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| UNITED STATES                                          |
|--------------------------------------------------------|
| SECURITIES AND EXCHANGE COMMISSION                     |
| Washington, D.C. 20549                                 |
|                                                   |
| FORM 10-Q                                              |
|                                                   |
| (Mark One)                                             |
| [X]                                                    | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
| SECURITIES EXCHANGE ACT OF 1934                        |
| For the quarterly period ended June 30, 2009           |
| OR                                                     |
| [  ]                                         | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
| SECURITIES EXCHANGE ACT OF 1934                        |
| For the transition period from                         |   | To |
| Commission File Number: 001-07791                      |
|                                                   |
|                                                        |
|                                                   |
| McMoRan Exploration Co.                                |
| (Exact name of registrant as specified in its charter) |

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

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

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|                                                                           |
|--------------------------------------------------------------------------------|
| McMoRan Exploration Co.                                                        |
| TABLE OF CONTENTS                                                              |
|                                                                           |
|                                                                           | Page |
|                                                                           |   |
| Part I.  Financial Information                                       |   |
|                                                                           |   |
| Item 1.  Financial Statements:                                       |   |
|                                                                           |   |
| Condensed Consolidated Balance Sheets (Unaudited)                              | 3 |
|                                                                           |   |
| Consolidated Statements of Operations (Unaudited)                              | 4 |
|                                                                           |   |
| Consolidated Statements of Cash Flow (Unaudited)                               | 5 |
|                                                                           |   |
| Notes to Consolidated Financial Statements (Unaudited)                         | 6 |
|                                                                           |   |
|   Report of Independent Registered Public Accounting Firm            | 25 |
|                                                                           |   |
| Item 2.  Management's Discussion and Analysis                        |   |
| of Financial Condition and Results of Operations                               | 26 |
|                                                                           |   |
| Item 3.  Quantitative and Qualitative Disclosures about Market Risks | 36 |
|                                                                           |   |
| Item 4.  Controls and Procedures                                     | 37 |
|                                                                           |   |
| Part II.  Other Information                                          |   |
|                                                                           |   |
| Item 1.  Legal Proceedings                                           | 37 |
|                                                                           |   |
| Item 1A.  Risk Factors                                               | 37 |
|                                                                           |   |
| Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds | 37 |
|                                                                           |   |
| Item 4.  Submission of Matters to a Vote of Securities Holders       | 38 |
|                                                                           |   |
| Item 6.  Exhibits                                                    | 38 |
|                                                                           |   |
| Signature                                                                      | 39 |
|                                                                           |   |
| Exhibit Index                                                                  | E-1 |

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TABLE OF CONTENTS

Part I.  FINANCIAL INFORMATION

Financial Statements

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

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited

|                                                                   |   | June 30,       |      | December 31, |   |
|------------------------------------------------------------------------|--------|----------------|-----------|--------------|--------|
|                                                                   |   | 2009           |      | 2008         |   |
|                                                                   |   | (In Thousands) |      |
| ASSETS                                                                 |   |           |      |         |   |   |   |
| Cash and cash equivalents                                              |   | $              | 225,483   |         | $      | 93,486 |   |
| Accounts receivable                                                    |   |           | 97,106    |         |   | 112,684 |   |
| Inventories                                                            |   |           | 47,490    |         |   | 31,284 |   |
| Prepaid expenses                                                       |   |           | 2,340     |         |   | 13,819 |   |
| Fair value of oil and gas derivative contracts                         |   |           | 16,784    |         |   | 31,624 |   |
| Current assets from discontinued operations, including restricted cash |   |           |      |         |   |   |   |
| of $0.5 million                                                        |   |           | 479       |         |   | 516 |   |
| Total current assets                                                   |   |           | 389,682   |         |   | 283,413 |   |
| Property, plant and equipment, net                                     |   |           | 866,410   |         |   | 992,563 |   |
| Restricted investments and cash                                        |   |           | 37,327    |         |   | 29,789 |   |
| Deferred financing costs                                               |   |           | 13,959    |         |   | 15,658 |   |
| Fair value of oil and gas derivative contracts                         |   |           | 2,231     |         |   | 5,847 |   |
| Sulphur business assets, net                                           |   |           | 3,005     |         |   | 3,012 |   |
| Total assets                                                           |   | $              | 1,312,614 |         | $      | 1,330,282 |   |
|                                                                   |   |           |      |         |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                             |   |           |      |         |   |   |   |
| Accounts payable                                                       |   | $              | 68,434    |         | $      | 77,009 |   |
| Accrued liabilities                                                    |   |           | 65,336    |         |   | 89,565 |   |
| Accrued interest and dividends payable                                 |   |           | 7,819     |         |   | 7,586 |   |
| Current portion of accrued oil and gas reclamation costs               |   |           | 53,350    |         |   | 103,550 |   |
| Current portion of accrued sulphur reclamation cost                    |   |           | 303       |         |   | 785 |   |
| Fair value of oil and gas derivative contracts                         |   |           | 421       |         |   | - |   |
| Current liabilities from discontinued operations                       |   |           | 3,031     |         |   | 1,317 |   |
| Total current liabilities                                              |   |           | 198,694   |         |   | 279,812 |   |
| 5¼% convertible senior notes                                      |   |           | 74,720    |         |   | 74,720 |   |
| 11.875% senior notes                                                   |   |           | 300,000   |         |   | 300,000 |   |
| Accrued oil and gas reclamation costs                                  |   |           | 366,260   |         |   | 317,651 |   |
| Accrued sulphur reclamation costs                                      |   |           | 23,219    |         |   | 22,218 |   |
| Fair value of oil and gas derivative contracts                         |   |           | 110       |         |   | - |   |
| Other long-term liabilities                                            |   |           | 20,166    |         |   | 20,023 |   |
| Other long-term liabilities from discontinued operations               |   |           | 6,953     |         |   | 6,835 |   |
| Total liabilities                                                      |   |           | 990,122   |         |   | 1,021,259 |   |
| Stockholders' equity                                                   |   |           | 322,492   |         |   | 309,023 |   |
| Total liabilities and stockholders' equity                             |   | $              | 1,312,614 |         | $      | 1,330,282 |   |
|                                                                   |   |           |      |         |   |   |   |

