SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549
                            FORM 10-Q

     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                 SECURITIES EXCHANGE ACT OF 1934

            For the Quarter Ended September 30, 2002



                Commission File Number: 001-07791



                     McMoRan Exploration Co.



 Incorporated in Delaware                 72-1424200
                               (IRS Employer Identification No.)


        1615 Poydras Street, New Orleans, Louisiana 70112


   Registrant's telephone number, including area code:(504)582-4000


    Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X  No _


    On September 30, 2002, there were issued and outstanding
16,064,559 shares of the registrant's Common Stock, par value
$0.01 per share.



                     McMoRan Exploration Co.
                        TABLE OF CONTENTS

                                                           Page

        Part I.  Financial Information

          Financial Statements:

            Condensed Balance Sheets                         3

            Statements of Operations                         4

            Statements of Cash Flows                         5

            Notes to Financial Statements                    6

          Remarks                                           12

          Report of Independent Public Accountants          13

          Management's Discussion and Analysis
            of Financial Condition and Results of
            Operations                                      14

          Controls and Procedures                           25

        Part II.  Other Information                         25

        Signature                                           26

        Certifications                                      27

        Exhibit Index                                       E-1


<PAGE>                            2

                     McMoRan Exploration Co.
                 Part I.  FINANCIAL INFORMATION

Item 1.     Financial Statements.

                     McMoRan EXPLORATION CO.
              CONDENSED BALANCE SHEETS (Unaudited)


<TABLE>
<CAPTION>
                                                 September 30,  December 31,
                                                      2002          2001
                                                   ---------     ----------
                                                       (In Thousands)
<S>                                                <C>           <C>
ASSETS
Cash and cash equivalents:
    Continuing operations                          $  21,255     $      -
    Discontinued operations, amount restricted
      at September 30, 2002                            2,266            500
Accounts receivable                                    5,426         10,892
Inventories                                              459            690
Prepaid expenses                                         129            270
Current assets from discontinued operations,
 excluding cash                                          800         12,477
                                                   ---------     ----------
     Total current assets                             30,335         24,829
Property, plant and equipment, net                    50,030         98,519
Sulphur business assets, net                             355         54,607
Other assets, including restricted cash
  of $3.5 million                                      4,046         11,731
                                                   ---------     ----------
Total assets                                       $  84,766     $  189,686
                                                   =========     ==========

LIABILITIES AND STOCKHOLDERS' DEFICIT
Accounts payable                                   $   9,069     $   21,334
Accrued liabilities                                    9,257         15,192
Borrowings outstanding on sulphur credit facility        -           55,000
Current portion of oil and gas credit facility           -            2,000
Current portion of accrued oil and gas
  reclamation costs                                       91            398
Current portion of accrued sulphur
  reclamation cost                                    13,000            -
Current liabilities from discontinued operations       6,269         15,281
Other                                                    355            305
                                                   ---------     ----------
     Total current liabilities                        38,041        109,510
Accrued sulphur reclamation costs                     30,479         63,876
Accrued oil and gas reclamation costs                 17,837         18,278
Long-term borrowings on oil and gas credit facility      -           47,657
Contractual postretirement obligation                 21,765         21,122
Other long-term liabilities                           18,631         17,015
Mandatorily redeemable convertible preferred stock    33,801            -
Stockholders' deficit                                (75,788)       (87,772)
                                                   ---------     ----------
Total liabilities and stockholders' deficit        $  84,766     $  189,686
                                                   =========     ==========

</TABLE>

The accompanying notes are an integral part of these financial
statements.

<PAGE>                               3


                     McMoRan EXPLORATION CO.
              STATEMENTS OF OPERATIONS (Unaudited)


<TABLE>
<CAPTION>

                                     Three Months Ended  Nine Months Ended
                                        September 30,      September 30,
                                     ------------------  ------------------
                                       2002      2001     2002      2001
                                     --------  --------  --------  --------
                                    (In Thousands, Except Per Share Amounts)
<S>                                  <C>       <C>       <C>       <C>
Revenues                             $  9,785  $ 24,555  $ 34,771  $ 56,446
Costs and expenses:
Production and delivery costs           7,437     9,319    20,127    28,555
Depreciation and amortization           6,207    10,269    16,804    17,424
Exploration expenses                    7,090     6,707    11,643    54,606
General and administrative expenses     1,624     3,960     5,481    11,840
Gain on disposition of oil and gas
  properties                              -         -     (30,084)      -
                                     --------  --------  --------  --------
     Total costs and expenses          22,358    30,255    23,971   112,425
                                     --------  --------  --------  --------
Operating income (loss)               (12,573)   (5,700)   10,800   (55,979)
Interest expense                         (151)      -        (694)     (357)
Other income, net                         103        33       162       461
Provision for income taxes                -          (8)       (7)       (8)
                                     --------  --------  --------  --------
Income (loss) from continuing
  operations                          (12,621)   (5,675)   10,261   (55,883)
Income (loss) from discontinued
  operations                            2,853    (2,691)    1,537   (16,288)
                                     --------  --------  --------  --------
Net income (loss)                      (9,768)   (8,366)   11,798   (72,171)
Preferred dividends and amortization
  of convertible preferred stock
  issuance costs                         (488)      -        (537)      -
                                     --------  --------  --------  --------
Net income (loss) applicable to
  common stock                       $(10,256) $ (8,366) $ 11,261  $(72,171)
                                     ========  ========  ========  ========

Net income (loss) per share of common stock:
Basic net income (loss) from
  continuing operations                $(0.82)   $(0.36)    $0.61    $(3.52)
Basic net income (loss) from
  discontinued operations                0.18     (0.17)     0.10     (1.03)
                                       ------    ------     -----    ------
Basic net income (loss) per share
  of common stock                      $(0.64)   $(0.53)    $0.71    $(4.55)
                                       ======    ======     =====    ======
Diluted net income (loss) from
  continuing operations                $(0.82)   $(0.36)    $0.55    $(3.52)
Diluted net income (loss) from
  discontinued operations                0.18     (0.17)     0.08     (1.03)
                                       ------    ------     -----    ------
Diluted net income (loss) per
  share of common stock                $(0.64)   $(0.53)    $0.63    $(4.55)
                                       ======    ======     =====    ======

Average common shares outstanding:
 Basic                                 16,041    15,872    15,978    15,862
                                       ======    ======    ======    ======
 Diluted                               16,041    15,872    18,698    15,862
                                       ======    ======    ======    ======

</TABLE>

The accompanying notes are an integral part of these financial
statements.

<PAGE>                              4

                     McMoRan EXPLORATION CO.
              STATEMENTS OF CASH FLOWS (Unaudited)

<TABLE>
<CAPTION>

                                                       Nine Months Ended
                                                          September 30,
                                                      --------------------
                                                        2002       2001
                                                      --------   ---------
                                                         (In Thousands)
<S>                                                   <C>        <C>
Cash flow from operating activities:
Net income (loss)                                     $ 11,798   $ (72,171)
Adjustments to reconcile net income (loss) to
 net cash used in operating activities:
  (Income) loss from discontinued operations            (1,537)     16,288
  Depreciation and amortization                         16,804      17,424
  Exploration drilling and related expenditures          8,487      40,464
  Gain on disposition of oil and gas properties        (30,084)
  Change in assets and liabilities:
  Reclamation and mine shutdown expenditures              (728)     (1,199)
  Other                                                     27       1,536
  (Increase) decrease in working capital:
     Accounts receivable                                 3,403       5,317
     Accounts payable and accrued liabilities          (11,515)     (1,087)
     Inventories and prepaid expenses                      231          61
                                                      --------   ---------
Net cash (used in) provided by continuing
 operations                                             (3,114)      6,633
Net cash used in discontinued operations                (7,367)    (15,243)
                                                      --------   ---------
Net cash used in operating activities                  (10,481)     (8,610)
                                                      --------   ---------

Cash flow from investing activities:
Exploration, development and other capital             (13,893)    (92,300)
 expenditures
Proceeds from disposition of oil and gas properties     60,000       1,291
Net cash provided by (used in) continuing operations    46,107     (91,009)
Net cash provided by discontinued operations            58,583       3,243
                                                      --------   ---------
Net cash provided by (used in) investing activities    104,690     (87,766)
                                                      --------   ---------

Cash flow from financing activities:
Net proceeds from equity offering                       33,750         -
Repayment of borrowings on oil and gas credit facility (49,657)        -
Dividends paid on convertible preferred stock             (486)        -
Net borrowings on oil and gas credit facility              -        35,000
Other                                                      205         470
                                                      --------   ---------
Net cash (used in) provided by continuing operations   (16,188)     35,470
Net cash (used in) provided by discontinued operations (55,000)     12,000
                                                      --------   ---------
Net cash (used in) provided by financing activities    (71,188)     47,470
                                                      --------   ---------
Net increase (decrease) in cash and cash equivalents    23,021     (48,906)
Restricted cash of discontinued operations              (2,266)        -
                                                      --------   ---------
Net increase (decrease) in unrestricted cash and
  cash equivalents                                      20,755     (48,906)
Cash and cash equivalents at beginning of year             500      48,906
                                                      --------   ---------
Cash and cash equivalents at end of period            $ 21,255   $     -
                                                      ========   =========

</TABLE>

The accompanying notes are an integral part of these financial
statements.

<PAGE>                          5


                     McMoRan EXPLORATION CO.
                  NOTES TO FINANCIAL STATEMENTS

1.   BASIS OF PRESENTATION
The financial statements of McMoRan Exploration Co. (McMoRan) are
prepared in accordance with accounting principles generally
accepted in the United States. As further discussed in Note 2,
McMoRan faced significant liquidity issues earlier in 2002 as a
result of adverse business conditions with its former sulphur
operations and significant nonproductive exploratory drilling
costs incurred during 2001 and 2000. As discussed in Note 2
below, management has made substantial progress in implementing
its financial plan to address these issues, and believes that the
company has the financial resources to conduct its business plan.
Management is addressing its remaining reclamation obligation at
Main Pass.  The ultimate resolution of this matter involves
inherent uncertainties and conditions beyond the control of
McMoRan.

  As a result of McMoRan's exit from the sulphur business, as
evidenced by its sale of substantially all of its sulphur assets
(Note 2), its sulphur results have been presented as discontinued
operations and the major classes of assets and liabilities
related to the sulphur business held for sale have been
separately shown for all periods presented.

2.  CAPITAL RESOURCES and LIQUIDITY
McMoRan's business plan for the remainder of 2002 and 2003 is to
drill, or have third parties drill, its high-potential, high-
risk, deep-gas exploratory prospects in the shallow waters of the
Gulf of Mexico. The steps taken by McMoRan to address its
financial requirements are described below.

Sale of Certain Oil and Gas Properties
On February 22, 2002, McMoRan Oil & Gas LLC (MOXY), McMoRan's
wholly owned subsidiary engaged in oil and gas exploration and
production activities, sold three of its oil and gas properties
for $60.0 million. The sale was effective January 1, 2002.
McMoRan sold its interest in Vermilion Block 196 and Main Pass
Blocks 86/97, and 80 percent of its interest in Ship Shoal Block
296.  McMoRan has retained its interests in exploratory prospects
lying 100 feet below the stratigraphic equivalent of the deepest
currently producing interval at both Vermilion Block 196 and Ship
Shoal Block 296. The properties were sold subject to a
reversionary interest after a defined payout, which would occur
when the purchaser receives aggregate cumulative proceeds from
the properties of $60.0 million plus an agreed annual rate of
return. McMoRan's current estimates of proved reserves do not
include any reserves for McMoRan's reversionary interest;
however, whether or not payout ultimately occurs depends
primarily upon future production and future market prices of both
natural gas and oil.

     McMoRan used the proceeds from this transaction to repay all
borrowings under its oil and gas credit facilities, which totaled
$51.7 million on February 22, 2002, and to fund a portion of its
working capital requirements. The credit facilities were
terminated at that time.  McMoRan recorded a gain on the sale of
its interests in these properties, which commenced production in
mid-2001, totaling $29.2 million during the first quarter of
2002.

Sulphur Reclamation Obligations
McMoRan and Freeport-McMoRan Sulphur LLC (Freeport Sulphur),
McMoRan's wholly owned subsidiary formerly engaged in the sulphur
business and currently engaged in the production of oil from Main
Pass Block 299 (Main Pass), are parties to a trust agreement with
the Minerals Management Service (MMS) to provide financial
assurances regarding the future costs associated with the Main
Pass reclamation activities.  Freeport Sulphur was required to
provide these financial assurances to the MMS by September 27,
2002, but the MMS granted Freeport Sulphur an extension of this
requirement to January 15, 2003.   McMoRan's plan to satisfy
these requirements is currently in progress, as further described
below.

    In the first quarter of 2002, Freeport Sulphur and Offshore
Specialty Fabricators Inc. (OSFI) entered into contractual
agreements for the dismantlement and removal (reclamation) of the
Main Pass and Caminada sulphur mines and related facilities
located offshore in the Gulf of Mexico. During the second quarter
of 2002, OSFI substantially completed its reclamation activities
at the Caminada mine site and McMoRan recorded a $5.0 million
gain associated with the substantial resolution of its Caminada
sulphur reclamation obligations and the related conveyance of
assets to OSFI, as further discussed below. The gain on the
resolution of the Caminada reclamation obligation is included in
the caption "Income (loss) from discontinued operations" in the
accompanying statements of operations.

