - | c |
| Stock                warrants a,d                    |   |                          | 1,558  |   |                      |   | - | c |   |   | 1,534 |   |   |   | - | c |
| 5%                mandatorily redeemable convertible |   |                          |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| preferred                stock e                     |   |                          | -      |   |                      |   | - | c |   |   | - |   |   |   | 6,214 |   |
| 6%                convertible senior notes f         |   |                          | 7,079  |   |                      |   | - | c |   |   | 7,079 |   |   |   | 7,080 |   |
| 5¼%                convertible senior notes g   |   |                          | 6,938  |   |                      |   | - | c |   |   | 6,938 |   |   |   | 6,938 |   |

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

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

| c.   | Included                in McMoRan’s diluted net income per share calculation (see table below for                a reconciliation of McMoRan’s basic and diluted net income per share                calculations for the second-quarter and six months ended June 30,                2006). |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| d.   | Includes                stock warrants issued in December 2002 (1.74 million shares) and                September                2003 (0.76 million shares).  The warrants are exercisable for                McMoRan common stock at any time over their |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table of Contents

| e.   | All                of the remaining shares of McMoRan convertible preferred stock were                converted into approximately 6.2 million common shares in the second                quarter of 2007 (Note 3).  The conversion of these preferred                shares, which occurred in late June 2007, had an insignificant impact                on                the average shares outstanding for the three months and six months                ended                June 30, 2007.  For additional information see Note 6 of                McMoRan’s 2006 Form 10-K. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| f.   | The                notes, issued in July 2003, are convertible at the option of the                holder at                any time prior to their maturity on July 2, 2008 into shares of McMoRan                common stock at a conversion price of $14.25 per share.  Net                interest expense on the 6% convertible senior notes totaled $1.4                million                during the second quarter of 2007 and $2.9 million and $2.1 million                for                the six-month periods ended June 30, 2007 and 2006, respectively.                For                additional information see Note 5 of McMoRan’s 2006 Form                10-K. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| g.   | The                notes, issued in October 2004, are convertible at the option of the                holder                at any time prior to their maturity on October 6, 2011 into shares                of                McMoRan common stock at a conversion price of $16.575 per                share.   Net interest expense on the 5¼% convertible senior                notes totaled $1.4 million for the second quarter of 2007 and $2.7                million                and $1.8 million for the six months ended June 30, 2007 and 2006,                respectively. For additional information see Note 5 of McMoRan’s 2006 Form                10-K. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                     |   |   | Second                Quarter |   |   | SixMonths |   |
|--------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------------------------|--------|--------|-----------|--------|
| Basic                net income from continuing operations                                                               |   | $      | 15,706                        |   | $      | 3,898     |   |
| Add:  Preferred                dividends from assumed conversion of  5%                mandatorily   |   |   |                          |   |   |      |   |
|                   redeemable convertible preferred stock                                                       |   |   | 404                           |   |   | -         |   |
| Add:  Net                interest from assumed conversion of 6% convertible senior                notes        |   |   | 1,067                         |   |   | -         |   |
| Add:  Net                interest from assumed conversion of 5 ¼% convertible senior                notes |   |   | 1,001                         |   |   | -         |   |
| Diluted                net income from continuing operations                                                             |   |   | 18,178                        |   |   | 3,898     |   |
| Loss                from discontinued sulphur operations                                                                 |   |   | (1,616                        | )      |   | (3,293    | )      |
| Diluted                net income applicable to common stock                                                             |   | $      | 16,562                        |   | $      | 605       |   |

| Weighted                average common shares outstanding for purpose of                calculating       |   |   |                  |   |   |                  |   |
|-----------------------------------------------------------------------------------------------------------|--------|--------|-----------------------|--------|--------|-----------------------|--------|
| basic                net income per share                                                                 |   |   | 28,280                |   |   | 27,556                |   |
| Assumed                exercise of dilutive stock options                                                 |   |   | 1,080                 |   |   | 1,247                 |   |
| Assumed                exercise of stock warrants                                                         |   |   | 1,749                 |   |   | 1,782                 |   |
| Assumed                conversion of 5% mandatorily redeemable convertible preferred                stock |   |   | 6,214                 |   |   | -                     |   |
| Assumed                conversion of 6% convertible senior notes                                          |   |   | 7,080                 |   |   | -                     |   |
| Assumed                conversion of 5¼% convertible senior notes                                    |   |   | 6,938                 |   |   | -                     |   |
| Weighted                average common shares outstanding                                                 |   |   |                  |   |   |                  |   |
|      for                purposes of calculating diluted net income per share     |   |   | 51,341                |   |   | 30,585                |   |
|                                                                                                      |   |   |                  |   |   |                  |   |
| Diluted                net income from continuing operations                                              |   |   | $                0.35 |   |   | $                0.13 |   |
| Diluted                net loss from discontinued sulphur operations                                      |   |   |   (0.03     | )      |   | (0.11                 | )      |
| Diluted                net income per share                                                               |   |   | $                0.32 |   |   | $                0.02 |   |

|                                              |   | Second                Quarter |   |   | Six                Months |   |
|---------------------------------------------------|--------|-------------------------------|--------|--------|---------------------------|--------|
|                                              |   | 2007                          |   |   | 2006                      |   |   | 2007 |   |   | 2006 |   |
| Outstanding                options (in thousands) |   |                          | 5,503  |   |                      |   | 2,145 |   |   |   | 5,721 |   |   |   | 2,133 |   |
| Average                exercise price             |   | $                             | 17.57  |   |                      | $      | 19.84 |   |   | $ | 17.43 |   |   | $ | 19.85 |   |