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TABLE OF CONTENTS

CONSOLIDATED STATEMENTS OF OPERATIONS 

|                                                         | Three Months Ended                       |     | Six Months Ended |   |
|--------------------------------------------------------------|------------------------------------------|----------|------------------|--------|
|                                                         | June 30,                                 |     | June 30,         |   |
|                                                         | 2009                                     |     | 2008             |   | 2009 |   | 2008 |   |
|                                                         | (In Thousands, Except Per Share Amounts) |     |
| Revenues:                                                    |                                     |     |             |   |   |   |   |   |   |   |   |   |
| Oil and gas                                                  | $                                        | 94,065   |             | $      | 372,321 |   | $ | 189,147 |   | $ | 664,267 |   |
| Service                                                      |                                     | 2,487    |             |   | 3,187 |   |   | 4,781 |   |   | 6,717 |   |
| Total revenues                                               |                                     | 96,552   |             |   | 375,508 |   |   | 193,928 |   |   | 670,984 |   |
| Costs and expenses:                                          |                                     |     |             |   |   |   |   |   |   |   |   |   |
| Production and delivery costs                                |                                     | 48,800   |             |   | 69,505 |   |   | 97,846 |   |   | 125,151 |   |
| Depletion, depreciation and amortization expense             |                                     | 73,970   |             |   | 121,001 |   |   | 167,367 |   |   | 242,333 |   |
| Exploration expenses                                         |                                     | 46,836   |             |   | 27,480 |   |   | 75,262 |   |   | 34,293 |   |
| (Gain) loss on oil and gas derivative contracts              |                                     | 2,972    |             |   | 70,775 |   |   | (15,886 | ) |   | 116,006 |   |
| General and administrative expenses                          |                                     | 10,916   |             |   | 18,237 |   |   | 23,362 |   |   | 27,249 |   |
| Start-up costs for Main Pass Energy Hub™               |                                     | 351      |             |   | 1,645 |   |   | 1,116 |   |   | 3,262 |   |
| Insurance recoveries                                         |                                     | (35      | )                |   | (3,391 | ) |   | (18,742 | ) |   | (3,391 | ) |
| Total costs and expenses                                     |                                     | 183,810  |             |   | 305,252 |   |   | 330,325 |   |   | 544,903 |   |
| Operating income (loss)                                      |                                     | (87,258  | )                |   | 70,256 |   |   | (136,397 | ) |   | 126,081 |   |
| Interest expense, net                                        |                                     | (10,275  | )                |   | (12,520 | ) |   | (20,941 | ) |   | (29,631 | ) |
| Other income (expense), net                                  |                                     | 2,843    |             |   | (1,897 | ) |   | 3,172 |   |   | (2,524 | ) |
| Income (loss) from continuing operations before income taxes |                                     | (94,690  | )                |   | 55,839 |   |   | (154,166 | ) |   | 93,926 |   |
| Provision for income taxes                                   |                                     | (17      | )                |   | (1,009 | ) |   | (33 | ) |   | (1,865 | ) |
| Income (loss) from continuing operations                     |                                     | (94,707  | )                |   | 54,830 |   |   | (154,199 | ) |   | 92,061 |   |
| Loss from discontinued operations                            |                                     | (3,050   | )                |   | (748 | ) |   | (4,117 | ) |   | (1,604 | ) |
| Net income (loss)                                            |                                     | (97,757  | )                |   | 54,082 |   |   | (158,316 | ) |   | 90,457 |   |
| Preferred dividends                                          |                                     | (2,855   | )                |   | (4,357 | ) |   | (5,537 | ) |   | (8,723 | ) |
| Net income (loss) applicable to common stock                 | $                                        | (100,612 | )                | $      | 49,725 |   | $ | (163,853 | ) | $ | 81,734 |   |
|                                                         |                                     |     |             |   |   |   |   |   |   |   |   |   |
| Basic net income (loss) per share of common stock:           |                                     |     |             |   |   |   |   |   |   |   |   |   |
| Continuing operations                                        |                                     | $(1.36   | )                |   | $0.88 |   |   | $(2.24 | ) |   | $1.50 |   |
| Discontinued operations                                      |                                     | (0.04    | )                |   | (0.01 | ) |   | (0.06 | ) |   | (0.03 | ) |
| Net income (loss) per share of common stock                  |                                     | $(1.40   | )                |   | $0.87 |   |   | $(2.30 | ) |   | $1.47 |   |
|                                                         |                                     |     |             |   |   |   |   |   |   |   |   |   |
| Diluted net income (loss) per share of common stock:         |                                     |     |             |   |   |   |   |   |   |   |   |   |
| Continuing operations                                        |                                     | $(1.36   | )                |   | $0.64 |   |   | $(2.24 | ) |   | $1.11 |   |
| Discontinued operations                                      |                                     | (0.04    | )                |   | (0.01 | ) |   | (0.06 | ) |   | (0.02 | ) |
| Net income (loss) per share of common stock                  |                                     | $(1.40   | )                |   | $0.63 |   |   | $(2.30 | ) |   | $1.09 |   |
|                                                         |                                     |     |             |   |   |   |   |   |   |   |   |   |
| Average common shares outstanding:                           |                                     |     |             |   |   |   |   |   |   |   |   |   |
| Basic                                                        |                                     | 71,943   |             |   | 57,450 |   |   | 71,209 |   |   | 55,703 |   |
| Diluted                                                      |                                     | 71,943   |             |   | 88,278 |   |   | 71,209 |   |   | 86,783 |   |