<PAGE>                        6

       In August 2002, OSFI commenced its initial reclamation
work at Main Pass covering the structures not essential for any
potential future business activities at the field (Phase I).
OSFI has removed five of nine bridge structures and has commenced
demolition of the power plant facility at Main Pass.  OSFI's
reclamation work at Main Pass was delayed by weather conditions
during September and October and it is anticipated that the Phase
I reclamation work will continue in 2003.

     As payment of its share of these reclamation costs, Freeport
Sulphur conveyed certain assets to OSFI including a supply
service boat, Freeport Sulphur's dock facilities in Venice,
Louisiana, and certain assets previously salvaged by Freeport
Sulphur during a prior reclamation phase at Main Pass.  In
addition to these conveyed assets, Freeport Sulphur agreed to
provide to OSFI the proceeds from the sale of its economic
interest in the Main Pass oil operations and certain initial
payments relating to the establishment of a business enterprise
using certain of the Main Pass sulphur facilities for the
disposal of non-hazardous oilfield waste from offshore oil
operations. In August 2002, OSFI and Freeport Sulphur amended the
contract to clarify certain aspects, including specifying values
for the reclamation of the Phase I sulphur structures at Main
Pass.  Under terms of this arrangement, OSFI would receive $13
million for its Phase I reclamation activities. Freeport Sulphur
expects to fund the Phase I reclmation costs with proceeds from the
sale of its Main Pass oil facilities to a joint venture (see
"Agreement to Form Joint Venture" below).  Freeport Sulphur has
incurred $1.0 million of costs associated with the Phase I reclamation
activities and any costs funded by Freeport Sulphur prior to the closing
of the joint venture transaction would be reimbursed upon the formation
of the joint venture. Freeport Sulphur recorded a $5.2 million gain
during the third quarter of 2002 in connection with the reduction
in the estimated Phase I Main Pass accrued reclamation costs from
$18.2 million to $13.0 million based on the contract with OSFI.
The gain is included within the caption "Income (loss) from discontinued
operations" in the accompanying statements of operations and the
obligation for Phase I is included in current liabilities in the
accompanying balance sheet as of September 30, 2002.

Sale of Sulphur Transportation and Terminaling Assets
On June 14, 2002, Freeport Sulphur sold substantially all the
assets used in its sulphur transportation and terminaling
business to Gulf Sulphur Services Ltd., LLP, a new sulphur joint
venture owned equally by IMC Global Inc. (IMC) and Savage
Industries Inc.  In connection with this transaction, McMoRan and
IMC   settled all outstanding disputes between the companies and
their respective subsidiaries.  In addition, Freeport Sulphur's
contract to supply sulphur to IMC also terminated upon completion
of the transactions. The transactions provided Freeport Sulphur
with $58.0 million in gross proceeds, which it used to fund a
portion of its remaining sulphur working capital requirements,
transaction costs and to repay a substantial portion of its
borrowings under the sulphur credit facility (Note 3).  At
September 30, 2002, approximately $2.3 million of the funds from
these transactions remained deposited in various restricted
escrow accounts, which will be used to fund Freeport Sulphur's
remaining sulphur working capital requirements and to provide
funding for certain retained environmental obligations as further
discussed below.  As a result of these transactions, McMoRan's
results for the nine months ended September 30, 2002 include a
$4.6 million loss, which is included in the accompanying
statements of operations within "Income (loss) from discontinued
operations."  The $4.6 million loss includes $1.8 million of
additional losses that were recorded in the third quarter of 2002
primarily reflecting revisions to the previously estimated losses
associated with the pending disposal of certain sulphur rail
cars.

     The assets sold to Gulf Sulphur Services included Freeport
Sulphur's terminal facilities at Galveston, Texas, its terminals
at Tampa and Pensacola, Florida, its marine transportation assets
and other assets and commercial contracts associated with its
sulphur transportation and terminaling business. Freeport
Sulphur's terminal facility at Port Sulphur, Louisiana was not
transferred to Gulf Sulphur Services and is being marketed
separately.

     In connection with the preceding transactions, McMoRan has
also agreed to be responsible for any historical environmental
obligations relating to its sulphur transportation and
terminaling assets and has also agreed to indemnify Gulf Sulphur
Services and IMC from any liabilities with respect to the
historical sulphur operations engaged in by Freeport Sulphur and
its predecessor companies, including reclamation obligations.  In
addition, McMoRan assumed, and agreed to indemnify IMC from, any
obligations, including environmental obligations, other than
liabilities existing as of the closing of the sale, associated
with historical oil and gas operations undertaken by the Freeport-
McMoRan companies prior to the 1997 merger of Freeport-McMoRan
Inc. and IMC.  Subsequently, no costs or liabilities have been
incurred with respect to McMoRan's assuming these contingent
obligations.

<PAGE>                        7

Additional Capital
On June 21, 2002, McMoRan completed a $35 million public offering
of 1.4 million shares of 5% mandatorily redeemable convertible
preferred stock (Note 4).  Proceeds received from the offering
totaled $33.7 million, net of an underwriting discount of $1.1
million and $0.2 million of certain other issuance costs.  As of
September 30, 2002, McMoRan has amortized a total of $51,000 of
its convertible preferred stock issuance costs.  McMoRan used a
portion of the proceeds from the offering to repay all remaining
borrowings outstanding under its now-terminated sulphur credit
facility (Note 3) and is using the remaining funds for its
working capital requirements and other general corporate
purposes.  In July 2002, MOXY entered into a one-year, $10
million revolving bank credit facility agreement that provided it
with borrowing capacity of $3.5 million at September 30, 2002
(Note 3).  McMoRan has not borrowed any amounts under this
facility.  McMoRan is also considering the sale or other farm-out
arrangements of additional oil and gas properties to raise
additional capital.

Exploration Funding Arrangements
In May 2002, MOXY entered into a farm-out agreement with El Paso
Production Company (El Paso) that provides for the funding of
exploratory drilling and related development costs with respect
to four of its high-potential, deep-gas prospects in the shallow
waters of the Gulf of Mexico.  Under the program, El Paso is
funding all of McMoRan's interests for the exploratory drilling
and development costs of these prospects and will own 100 percent
of the program's interests in the four prospects until aggregate
production to the program totals 100 billion cubic feet of gas
equivalent (Bcfe).  After aggregate production of 100 Bcfe,
ownership of 50 percent of the program's interests would revert
back to MOXY.  The four prospects in the exploration program are
"Hornung" at Eugene Island Block 108 (28-foot water depth), "JB
Mountain" at South Marsh Island Block 223 (10-foot water depth),
"Lighthouse Point- Deep" at South Marsh Island Block 207 (16-foot
water depth) and "Mound Point" at Louisiana State Lease 340 (10-
foot water depth).  Drilling commenced at the Hornung prospect in
April 2002 and at JB Mountain and Lighthouse Point-Deep in June
2002.  In October 2002, the Hornung well's results were evaluated
not to contain commercial quantities of hydrocarbons and the well is
being plugged and abandoned.  As a result, McMoRan impaired its
leasehold acquisition costs for the Hornung prospect, which is
located on acreage covering four offshore blocks covering 20,000
gross acres, resulting in a $5.3 million charge to exploration
expense in the third quarter of 2002 (Note 5).  MOXY plans to
enter into additional farm-out or other exploration arrangements
with other oil and gas industry participants for other prospects.

Agreement to Form Joint Venture
On October 22, 2002, McMoRan and K1 USA Ventures, Inc., a
wholly owned subsidiary of K1 Ventures Limited (collectively
K1), announced an agreement to form a joint venture, K-Mc
Energy Ventures, to acquire energy related businesses.  McMoRan
would manage the business activities of the new joint venture.

     The new joint venture would form K-Mc Venture I LLC (K-McI)
to acquire certain of McMoRan's Main Pass facilities.  K-Mc I
would pursue new business activities using the site's unique
infrastructure and would also continue to produce oil at Main
Pass.

     Under terms of the agreement, McMoRan would contribute to
K-Mc I its Main Pass oil interests, and at the election of K1
USA Ventures, Inc., other Main Pass infrastructure assets
required to support the new business activities currently being
pursued at the site.  McMoRan would receive $13 million in the
transaction, which would be used to fully fund the Main Pass
Phase I reclamation costs. These facilities are currently in
the process of being dismantled pursuant to the previously
announced fixed cost contract with OSFI (see "Sulphur
Reclamation Obligations" above).  In addition, K1 would provide
credit support for the new venture in an amount up to $10
million to provide financial assistance for K-Mc I's bonding
requirements with the MMS.  McMoRan would own 33.3 percent of
K-Mc I.  Also in connection with the transaction, K1
would receive warrants to purchase 1.7 million shares of
McMoRan common stock at any time within five years at a price
of $5.25 per share and, upon K1's election to participate in
the future business activities, would receive additional
warrants to purchase an additional 0.76 million shares of
McMoRan common stock at a price of $5.25 per share.

     The new enterprise would continue the efforts previously
initiated by McMoRan to pursue the use of the Main Pass
facilities as a support hub for energy development and
production projects in the Gulf of Mexico.  The surface
platforms and related structures at Main Pass, together with
the two-mile diameter caprock and salt dome, have significant
capacity and potential for a variety of commercial activities.
The potential alternative uses may include the disposal of
nonhazardous waste from offshore oil and gas drilling
activities; a hub for receiving deepwater vessels transporting
oil and gas production, including compressed natural gas and

<PAGE>                        8

liquefied natural gas; and cavern storage facilities to store
natural gas and oil.  McMoRan is continuing its efforts to
pursue the required permits for the waste disposal operations
at Main Pass.  McMoRan began its efforts to obtain such a
permit in late 2000.

     The formation of the joint venture is expected to occur in
the fourth quarter of 2002, subject to certain closing
conditions.
                    -----------------------

    For more information regarding McMoRan's sulphur operations,
its decision to exit the sulphur business, its plans for
addressing its near-term sulphur reclamation obligations with the
MMS and information regarding its sulphur credit facility see
Notes 2, 8, 9 and 11 of the Notes to Consolidated Financial
Statements included within its 2001 Annual Report on Form 10-K as
filed with the Securities and Exchange Commission.

3.   BANK CREDIT FACILITIES
Freeport Sulphur's borrowings under the sulphur credit facility
totaled $55.0 million at December 31, 2001. In June 2002,
following the sale of the sulphur transportation and terminaling
assets (Note 2) and the completion of McMoRan's pubic equity
offering (Notes 2 and 4), Freeport Sulphur repaid all remaining
borrowings outstanding under the facility ($58.5 million), which
was then terminated.

    In July 2002, MOXY entered into a one-year, $10 million
revolving bank credit facility with Hibernia National Bank.
Amounts available for borrowing under this facility are subject
to a borrowing base, which provided MOXY up to $4.5 million of
borrowing capacity under the facility.  The amount available for
borrowing under the facility is decreasing by $0.5 million per
month.  The amount available for borrowing at September 30, 2002
was $3.5 million.  The variable rate loan is secured by all of
MOXY's oil and gas producing properties and is guaranteed by
McMoRan. At the time of this filing, MOXY has made no borrowings
under this credit facility.

5.   MANDATORILY REDEEMABLE PREFERRED STOCK
In June 2002, McMoRan completed a $35 million public offering of
1.4 million shares of its 5% mandatorily redeemable convertible
preferred stock (Note 2).  Each $25 share provides for a
quarterly cash dividend of $0.3125 per share ($1.25 per share
annually) and is convertible at the option of the holder at any
time into 5.1975 shares of McMoRan's common stock, which is
equivalent to $4.81 per common share, representing a 20 percent
premium over McMoRan's common stock closing price on June 17,
2002. The initial dividend totaling $0.5 million ($0.3472 per
share) was paid on September 30, 2002.  McMoRan may redeem the
preferred stock after June 30, 2007 and must redeem the stock by
June 30, 2012.  Any redemption by McMoRan must be made in cash.

5.   ASSET IMPAIRMENT
Costs for unproved oil and gas properties are assessed
periodically, and a loss is recognized if the properties are
deemed impaired.  Factors that may indicate that an unproved oil
and gas property is impaired include, without limitation,
exploratory drilling results on a specific prospect, the
remaining term before expiration of a specific lease and others.
When events or circumstances indicate that proved oil and gas
property carrying amounts might not be recoverable from estimated
future undiscounted cash flows from the property, a reduction of
the carrying amount to fair value is required.  Measurement of
the impairment loss is based on the estimated fair value of the
asset, which McMoRan generally determines using estimated
undiscounted future cash flows from the property, adjusted to
present value using an interest rate considered appropriate for
the asset.  Future cash flow estimates for McMoRan's oil and gas
properties are measured on a field-by-field basis and include
future estimates of proved and risk-assessed probable reserves,
oil and gas prices, production rates and operating, development
and reclamation costs based on operating budget forecasts.
Assumptions underlying future cash flow estimates are subject to
various risks and uncertainties.