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Table of Contents

**5.  STOCK-BASED      COMPENSATION**

** **

|                                                                 | Three                Months Ended |   |   | Six                Months Ended |   |
|----------------------------------------------------------------------|-----------------------------------|--------|--------|---------------------------------|--------|
|                                                                 | June                30,           |   |   | June                30,         |   |
|                                                                 | 2007                              |   | 2006   |                            |   | 2007 |   | 2006 |   |
| Cost                of options awarded to employees (including       | $                                 | 2,094  |   | $                               | 1,890  |   |   | $ | 8,375 | a | $ | 11,254 | a |
| Directors)                                                           |                              |   |   |                            |   |   |   |   |   |   |   |   |   |
| Cost                of options awarded to non-employees and advisory |                              | 139    |   |                            | 132    |   |   |   | 359 |   |   | 391 |   |
| Directors                                                            |                              |   |   |                            |   |   |   |   |   |   |   |   |   |
| Cost                of restricted stock units                        |                              | -      |   |                            | 18     |   |   |   | 6 |   |   | 70 |   |
| Total                compensation cost                               | $                                 | 2,233  |   | $                               | 2,040  |   |   | $ | 8,740 |   | $ | 11,715 |   |

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

** **

|                                     |      |   |     |   | Weighted                    |   |      |   |
|------------------------------------------|-----------|--------|----------|--------|-----------------------------|--------|-----------|--------|
|                                     |      |   | Weighted |   | Average                     |   | Aggregate |   |
|                                     | Number    |   | Average  |   | Remaining                   |   | Intrinsic |   |
|                                     | Of        |   | Option   |   | Contractual                 |   | Value     |   |
|                                     | Options   |   | Price    |   | Term                (years) |   | ($000)    |   |
| Balance                at January 1      | 7,095,991 |   | $        | 15.50  |                        |   |      |   |   |   |
| Granted                                  | 1,353,250 |   |     | 12.29  |                        |   |      |   |   |   |
| Exercised                                | (213,695  | )      |     | 8.37   |                        |   |      |   |   |   |
| Expired/Forfeited                        | (39,733   | )      |     | 18.12  |                        |   |      |   |   |   |
| Balance                at June 30        | 8,195,813 |   |     | 15.15  |                        | 6.4    |      | $      | 124,126 |   |
| Vested                and exercisable at |      |   |     |   |                        |   |      |   |   |   |
| June                30                   | 6,068,438 |   |     |   |                        | 5.6    |      | $      | 90,597 |   |
|                                     |      |   |     |   |                        |   |      |   |   |   |

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Table of Contents

|                                                                | Three                Months |   | Six                Months |   |
|---------------------------------------------------------------------|-----------------------------|--------|---------------------------|--------|
|                                                                | 2007                        |   | 2006                      |   | 2007 |   | 2006 |   |
| Fair                Value (per share) of stock option on grant date | $                           | 8.55   |                      | $      | 10.24 |   | $ | 6.94 | a |   | 11.86 | b |
| Expected                and weighted average volatility             |                        | 52.23  | %                         |   | 55.5 | % |   | 52.23 | % |   | 55.5 | % |
| Expected                life of options (in years)                  |                        | 6.29   |                      |   | 7 |   |   | 6.29 | a |   | 7 | b |
| Risk-free                interest rate                              |                        | 4.92   | %                         |   | 4.5 | % |   | 4.76 | % |   | 4.5 | % |

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

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

**6.      SENIOR SECURED TERM LOAN**

**7.  ACCUMULATED      COMPREHENSIVE LOSS**

|                                                                  | Three                  Months |   |   | SixMonths |   |
|-----------------------------------------------------------------------|-------------------------------|--------|--------|-----------|--------|
| Net                  loss                                             | $                             | (5,339 | )      |      | $      | (19,837 | ) |
| Other                  comprehensive income (loss):                   |                          |   |   |      |   |   |   |
| Amortization                  of minimum pension liability adjustment |                          | 14     |   |      |   | 28 |   |
| Total                  accumulated comprehensive loss                 | $                             | (5,325 | )      |      | $      | (19,809 | ) |
|                                                                  |                          |   |   |      |   |   |   |