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TABLE OF CONTENTS
CONSOLIDATED STATEMENTS OF CASH FLOW 

|                                                               |   | Six Months Ended |     |
|--------------------------------------------------------------------|--------|------------------|----------|
|                                                               |   | June 30,         |     |
|                                                               |   | 2009             |     | 2008 |   |
|                                                               |   | (In Thousands)   |     |
| Cash flow from operating activities:                               |   |             |     |   |   |   |   |
| Net income (loss)                                                  |   | $                | (158,316 | ) | $ | 90,457 |   |
| Adjustments to reconcile net income (loss) to net cash provided by |   |             |     |   |   |   |   |
| operating activities:                                              |   |             |     |   |   |   |   |
| Loss from discontinued operations                                  |   |             | 4,117    |   |   | 1,604 |   |
| Depletion, depreciation and amortization                           |   |             | 167,367  |   |   | 242,333 |   |
| Exploration drilling and related expenditures, net                 |   |             | 54,370   |   |   | 11,873 |   |
| Compensation expense associated with stock-based awards            |   |             | 9,180    |   |   | 20,875 |   |
| Amortization of deferred financing costs                           |   |             | 1,862    |   |   | 2,757 |   |
| Change in fair value of oil and gas derivative contracts           |   |             | 18,986   |   |   | 84,802 |   |
| Loss on induced conversions of convertible senior notes            |   |             | -        |   |   | 2,663 |   |
| Reclamation expenditures, net of prepayments by third parties      |   |             | (25,522  | ) |   | (1,146 | ) |
| Increase in restricted cash                                        |   |             | (7,537   | ) |   | (7,567 | ) |
| Other                                                              |   |             | (47      | ) |   | (262 | ) |
| (Increase) decrease in working capital:                            |   |             |     |   |   |   |   |
| Accounts receivable                                                |   |             | 5,461    |   |   | (82,176 | ) |
| Accounts payable and accrued liabilities                           |   |             | (10,007  | ) |   | 22,295 |   |
| Prepaid expenses and inventories                                   |   |             | (4,728   | ) |   | (2,024 | ) |
| Net cash provided by continuing operations                         |   |             | 55,186   |   |   | 386,484 |   |
| Net cash used in discontinued operations                           |   |             | (1,655   | ) |   | (4,259 | ) |
| Net cash provided by operating activities                          |   |             | 53,531   |   |   | 382,225 |   |
|                                                               |   |             |     |   |   |   |   |
| Cash flow from investing activities:                               |   |             |     |   |   |   |   |
| Exploration, development and other capital expenditures            |   |             | (84,331  | ) |   | (111,059 | ) |
| Other                                                              |   |             | -        |   |   | 1,112 |   |
| Net cash used in continuing operations                             |   |             | (84,331  | ) |   | (109,947 | ) |
| Net cash from discontinued operations                              |   |             | -        |   |   | - |   |
| Net cash used in investing activities                              |   |             | (84,331  | ) |   | (109,947 | ) |
|                                                               |   |             |     |   |   |   |   |
| Cash flow from financing activities:                               |   |             |     |   |   |   |   |
| Net proceeds from the sale of common stock                         |   |             | 84,934   |   |   | - |   |
| Net proceeds from the sale of 8% convertible perpetual             |   |             |     |   |   |   |   |
| preferred stock                                                    |   |             | 83,228   |   |   | - |   |
| Payments under senior secured revolving credit facility, net       |   |             | -        |   |   | (269,500 | ) |
| Dividends paid on preferred stock                                  |   |             | (5,365   | ) |   | (9,108 | ) |
| Payments for induced conversion of convertible senior notes        |   |             | -        |   |   | (2,663 | ) |
| Proceeds from exercise of stock options and other                  |   |             | -        |   |   | 4,686 |   |
| Net cash provided by (used in) continuing operations               |   |             | 162,797  |   |   | (276,585 | ) |
| Net cash from discontinued operations                              |   |             | -        |   |   | - |   |
| Net cash provided by (used in)  financing activities     |   |             | 162,797  |   |   | (276,585 | ) |
| Net increase (decrease) in cash and cash equivalents               |   |             | 131,997  |   |   | (4,307 | ) |
| Cash and cash equivalents at beginning of year                     |   |             | 93,486   |   |   | 4,830 |   |
| Cash and cash equivalents at end of period                         |   | $                | 225,483  |   | $ | 523 |   |

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TABLE OF CONTENTS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED

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

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TABLE OF CONTENTS

|                                             |   |   | Second  |   |   | Six    |   |
|--------------------------------------------------|--------|--------|---------|--------|--------|--------|--------|
|                                             |   |   | Quarter |   |   | Months |   |
|                                             |   |   | 2009    |   |
| Stock options a,b                                |   |   | 9       |   |   | -      |   |
| Assumed conversion of 6¾% preferred stock c |   |   | 12,817  |   |   | 12,817 |   |
| Assumed conversion of 8% preferred stock d       |   |   | 1,108   |   |   | 557    |   |
| 5¼% convertible senior notes e              |   |   | 4,508   |   |   | 4,508  |   |