     In the third quarter of 2002, as a result of mechanical
problems encountered by the well at the West Cameron Block 624
field, McMoRan recorded a $3.2 million impairment charge to
depreciation expense to write-off the asset carrying cost of the
field.  In October 2002, the initial Hornung prospect exploratory
well at Eugene Island Block 108 was evaluated not to contain
commercial quantities of hydrocarbons and is being plugged and
abandoned.  As a result, McMoRan recorded a $5.3 million charge
to exploration expense to impair its leasehold acquisition costs
associated with the Hornung prospect, which covers four offshore
lease blocks (Eugene Island Blocks 96/97/108/109) encompassing
20,000 gross acres.  McMoRan has $4.0 million of remaining
Hornung prospect leasehold acquisition costs.  Recovery of this
leasehold cost is dependent upon El Paso or others pursuing and

<PAGE>                          9

successfully drilling additional identified exploration
opportunities on this acreage over the near term.  Two of the
four leases comprising the Hornung prospect are currently
scheduled to expire in mid-2003.


6.   EARNINGS PER SHARE
Basic net income (loss) per share of common stock was calculated
by dividing the income (loss) applicable to continuing
operations, income (loss) from discontinued operations and net
income applicable to common stock by the weighted-average number
of common shares outstanding during the periods presented.  Net
income applicable to continuing operations is calculating by
taking "income (loss) from continuing operations" and subtracting
the "preferred dividends and amortization of convertible
preferred stock issuance cost" line in the accompanying
statements of operations.  See the caption entitled "Diluted
income (loss) from continuing operations before assumed
conversion" in the table below for an illustration of net income
applicable to continuing operations.  The following is a
reconciliation of net income and weighted average common shares
outstanding for purposes of calculating diluted net income (loss)
per share (in thousands, except per share amounts):

<TABLE>
<CAPTION>

                                     Three Months Ended   Nine Months Ended
                                        September 30,       September 30,
                                    -------------------  -------------------
                                       2002       2001      2002       2001
                                    ---------  --------  --------  ---------
<S>                                  <C>         <C>       <C>        <C>
Diluted net income (loss) per share of
 common stock:
Income (loss) from continuing
 operations                         $ (12,621) $ (5,675) $ 10,261  $ (55,883)
Preferred dividends and amortization
 of issuance costs                       (488)      -        (537)       -
                                    ---------  --------  --------   --------
Diluted income (loss) from continuing
 operations before assumed conversion (13,109)   (5,675)    9,724    (55,883)
Add:  Preferred dividends and issuance
 cost amortization from assumed
 conversion                               -         -         537        -
                                    ---------  --------  --------   --------
Diluted income (loss) from continuing
 operations                           (13,109)   (5,675)   10,261    (55,883)
Income (loss) from discontinued
 operations                             2,853    (2,691)    1,537    (16,288)
                                    ---------  --------  --------   --------
Diluted net income (loss) applicable
 to common stock                    $ (10,256) $ (8,366) $ 11,798   $(72,171)
                                    =========  ========  ========   ========

Weighted average common shares
 outstanding                           16,041    15,872    15,978     15,862
Dilutive stock options  a                 -         -           1        -
Assumed conversion of preferred
 stock  b                                 -       2,719       -          -
                                    ---------  --------  --------   --------
Weighted average common shares
 outstanding for purposes of
 calculating diluted net income
 (loss) per share                      16,041    15,872    18,698     15,862
                                    ---------  --------  --------   --------

Diluted net income (loss) from
 continuing  operations                $(0.82)   $(0.36)    $0.55     $(3.52)
Diluted net income (loss) from
 discontinued operations                 0.18     (0.17)     0.08      (1.03)
                                       ------    ------     -----     ------
Diluted net income (loss) per share    $(0.64)   $(0.53)    $0.63     $(4.55)
                                       ======    ======     =====     ======

</TABLE>

a. Excludes options that otherwise would have been included in
   the diluted per share calculation but would make the calculations
   anti-dilutive considering the net loss incurred during the
   periods.  Excluded options represented 24,000 shares for the nine
   months ended September 30, 2001.  There were no dilutive stock
   options during the third quarters of 2002 and 2001.
b. Assumes the conversion of the 1.4 million shares of 5%
   convertible preferred stock into approximately 7.3 million shares
   of McMoRan common stock (Note 4).  The effect of the assumed
   conversion during the period from the issuance date (June 21,
   2002) to September 30, 2002 (102 days) equates to approximately
   2.7 million shares of McMoRan common stock.

     Outstanding stock options excluded from the computation of
diluted net loss per share of common stock because their exercise
prices were greater than the average market price of the common
stock during the period are as follows:

<TABLE>
<CAPTION>

                                      Third Quarter       Nine Months
                                    -----------------   ----------------
                                      2002      2001     2002     2001
                                    -------   -------   -------  -------
<S>                                 <C>       <C>       <C>      <C>
Outstanding options (in thousands)    3,379     2,468     3,379    2,213
Average exercise price              $ 14.89   $ 17.08   $ 14.89  $ 17.76

</TABLE>

<PAGE>                          10

7. RATIO OF EARNINGS TO FIXED CHARGES AND COMPREHENSIVE LOSS
McMoRan's ratio of earnings to fixed charges calculation was 2.5
to 1 for the nine months ended September 30 2002, while the same
calculation resulted in a shortfall of $49.8 million for the nine
months ended September 30, 2001. For this calculation, earnings
consist of income from continuing operations before income taxes
and fixed charges. Fixed charges include interest and that
portion of rent deemed representative of interest.

McMoRan had no items of other comprehensive income in 2002.
McMoRan's total comprehensive loss for the periods ended
September 30, 2001 follows (in thousands):

<TABLE>
<CAPTION>

                                              Third       Nine
                                             Quarter     Months
                                            --------   ---------
<S>                                         <C>        <C>
Net loss                                    $ (8,366)  $ (72,171)
Other comprehensive loss:
Cumulative effect loss from change in
 accounting principle                            -          (492)
Change in unrealized derivatives' fair value     (33)       (278)
Reclassification to earnings                     174         610
                                            --------   ---------
Total comprehensive loss                    $ (8,225)  $ (72,331)
                                            ========   =========
</TABLE>

8. DISCONTINUED OPERATIONS
In June 2002, McMoRan sold its sulphur transportation and
terminaling assets to a newly formed sulphur services joint
venture, in which McMoRan owns no interest (Note 2).

     Following is a summary of McMoRan's sulphur operations,
which are reflected on a net basis within loss from discontinued
operations in the accompanying statements of operations (in
thousands):

<TABLE>
<CAPTION>
                                    Three Months Ended   Nine Months Ended
                                       September 30,        September 30,
                                    ------------------  --------------------
                                      2002      2001      2002        2001
                                    -------   --------  --------    --------
<S>                                 <C>       <C>       <C>         <C>
Revenues                            $   -     $ 12,654  $ 30,810    $ 55,761
Production and delivery                 -       12,002    28,326      64,174
Depreciation and amortization           -          724       646       3,724
General and administrative expenses     408      1,282     2,371       4,063
                                    -------   --------  --------    --------
  Operating loss                       (408)    (1,354)     (533)    (16,200)
Interest expense                        (48)    (1,345)   (3,503)     (4,074)
Other income, net                     2,559 a        8     4,823 a,b   3,986
                                    -------   --------  --------    --------
Net income (loss) from discontinued
 sulphur operations                   2,103     (2,691)      787     (16,288)
                                    -------   --------  --------    --------
Gain on sale of asset c                 750        -         750         -
                                    -------   --------  --------    --------
Total income (loss) from discontinued
 operations                         $ 2,853   $ (2,691) $  1,537    $(16,288)
                                    =======   ========  ========    ========

</TABLE>

a. Reflects a $5.2 million reduction in the estimated accrued
   Main Pass sulphur reclamation costs based on the fixed fee
   contractual arrangement with OSFI (Note 2).  Also includes $1.8
   million of additional losses associated with McMoRan's exit
   from the sulphur business, primarily reflecting revisions to
   the previously estimated losses associated with the pending
   disposal of certain sulphur rail cars.
b. Includes $5.0 million gain associated with the substantial
   resolution of McMoRan's Caminada sulphur reclamation obligation
   partially offset by the $2.8 million loss incurred from the
   sale of its sulphur transportation and terminaling assets in
   June 2002 (Note 2).
c. Received $0.8 million of proceeds from the sale of an asset
   that was previously written off.

9.  NEW ACCOUNTING STANDARDS
In July 2001, the Financial Accounting Standards Board (FASB)
issued SFAS No. 143, "Accounting for Asset Retirement
Obligations," which requires the fair value of liabilities for
asset retirement obligations to be recorded in the period
incurred.  The standard is effective for fiscal years beginning
after June 15, 2002, with earlier application permitted.  McMoRan
will be required to recognize the cumulative-effect for changes

<PAGE>                          11

in its asset retirement obligation liabilities, asset retirement
costs and accumulated depreciation in the period this standard is
adopted.  McMoRan has begun work on identifying and quantifying
its asset retirement obligations in accordance with the new
standard, but currently does not expect to adopt the new rules
before January 1, 2003.

   In August 2001, the FASB issued SFAS No. 144, "Accounting for
the Impairment or Disposal of Long-Lived Assets", which
supersedes SFAS No. 121, "Accounting for the Impairment of Long-
Lived Assets and for Long-Lived Assets to be Disposed of."  SFAS
No. 144 also supersedes certain aspects of Accounting Principles
Board Opinion (APB) No. 30, "Reporting the Results of Operations-
Reporting the effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and
Transaction," with regard to reporting the effects of a disposal
of a segment of a business and requires expected future operating
losses from discontinued operations to be separately reported in
the period incurred rather than as of the measurement date as
previously required by APB 30.  Additionally, certain asset
dispositions previously not qualifying for discontinued
operations treatment may now be required to be presented in this
manner.  The provisions of this statement are required to be
applied for fiscal years beginning after December 15, 2001 and
interim periods within those fiscal years.  McMoRan adopted this
new standard effective January 1, 2002  and has reflected its
sulphur operations as discontinued operations for all periods
presented as discussed in Note 1.


                       -----------------
                            Remarks

The information furnished herein should be read in conjunction
with McMoRan's financial statements contained in its 2001 Annual
Report on Form 10-K.  The information furnished herein reflects
all adjustments which are, in the opinion of management,
necessary for a fair statement of the results for the periods.
All such adjustments are, in the opinion of management, of a
normal recurring nature.

<PAGE>                        12


               REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders of McMoRan Exploration
Co.:

We have reviewed the accompanying condensed balance sheet of
McMoRan Exploration Co. (a Delaware Corporation) as of September
30, 2002 and the related statements of operations for the three-
month and nine-month periods ended September 30, 2002 and the
statement of cash flows for the nine months ended September 30,
2002.  These financial statements are the responsibility of the
Company's management.  We did not perform a similar review of the
accompanying condensed balance sheet as of December 31, 2001, the
statements of operations for the three-month and nine-month
periods ended September 30, 2001 or the statement of cash flows
for the nine months ended September 30, 2001.

    We conducted our review in accordance with standards
established by the American Institute of Certified Public
Accountants.  A review of interim financial information consists
principally of applying analytical procedures to financial data,
and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an
audit conducted in accordance with auditing standards generally
accepted in the United States, which will be performed for the
full year with the objective of expressing an opinion regarding
the financial statements taken as a whole.  Accordingly, we do
not express such an opinion.

    Based on our review, we are not aware of any material
modifications that should be made to the accompanying financial
statements as of September 30, 2002, and for the three-month and
nine-month periods then ended for them to be in conformity with
accounting principles generally accepted in the United States.

                                 /s/ ERNST & YOUNG LLP

New Orleans, Louisiana
October 22, 2002


<PAGE>                       13


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

OVERVIEW
  We engage in the exploration, development and production of
oil and gas offshore in the Gulf of Mexico and onshore in the
Gulf Coast region.  Through mid-June 2002, we also were engaged
in the purchasing, transporting, terminaling, processing and
marketing of recovered sulphur.

Status of 2002 Business Plan
  As previously disclosed, we have been required to address
significant financial liquidity issues in 2002 as a result of
adverse business conditions associated with our former sulphur
operations and significant nonproductive exploratory drilling and
related costs incurred during 2001 and 2000.