**8.  NEW      ACCOUNTING STANDARDS**

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Table      of Contents

**9.      OTHER MATTERS**

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Table        of Contents

|                                             |   |   | Second                Quarter |   |   | Six                Months |   |
|--------------------------------------------------|--------|--------|-------------------------------|--------|--------|---------------------------|--------|
|                                             |   |   | 2007                          |   |   | 2006                      |   |   | 2007 |   |   | 2006 |   |
| Interest                cost                     |   | $      | (29                           | )      | $      | 51                        |   | $ | 29 |   | $ | 135 |   |
| Service                cost                      |   |   | -                             |   |   | -                         |   |   | - |   |   | - |   |
| (Return)                loss on plan assets      |   |   | (29                           | )      |   | 45                        |   |   | (47 | ) |   | 37 |   |
| Change                in plan payout assumptions |   |   | -                             |   |   | -                         |   |   | - |   |   | - |   |
| Net                periodic (benefit) expense    |   | $      | (58                           | )      | $      | 96                        |   | $ | (18 | ) | $ | 172 |   |

|                                               |   |   | Second                Quarter |   |   | Six                Months |   |
|----------------------------------------------------|--------|--------|-------------------------------|--------|--------|---------------------------|--------|
|                                               |   |   | 2007                          |   |   | 2006                      |   |   | 2007 |   |   | 2006 |   |
| Interest                cost                       |   | $      | 5                             |   | $      | 5                         |   | $ | 10 |   | $ | 10 |   |
| Service                cost                        |   |   | 86                            |   |   | 85                        |   |   | 172 |   |   | 170 |   |
| Return                on plan assets               |   |   | -                             |   |   | -                         |   |   | - |   |   | - |   |
| Amortization                of prior service costs |   |   | (10                           | )      |   | (12                       | )      |   | (20 | ) |   | (24 | ) |
| Recognition                of actuarial losses     |   |   | 24                            |   |   | 34                        |   |   | 48 |   |   | 68 |   |
| Net                periodic expense                |   | $      | 105                           |   | $      | 112                       |   | $ | 210 |   | $ | 224 |   |

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| Oil                and Natural Gas                                |   |   |   |
|-------------------------------------------------------------------|--------|--------|--------|
| Asset                retirement obligation at beginning of year   | $      | 25,876 |   |
| Liabilities                settled                                |   | (3,626 | )a     |
| Accretion                expense                                  |   | 862    |   |
| Incurred                liabilities                               |   | -      |   |
| Revision                for changes in estimates                  |   | 3,369  | b      |
| Asset                retirement obligations at June 30, 2007      | $      | 26,481 |   |
|                                                              |   |   |   |
| Sulphur                                                           |   |   |   |
| Asset                retirement obligations at beginning of year: | $      | 23,094 |   |
| Liabilities                settled                                |   | (622   | )      |
| Accretion                expense                                  |   | 869    |   |
| Revision                for changes in estimates                  |   | -      |   |
| Asset                retirement obligation at June 30, 2007       | $      | 23,341 |   |

|   | a.  Includes                $0.8 million of costs included in accounts payable at June 30, 2007                for                completed work. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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

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REPORT      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING      FIRM

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Management's Discussion and Analysis of Financial      Condition and Results of Operations

**OVERVIEW**

*In      management’s discussion and analysis “we,” “us,” and “our” refer to McMoRan      Exploration Co. and its wholly owned consolidated subsidiaries, McMoRan Oil      & Gas LLC (MOXY) and Freeport-McMoRan Energy LLC (Freeport      Energy).  You should read the following discussions in conjunction      with our consolidated financial statements, the related discussion and analysis      of financial condition and results of operations and our discussion of “Business      and Properties” in our Form 10-K for the year ended December 31, 2006 (2006 Form      10-K), filed with the Securities and Exchange Commission.  The results      of operations reported and summarized below are not necessarily indicative      of      future operating results. Unless otherwise specified, all references to Notes      refers to Notes to Consolidated Financial Statements included elsewhere in      this      Form 10-Q.*

**GULF      OF MEXICO PROPERTY ACQUISITION**

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| **Natural                Gas Positions (million MMbtu)**                                                         |
|------------------------------------------------------------------------------------------------------------------|
|                                                                                                             |   | Open                Swap Positions(1) |   | Put                Options(2) |   |   |
|                                                                                                             |   | Annual | Average |   | Annual | Average |   | Total |
|                                                                                                             |   | Volumes | Swap                Price |   | Volumes | Floor |   | Volumes |
| 2008                                                                                                             |   |            16.4 |  $        8.60 |   |              6.6 |  $        6.00 |   | 23.0 |
| 2009                                                                                                             |   |              7.3 |  $        8.97 |   |              3.2 |  $        6.00 |   | 10.5 |
| 2010                                                                                                             |   |              2.6 |  $        8.63 |   |              1.2 |  $        6.00 |   | 3.8 |
|                                                                                                             |   |   |   |   |   |   |   |   |
| **Oil                Positions (thousand bbls)**                                                                 |
|                                                                                                             |   | Open                Swap Positions(1) |   | Put                Options(2) |   |   |
|                                                                                                             |   | Annual | Average |   | Annual | Average |   | Total |
|                                                                                                             |   | Volumes | Swap                Price |   | Volumes | Floor |   | Volumes |
| 2008                                                                                                             |   |             693 |  $      73.50 |   |             288 |  $      50.00 |   | 981 |
| 2009                                                                                                             |   |             322 |  $      71.82 |   |             125 |  $      50.00 |   | 447 |
| 2010                                                                                                             |   |             118 |  $      70.89 |   |               50 |  $      50.00 |   | 168 |
|                                                                                                             |   |   |   |   |   |   |   |   |
| *(1)                Covering periods January-June and November-December of the respective                years.* |   |   |   |
| *(2)                Covering periods July-October of the respective                years.*                       |   |   |   |   |   |