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|   TABLE OF CONTENTS                                                                      |   | Second  |   | Six    |   |
|----------------------------------------------------------------------------------------------------|--------|---------|--------|--------|--------|
|                                                                                               |   | Quarter |   | Months |   |
|                                                                                               |   | 2008    |   |
| Net income from continuing operations                                                              |   | $       | 54,830 |   | $      | 92,061 |   |
| Preferred dividends                                                                                |   |    | (4,357 | )      |   | (8,723 | ) |
| Net income from continuing operations applicable to common stock                                   |   |    | 50,473 |   |   | 83,338 |   |
| Add:  Preferred dividends from assumed conversion of  6¾% preferred stock |   |    | 4,357  |   |   | 8,723 |   |
| Add:  Net interest from assumed conversion of 6% notes                                   |   |    | 281    |   |   | 1,533 |   |
| Add:  Net interest from assumed conversion of 5¼% notes                             |   |    | 1,017  |   |   | 2,548 |   |
| Diluted net income from continuing operations                                                      |   |    | 56,128 |   |   | 96,142 |   |
| Loss from discontinued operations                                                                  |   |    | (748   | )      |   | (1,604 | ) |
| Diluted net income applicable to common stock                                                      |   | $       | 55,380 |   |   | 94,538 |   |
|                                                                                               |   |    |   |   |   |   |   |
| Weighted average common shares outstanding for purpose of calculating                              |   |    |   |   |   |   |   |
| basic net income per share                                                                         |   |    | 57,450 |   |   | 55,703 |   |
| Assumed exercise of dilutive stock options a, b                                                    |   |    | 2,738  |   |   | 1,917 |   |
| Assumed exercise of stock warrants a, f                                                            |   |    | 495    |   |   | 522 |   |
| Assumed conversion of 6¾% preferred stock c                                                   |   |    | 17,346 |   |   | 17,368 |   |
| Assumed conversion of 6% notes g                                                                   |   |    | 4,150  |   |   | 4,754 |   |
| Assumed conversion of 5¼% notes e                                                             |   |    | 6,099  |   |   | 6,519 |   |
| Weighted average common shares outstanding                                                         |   |    |   |   |   |   |   |
| for purposes of calculating diluted net income per share                                           |   |    | 88,278 |   |   | 86,783 |   |
|                                                                                               |   |    |   |   |   |   |   |
| Diluted net income per share from continuing operations                                            |   |    | $0.64  |   |   | $1.11 |   |
| Diluted net loss per share from discontinued operations                                            |   |    | (0.01  | )      |   | (0.02 | ) |
| Diluted net income per share                                                                       |   |    | $0.63  |   |   | $1.09 |   |

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

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

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

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

| e.   | Net interest expense on the 5¼% notes totaled $1.0 million during the second quarters of 2009 and 2008, and $2.0 million and $2.5 million for the six month periods ended June 30, 2009 and 2008, respectively. Additional information regarding McMoRan’s 5¼% notes is disclosed in Note 8 of the 2008 Form 10-K. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| g.   | The 6% notes matured on July 2, 2008.  Net interest expense on the 6% notes totaled $0.3 million during the second quarter of 2008 and $1.5 million for the six month periods ended June 30, 2008.  Additional information regarding McMoRan’s 6% notes is disclosed in Note 8 of the 2008 Form 10-K. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   TABLE OF CONTENTS      |   | Second Quarter |   |   | Six Months |   |
|------------------------------------|--------|----------------|--------|--------|------------|--------|
|                               |   | 2009           |   |   | 2008       |   |   | 2009 |   |   | 2008 |   |
| Outstanding options (in thousands) |   |           | 10,642 |   |       |   | 40 |   |   |   | 10,230 |   |   |   | 220 |   |
| Average exercise price             |   | $              | 13.54  |   |       | $      | 31.92 |   |   | $ | 13.84 |   |   | $ | 23.91 |   |

|   | Natural Gas Positions (million MMbtu)                                             |   |
|--------|-----------------------------------------------------------------------------------|--------|
|   | Open Swap Positions a                                                             |   | Put Options b |   |
|   |                                                                              |   | Average |   |   |   | Average |   |
|   | Volumes                                                                           |   | Swap Price c |   | Volumes |   | Floor Price c |   |
| 2009   | 1.1                                                                               |   | $ |  8.97 |   |              3.2 |   | $ |  6.00 |   |
| 2010   |              2.6 |   | $ |  8.63 |   |              1.2 |   | $ |  6.00 |   |

|   | Oil Positions (thousand bbls)                                               |   |
|--------|-----------------------------------------------------------------------------|--------|
|   | Open Swap Positions a                                                       |   | Put Options b |   |
|   |                                                                        |   | Average |   |   |   | Average |   |
|   | Volumes                                                                     |   | Swap Price d |   | Volumes |   | Floor Price d |   |
| 2009   |             45  |   | $ |  71.16 |   |             125 |   | $ |  50.00 |   |
| 2010   |             118 |   | $ |  70.89 |   |               50 |   | $ |  50.00 |   |

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

| b.   | Covering periods July-October of the respective years. |
|----------------|--------------------------------------------------------|