  Our business plan for the remainder of 2002 and 2003 is to
drill, or have third parties drill, our high-potential, high-
risk, deep-gas exploratory prospects in shallow-water depths in
the Gulf of Mexico included within our existing lease acreage
position. To enable us to accomplish our business plan and meet
our financial obligations, we developed a financial plan
requiring the achievement of various objectives.  During 2002 we
have taken the following actions:

  *  completed the sale of three oil and gas properties for $60
     million and repaid all of the debt outstanding under our previous
     oil and gas credit facility, which has been terminated;

  *  completed the sale of substantially all the assets used in
     our sulphur transportation and terminaling business and used the
     gross proceeds of $58 million to repay a substantial portion of
     our former sulphur credit facility and to fund our remaining
     sulphur working capital requirements;

  *  completed a $35 million public offering of redeemable
     preferred stock (Note 4), that resulted in $33.7 million of
     proceeds net of issuance costs and expenses, which enabled us to
     repay all remaining amounts outstanding under our now terminated
     sulphur credit facility, with the remaining funds available for
     our working capital requirements and for other general corporate
     purposes;

  *  completed the dismantlement and removal (reclamation)
     activities of the sulphur facilities at Caminada and commenced
     the reclamation of the Main Pass 299 (Main Pass) sulphur
     facilities not essential for use in the contemplated future
     businesses at the site (Phase I);

  *  entered into a major farm-out agreement with El Paso
     Production Company (El Paso) to provide funding for four of our
     near-term prospects and plan to enter into additional farm-out or
     other exploration arrangements with other oil and gas industry
     participants;

  *  entered into a one-year, $10 million revolving credit
     facility with Hibernia National Bank in July 2002. At September
     30, 2002, availability under this facility totaled $3.5 million
     (Note 3); and

  *  agreed to form a joint venture with K1 USA Ventures Inc., a
     wholly owned subsidiary of K1 Ventures Limited (collectively K1),
     to acquire energy related businesses.  K-Mc Venture I LLC (K-Mc I),
     the initial joint venture between us and K1 would acquire
     certain of our Main Pass structures and facilities and would
     provide certain bonding assurances to the Minerals Management
     Service (MMS) for all the structures K-Mc I acquires at Main Pass
     other than the Phase I structures, which are currently in the
     process of being dismantled (Note 2).  The formation of the joint
     venture is expected to occur in the fourth quarter of 2002,
     subject to certain closing conditions.

   For additional information regarding these transactions see
"Capital Resources and Liquidity" and "Exit from Sulphur
Operations" below.

  As discussed above, we have made substantial progress in
implementing our financial plan.  As a result of the above
transactions, we have repaid over $100 million of debt during
2002 and have $21.3 million of unrestricted cash available for
our operations, working capital requirements and other general
corporate purposes at September 30, 2002. We continue to pursue
actively the completion of the Main Pass reclamation activities
and satisfaction of the related obligation; our balance sheet
reflects $13.0 million in current liabilities relating to Phase I
of the Main Pass reclamation obligation, which we expect to be
settled in the near-term.  In August 2002, we amended our contract
with Offshore Speciality Fabricators Inc. (OSFI) to clarify certain
aspects, including specifying values for the reclamation of the

<PAGE>                        14

Phase I structures at Main Pass.  Under the terms of this arrangement,
OSFI would receive $13 million for its Phase I reclamation activities.
We expect to fund the Phase I reclmation costs with the proceeds from
the sale of our Main Pass oil facilities to a joint venture (see
"Exit From Sulphur Operations - Agreement to Form Joint Venture" below
and Note 2).  We have incurred $1.0 million of costs associated with
the Phase I reclamation activities and any costs we fund prior to
the closing of the joint venture transaction would be reimbursed to
us upon the formation of the joint venture.  For more information
regarding our business plan and these transactions, see "Exit
from Sulphur Operations" below and Note 2 and for the related
risks, see "Risk Factors" in Items 1. and 2. included in our 2001
Annual Report on Form 10-K.

RESULTS OF OPERATIONS
     As a result of our exit from the sulphur business, our
remaining continuing operating segment is oil and gas exploration
and production activities.  See "Exit from Sulphur Operations"
below for information regarding our former sulphur segment. The
oil and gas segment includes all of our oil and gas operations
located in the Gulf of Mexico and Gulf Coast region, including
the oil operations at Main Pass.  We use the successful efforts
accounting method for our oil and gas operations, under which
exploration costs, other than costs of drilling successfully and
in progress exploratory wells, are charged to expense as
incurred.

     During the third quarter of 2002, we recorded an operating
loss of $12.6 million associated with our oil and gas operations,
which included a charge of $5.3 million for the impairment of the
leasehold costs associated with the Eugene Island Block 108
(Hornung) prospect following a determination that the initial
Hornung well did not contain commercial quantities of
hydrocarbons and a $3.2 million charge to write off the asset
carrying cost of the West Cameron Block 624 field following the
shut-in of production from the field in September 2002 (see
"Operational Activities" below).

     For the nine months ended September 30, 2002 our operating
income from oil and gas operations totaled $10.8 million, which
included $30.1 million of gains associated with dispositions of
certain ownership interests in our oil and gas properties during
the first half of 2002 (see "Capital Resources and Liquidity"
below and Note 2).  During the third quarter of 2001, our oil and
gas operations resulted in an operating loss of $5.7 million,
including $3.8 million of nonproductive exploratory drilling and
related costs. For the nine months ended September 30, 2001, our
oil and gas operations resulted in an operating loss of $56.0
million, which included $40.5 million of nonproductive
exploratory drilling and related costs.

Summarized operating data is as follows:

<TABLE>
<CAPTION>

                         Three Months Ended     Nine Months Ended
                            September 30,         September 30,
                        --------------------  ----------------------
                          2002       2001       2002         2001
                        ---------  ---------  ---------    ---------
<S>                     <C>        <C>        <C>          <C>
Sales volumes:
  Gas (thousand cubic
   feet, or Mcf)        1,004,900  4,096,100  5,228,300 a  7,468,600
  Oil, excluding Main
   Pass (barrels)          19,900    153,400    110,000 b    228,800
  Oil from Main Pass
   (barrels)              235,000    302,800    762,300      728,400
  Plant products
   (equivalent barrels)c    8,200     81,000     23,600       81,000
Average realizations:
  Gas (per Mcf)            $ 3.10    $ 2.90      $ 2.82       $ 4.21
  Oil, excluding Main
   Pass (per barrel)        27.98     22.69       23.76        26.98
  Oil from Main Pass
   (per barrel)             24.73     22.75       21.59        22.85

</TABLE>

a.  Sales volumes include 856,000 Mcf of gas associated with oil
    and gas properties sold in February 2002.
b.  Sales volumes include 18,500 barrels of oil associated with
    the oil and gas properties sold in February 2002.
c.  We recorded approximately $0.2 million and $0.7 million of
    revenues associated with plant products (ethane, propane, butane,
    etc.) during the third quarter of 2002 and nine months ending
    September 30, 2002, respectively. We recorded a total of $1.6
    million of revenues associated with plant products during the
    third quarter of 2001.  There were no significant plant product
    revenues during the first half of 2001.

Oil and Gas Operations
A summary of increases (decreases) in our oil and gas revenues
between the periods follows (in thousands):

<PAGE>                         15

<TABLE>
<CAPTION>

                                  Third      Nine
                                 Quarter    Months
                                --------   --------
      <S>                       <C>        <C>
      Oil and gas revenues -
        prior year period       $ 24,555   $ 56,446
      Increase (decrease)
        Sales volumes:
            Oil                   (5,115)    (2,430)
            Gas                   (8,964)    (9,432)

        Price realizations:
            Oil                      491     (1,314)
            Gas                      201     (7,267)
      Plant products revenues     (1,331)      (945)
      Other                          (52)      (287)
                                --------   --------
      Oil and gas revenues -
        current year period a   $  9,785   $ 34,771
                                ========   ========

</TABLE>
a.  Current year oil and gas revenues include $2.4 million
    associated with the properties that were sold in February 2002
    (see "Capital Resources and Liquidity" below and Note 2).  Oil
    and gas revenues for the nine months ended September 30, 2002
    also include $0.3 million from West Cameron Block 616, which we
    farmed-out our ownership interests to a third party in June
    2002.

     Our third-quarter 2002 oil and gas revenues decreased 60
percent when compared to oil and gas revenues during the third
quarter of 2001.  The decrease between the comparable periods
reflects decreases in volumes sold of both gas (75 percent) and
oil (44 percent), partially offset by increases in the average
realizations received for both gas (7 percent) and oil (38
percent) during the comparable third quarter 2002 and 2001
periods.  The decrease in sales volumes between the comparable
periods reflects 1) the sale of three oil and gas properties in
February 2002, two of which began production during mid-2001; 2)
the farm-out of our West Cameron Block 616 field in June 2002; 3)
severe weather conditions in the Gulf of Mexico that shut-in our
production for a number of days in late September; and 4) routine
shut-ins for pipeline maintenance by other companies involving
our fields.  Revenues for the third quarter of 2002 include $0.2
million of plant products revenues associated with approximately
8,200 equivalent barrels of oil and condensate received for
products (ethane, propane, butane, etc.) recovered from the
processing of our natural gas.  Plant product revenues during the
third quarter of 2001 totaled $1.6 million from 81,000 equivalent
barrels of oil and condensate.  The decrease in plant product
revenues is primarily the result of the sale of two of our
producing properties in February 2002.

     For the nine months ended September 30, 2002, our oil and
gas revenues decreased by 38 percent when compared to the oil and
gas revenues for the comparable period in 2001.  This decrease
primarily reflects a 30 percent reduction in the volumes of gas
sold and a 33 percent decline in the average realizations
received for gas between the comparable periods.  For the nine
months ended September 30, 2002, oil revenues reflected a
decrease of 8 percent in both the volumes sold and average
realizations received over levels during the comparable period of
2001.  The decrease in our oil and gas revenues during the
comparable nine-month periods reflects the sale of certain oil
and gas properties and other factors discussed for the comparable
third-quarter periods above.  Production from Main Pass oil
increased by 5 percent during the comparable nine-month 2002 and
2001 periods reflecting the additional 16.7 percent interest we
purchased in June 2001 and the operations having only eight
months of production in 2001 because of the shut-in of its
operations during February 2001 for the performance of platform
and equipment maintenance.  This increase in Main Pass oil
production was partially offset by the field being shut-in during
portions of the third quarter of 2002 because of severe weather
conditions in the Gulf of Mexico, work to enhance production from
the field (see "Operational Activities" below) and the
reclamation work being conducted on certain of the sulphur
facilities at the field (see "Exit  from Sulpur Operations"
below).  For the nine months ended September 30, 2002, the
revenues associated with our plant products (discussed above)
totaled $0.7 million from approximately 23,600 equivalent barrels
of oil and condensate.

     Production and delivery costs totaled $7.4 million in the
third quarter of 2002 and $20.1 million for the nine months ended
September 30, 2002 compared to $9.3 million and $28.6 million for
the comparable periods in 2001. The decrease between the
comparable third-quarter periods primarily reflects decreases in
well workover costs, which totaled $0.6 million in the third
quarter of 2002 and $1.6 million during the third quarter of
2001, as well as lower sales volumes associated with the
disposition of certain oil and gas properties during the first
half of 2002.   The decreases between the comparable nine-month
2002 and 2001 periods reflect approximately $1.9 million of costs
associated with the extensive Main Pass oil platform and
equipment maintenance performed in February 2001 and an aggregate

<PAGE>                       16

total of $6.3 million of lease workover costs for work performed
at the Eugene Island Block 193/208/215 and Vermilion Block 160
and 159 fields during the nine months ending September 30, 2001.
During the nine months ended September 30, 2002 our workover costs
totaled $1.2 million, which represent our efforts to re-establish
production for the Mound Point No. 2 well at Louisiana State Lease
340 during the first quarter of 2002 and remedial operations at the
Eugene Island Block 193 C-1 well (see "Operational Activities"
below) during the third quarter of 2002.

     Depreciation and amortization expense totaled $6.2 million
in the third quarter of 2002 and $16.8 million for the nine
months ended September 30, 2002 compared with $10.3 million and
$17.4 million for the same periods last year.  The variance
between the respective periods reflects the fluctuations in
production volumes, which decreased during the comparable 2002
and 2001 periods as a result of volumes attributable to the
disposition of properties during the first half of 2002 and other
properties commencing production during the first quarter of
2002.  The depreciation expense for both the third-quarter and
nine-month periods ended September 30, 2002 were affected by
higher unit-of-production depreciation rates compared to those in
the comparable periods during 2001.  Depreciation expense for the
third quarter and nine-months ended September 30, 2002 includes a
$3.2 million charge to write off the remaining asset carrying
value of the West Cameron Block 624 field (Note 5).

     Our exploration expenses will fluctuate in future periods
based on the number, results and costs of our exploratory
drilling projects and the incurrence of geological and
geophysical costs, including seismic data. Summarized exploration
expenses are as follows (in millions):

<TABLE>
<CAPTION>

                                  Third Quarter      Nine Months
                                 ---------------   ---------------
                                  2002     2001     2002     2001
                                 ------   ------   ------   ------
<S>                              <C>      <C>      <C>      <C>
Geological and geophysical,
 including 3-D seismic purchases $  1.2   $  3.5   $  2.9   $ 12.9
Nonproductive exploratory well
 drilling costs, including lease
 amortization costs                 5.9 a    3.8 b    8.5 a   40.5 b,c
Other                                -      (0.6)     0.2      1.2
                                 ------   ------   ------   ------
                                 $  7.1   $  6.7   $ 11.6   $ 54.6
                                 ======   ======   ======   ======

</TABLE>

a. Includes a $5.3 million charge to impair the leasehold
   acquisition costs for the Hornung prospect following the
   determination that the initial Hornung exploratory well at Eugene
   Island Block 108 did not contain commercial quantities of
   hydrocarbons (see "Capital Resources and Liquidity - Exploration
   Program" below and Note 5).  Also includes residual costs
   associated with various nonproductive exploratory wells drilled
   in prior years totaling $0.1 million during the third quarter of
   2002 and $1.6 million during the nine months ended September 30,
   2002.
b. Includes nonproductive exploratory well costs associated
   with the Louisiana State Lease 340 No. 3 well.
c. Includes nonproductive exploratory well drilling and related
   costs, primarily associated with the West Delta Block 12 No. 1
   and the Garden Banks Block 272 No. 1 wells.  Also includes the
   nonproductive exploratory well costs associated with the Viosca
   Knoll Block 863 No. 1 well and additional plugging and
   abandonment costs associated with the Vermilion Block 144 No. 3
   well.