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**OIL      & GAS ACTIVITIES**

** **

|                                                                                            |  **Working****Interest** | **Net****Revenue****Interest** |  **Prospect****Acreage                a** | **Water                Depth** | **Proposed****Total****Depth                b** |  **Recent****Depth** | **Spud                Date**    |
|-------------------------------------------------------------------------------------------------|-------------------------------|--------------------------------|------------------------------------------------|--------------------------------|-------------------------------------------------|---------------------------|---------------------------------|
|                                                                                            | %                             | %                              |                                           | Feet                           | feet                                            | Feet                      |                            |
| South                Timbalier Block 70“Cas”                c                       | 15.0                          | 12.4                           | 5,000                                          | 65                             | 25,000                                          | 20,000e                   | January                30, 2007 |
| Vermilion                Block 31“Cottonwood                Point”                c | 15.0                          | 11.3                           | 5,523                                          | 15                             | 21,000                                          | 18,100                    | March                1, 2007    |
| South                Marsh Island Block 212“Flatrock”                c,d            | 25.0                          | 18.8                           | 3,805                                          | 10                             | 19,000                                          | 18,100                    | March                27, 2007   |
| Louisiana                State Lease 340“Mound                Point South” d        | 18.3                          | 14.5                           | 6,400                                          | 8                              | 20,000                                          | 19,100                    | April                12, 2007   |

| a.   | Gross                acres encompassing prospect to which we retain exploration                rights. |
|----------------|--------------------------------------------------------------------------------------------------------|

| b.   | Planned                target measured depth, which is subject to                change. |
|----------------|------------------------------------------------------------------------------------------|

| c.   | Prospect                will be eligible for deep gas royalty relief under current Minerals                Management Service (MMS) guidelines, which could result in an increased                net revenue interest for early production.  If |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| d.   | Wells                in which we are the operator. |
|----------------|----------------------------------------------------|

| e.   | Drilling                below 20,000 feet. |
|----------------|--------------------------------------------|

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**MAIN      PASS ENERGY HUBTM      PROJECT**

**™**

**™**

----

Table of Contents

**RESULTS      OF OPERATIONS**

** **

|                                                 | Three                Months Ended |   | Six                Months Ended |   |
|------------------------------------------------------|-----------------------------------|--------|---------------------------------|--------|
|                                                 | June                30,           |   | June                30,         |   |
|                                                 | 2007                              |   | 2006                            |   | 2007 |   | 2006 |   |
| Sales                volumes:                        |                              |   |                            |   |   |   |   |   |
| Gas                (thousand cubic feet, or Mcf)     | 2,907,700                         |   | 3,867,100                       |   | 6,756,800 |   | 6,026,500 |   |
| Oil                (barrels)a                        | 308,200                           |   | 339,700                         |   | 652,600 |   | 636,600 |   |
| Plant                products (equivalent barrels) b | 40,900                            |   | 21,000                          |   | 113,500 |   | 35,300 |   |
| Average                realizations:                 |                              |   |                            |   |   |   |   |   |
| Gas                (per Mcf)                         | $                8.07             |   | $  6.90               |   | $                7.80 |   | $                7.34 |   |
| Oil                (per barrel)a                     | 62.87                             |   | 64.96                           |   | 58.32 |   | 61.32 |   |

| a.   | Sales                volumes from Main Pass totaled 160,900 barrels in the second quarter                of                2007 and 321,000 barrels for the six months ended June 30, 2007 compared                with 203,600 barrels in the second quarter and 402,900 for six months                ended June 30, 2006.  Main Pass produces sour crude oil, which                sells at a discount to other crude                oils. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | We                received approximately $2.0 million and $5.3 million of revenues                associated with plant products (ethane, propane, butane, etc.) during                the                second quarter of 2007 and six months ending June 30, 2007, respectively,                compared with $1.1 million and $1.8 million of plant product revenues                in                the comparable periods last                year. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**Oil      and Gas Operations**

|                                                                    |  Second |   |   | Six    |   |
|-------------------------------------------------------------------------|--------------|--------|--------|--------|--------|
|                                                                    | Quarter      |   |   | Months |   |
| Oil                and natural gas revenues – prior year period   | $            | 50,276 |   | $      | 85,717 |   |
| Increase                (decrease) in:                                  |         |   |   |   |   |   |
| Sales                volumes:                                           |         |   |   |   |   |   |
| Natural                gas                                              |         | (6,621 | )      |   | 5,361  |   |
| Oil                and condensate                                       |         | (1,851 | )      |   | 1,771  |   |
| Price                realizations:                                      |         |   |   |   |   |   |
| Natural                gas                                              |         | 3,403  |   |   | 3,103  |   |
| Oil                and condensate                                       |         | (835   | )      |   | (2,744 | ) |
| Plant                products revenues                                  |         | 921    |   |   | 3,510  |   |
| Other                                                                   |         | (305   | )      |   | (355   | ) |
| Oil                and natural gas revenues – current year period | $            | 44,988 |   | $      | 96,363 |   |