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

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

|                                            | Second Quarter |    | Six Months |   |
|-------------------------------------------------|----------------|---------|------------|--------|
|                                            | 2009           |    | 2008       |   | 2009 |   | 2008 |   |
| Realized (gain) loss                            |           |    |       |   |   |   |   |   |   |   |   |   |
| Gas puts                                        | $              | -       |       | $      | - |   | $ | - |   | $ | - |   |
| Oil puts                                        |           | -       |       |   | - |   |   | - |   |   | - |   |
| Gas swaps                                       |           | (15,171 | )          |   | 14,648 |   |   | (28,887 | ) |   | 10,777 |   |
| Oil swaps                                       |           | (1,621  | )          |   | 12,916 |   |   | (5,985 | ) |   | 20,427 |   |
| Total realized (gain) loss                      |           | (16,792 | )          |   | 27,564 |   |   | (34,872 | ) |   | 31,204 |   |
|                                            |           |    |       |   |   |   |   |   |   |   |   |   |
| Unrealized (gain) loss                          |           |    |       |   |   |   |   |   |   |   |   |   |
| Gas puts                                        |           | (226    | )          |   | 728 |   |   | (4,467 | ) |   | 2,324 |   |
| Oil puts                                        |           | 692     |       |   | 47 |   |   | 1,050 |   |   | 53 |   |
| Gas swaps                                       |           | 14,561  |       |   | 25,203 |   |   | 14,574 |   |   | 65,800 |   |
| Oil swaps                                       |           | 4,737   |       |   | 17,233 |   |   | 7,829 |   |   | 16,625 |   |
| Total unrealized (gain) loss                    |           | 19,764  |       |   | 43,211 |   |   | 18,986 |   |   | 84,802 |   |
| (Gain) loss on oil and gas derivative contracts | $              | 2,972   |       | $      | 70,775 |   | $ | (15,886 | ) | $ | 116,006 |   |

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TABLE OF CONTENTS

|                        | June 30, 2009 |   |
|-----------------------------|---------------|--------|
|                        | Puts          |   | Swaps |   |   |   |   |
|                        | Gas           |   | Oil |   | Gas |   | Oil |   | Total |   |
| Current assets              | $             | 6,768  |   | $ | 38 |   | $ | 9,978 |   | $ | - |   | $ | 16,784 |   |
| Other assets                |          | 1,123  |   |   | 124 |   |   | 984 |   |   | - |   |   | 2,231 |   |
| Current liabilities         |          | -      |   |   | - |   |   | - |   |   | (421 | ) |   | (421 | ) |
| Other long-term liabilities |          | -      |   |   | - |   |   | - |   |   | (110 | ) |   | (110 | ) |
| Fair value of contracts     | $             | 7,891  |   | $ | 162 |   | $ | 10,962 |   | $ | (531 | ) | $ | 18,484 |   |

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

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TABLE OF CONTENTS

|                                       | Preferred stock |    | Common stock |   | Capital  in excess of par value |   | Accumulated deficit |      | Accumulated other comprehensive loss |   | Common stock held in treasury |   | Total Stockholders’ Equity |   |
|--------------------------------------------|-----------------|---------|--------------|--------|-------------------------------------------|--------|---------------------|-----------|-------------------------------------------|--------|-------------------------------|--------|----------------------------------|--------|
| Balance as of January 1, 2009              | $               | 158,934 |         | $      | 730                                       |   | $                   | 971,977   |                                      | $      | (776,153                      | )      | $                                | (22    | ) | $ | (46,443 | ) | $ | 309,023 |   |
| Common stock offering,                     |            |    |         |   |                                      |   |                |      |                                      |   |                          |   |                             |   |   |   |   |   |   |   |   |
|    15,547,400 shares issued |            | -       |         |   | 155                                       |   |                | 84,779    |                                      |   | -                             |   |                             | -      |   |   | - |   |   | 84,934 |   |
| Preferred stock offering,                  |            |    |         |   |                                      |   |                |      |                                      |   |                          |   |                             |   |   |   |   |   |   |   |   |
|    86,250 shares issued     |            | 86,250  |         |   | -                                         |   |                | (3,022    | )                                         |   | -                             |   |                             | -      |   |   | - |   |   | 83,228 |   |
| Stock-based compensation                   |            |    |         |   |                                      |   |                |      |                                      |   |                          |   |                             |   |   |   |   |   |   |   |   |
|    expense                  |            | -       |         |   | -                                         |   |                | 9,180     |                                      |   | -                             |   |                             | -      |   |   | - |   |   | 9,180 |   |
| Preferred stock dividends                  |            | -       |         |   | -                                         |   |                | (5,537    | )                                         |   | -                             |   |                             | -      |   |   | - |   |   | (5,537 | ) |
| Net loss                                   |            | -       |         |   | -                                         |   |                | -         |                                      |   | (158,316                      | )      |                             | -      |   |   | - |   |   | (158,316 | ) |
| Other comprehensive loss                   |            | -       |         |   | -                                         |   |                | -         |                                      |   | -                             |   |                             | (20    | ) |   | - |   |   | (20 | ) |
| Balance as of June 30, 2009                | $               | 245,184 |         | $      | 885                                       |   | $                   | 1,057,377 |                                      | $      | (934,469                      | )      | $                                | (42    | ) | $ | (46,443 | ) | $ | 322,492 |   |

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TABLE OF CONTENTS

|                                             | Oil and     |    |    |   |
|--------------------------------------------------|-------------|---------|---------|--------|
|                                             | Natural Gas |    | Sulphur |   |
| Asset retirement obligation at beginning of year | $           | 421,201 |    | $      | 23,003 |   |
| Liabilities settled                              |        | (20,801 | )       |   | (482 | ) |
| Accretion expense                                |        | 15,677  |    |   | 1,001 |   |
| Reclamation costs assumed from third parties     |        | 524     |    |   | - |   |
| Incurred liabilities                             |        | 2,152   |    |   | - |   |
| Revision for changes in estimates                |        | 857     |    |   | - |   |
| Asset retirement obligations at June 30, 2009    | $           | 419,610 |    | $      | 23,522 |   |