Other Financial Results
     General and administrative expense totaled $1.6 million in
the third quarter of 2002 and $5.5 million for the nine months
ended September 30, 2002 compared with $4.0 million for the third
quarter of 2001 and $11.8 million for the nine months ended
September 30, 2001.  The decreases during the comparable periods
primarily reflects reduced administrative costs incurred as a
result of the sale of certain oil and gas properties, the
decrease in our exploration and development activities, and
efforts to reduce personnel and related costs, including the
effect of our two Co-Chairmen not receiving any cash compensation
during 2002.

     Interest expense, net of capitalized interest, totaled $0.2
million for the third quarter and $0.7 million for the nine
months ended September 30, 2002 compared to $0.4 million for the
nine months ended September 30, 2001. All of our interest expense
was capitalized during the third quarter of 2001.  Capitalized
interest totaled $0.3 million for the nine months ended September
30, 2002, $0.6 million during the third quarter of 2001 and $0.9
million for the nine months ended September 30, 2001.  There was
no capitalized interest during the third quarter of 2002.  Our
interest expense during the third quarter of 2002 represents fees
paid in connection with finalizing our current revolving line of
credit.  All our outstanding oil and gas debt was repaid
following the February 2002 sale of three of our and gas
properties. For additional information on the sale of the oil and
gas properties and the revolving line of credit see "Capital

<PAGE>                      17

Resources and Liquidity" below and Note 2.

     During the first quarter of 2002, we recorded a $29.2
million gain associated with the sale of all of our ownership
interests in Vermilion Block 196 and Main Pass Blocks 86 and 97
and 80 percent of our ownership interests in Ship Shoal Block 296
(see "Capital Resources and Liquidity" below and Note 2). During
the second quarter of 2002, we recorded a $0.8 million gain from
the disposition of our interests in West Cameron Block 616 (see
"Operational Activities" below).

CAPITAL RESOURCES AND LIQUIDITY
     Operating activities used cash of $10.5 million for the nine
months ended September 30, 2002 compared to using cash of $8.6
million during the nine months ended September 30, 2001.
Operating cash flow from continuing operations used cash of $3.1
million during 2002 compared with providing $6.6 million during
2001.  The decrease reflects the lower revenues generated in 2002
primarily as a result of the disposition of oil and gas
properties during the first half of 2002 and working capital
changes offset in part by lower geological and geophysical and
other exploration costs, which totaled $3.2 million for the nine
months ended September 30, 2002 and $14.1 million for the nine
months ended September 30, 2001.  Operating cash flow associated
with our discontinued operations used cash of $7.4 million during
the nine months ended September 30, 2002 compared to using $15.2
million of cash during the nine months ended September 30, 2001.
During the nine months ended September 30, 2001 we incurred $11.2
million of Main Pass sulphur mine reclamation costs compared with
$0.4 million of reclamation costs associated with our Caminada
mine site in 2002.  A significant portion of our remaining
sulphur reclamation costs is being incurred by a third party
under the terms of a fixed cost contractual agreement (see "Exit
From Sulphur Operations" below and Note 2).

    Our investing activities provided $104.7 million of cash
during the nine months ended September 30, 2002 compared with
using cash of $87.8 million during the nine months ended
September 30, 2001.  Investing cash flow from our continuing
operations provided cash of $46.1 million during 2002 compared
with using cash of $91.0 million during 2001.  Our investing cash
flow during 2002 included the receipt of $60.0 million associated
with the sale of three of our oil and gas property interests (see
below), offset in part by $13.9 million of exploration and
development capital expenditures primarily reflecting the
development of the Eugene Island Block 97 No. 3 well and
recompletion efforts at a number of our fields during 2002.  Our
investing cash flow during 2001 included exploration and
development capital expenditures of $92.3 million, which included
$40.5 million of nonproductive exploratory drilling and related
costs primarily associated with the West Delta Block 12 No. 1,
Garden Banks Block 272 No. 1, Viosca Knoll Block 863 No. 1 and
Vermilion Block 144 No. 3 exploratory wells. Other capital
expenditures during the nine months ended September 30, 2001
included approximately $40.7 million of development costs
primarily associated with development of our year 2000
discoveries and the costs incurred in recompletion operations at
West Cameron Block 616 and Eugene Island Blocks 193/208/215.

    Our investing cash flows during the nine months ended
September 30, 2001 also include the sale of two of our unproved
oil and gas leases for $1.3 million.  Investing cash flow
associated with our discontinued operations totaled $58.6
million during the nine months ended September 30, 2002, which
included the $58.0 million of gross proceeds we received in June
2002 in connection with the transactions that resulted in our
exit from the recovered sulphur business (see "Exit from Sulphur
Operations" below).  The discontinued operations investing cash
flows also include a $0.6 million sale of miscellaneous assets
from the Main Pass sulphur facilities.

    Our financing activities resulted in a use of cash of $71.2
million for the nine months ended September 30, 2002 compared to
providing cash of $47.5 million for the nine months ended
September 30, 2001.  Our continuing operations' financing
activities used cash of $16.2 million during 2002 primarily to
repay the $49.7 million of accumulated net borrowings under our
oil and gas credit facility as of December 31, 2001 (see below),
compared to providing $35.5 million during the nine months ended
September 30, 2001. The repayment of the oil and gas debt was
partially offset by the $33.7 million of net proceeds received
from the public convertible preferred stock offering in June 2002
(see "Equity Offering" below). Cash used by our discontinued
operations totaled $55.0 million during the nine months
ended September 30, 2002 compared to providing cash of $12.0
million during the nine months ended September 30, 2001.  The
cash used by the discontinued operations during 2002
represents the repayment of the accumulated net borrowings
outstanding under the sulphur credit facility as of December 31,
2001 following the closing of the sale of the sulphur
transportation and terminaling assets (see "Exit from the Sulphur
Business below) and the completion of our equity offering (see
"Equity Offering" below).  The cash provided by the discontinued
sulphur operations during 2001 reflects the net borrowings under
the sulphur credit facility during that period.

<PAGE>                       18

     In February 2002, we sold three of our oil and gas
properties for $60.0 million.  Under terms of the sales
agreement, we sold our ownership interests in Vermilion Block
196, Main Pass Blocks 86/97, and 80 percent of our interests in
Ship Shoal Block 296.  We have retained our interests in
exploratory prospects lying 100 feet below the stratigraphic
equivalent of the deepest currently producing interval at both
Vermilion Block 196 and Ship Shoal Block 296.  We also have
retained a potential reversionary interest in these properties
equal to 75 percent of the transferred interests following payout
of $60 million plus a specified annual rate of return.  Whether
or not payout ultimately occurs will depend upon future
production and future market prices of both natural gas and oil,
among other factors.  Upon closing, we used the proceeds to repay
all borrowings outstanding on the oil and gas credit facility
($51.7 million), which then was terminated.  Our operating
results for the nine months ended September 30, 2002 include a
$29.2 million gain associated with this sales transaction (see
"Results of Operations" above).  In July 2002 we entered into a
one-year revolving credit facility with Hibernia National Bank
which at September 30, 2002 provided up to $3.5 million of
borrowing capacity.  The amount available for borrowing under
this revolving credit facility is reduced by $0.5 million per
month (Note 3).

Preferred Stock Offering
    In June 2002, we completed a $35 million public offering of
1.4 million shares of our 5% mandatorily preferred convertible
preferred stock.  Each $25 share provides for a quarterly cash
dividend of $0.3125 per share ($1.25 per share annually) and is
convertible at the option of the holder at any time into 5.1975
shares of our common stock, which is equivalent to $4.81 per
share representing a 20 percent premium over our common stock
closing price on June 17, 2002.  We can redeem the preferred
stock after June 30, 2007 and must redeem the stock by June 30,
2012.  Any redemption we make must be made in cash.  The initial
dividend totaling $0.5 million ($0.3472 per share) was paid on
September 30, 2002.

Exploration Program
     In May 2002, we entered into an exploration program with El
Paso Production Company, a subsidiary of El Paso Corporation,
through a major farm-out transaction covering four of our shallow-
water, high-potential, deep-gas prospects on 100,000 acres in the
Gulf of Mexico.  Under the program, El Paso is funding all of our
interests for the exploratory drilling and development costs of
these prospects and will own 100 percent of the program's
interests in the four prospects until aggregate production to the
program totals 100 billion cubic feet of gas equivalent (Bcfe).
After aggregate production of 100 Bcfe, ownership of 50 percent
of the program's interests would revert back to McMoRan.  The
four prospects in the exploration program are "Hornung" at Eugene
Island Block 108 (28-foot water depth), "JB Mountain" at South
Marsh Island Block 223 (10-foot water depth), "Lighthouse Point-
Deep" at South Marsh Island Block 207 (16-foot water depth) and
"Mound Point" at Louisiana State Lease 340 (10-foot water depth).
Drilling commenced at the Hornung prospect in April 2002 and at
JB Mountain and Lighthouse Point-Deep in June 2002.  We
anticipate drilling at Mound Point will commence in the first
quarter of 2003.  We are pursuing additional farm-out or
other exploration arrangements with other oil and gas industry
participants for other prospects.

     The Hornung well was drilled to a total measured depth of
21,800 feet and encountered several zones below 17,000 feet which
showed resistivity potentially indicative of hydrocarbon bearing
formations. However, the well was evaluated not to contain
commercial quantities of hydrocarbons and it will be plugged and
abandoned.  As a result, our third-quarter 2002 results include a
$5.3 million charge to exploration expense to impair the
leasehold acquisition costs relating to the Horning prospect.  We
did not incur any drilling costs for the well.  We have $4.0
million of remaining leasehold acquisition costs relating to our
rights in the Hornung prospect, which is located on acreage
covering four offshore blocks covering 20,000 gross acres.
Recovery of this remaining leasehold acquisition cost is
dependent upon El Paso or others pursuing and successfully
drilling additional prospects on this exploration acreage over
the near term.  Two of the four leases comprising the Hornung
prospect are scheduled to expire in mid-2003. See Note 5 for
additional discussion of our impairment charges recorded during
the third quarter of 2002.

                       --------------------

     The transactions described above and in "Status of 2002
Business Plan" have provided us financial resources to conduct
our business in 2002 and are currently expected to enable us to
conduct our business plan in 2003.  This plan involves pursuing
exploration activities on our large lease acreage position in the
Gulf of Mexico, principally through drilling arrangements
involving funding by third parties.  In addition, we will
continue to address our reclamation obligations resulting from
our discontinued sulphur operations, primarily at Main Pass in
the Gulf of Mexico, and to pursue the development of alternative

<PAGE>                     19

business uses for the Main Pass facilities.  These Main Pass
activities would be conducted through the proposed joint venture
described below in "Exit From Sulphur Operations - Agreement to
Form Joint Venture," which is contemplated to encompass
additional opportunities for us to participate in other
investments in the energy industry.  Our plan is to focus on
preserving our limited financial resources and our liquidity
through managing our operations and limiting costs in all areas
of our business.  Events involving uncertainties, including those
beyond our control, could have an adverse future impact on our
financial resources and liquidity.

OPERATIONAL ACTIVITIES
Our average net daily production approximated 13 million cubic
feet of gas equivalent (Mmcfe/d) in the third quarter of 2002 and
is expected to average approximately 13 Mmcfe/d for the fourth
quarter of 2002 and 12 Mmcfe/d for the first half of 2003.

Eugene Island Blocks 193/208/215 (Deep Tern Prospect)   This
field was shut-in during early July while the pipeline company
servicing this field performed maintenance work on their
pipeline.  Production was restored in mid-July, at which time we
ran a log on the Eugene Island Block 193 C-1 well to assist us in
identifying the source of water production in the well, which had
reduced the gross flow rate from the well to approximately 2
Mmcfe/d, prior to it being shut in during early July 2002.  We
identified the source of the water and performed the necessary
remedial procedures to correct the problem.  Production from the
well was re-established in early August and was producing at a
rate approximating 10 Mmcfe/d, 4.3 Mmcfe/d net to our interests.
In late September 2002, the well's production was again shut-in
because of the storms that affected the Gulf of Mexico.  We have
been unable to re-establish production at rates comparable to
those before the storms.  We are currently evaluating remedial
alternatives for the well.  We have a 53.4 percent working
interest and 41.7 percent net revenue interest in the Eugene
Island Block 193/208/215 field and a 42.2 percent working
interest and 33.4 percent net revenue interest in the Eugene
Island Block 193 C-1 well.  The field is located approximately 50
miles offshore Louisiana in 100 feet of water.