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Table      of Contents

|                                                      | Second                Quarter |   | Six                Months |   |
|-----------------------------------------------------------|-------------------------------|--------|---------------------------|--------|
|                                                      | 2007                          |   | 2006                      |   | 2007 |   | 2006 |   |
| Geological                and geophysical a               | $                             | 3.0    |                      | $      | 2.4 |   | $ | 9.9 |   | $ | 9.4 |   |
| Nonproductive                exploratory costs, including |                          |   |                      |   |   |   |   |   |   |   |   |   |
| related                lease costs                        |                          | 0.2    |                      |   | 2.2 |   |   | 1.3 | b |   | 14.5 | c |
| Other                                                     |                          | 2.1    |                      |   | 2.2 |   |   | 3.9 |   |   | 3.5 |   |
|                                                      | $                             | 5.3    |                      | $      | 6.8 |   | $ | 15.1 |   | $ | 27.4 |   |

| a.   | Includes                compensation costs associated with outstanding stock-based awards                totaling                $1.1 million in the second quarter of 2007 and $4.3 million for the                six                months ended June 30, 2007 compared with $1.0 million and $6.0 million                of                compensation costs during comparable periods in 2006 (see “Stock Based                Compensation” below and Note 5). |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | Primarily                reflects the nonproductive exploratory well drilling and related                costs                associated with the “Marlin” well at Grand Isle Block 18 evaluated to be                nonproductive in January 2007 |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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**Other      Financial Results**

**CAPITAL      RESOURCES AND LIQUIDITY**

|                                 | Six                Months Ended |   |
|--------------------------------------|---------------------------------|--------|
|                                 | June                30,         |   |
|                                 | 2007                            |   |   | 2006 |   |
| Continuing                operations |                            |   |   |   |   |   |   |
| Operating                            | $                               | 38.1   |   |   | $ | 24.0 |   |
| Investing                            |                            | (73.6  | ) |   |   | (128.2 | ) |
| Financing                            |                            | 69.1   |   |   |   | (5.6 | ) |

| Discontinued                operations |   |   |   |   |   |   |   |
|----------------------------------------|--------|--------|--------|--------|--------|--------|--------|
| Operating                              |   | 0.6    |   |   |   | (4.4   | )      |
| Investing                              |   | -      |   |   |   | -      |   |
| Financing                              |   | -      |   |   |   | -      |   |

| Total                cash flow |   |   |   |   |   |   |   |
|--------------------------------|--------|--------|--------|--------|--------|--------|--------|
| Operating                      |   | 38.7   |   |   |   | 19.6   |   |
| Investing                      |   | (73.6  | )      |   |   | (128.2 | )      |
| Financing                      |   | 69.1   |   |   |   | (5.6   | )      |

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

**Senior      Secured Debt Financings**

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Table of Contents

**Convertible      Senior Notes**

**Debt      Conversion Transactions**

**STOCK-BASED      COMPENSATON**

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Table of Contents

|                                               | Three                Months Ended |   | Six                Months Ended |   |
|----------------------------------------------------|-----------------------------------|--------|---------------------------------|--------|
|                                               | June                30,           |   | June                30,         |   |
|                                               | 2007                              |   | 2006                            |   | 2007 |   | 2006 |   |
| General                and administrative expenses | $                                 | 1,087  |                            | $      | 939 |   | $ | 4,143 |   | $ | 5,252 |   |
| Exploration                expenses                |                              | 1,063  |                            |   | 1,022 |   |   | 4,277 |   |   | 6,021 |   |
| Main                Pass Energy Hub start-up costs |                              | 83     |                            |   | 79 |   |   | 320 |   |   | 442 |   |
| Total                stock-based compensation cost | $                                 | 2,233  |                            | $      | 2,040 |   | $ | 8,740 |   | $ | 11,715 |   |
|                                               |                              |   |                            |   |   |   |   |   |   |   |   |   |

**DISCONTINUED      OPERATIONS**

|                                                      | Second                Quarter |   | Six                Months |   |
|-----------------------------------------------------------|-------------------------------|--------|---------------------------|--------|
|                                                      | 2007                          |   | 2006                      |   | 2007 |   | 2006 |   |
| Sulphur                retiree costs                      | $                             | 289    |                      | $      | 475 |   | $ | 724 |   | $ | 935 |   |
| Caretaking                costs                           |                          | 250    |                      |   | 243 |   |   | 434 |   |   | 673 |   |
| Accretion                expense – sulphur          |                          |   |                      |   |   |   |   |   |   |   |   |   |
| reclamation                obligations                    |                          | 435    |                      |   | 348 |   |   | 869 |   |   | 696 |   |
| Insurance                                                 |                          | 23     |                      |   | 416 |   |   | 411 |   |   | 834 |   |
| General                and administrative and legal       |                          | 26     |                      |   | 38 |   |   | 85 |   |   | 119 |   |
| Other                                                     |                          | 79     |                      |   | 96 |   |   | (3,752 | )a |   | 36 |   |
| Loss                (income) from discontinued operations | $                             | 1,102  |                      | $      | 1,616 |   | $ | (1,229 | ) | $ | 3,293 |   |

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

**NEW      ACCOUNTING STANDARDS**

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**CAUTIONARY      STATEMENT**

Item      3.  Quantitative and Qualitative Disclosures      about Market Risk.