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TABLE OF CONTENTS

|                              | Second Quarter |   | Six Months |   |
|-----------------------------------|----------------|--------|------------|--------|
|                              | 2009           |   | 2008       |   | 2009 |   | 2008 |   |
| Interest cost                     | $              | -      |       | $      | (38 | ) | $ | - |   | $ | (16 | ) |
| Service cost                      |           | -      |       |   | - |   |   | - |   |   | - |   |
| Return on plan assets             |           | -      |       |   | (9 | ) |   | - |   |   | (18 | ) |
| Change in plan payout assumptions |           | -      |       |   | - |   |   | - |   |   | - |   |
| Net periodic benefit expense      | $              | -      |       | $      | (47 | ) | $ | - |   | $ | (34 | ) |

----

|   TABLE OF CONTENTS       | Second Quarter |   | Six Months |   |
|-------------------------------------|----------------|--------|------------|--------|
|                                | 2009           |   | 2008       |   | 2009 |   | 2008 |   |
| Service cost                        | $              | 13     |       | $      | 7 |   | $ | 26 |   | $ | 14 |   |
| Interest cost                       |           | 72     |       |   | 84 |   |   | 144 |   |   | 167 |   |
| Return on plan assets               |           | -      |       |   | - |   |   | - |   |   | - |   |
| Amortization of prior service costs |           |   |       |   |   |   |   |   |   |   |   |   |
| and actuarial gains                 |           | (10    | )          |   | (1 | ) |   | (20 | ) |   | (2 | ) |
| Net periodic benefit expense        | $              | 75     |       | $      | 90 |   | $ | 150 |   | $ | 179 |   |

|                                                  | Second Quarter |   |   | Six Months |   |
|-------------------------------------------------------|----------------|--------|--------|------------|--------|
|                                                  | 2009           |   | 2008   |       |   | 2009 |   | 2008 |   |
| Cost of options awarded to employees (including       |           |   |   |       |   |   |   |   |   |   |   |   |   |
| directors) a                                          | $              | 2,602  |   | $          | 18,280 |   |   | $ | 8,615 |   | $ | 20,060 |   |
| Cost of options awarded to non-employees and advisory |           |   |   |       |   |   |   |   |   |   |   |   |   |
| directors                                             |           | 147    |   |       | 602    |   |   |   | 400 |   |   | 730 |   |
| Cost of restricted stock units                        |           | 84     |   |       | 52     |   |   |   | 165 |   |   | 85 |   |
| Total compensation cost                               | $              | 2,833  |   | $          | 18,934 |   |   | $ | 9,180 |   | $ | 20,875 |   |

| a.   | Includes compensation charges associated with immediately vested stock options totaling $2.9 million for the six months ended June 30, 2009 and $16.2 million for the second quarter and six months ended June 30, 2008.  These charges included the compensation costs associated with the immediately exercisable options and the compensation costs relatedto stock options granted to retiree-eligible employees, which resulted in one-year’s compensation expense being immediately recognized at the effective date of the stock option grant. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                            | Second Quarter |    |   | Six Months |   |
|-------------------------------------------------|----------------|---------|--------|------------|--------|
|                                            | 2009           |    | 2008   |       |   | 2009 |   | 2008 |   |
| Net income (loss)                               | $              | (97,757 | )      | $          | 54,082 |   |   | $ | (158,316 | ) | $ | 90,457 |   |
| Other comprehensive income (loss)               |           |    |   |       |   |   |   |   |   |   |   |   |   |
| Amortization of previously unrecognized pension |           |    |   |       |   |   |   |   |   |   |   |   |   |
| components, net                                 |           | (10     | )      |       | (1     | ) |   |   | (20 | ) |   | (2 | ) |
| Comprehensive income (loss)                     | $              | (97,767 | )      | $          | 54,081 |   |   | $ | (158,336 | ) | $ | 90,455 |   |