Eugene Island Block 97 (Thunderbolt)  This field experienced
significant down time during the quarter because of maintenance
work to the pipelines, remedial work on the No. 2 well and shut-
ins during the recent tropical storms.  Additionally, the No. 3
well was recompleted to a previously unproduced sand.  The most
recent well test indicates the No. 3 well is producing at a gross
rate of 13.7 Mmcfe/d, 3.7 Mmcfe/d net to our interests. The No. 2
well is currently shut-in and a recompletion to the final
producible sand is being planned and evaluated.  Currently the
two wells comprising the Thunderbolt field are producing at an
average gross rate of 15.8 Mmcfe/d, 4.3 Mmcfe/d net to our
interests.  We have an approximate 38.0 percent working interest
and 27.2 net revenue interest in the Thunderbolt prospect, which
is located approximately 25 miles offshore Louisiana in 27 feet
of water.

Main Pass Block 299  We began several value-enhancing projects in
the third quarter of 2002.   These projects include a gas lift
pipeline repair, which is expected to provide higher production
levels from the field, and the H2S dilution project, a process to
assist in removing certain impurities from the oil produced at
the field, which is expected to significantly reduce the
maintenance costs and production downtime at the field.  The
estimated cost associated with these projects, which are expected
to be completed during the fourth quarter of 2002, is expected to
approximate $2.0 million.  We have entered into an agreement in
which we would sell our interest in the Main Pass oil operations
to a joint venture in which we will retain a 33.3 percent
interest  (see Note 2 and "Exit From Sulphur Operations -
Agreement to Form Joint Venture" below).

West Cameron Block 616   At December 31, 2001, we had one well
producing at the West Cameron Block 616 field.  On February 26,
2002, the well ceased production and in June 2002, we farmed-out
our interest in the field.  The parties acquiring the field
agreed to assume all of our reclamation obligations associated
with the wells and structures at the field.  Accordingly, we
recorded an approximate $0.8 million gain associated with the
reversal of our previously accrued reclamation costs for the
field.  Under terms of the farm-out agreement, the farmee is
required to attempt to restore production from one well that was
producing in early 2002 and drill at least one additional well or
sidetrack an existing well in the field.  In September 2002, the
farmee commenced a replacement well at the field.  This
replacement well has reached its objectives, been logged and its
results are being evaluated.  The farmee has now commenced a
second well at the field.  We have retained a five percent
overriding royalty interest in any future production from this
field, which would increase to 10 percent after production of an
additional 12 Bcfe from the field.

<PAGE>                       20

West Cameron Block 624  The well at this field has been shut-in
since September 3, 2002.  Although we are evaluating possible
remediation work at the field, we have no further current
development plans.  Accordingly, we recorded a $3.2 million
impairment charge to write off the remaining asset carrying cost
for this field during the third quarter of 2002 (Note 5).  We own
a 95.0 percent working interest and 66.8 percent net revenue
interest in the well, which is located approximately 130 miles
offshore Louisiana in 365 feet of water.

Drilling Arrangements   As discussed in "Capital Resources and
Liquidity - Exploration Program" above, we completed an agreement
with El Paso to fund exploration and development activities on
certain of our prospects identified for drilling in 2002.  Our
exploration acreage position currently consists of approximately
400,000 gross acres, including approximately 100,000 gross acres in
the El Paso arrangement.  Over the past two years, our exploration
team has undertaken an intensive process to evaluate the
substantial acreage position from a technical standpoint.
Including the four prospects included in the El Paso exploration
program, we have identified a group of over 20 prospects,
including deep exploration targets for natural gas accumulations
in shallow waters near existing production infrastructure.
Included in this inventory of prospects is Cyprus, which is a 3-D
seismic amplitude play located on Garden Banks Block 228.  We are
negotiating trade agreements with a partner who would operate and
initiate drilling an exploratory well on this prospect before the
end of 2002.  We would retain a small working interest position
with the partner agreeing to pay a portion of our costs to drill
the well to casing point.  We will continue our efforts to enter
into exploration arrangements with industry participants under
which, we would expect to retain a potentially significant
reversionary interest in any discoveries.

Exploration Commitments   Effective January 1, 2002, we entered
into an agreement with Texaco Exploration and Production Inc.,
which committed us to expend $110 million by June 30, 2003 (see
Note 9 in our 2001 Annual Report on Form 10-K).  Under the
terms of the agreement, we have exceeded the requirement to
commit to spend an aggregate $80 million by June 30, 2002.  As
of September 30, 2002, we have incurred approximately $92
million of expenditures and we anticipate that a substantial
majority of the remaining $18 million of required expenditures
will be incurred through our recent farm-out transaction with
El Paso as discussed in "Drilling Arrangements" above.

EXIT FROM SULPHUR OPERATIONS
Sale Of Sulphur Transportation And Terminaling Assets
     On June 14, 2002, we sold substantially all the assets used
in our sulphur transportation and terminaling business to Gulf
Sulphur Services Ltd., LLP, a new sulphur joint venture owned
equally by IMC Global Inc. (IMC) and Savage Industries Inc.  In
connection with this transaction, we settled all outstanding
disputes between IMC and its subsidiaries and us.  In addition,
our contract to supply sulphur to IMC also terminated upon
completion of the transactions.  The transactions provided us
with $58.0 million in gross proceeds, which we used to fund our
remaining sulphur working capital requirements, transaction costs
and to repay a substantial portion of our borrowings under the
sulphur credit facility (Note 3).  At September 30, 2002,
approximately $2.3 million of the funds from these transactions
remained deposited in various restricted escrow accounts, which
will be used to fund a portion of our remaining sulphur working
capital requirements and to provide the potential funding for the
retained environmental obligations further discussed below.  For
the nine months ended September 30, 2002, we have recorded an
aggregate loss of $4.6 million associated with the disposal of
the sulphur business assets.  This loss includes the $2.8 million
loss we recorded in June 2002, as well as an additional $1.8
million loss in the third quarter of 2002 primarily reflecting
the estimated loss on the pending disposal of certain sulphur
rail cars.

     In connection with the preceding transactions, we have also
agreed to be responsible for any historical environmental
obligations relating to our sulphur transportation and
terminaling assets and have also agreed to indemnify Gulf Sulphur
Services and IMC from any liabilities with respect to the
historical sulphur operations engaged in by our predecessor
companies, and us, including reclamation obligations.  In
addition, we assumed, and agreed to indemnify IMC from, any
obligations, including environmental obligations, other than
liabilities existing as of the closing of the sale, associated
with historical oil and gas operations undertaken by the Freeport-
McMoRan companies prior to the 1997 merger of Freeport-McMoRan
Inc. and IMC.   See "Risk Factors" included in our 2001 Annual
Report on Form 10-K.

MMS Bonding Requirement
     We have completed certain reclamation activities at the Main
Pass sulphur mine, including the plugging and abandonment of the
sulphur wells and removal of the living quarters and warehouse
facility.  We incurred reclamation costs totaling $11.2 million
during the nine months ended September 30, 2001 associated with
these initial reclamation activities.  During the first quarter
of 2002, we entered into contractual agreements with a third

<PAGE>                      21

party to dismantle and remove the remaining Main Pass and
Caminada sulphur facilities (see "Progress Towards Resolution of
Sulphur Reclamation Obligations" below).

     In July 2001, the MMS, which has regulatory authority to
ensure offshore leaseholders fulfill the abandonment and site
clearance obligations related to their properties, informed us
that they were considering requiring us or Freeport Sulphur
either to post a bond of approximately $35 million or to enter
into other funding arrangements acceptable to the MMS, relative
to reclamation of the Main Pass sulphur mine and related
facilities as well as the Main Pass oil production facilities. In
October 2001, Freeport Sulphur entered into a trust agreement
with the MMS to provide financial assurances meeting the MMS
requirements by February 3, 2002.  The trust agreement was
subsequently extended by the MMS, most recently from September
27, 2002 to January 15, 2003.  We are progressing towards
resolving our sulphur reclamation obligations as evidenced by the
commencement of certain Main Pass reclamation activities on
facilities not essential in any potential future business
opportunities. See "Progress Towards Resolution of Sulphur
Reclamation Obligations" below.

Progress Towards Resolution Of Sulphur Reclamation Obligations
    In the first quarter of 2002, we entered into contractual
agreements with Offshore Specialty Fabricators Inc. (OSFI) for
the reclamation of the Main Pass and Caminada sulphur mines and
related facilities located offshore in the Gulf of Mexico.   OSFI
commenced its reclamation activities at the Caminada mine in
March 2002 and its operations at the site are now complete.
During the second quarter of 2002, we recorded a $5.0 million
gain associated with the substantial resolution of the Caminada
sulphur reclamation obligations and the related conveyance of
certain assets to OSFI, as further discussed below. The gain on
the resolution of the Caminada reclamation obligation is included
in the caption "income (loss) from discontinued sulphur operations"
in the accompanying statements of operations.   OSFI commenced its
initial Phase I reclamation work at Main Pass (see Overview -
Status of 2002 Business Plan above) in August 2002. OSFI has
removed five of nine bridge structures and has started demolition
of the power plant facility at Main Pass.  Although work has
progressed, OSFI's reclamation work has been delayed by recent
storms in the Gulf of Mexico and it is anticipated that the Phase
I reclamation work will continue in 2003.

     As payment of our share of these reclamation costs, we
conveyed certain assets to OSFI including a supply service boat,
our dock facilities in Venice, Louisiana, and certain assets we
previously salvaged during a prior reclamation phase at Main
Pass.  When we entered into the contractual agreements with OSFI,
the parties expected to dispose of the Main Pass oil facilities
and related reclamation obligations through a sale of those
assets to a third party and payment of the sales proceeds to OSFI
as it completed Main Pass sulphur reclamation activities. In August
2002, we amended our contract OSFI to clarify certain aspects,
including specifying values for the reclamation of the  Phase I
structures at Main Pass.  Under the terms of this arrangement, OSFI
would receive $13 million for its Phase I reclamation activities.
In addition, we have been engaged in on-going activities to obtain
regulatory approval from the MMS to enable the establishment of a new
business enterprise that would use part of the Main Pass sulphur
facilities and infrastructure for non-hazardous oilfield waste disposal.
Subsequently, we identified other potential business opportunities for
part of the Main Pass sulphur facilities in support of the offshore
petroleum industry, including the storage of natural gas and crude oil.
At the time we entered into the contractual agreements with OSFI, we
contemplated that a third party would establish and operate this
new business enterprise and that we would retain a negotiated
share of the revenues or profits from this new business
enterprise, which we would share with OSFI.

     We have entered into agreements pursuant to which a new
venture would acquire the Main Pass oil facilities and may
acquire other Main Pass assets to support the new business
activities currently being pursued at the site (see "Agreement to
Form Joint Venture" below).  Under the new venture we are
entitled to receive $13 million, which would be used to fund the
remaining Main Pass Phase I reclamation costs.  We have incurred
$1.0 million of costs associated with the Phase I reclamation
activities and any costs we fund prior to the closing of the joint
venture transaction would be reimbursed to us upon the
formation of the joint venture.

     The transactions described above are expected to resolve our
sulphur bonding issues with the MMS.  These transactions are
expected to significantly reduce or eliminate our accrued Main
Pass reclamation obligations in which case additional gains would
be recognized.  Because these matters involve inherent
uncertainties, including matters beyond our control, no
assurances can be given that these transactions will be completed
as contemplated.

<PAGE>                         22

Agreement to Form Joint Venture
     On October 22, 2002, we announced an agreement to form a
joint venture with K1 USA Ventures, Inc., a wholly owned
subsidiary of K1 Ventures Limited (collectively K1).  The joint
venture, K-Mc Energy Ventures, would acquire energy related
businesses and would combine the financial resources and
expertise of K1 with our experience in the energy sector to
identify high quality opportunities now available at attractive
values.  We would manage the business activities of the new
joint venture.

     The new joint venture would form K-Mc Venture I LLC (K-Mc I)
to acquire certain of our Main Pass facilities.  K-Mc I
would pursue new business activities using the site's unique
infrastructure and would also continue to produce oil at Main
Pass.

     Under terms of the agreement, we would contribute to K-Mc I
our Main Pass oil interests, and at the election of K1, other Main
Pass infrastructure assets required to support the new business
activities currently being pursued at the site.  We would receive
$13 million in the transaction, which would be used to fully fund the
Main Pass Phase I reclamation costs.  These facilities are currently
in the process of being dismantled pursuant to the previously
announced fixed cost contract with OSFI (see "Sulphur
Reclamation Obligations" above).  In addition, K1 would provide
credit support for the new venture in an amount up to $10
million to provide financial assistance for K-Mc I's bonding
requirements with the MMS.  We would own 33.3 percent of K-Mc I.
Also in connection with the transaction, K1 would receive
warrants to purchase 1.7 million shares of McMoRan common stock
at any time within five years at a price of $5.25 per share
and, upon their election to participate in the future business
activities, would receive additional warrants to purchase an
additional 0.76 million shares of McMoRan common stock at a
price of $5.25 per share.