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Table      of Contents

Item      4.   Controls and      Procedures.

PART      II––OTHER INFORMATION

**Factors      Relating to Financial Matters**

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

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

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

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

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

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

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

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

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

**We      are subject to indemnification obligations with respect to (1) the sulphur      transportation and terminaling assets that we sold in June 2002, including      sulphur and oil and gas obligations arising under environmental laws and (2)      the      property interests and related assets of Newfield that we purchased in August      2007.**

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**Factors      Relating to Our Operations**

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

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

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

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

|                            |   |                             |   |                           |   |                                |                               |                                  | (d)                Maximum Number      |
|---------------------------------|--------|----------------------------------|--------|--------------------------------|--------|-------------------------------------|------------------------------------|---------------------------------------|----------------------------------------|
|                            |   |                             |   |                           |   |                                | (c)                Total Number of |                                  | (or                Approximate         |
|                            |   | (a)                Total         |   |                           |   |                                | Shares                (or Units)   |                                  | Dollar                Value) of Shares |
|                            |   | Number                of         |   | (b)                Average     |   | Purchased                as Part of |                               | (or                Units) That May    |
|                            |   | Shares                (or Units) |   | Price                Paid Per  |   | Publicly                Announced   |                               | Yet                Be Purchased Under |
| Period                          |   | Purchaseda                       |   | Share                (or Unit) |   | Plans                or Programs    |                               | the                Plans or Programs  |
| April                1-30, 2007 |   | 24,428                           |   | $                              | 13.45  |                                | -                                  |                                  | -                                      |
| May                1-31, 2007   |   | 12,140                           |   |                           | 13.33  |                                | -                                  |                                  | -                                      |
| June                1-30, 2007  |   | -                                |   |                           | -      |                                | -                                  |                                  | -                                      |
| Total                           |   | 36,568                           |   | $                              | 13.41  |                                | -                                  |                                  | -                                      |
|                            |   |                             |   |                           |   |                                |                               |                                  |                                   |

| a. | This                category include shares repurchased under McMoRan’s applicable stock                incentive plans (Plans). McMoRan repurchased previously issued shares                tendered to the Company to satisfy exercise prices and certain tax                obligations on option awards under the                Plans. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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SIGNATURE

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Table of Contents

**McMoRan      Exploration Co.**

**Exhibit      Index**

**Exhibit      Number**

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

| 4.9 | Indenture                dated as of July 2, 2003 by and between McMoRan and The Bank of New                York,                as trustee.  (Incorporated by reference to Exhibit 4.9 to                McMoRan’s Second Quarter 2003 Form                10-Q). |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 4.10   | Collateral                Pledge and Security Agreement dated as of July 2, 2003 by and among                McMoRan, as pledgor, The Bank of New York, as trustee, and the Bank                of New                York, as collateral agent. (Incorporated by reference to Exhibit                4.11 to                McMoRan’s Second Quarter 2003 Form 10-Q).                                                                                                                      |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.11   | Purchase                Agreement dated September 30, 2004, by and among McMoRan Exploration                Co.,                Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith                Incorporated, and J.P. Morgan Securities Inc.  (Incorporated by                reference to Exhibit 99.2 to McMoRan’s Current Report on Form 8-K dated                October 6, 2004 (filed October 7, 2004).                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.12   | Indenture                dated October 6, 2004 by and among McMoRan and the Bank of New York,                as                trustee.  (Incorporated by reference to Exhibit 99.3 to                McMoRan’s Current Report on Form 8-K dated October 6, 2004 (filed October                7, 2004)).                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.13   | Collateral                Pledge and Security Agreement dated October 6, 2004 by and among                McMoRan,                as pledgor, The Bank of New York, as trustee and the Bank of New                York, as                collateral agent.   (Incorporated by reference to Exhibit                99.4 to McMoRan’s Current Report on Form 8-K dated October 6, 2004 (filed                October 7, 2004)).                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.14   | Registration                Rights Agreement dated October 6, 2004 by and among McMoRan, as issuer                and                Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan                Securities Inc. and Jefferies & Company, Inc. as Initial                Purchasers.  (Incorporated by reference to Exhibit 99.5 to                McMoRan’s Current Report on Form 8-K dated October 6, 2004 (filed October                7, 2004)). |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.1   | Main                Pass 299 Sulphur and Salt Lease, effective May 1,                1988.  (Incorporated by reference to Exhibit 10.1 to McMoRan’s                2001 Annual Report on Form 10-K (the McMoRan 2001 Form                10-K)).                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.2   | IMC                Global/FSC Agreement dated as of March 29, 2002 among IMC Global                Inc., IMC                Global Phosphate Company, Phosphate Resource Partners Limited Partnership,                IMC Global Phosphates MP Inc., MOXY and McMoRan.  (Incorporated                by reference to Exhibit 10.10 to McMoRan’s Second Quarter 2002 Form                10-Q).                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.3   | Amended                and Restated Services Agreement dated as of January 1, 2002 between                McMoRan and FM Services Company. (Incorporated by reference to Exhibit                10.3 to McMoRan’s Second Quarter 2003 Form 10-Q).                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.4   | Letter                Agreement dated August 22, 2000 between Devon Energy Corporation                and                Freeport Sulphur.  (Incorporated by reference to Exhibit 10.36                to McMoRan’s Third Quarter 2000 Form 10-Q).                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.5   | Asset                Purchase Agreement dated effective December 1, 1999 between SOI Finance                Inc., Shell Offshore Inc. and MOXY. (Incorporated by reference to                Exhibit                10.33 to McMoRan’s 1999 Form 10-K).                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.6   | Employee                Benefits Agreement by and between Freeport-McMoRan Inc. and Freeport                Sulphur (Incorporated by reference to Exhibit 10.29 to McMoRan’s 2001 Form                10-K).                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.7   | Purchase                and Sales agreement dated January 25, 2002 but effective January                1, 2002                by and between MOXY and Halliburton Energy Services, Inc. (Incorporated                by                reference to Exhibit 10.1 to McMoRan’s Current Report on Form 8-K dated                February 22, 2002).                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 10.8   | Purchase                and Sale Agreement dated as of March 29, 2002 by and among Freeport                Sulphur, McMoRan, MOXY and Gulf Sulphur Services Ltd., LLP. (Incorporated                by reference to Exhibit 10.37 to McMoRan’s First Quarter 2002 Form                10-Q.)                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