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

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

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

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

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

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

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

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TABLE OF CONTENTS

|                                             |   |           |    |   |   | Freeport  |   |         |    | Consolidated |   |
|--------------------------------------------------|--------|----------------|---------|--------|--------|-----------|--------|--------------|---------|--------------|--------|
|                                             |   | Parent         |    | MOXY   |   | Energy    |   | Eliminations |    | McMoRan      |   |
|                                             |   | (In Thousands) |    |
| ASSETS                                           |   |           |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| Current assets:                                  |   |           |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| Cash and cash equivalents                        |   | $              | 10      |   | $      | 225,469   |   | $            | 4       |         | $      | - |   | $ | 225,483 |   |
| Accounts receivable                              |   |           | -       |   |   | 97,106    |   |         | -       |         |   | - |   |   | 97,106 |   |
| Inventories                                      |   |           | -       |   |   | 47,490    |   |         | -       |         |   | - |   |   | 47,490 |   |
| Prepaid expenses                                 |   |           | 543     |   |   | 1,797     |   |         | -       |         |   | - |   |   | 2,340 |   |
| Fair value of derivative contracts               |   |           | -       |   |   | 16,784    |   |         | -       |         |   | - |   |   | 16,784 |   |
| Current assets from discontinued                 |   |           |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| operations                                       |   |           | -       |   |   | -         |   |         | 479     |         |   | - |   |   | 479 |   |
| Total current assets                             |   |           | 553     |   |   | 388,646   |   |         | 483     |         |   | - |   |   | 389,682 |   |
| Property, plant and equipment, net               |   |           | -       |   |   | 866,379   |   |         | 31      |         |   | - |   |   | 866,410 |   |
| Discontinued sulphur assets                      |   |           | -       |   |   | -         |   |         | 3,005   |         |   | - |   |   | 3,005 |   |
| Investment in subsidiaries                       |   |           | 718,646 |   |   | -         |   |         | -       |         |   | (718,646 | ) |   | - |   |
| Amounts due from affiliates                      |   |           | -       |   |   | 16,716    |   |         | (3,488  | )            |   | (13,228 | ) |   | - |   |
| Deferred financing costs and other assets        |   |           | 10,493  |   |   | 43,024    |   |         | -       |         |   | - |   |   | 53,517 |   |
| Total assets                                     |   | $              | 729,692 |   | $      | 1,314,765 |   | $            | 31      |         | $      | (731,874 | ) | $ | 1,312,614 |   |
|                                             |   |           |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY       |   |           |    |   |   |      |   |         |    |         |
| Currentliabilities:                              |   |           |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| Accounts payable                                 |   | $              | 227     |   | $      | 68,162    |   | $            | 45      |         | $      | - |   | $ | 68,434 |   |
| Accrued liabilities                              |   |           | 2,932   |   |   | 62,405    |   |         | (1      | )            |   | - |   |   | 65,336 |   |
| Current portion of oil and gas accrued           |   |           |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| reclamation costs                                |   |           | -       |   |   | 53,350    |   |         | -       |         |   | - |   |   | 53,350 |   |
| Other current liabilities                        |   |           | 7,008   |   |   | 1,232     |   |         | -       |         |   | - |   |   | 8,240 |   |
| Current liabilities from discontinued            |   |           |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| operations                                       |   |           | -       |   |   | -         |   |         | 3,334   |         |   | - |   |   | 3,334 |   |
| Total current liabilities                        |   |           | 10,167  |   |   | 185,149   |   |         | 3,378   |         |   | - |   |   | 198,694 |   |
| Long-term debt                                   |   |           | 374,720 |   |   | -         |   |         | -       |         |   | - |   |   | 374,720 |   |
| Amounts due to affiliates                        |   |           | 13,228  |   |   | -         |   |         | -       |         |   | (13,228 | ) |   | - |   |
| Accrued oil and gas reclamation costs            |   |           | -       |   |   | 366,260   |   |         | -       |         |   | - |   |   | 366,260 |   |
| Accrued sulphur reclamation costs                |   |           | -       |   |   | -         |   |         | 23,219  |         |   | - |   |   | 23,219 |   |
| Other long-term liabilities                      |   |           | 9,085   |   |   | 9,574     |   |         | 8,570   |         |   | - |   |   | 27,229 |   |
| Total liabilities                                |   |           | 407,200 |   |   | 560,983   |   |         | 35,167  |         |   | (13,228 | ) |   | 990,122 |   |
| Commitments and contingencies                    |   |           |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| Stockholders’ equity (deficit)             |   |           | 322,492 |   |   | 753,782   |   |         | (35,136 | )            |   | (718,646 | ) |   | 322,492 |   |
| Total liabilities and stockholders’ equity |   | $              | 729,692 |   | $      | 1,314,765 |   | $            | 31      |         | $      | (731,874 | ) | $ | 1,312,614 |   |