     The new enterprise would continue the efforts previously
initiated by us to pursue the use of the Main Pass facilities as
a support hub for energy development and production projects in
the Gulf of Mexico.  The surface platforms and related structures
at Main Pass, together with the two-mile diameter caprock and
salt dome, have significant capacity and potential for a variety
of commercial activities.  The potential alternative uses may
include the disposal of nonhazardous waste from offshore oil and
gas drilling activities; a hub for receiving deepwater vessels
transporting oil and gas production, including compressed natural
gas and liquefied natural gas; and cavern storage facilities to
store natural gas and oil.  The permitting process for waste
disposal at Main Pass, which began in late-2000, is now nearing
completion.

     The formation of the joint venture is expected to occur in
the fourth quarter of 2002, subject to certain customary closing
conditions.

Discontinued Operations
     We sold approximately 823,000 long tons of recovered sulphur
at an average realization of $37.44 per long ton during the first
half of 2002.  We had no sulphur operation during the third
quarter of 2002 following our exit from the sulphur business in
June 2002 (see Exit From Sulphur Operations" above).  We sold
approximately 593,000 long tons of recovered sulphur at an
average realization of $21.35 per long ton during the third
quarter of 2001.  We sold approximately 1,545,000 long tons of
recovered sulphur at an average realization of $36.09 per long
ton during the nine months ended September 30, 2001.  A summary
of the increases (decreases) in our sulphur revenues between the
periods follows (in thousands):

<TABLE>
<CAPTION>
                                       Third        Nine
                                      Quarter      Months
                                      --------    --------
    <S>                               <C>         <C>
    Sulphur revenues - prior year
      period                          $ 12,654    $ 55,761
    Increase (decrease)
        Sales volumes                  (12,652)    (26,046)
        Price realization                  -         1,111
    Other                                   (2)        (16)
                                      --------    --------
    Sulphur revenues - current year
      period                          $    -      $ 30,810
                                      ========    ========
</TABLE>

     Our significant decrease in revenues reflects our exit from
the sulphur business in June 2002.  Sulphur production and

<PAGE>                        23

delivery costs totaled $28.3 million through June 30, 2002.
Sulphur production and delivery costs totaled $12.0 million for
the third quarter of 2001 and $64.2 million for the nine months
ended September 30, 2001.  During the first half of 2001 our
sulphur and delivery costs included two charges to adjust our
sulphur inventory to its then estimated net realizable value
totaling $10.0 million.

     General and administrative expenses totaled $0.4 million in
the third quarter of 2002 and $2.4 million for the nine months
ended September 30, 2002 compared with $1.3 million and $4.1
million during the comparable periods in 2001.  The decreases
reflect the exit from the sulphur operations in June 2002.
Interest expense totaled $3.5 million for the nine months ended
September 30, 2002 compared with $4.1 million during the
comparable period in 2001. We repaid all our outstanding sulphur
debt in June 2002 and therefore had very little interest expense
in the third quarter of 2002.  Interest expense for the third
quarter of 2001 totaled $1.3 million reflecting interest on our
outstanding borrowings under the sulphur credit facility.  For a
discussion regarding the repayment and termination of the sulphur
credit facility, see "Capital Resources and Liquidity - Sale of
Sulphur Transportation and Terminaling Assets" above.

     Other income totaled $2.6 million for the third quarter of
2002 and $4.8 million the for nine months ended September 30,
2002 compared with $4.0 million for the nine months ended
September 30, 2001.  There was no other income or expense
associated with our discontinued operations during the third
quarter of 2001.  During the third quarter of 2002, other income
includes a $5.2 million reduction in the estimated accrual of the
Phase I reclamation costs at Main Pass based on the fixed fee
contractual agreement with OSFI.  The discontinued operations
results during the third quarter of 2002 also include $1.8
million of additional losses associated with McMoRan's exit from
the sulphur business, primarily reflecting the revisions to
previously estimated losses on the pending disposal of certain
sulphur rail cars.  For the nine months period ended September
30, 2002, other income included the $5.0 million gain from the
substantial resolution of the Caminada sulphur reclamation
obligation, which was partially offset by the $2.8 million loss
we recorded on the sale of our sulphur transportation and
terminaling assets in June 2002.  The amounts in other income
during 2001 primarily reflected the receipt of the final $3.9
million of proceeds from the 1990 sale of a sulphur distillation
plant.

CAUTIONARY STATEMENT
     Management's Discussion and Analysis of Financial Condition
and Results of Operations contain forward-looking statements.
All statements other than statements of historical fact included
in this report, including, without limitation, statements
regarding plans and objectives of our management for future
operations and our exploration and development activities are
forward-looking statements.

      This report includes "forward looking statements" within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, including
statements about our plans, strategies, expectations, assumptions
and prospects.  "Forward-looking statements" are all statements
other than statements of historical fact, such as: statements
regarding our financial plan to address our liquidity issues and
our business plan; statements regarding our need for, and the
availability of, financing; statements regarding plans of a new
venture to acquire energy related businesses, the anticipated
transaction of K-Mc Venture I LLC and the transfer of the Main
Pass oil interests and other assets to K-Mc Venture I LLC, the
pursuit of new business activities at Main Pass, and the
permitting process for waste disposal at Main Pass; our ability
to satisfy the MMS reclamation obligations with respect to Main
Pass; our ability to arrange for additional industry participants
to fund our exploration activities with respect to our prospects;
drilling potential and results; anticipated flow rates of
producing wells; anticipated initial flow rates of new wells;
reserve estimates and depletion rates; general economic and
business conditions; risks and hazards inherent in the production
of oil and natural gas; demand and potential demand for oil and
gas; trends in oil and gas prices; amounts and timing of capital
expenditures and reclamation costs; and other environmental
issues.  Further information regarding these and other factors
that may cause our future performance to differ from that
projected in the forward looking statements are described in more
detail under "Risk Factors" included in Items 1. and 2. "Business
and Properties" in our 2001 Annual Report on Form 10-K.

                   -------------------------

The results of operations reported and summarized above are not
necessarily indicative of future operating results.

<PAGE>                       24

Item 4.  Controls and Procedures.

     (a)  Evaluation of disclosure controls and procedures.  Our
chief executive officer and chief financial officer, with the
participation of management, have evaluated the effectiveness of
our "disclosure controls and procedures" (as defined in Rules 13a-
14(c) and 15d-14(c) under the Securities Exchange Act of 1934) as
of a date within 90 days prior to the filing of this quarterly
report on Form 10-Q.  Based on their evaluation, they have
concluded that our disclosure controls and procedures are
effective in timely alerting them to material information
relating to McMoRan (including our consolidated subsidiaries)
required to be disclosed in our periodic Securities and Exchange
Commission filings.

     (b)  Changes in internal controls.  There were no
significant changes in our internal controls or in other factors
that could significantly affect these controls subsequent to the
date of their evaluation.

                   PART II-OTHER INFORMATION

Item 1.  Legal Proceedings.
Daniel W. Krasner v. James R. Moffett; Rene L. Latiolais; J.
Terrell Brown; Thomas D. Clark, Jr.; B.M. Rankin, Jr.; Richard C.
Adkerson; Robert M. Wohleber; Freeport-McMoRan Sulphur Inc. and
McMoRan Oil & Gas Co., Civ. Act. No. 16729-NC (Del. Ch. filed
Oct. 22, 1998).  Gregory J. Sheffield and Moise Katz v. Richard
C. Adkerson, J. Terrell Brown, Thomas D. Clark, Jr., Rene L.
Latiolais, James R. Moffett, B.M. Rankin, Jr., Robert M. Wohleber
and McMoRan Exploration Co., (Court of Chancery of the State of
Delaware, filed December 15, 1998.)  These two lawsuits were
consolidated in January 1999.  The complaint alleges that
Freeport-McMoRan Sulphur Inc.'s directors breached their
fiduciary duty to Freeport-McMoRan Sulphur Inc.'s stockholders in
connection with the combination of Freeport Sulphur and McMoRan
Oil & Gas.  The plaintiffs contend that the transaction was
structured to give preference to McMoRan Oil & Gas stockholders
and failed to recognize the true value of Freeport Sulphur.  The
plaintiffs claim that the directors failed to take actions that
were necessary to obtain the true value of Freeport Sulphur such
as auctioning the company to the highest bidder or evaluating
Freeport Sulphur's worth as an acquisition candidate.  The
plaintiffs also claim that McMoRan Oil & Gas Co. knowingly aided
and abetted the breaches of fiduciary duty committed by the other
defendants.  In January 2001, the court granted the motions to
dismiss for the defendants with 30 days leave for the plaintiffs
to amend.  In February 2001, the plaintiffs filed an amended
complaint.  In April 2001, the defendants filed a brief in
support of their motion to dismiss.  During oral argument on
September 10, 2002, the court granted the motion to dismiss from
the bench.  The plaintiffs subsequently filed a notice of appeal.
We will continue to defend this action vigorously.

    Other than the proceedings discussed above, we may from time
to time be involved in various legal proceedings of a character
normally incident to the ordinary course of our business.  We
believe that potential liability from any of these pending or
threatened proceedings will not have a material adverse effect on
our financial condition or results of operations. We maintain
liability insurance to cover some, but not all, of the potential
liabilities normally incident to the ordinary course of our
business as well as other insurance coverages customary in our
business, with coverage limits as we deem prudent.

Item 6.   Exhibits and Reports on Form 8-K.

(a)  The exhibits to this report are listed in the Exhibit Index
     appearing on page E-1 hereof.
(b)  During the period covered by this Quarterly Report on Form
     10-Q and through November 7, 2002 the registrant filed one
     Current Report on Form 8-K reporting an event under Item 4 dated
     July 10, 2002.


<PAGE>                        25

                     McMoRan Exploration Co.
                            SIGNATURE

Pursuant  to the requirements of the Securities Exchange  Act  of
1934, the registrant has duly caused this report to be signed  on
its behalf by the undersigned thereunto duly authorized.

                             McMoRan Exploration Co.

                             By:   /s/ C. Donald Whitmire, Jr.
                                 --------------------------------
                                       C. Donald Whitmire, Jr.
                                    Vice President and Controller-
                                         Financial Reporting
                                      (authorized signatory and
                                     Principal Accounting Officer)
Date:  November 8, 2002

<PAGE>                         26


CERTIFICATIONS

I, Richard C. Adkerson, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of
McMoRan Exploration Co.;

2.   Based on my knowledge, this quarterly report does not
     contain any untrue statement of a material fact or omit to state
     a material fact necessary to make the statements made, in light
     of the circumstances under which such statements were made, not
     misleading with respect to the period covered by this quarterly
     report;

3.   Based on my knowledge, the financial statements, and other
     financial information included in this quarterly report,
     fairly present in all material respects the financial
     condition, results of operations and cash flows of the
     registrant as of, and for, the periods presented in this
     quarterly report;

4.   The registrant's other certifying officers and I are
     responsible for establishing and maintaining disclosure
     controls and procedures (as defined in Exchange Act Rules
     13a-14 and 15d-14) for the registrant and we have:

     a)   designed such disclosure controls and procedures to ensure
          that material information relating to the registrant, including
          its consolidated subsidiaries, is made known to us by others
          within those entities, particularly during the period in which
          this quarterly report is being prepared;

     b)   evaluated the effectiveness of the registrant's disclosure
          controls and procedures as of a date within 90 days prior to the
          filing date of this quarterly report (the "Evaluation Date"); and

     c)   presented in this quarterly report our conclusions about the
          effectiveness of the disclosure controls and procedures based on
          our evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have
     disclosed, based on our most recent evaluation, to the
     registrant's auditors and the audit committee of registrant's
     board of directors (or persons performing the equivalent
     function):

     a)   all significant deficiencies in the design or operation of
          internal controls which could adversely affect the registrant's
          ability to record, process, summarize and report financial data
          and have identified for the registrant's auditors any material
          weaknesses in internal controls; and

     b)   any fraud, whether or not material, that involves management
          or other employees who have a significant role in the
          registrant's internal controls; and

6.   The registrant's other certifying officers and I have
     indicated in this quarterly report whether or not there were
     significant changes in internal controls or in other factors that
     could significantly affect internal controls subsequent to the
     date of our most recent evaluation, including any corrective
     actions with regard to significant deficiencies and material
     weaknesses.