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| 10.9   | Purchase                and Sale Agreement dated May 9, 2002 by and between MOXY and El Paso                Production Company.  (Incorporated by reference to Exhibit 10.28                to McMoRan’s Second Quarter 2002 Form 10-Q).                                                                                                                                                                                  |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.10  | Amendment                to Purchase and Sale Agreement dated May 22, 2002 by and between                MOXY and                El Paso Production Company.  (Incorporated by reference to                Exhibit 10.29 to McMoRan’s Second Quarter 2002 Form                10-Q).                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.11  | Master                Agreement dated October 22, 2002 by and among Freeport-McMoRan Sulphur                LLC, K-Mc Venture LLC, K1 USA Energy Production Corporation and McMoRan                (Incorporated by reference to Exhibit 10.18 to McMoRan’s 2002 Form                10-K).                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.12  | Credit                Agreement dated as of April 19, 2006 among McMoRan Oil & Gas LLC as                borrower, JP Morgan Chase Bank, N.A., as administrative agent,                Toronto-Dominion (Texas) LLC, as syndication agent and the Lenders                Party                Hereto. (Incorporated by reference to Exhibit 10.1 to McMoRan’s Current                Report on Form 8-K dated April 19, 2006).  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.13  | First                Amendment to Credit Agreement effective January 19, 2007 among McMoRan                Oil                & Gas LLC as borrower, JP Morgan Chase Bank, N.A, as administrative                agent, Toronto-Dominion (Texas) LLC, as syndication agent and the                Lenders                Party Hereto (Incorporated by reference to Exhibit 10.14 to McMoRan’s 2006                Form 10-K) . |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.14  | Senior                Term Loan Agreement effective as of January 19, 2007 among McMoRan                Oil                & Gas LLC as borrower, JP Morgan Chase Bank, N.A., as administrative                agent, TD Securities (USA) LLC, as syndication agent and the Lenders                Party                Hereto (Incorporated by reference to Exhibit 10.14 to McMoRan’s 2006 Form                10-K).         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | Executive                and Director Compensation Plans and Arrangements (Exhibits 10.15                through                10.36).                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.15  | McMoRan                Adjusted Stock Award Plan, as amended and restated. (Incorporated                by                reference to Exhibit 10.15 to McMoRan’s First-Quarter 2007 Form                10-Q).                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.16  | McMoRan                1998 Stock Option Plan, as amended and restated. (Incorporated by                reference to Exhibit 10.16 to McMoRan’s First-Quarter 2007 Form                10-Q).                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.17  | McMoRan                1998 Stock Option Plan for Non-Employee Directors, as amended and                restated. (Incorporated by reference to Exhibit 10.17 to McMoRan’s                First-Quarter 2007 Form 10-Q).                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.18  | McMoRan                Form of Notice of Grant of Nonqualified Stock Options under the 1998                Stock                Option Plan.  (Incorporated by reference to Exhibit 10.15 to                McMoRan’s Second Quarter 2005 Form 10-Q).                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.19  | McMoRan                2000 Stock Incentive Plan, as amended and restated. (Incorporated                by                reference to Exhibit 10.19 to McMoRan’s First-Quarter 2007 Form                10-Q).                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.20  | McMoRan                Form of Notice of Grant of Nonqualified Stock Options under the 2000                Stock                Incentive Plan.  (Incorporated by reference to Exhibit 10.17 to                McMoRan’s Second Quarter 2005 Form 10-Q).                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.21  | McMoRan                2001 Stock Incentive Plan, as amended and restated. (Incorporated                by                reference to Exhibit 10.21 to McMoRan’s First-Quarter 2007 Form                10-Q).                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.22  | McMoRan                2003 Stock Incentive Plan, as amended and restated. (Incorporated                by                reference to Exhibit 10.22 to McMoRan’s First-Quarter 2007 Form                10-Q).                                                                                                                                                                                                                     |

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|   |                                                                                                                                                                                                                                                          |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.23  | McMoRan’s                Performance Incentive Awards Program as amended effective February                1,                1999.  (Incorporated by reference to Exhibit 10.18 to McMoRan’s                1998 Form 10-K).            |
|   |                                                                                                                                                                                                                                                          |
| 10.24  | McMoRan                Form of Notice of Grant of Nonqualified Stock Options under the 2001                Stock                Incentive Plan. (Incorporated by reference to Exhibit 10.21 to McMoRan’s                Second Quarter 2005 Form 10-Q). |

| 10.25  | McMoRan                Form of Restricted Stock Unit Agreement Under the 2001 Stock Incentive                Plan.                                                                                                                                                                                                                                                                                                                           |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.26  | McMoRan                Exploration Co. Executive Services Program (Incorporated by reference                to                Exhibit 10.8 to McMoRan’s May 1, 2006 Form 8-K).                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.27  | McMoRan                Form of Notice of Grants of Nonqualified Stock Options under the                2003                Stock Incentive Plan. (Incorporated by reference to Exhibit 10.24                to                McMoRan’s Second Quarter 2005 Form 10-Q).                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.28  | McMoRan                Form of Restricted Stock Unit Agreement Under the 2003 Stock Incentive                Plan.                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.29  | McMoRan                2004 Director Compensation Plan, as amended and restated. (Incorporated                by                reference to Exhibit 10.29 to McMoRan’s First-Quarter 2007 Form                10-Q).                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.30  | Form                of Amendment No. 1 to Notice of Grant of Nonqualified Stock Options                under                the 2004 Director Compensation Plan.  (Incorporated by reference                to Exhibit 10.7 to McMoRan’s May 1, 2006 Form 8-K).                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.31  | Agreement                for Consulting Services between Freeport-McMoRan Inc. and B. M. Rankin,                Jr. effective as of January 1, 1991) (assigned to FM Services Company                as                of January 1, 1996); as amended on December 15, 1997 and on December                7,                1998.  (Incorporated by reference to Exhibit 10.32 to McMoRan’s                1998 Form 10-K). |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.32  | Supplemental                Letter Agreement between FM Services Company and B.M. Rankin, Jr.                effective as of January 1, 2007 (Incorporated by reference to Exhibit                10.32 to McMoRan’s 2006 Form 10-K).                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.33  | McMoRan                Director Compensation. (Incorporated by reference to Exhibit 10.27                to                McMoRan’s 2004 Form 10-K).                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.34  | McMoRan                Exploration Co. 2005 Stock Incentive Plan, as amended and restated.                (Incorporated by reference to Exhibit 10.34 to McMoRan’s First-Quarter                2007 Form 10-Q).                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.35  | Form                of Notice of Grant of Nonqualified Stock Options under the 2005 Stock                Incentive Plan.  (Incorporated by reference to Exhibit 10.2 to                McMoRan’s Current Report on Form 8-K filed May 6,                2005).                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.36  | Form                of Restricted Stock Unit Agreement under the 2005 Stock Incentive                Plan.                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 10.37  | Purchase                and Sale Agreement dated June 20, 2007 by and between Newfield Exploration                Company as Seller and McMoRan Oil & Gas LLC as Buyer effective July 1,                2007.  (Incorporated by reference to Exhibit 99.1 to McMoRan’s                Current Report on Form 8-K dated June 21, 2007 (filed on June 22,                2007)).                                           |

| 15.1   | Letter                dated August 6, 2007 from Ernst & Young LLP regarding unaudited                interim financial statements. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                   |
| 31.1   | Certification                of Principal Executive Officer pursuant to Rule                13a–14(a)/15d-14(a).                 |
|   |                                                                                                                                   |

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| 31.2 | Certification                  of Principal Financial Officer pursuant to Rule                  13a–14(a)/15d-14(a). |
|------|----------------------------------------------------------------------------------------------------------------------------|

|   |                                                                                                           |
|--------|----------------------------------------------------------------------------------------------------------------|
| 32.1   | Certification                of Principal Executive Officer pursuant to 18 U.S.C. Section                1350. |
|   |                                                                                                           |
| 32.2   | Certification                of Principal Financial Officer pursuant to 18 U.S.C. Section                1350. |

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