Date:  November 8, 2002
                                      /s/ Richard C. Adkerson
                                     -------------------------
                                         Richard C. Adkerson
                                      Co-Chairman of the Board,
                                           President and
                                       Chief Executive Officer


<PAGE>                            27


CERTIFICATIONS

I, Nancy D. Parmelee, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of
     McMoRan Exploration Co.;

2.   Based on my knowledge, this quarterly report does not
     contain any untrue statement of a material fact or omit to state
     a material fact necessary to make the statements made, in light
     of the circumstances under which such statements were made, not
     misleading with respect to the period covered by this quarterly
     report;

3.   Based on my knowledge, the financial statements, and other
     financial information included in this quarterly report, fairly
     present in all material respects the financial condition, results
     of operations and cash flows of the registrant as of, and for,
     the periods presented in this quarterly report;

4.   The registrant's other certifying officers and I are
     responsible for establishing and maintaining disclosure controls
     and procedures (as defined in Exchange Act Rules 13a-14 and 15d-
     14) for the registrant and we have:

     a)   designed such disclosure controls and procedures to ensure
          that material information relating to the registrant, including
          its consolidated subsidiaries, is made known to us by others
          within those entities, particularly during the period in which
          this quarterly report is being prepared;

     b)   evaluated the effectiveness of the registrant's disclosure
          controls and procedures as of a date within 90 days prior to the
          filing date of this quarterly report (the "Evaluation Date"); and

     c)   presented in this quarterly report our conclusions about the
          effectiveness of the disclosure controls and procedures based on
          our evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have
     disclosed, based on our most recent evaluation, to the
     registrant's auditors and the audit committee of
     registrant's board of directors (or persons performing the
     equivalent function):

     c)   all significant deficiencies in the design or operation of
          internal controls which could adversely affect the registrant's
          ability to record, process, summarize and report financial data
          and have identified for the registrant's auditors any material
          weaknesses in internal controls; and

     d)   any fraud, whether or not material, that involves management
          or other employees who have a significant role in the
          registrant's internal controls; and

6.   The registrant's other certifying officers and I have
     indicated in this quarterly report whether or not there were
     significant changes in internal controls or in other factors that
     could significantly affect internal controls subsequent to the
     date of our most recent evaluation, including any corrective
     actions with regard to significant deficiencies and material
     weaknesses.

Date:  November 8, 2002

                                       /s/ Nancy D. Parmelee
                                      ----------------------
                                          Nancy D. Parmelee
                                        Senior Vice President,
                                       Chief Financial Officer
                                           and Secretary

<PAGE>                        28

                     McMoRan Exploration Co.
                          Exhibit Index

  Exhibit Number

 2.1      Agreement and Plan of Mergers 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      By-laws of McMoRan as amended effective February 1,
          1999.  (Incorporated by reference to Exhibit 3.2 to the
          McMoRan 1998 Form 10-K).

 4.1      Form of Certificate of McMoRan Common Stock
          (Incorporated by reference to Exhibit 4.1 of the McMoRan
          S-4).

 4.2      Rights Agreement dated as of November 13, 1998.
          (Incorporated by reference to Exhibit 4.2 to McMoRan
          1998 Form 10-K).

 4.3      Amendment to Rights Agreement dated December 28, 1998.
          (Incorporated by reference to Exhibit 4.3 to McMoRan
          1998 Form 10-K).

 4.4      Standstill Agreement dated August 5,1999 between McMoRan
          and Alpine Capital, L.P., Robert W. Bruce III, Algenpar,
          Inc, J.Taylor Crandall, Susan C. Bruce, Keystone, Inc.,
          Robert M. Bass, the Anne T. and Robert M. Bass
          Foundation, Anne T. Bass and The Robert Bruce Management
          Company, Inc. Defined Benefit Pension Trust.
          (Incorporated by reference to Exhibit 4.4 to McMoRan's
          Third Quarter 1999 Form 10-Q).

4.5       Form of Certificate of McMoRan 5% Convertible Preferred
          Stock (McMoRan Preferred Stock).  (Incorporated by
          reference to Exhibit 4.5 to McMoRan's Second Quarter
          2002 Form 10-Q).

4.6       Certificate of Designations of McMoRan Preferred Stock.

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      Joint Operating Agreement by and between Freeport-
          McMoRan Resource Partners, IMC-Fertilizer, Inc. and
          Felmont Oil Corporation, dated as of May 1, 1988
          (Incorporated by reference to Exhibit 10.2 to McMoRan's
          2001 Form 10-K).

10.3      Agreement to Coordinate Operating Agreements by and
          between Freeport-McMoRan Resource Partners,
          IMC-Fertilizer and Felmont Oil Corporation, dated as of
          May 1, 1988 (Incorporated by reference to Exhibit 10.3
          to McMoRan's 2001 Form 10-K).

10.4      Joint Operating Agreement by and between Freeport-
          McMoRan Resource Partners, IMC-Fertilizer, Inc. and
          Felmont Oil Corporation, dated as of June 5, 1990
          (Incorporated by reference to Exhibit 10.4 to McMoRan's
          2001 Form 10-K).

10.5      Amendment No. 1 to Joint Operating Agreement dated July
          1, 1993 between Freeport McMoRan Resource Partners, IMC
          Fertilizer, Inc. and Homestake Sulphur Company.
          (Incorporated by reference to Exhibit 10.14 to McMoRan's
          1999 Annual Report on Form 10-K (the McMoRan 1999 Form
          10-K)).

<PAGE>                           E-1

10.6      Amendment No. 2 to Joint Operating Agreement dated
          November 30, 1993 between Freeport McMoRan Resource
          Partners, IMC Fertilizer, Inc. and Homestake Sulphur
          Company. (Incorporated by reference to Exhibit 10.15 in
          the McMoRan 1999 Form 10-K).

10.7      Processing and Marketing Agreement between the Freeport
          Sulphur (a division of Freeport-McMoRan Resource
          Partners) and Felmont Oil Corporation dated as of June
          19, 1990 (Processing Agreement) (Incorporated by
          reference to Exhibit 10.7 to McMoRan's 2001 Form 10-K).

10.8      Amendment Number 1 to the Processing Agreement
          (Incorporated by reference to Exhibit 10.8 to McMoRan's
          2001 Form 10-K).

10.9      Amendment Number 2 to the Processing Agreement
          (Incorporated by reference to Exhibit 10.9 to McMoRan's
          2001 Form 10-K).

10.10     IMC/FSC Agreement dated as of March 29, 2002 among IMC
          Global Inc., IMC Phosphate Company, Phosphate Resource
          Partners Limited Partnership, IMC Phosphates MP Inc.,
          McMoRan Oil & Gas and McMoRan.  (Incorporated by
          reference to Exhibit 10.10 to McMoRan's Second Quarter
          2002 Form 10-Q).

10.11     Services Agreement dated as of November 17, 1998 between
          McMoRan and FM Services Company. (Incorporated by
          reference to Exhibit 10.11 to McMoRan 1998 Form 10-K).

10.12     Participation Agreement between McMoRan Oil & Gas and
          Gerald J.  Ford dated as of December 15, 1997
          (Incorporated by reference to Exhibit 10.13 to McMoRan's
          2001 Form 10-K).

10.13     Offshore Exploration Agreement dated December 20, 1999
          between Texaco Exploration and Production Inc. and
          McMoRan Oil & Gas. (Incorporated by reference to Exhibit
          10.34 in the McMoRan 1999 Form 10-K).

10.14     Participation Agreement dated as of June 15, 2000 but
          effective as of March 24, 2000 between McMoRan Oil & Gas
          and Halliburton Energy Services, Inc.  (Incorporated by
          reference to Exhibit 10.34 to McMoRan's Second-Quarter
          2000 Form 10-Q).

10.15     Termination Agreement dated January 25, 2002 between
          Halliburton Company, Halliburton Energy Services Inc.
          and McMoRan Oil & Gas.  (Incorporated by reference to
          Exhibit 10.15 to McMoRan's Second Quarter 2002 Form 10-Q).

10.16     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).

10.17     Exploration Agreement dated November 14, 2000 between
          McMoRan Oil & Gas LLC and Samedan Oil Corporation.
          (Incorporated by reference to Exhibit 10.17 to McMoRan's
          2000 Form 10-K).

10.18     Credit Agreement dated as of July 1, 2002 among McMoRan
          Oil & Gas, as borrower, Hibernia National Bank, as
          agent, and the Lenders signatory thereto.  (Incorporated
          by reference to Exhibit 10.18 to McMoRan's Second
          Quarter 2002 Form 10-Q).

10.19     Asset Sale Agreement for Main Pass Block 299 between
          Freeport-McMoRan Resource Partners, Limited Partnership
          (Freeport-McMoRan Resource Partners) and Chevron USA,
          Inc. dated as of May 2, 1990 (Incorporated by reference
          to Exhibit 10.24 to McMoRan's 2001 Form 10-K).

<PAGE>                          E-2

10.20     Asset Purchase Agreement between Freeport-McMoRan
          Resource Partners and Pennzoil Company dated as of
          October 22, 1994 (Asset Purchase Agreement)
          (Incorporated by reference to Exhibit 10.25 to McMoRan's
          2001 Form 10-K).

10.21     Amendment No. 1 to the Asset Purchase Agreement dated as
          of January 3, 1995 (Incorporated by reference to Exhibit
          10.26 to McMoRan's 2001 Form 10-K).

10.22     Agreement for Purchase and Sale dated as of August 1,
          1997 between FM Properties Operating Co. and McMoRan Oil
          & Gas (Incorporated by reference to Exhibit 10.27 to
          McMoRan's 2001 Form 10-K).

10.23     Asset Purchase Agreement dated effective December 1,
          1999 between SOI Finance Inc., Shell Offshore Inc. and
          McMoRan Oil & Gas. (Incorporated by reference to Exhibit
          10.33 in the McMoRan 1999 Form 10-K).

10.24     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).

10.25     Purchase and Sales agreement dated January 25, 2002 but
          effective January 1, 2002 by and between McMoRan Oil &
          Gas 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.)

10.26     Purchase and Sale Agreement dated as of March 29, 2002
          by and among Freeport Sulphur, McMoRan, MOXY and Gulf
          Sulphur Services Ltd., LLP. (Incorporated by reference
          to Exhibit 10.37 to McMoRan's First-Quarter 2002 Form 10-Q.)

10.27     Turnkey contract for the reclamation removal, site
          clearance and scrapping of Main Pass Block 299 dated as
          of March 2, 2002 between Offshore Specialty Fabricators
          Inc. and Freeport Sulphur. (Incorporated by reference to
          Exhibit 10.38 to McMoRan's First-Quarter 2002 Form 10-Q.)

10.28     Purchase and Sale Agreement dated May 9, 2002 by and
          between McMoRan Oil & Gas and El Paso Production
          Company.  (Incorporated by reference to Exhibit 10.28 to
          McMoRan's Second Quarter 2002 Form 10-Q).

10.29     Amendment to Purchase and Sale Agreement dated May 22,
          2002 by and between McMoRan Oil & Gas and El Paso
          Production Company.  (Incorporated by reference to
          Exhibit 10.29 to McMoRan's Second Quarter 2002 Form 10-Q).

          Executive and Director Compensation Plans and
          Arrangements (Exhibits 30 through 43).

10.30     McMoRan Adjusted Stock Award Plan.  (Incorporated by
          reference to Exhibit 10.1 of the McMoRan S-4).

10.31     McMoRan 1998 Stock Option Plan.  (Incorporated by
          reference to Annex D to the McMoRan S-4).

10.32     McMoRan 2000 Stock Incentive Plan.  (Incorporated by
          reference to Exhibit 10.5 to McMoRan's Second-Quarter
          2000 Form 10-Q).

10.33     Stock Bonus Plan (Incorporated by reference from
          McMoRan's Registration Statement on Form S-8
          (Registration No. 333-67963) filed with the SEC on
          November 25, 1998.

<PAGE>                          E-3

10.34     McMoRan 1998 Stock Option Plan for Non-Employee
          Directors.  (Incorporated by reference to Exhibit 10.2
          of the McMoRan S-4).


10.35     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).

10.36     McMoRan Financial Counseling and Tax Return Preparation
          and Certification Program, effective September 30, 1998.
          (Incorporated by reference to Exhibit 10.13 to McMoRan's
          1998 Form 10-K).

10.37     McMoRan 2001 Stock Bonus Plan.  (Incorporated by
          reference to Exhibit 10.35 to McMoRan's First-Quarter
          2001 Form 10-Q).

10.38     McMoRan 2002 Stock Bonus Plan.  (Incorporated by
          reference to Exhibit 10.38 to McMoRan's Second Quarter
          2002 Form 10-Q).

10.39     McMoRan 2001 Stock Incentive Plan.  (Incorporated by
          reference to Exhibit 10.36 to McMoRan's Second-Quarter
          2001 Form 10-Q).

10.40     Agreement for Consulting Services between Freeport-
          McMoRan and B. M. Rankin, Jr. effective as of January 1,
          1991)(assigned to FM Services 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
          1998 Form 10-K).

10.41     Supplemental Agreement between FM Services and B.M.
          Rankin, Jr. dated February 5, 2001.  (Incorporated by
          reference to Exhibit 10.36b to McMoRan's 2000 Form 10-K).

10.42     Supplemental Agreement between FM Services and B.M.
          Rankin, Jr. dated December 13, 2001 (Incorporated by
          reference to Exhibit 10.49 to McMoRan's 2001 Form 10-K).

10.43     Supplemental Agreement between FM Service and Morrison
          C. Bethea dated October 15, 2001, providing an Amendment
          to the Consulting Agreement of November 1, 1993 as
          amended and Supplemental Agreement of December 21, 1999
          (Incorporated by reference to Exhibit 10.49 to McMoRan's
          2001 Form 10-K).

15.1      Letter from Ernst & Young LLP regarding the unaudited
          interim financial statements.


<PAGE>                           E-4