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TABLE OF CONTENTS

|                                             |   |           |    |   |   | Freeport  |   |         |    | Consolidated |   |
|--------------------------------------------------|--------|----------------|---------|--------|--------|-----------|--------|--------------|---------|--------------|--------|
|                                             |   | Parent         |    | MOXY   |   | Energy    |   | Eliminations |    | McMoRan      |   |
|                                             |   | (In Thousands) |    |
| ASSETS                                           |   |           |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| Current assets:                                  |   |           |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| Cash and cash equivalents                        |   | $              | 35      |   | $      | 93,442    |   | $            | 9       |         | $      | - |   | $ | 93,486 |   |
| Accounts receivable                              |   |           | -       |   |   | 112,684   |   |         | -       |         |   | - |   |   | 112,684 |   |
| Inventories                                      |   |           | -       |   |   | 31,284    |   |         | -       |         |   | - |   |   | 31,284 |   |
| Prepaid expenses                                 |   |           | 12,794  |   |   | 1,025     |   |         | -       |         |   | - |   |   | 13,819 |   |
| Fair value of derivative contracts               |   |           | -       |   |   | 31,624    |   |         | -       |         |   | - |   |   | 31,624 |   |
| Current assets from discontinued                 |   |           |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| operations                                       |   |           | -       |   |   | -         |   |         | 516     |         |   | - |   |   | 516 |   |
| Total current assets                             |   |           | 12,829  |   |   | 270,059   |   |         | 525     |         |   | - |   |   | 283,413 |   |
| Property, plant and equipment, net               |   |           | -       |   |   | 992,532   |   |         | 31      |         |   | - |   |   | 992,563 |   |
| Discontinued sulphur assets                      |   |           | -       |   |   | -         |   |         | 3,012   |         |   | - |   |   | 3,012 |   |
| Investment in subsidiaries                       |   |           | 841,882 |   |   | -         |   |         | -       |         |   | (841,882 | ) |   | - |   |
| Amounts due from affiliates                      |   |           |    |   |   | 168,004   |   |         | (2,993  | )            |   | (165,011 | ) |   | - |   |
| Deferred financing costs and other assets        |   |           | 11,122  |   |   | 40,172    |   |         | -       |         |   | - |   |   | 51,294 |   |
| Total assets                                     |   | $              | 865,833 |   | $      | 1,470,767 |   | $            | 575     |         | $      | (1,006,893 | ) | $ | 1,330,282 |   |
|                                             |   |           |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY       |   |           |    |   |   |      |   |         |    |         |
| Currentliabilities:                              |   |           |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| Accounts payable                                 |   | $              | 512     |   | $      | 76,491    |   | $            | 6       |         | $      | - |   | $ | 77,009 |   |
| Accrued liabilities                              |   |           | 705     |   |   | 88,329    |   |         | 531     |         |   | - |   |   | 89,565 |   |
| Current portion of oil and gas                   |   |           |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| accrued reclamation costs                        |   |           | -       |   |   | 103,550   |   |         | -       |         |   | - |   |   | 103,550 |   |
| Other current liabilities                        |   |           | 6,835   |   |   | 751       |   |         | -       |         |   | - |   |   | 7,586 |   |
| Current liabilities from discontinued            |   |           |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| operations                                       |   |           | -       |   |   | -         |   |         | 2,102   |         |   | - |   |   | 2,102 |   |
| Total current liabilities                        |   |           | 8,052   |   |   | 269,121   |   |         | 2,639   |         |   | - |   |   | 279,812 |   |
| Long-term debt                                   |   |           | 374,720 |   |   | -         |   |         | -       |         |   | - |   |   | 374,720 |   |
| Amounts due to affiliates                        |   |           | 165,011 |   |   | -         |   |         | -       |         |   | (165,011 | ) |   | - |   |
| Accrued oil and gas reclamation costs            |   |           | -       |   |   | 317,651   |   |         | -       |         |   | - |   |   | 317,651 |   |
| Accrued sulphur reclamation costs                |   |           | -       |   |   | -         |   |         | 22,218  |         |   | - |   |   | 22,218 |   |
| Other long-term liabilities                      |   |           | 9,027   |   |   | 9,380     |   |         | 8,451   |         |   | - |   |   | 26,858 |   |
| Total liabilities                                |   |           | 556,810 |   |   | 596,152   |   |         | 33,308  |         |   | (165,011 | ) |   | 1,021,259 |   |
| Commitments and contingencies                    |   |           |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| Stockholders’ equity (deficit)             |   |           | 309,023 |   |   | 874,615   |   |         | (32,733 | )            |   | (841,882 | ) |   | 309,023 |   |
| Total liabilities and stockholders’ equity |   | $              | 865,833 |   | $      | 1,470,767 |   | $            | 575     |         | $      | (1,006,893 | ) | $ | 1,330,282 |   |

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TABLE OF CONTENTS

|                                     |   |           |     |   |   | Freeport |   |         |   | Consolidated |   |
|------------------------------------------|--------|----------------|----------|--------|--------|----------|--------|--------------|--------|--------------|--------|
|                                     |   | Parent         |     | MOXY   |   | Energy   |   | Eliminations |   | McMoRan      |   |
|                                     |   | (In Thousands) |     |
| Revenues:                                |   |           |     |   |   |     |   |         |   |         |   |   |   |   |   |   |
| Oil and gas                              |   | $              | -        |   | $      | 94,065   |   | $            | -      |         | $      | - |   | $ | 94,065 |   |
| Service                                  |   |           | -        |   |   | 2,487    |   |         | -      |         |   | - |   |   | 2,487 |   |
| Total revenues                           |   |           | -        |   |   | 96,552   |   |         | -      |         |   | - |   |   | 96,552 |   |
| Costs and expenses:                      |   |           |     |   |   |     |   |         |   |         |   |   |   |   |   |   |
| Production and delivery costs            |   |           | -        |   |   | 48,815   |   |         | (15    | )            |   | - |   |   | 48,800 |   |
| Depreciation and amortization            |   |           | -        |   |   | 73,970   |   |         | -      |         |   | - |   |   | 73,970 |   |
| Exploration expenses                     |   |           | -        |   |   | 46,836   |   |         | -      |         |   | - |   |   | 46,836 |   |
| Loss on oil and gas derivative contracts |   |           | -        |   |   | 2,972    |   |         | -      |         |   | - |   |   | 2,972 |   |
| General and administrative expenses      |   |           | 1,508    |   |   | 9,401    |   |         | 7      |         |   | - |   |   | 10,916 |   |
| Start-up costs for Main Pass             |   |           |     |   |   |     |   |         |   |         |   |   |   |   |   |   |
| Energy Hub™                        |   |           | -        |   |   | -        |   |         | 351    |         |   | - |   |   | 351 |   |
| Insurance recoveries                     |   |           | -        |   |   | (35      | )      |         | -      |         |   | - |   |   | (35 | ) |
| Total costs and expenses                 |   |           | 1,508    |   |   | 181,959  |   |         | 343    |         |   | - |   |   | 183,810 |   |
| Operating loss                           |   |           | (1,508   | )      |   | (85,407  | )      |         | (343   | )            |   | - |   |   | (87,258 | ) |
| Interest expense                         |   |           | (10,284  | )      |   | 9        |   |         | -      |         |   | - |   |   | (10,275 | ) |
| Equity in earnings of consolidated       |   |           |     |   |   |     |   |         |   |         |   |   |   |   | - |   |
| subsidiaries                             |   |           | (85,937  | )      |   | -        |   |         | -      |         |   | 85,937 |   |   | - |   |
| Other income (expense), net              |   |           | (11      | )      |   | 2,854    |   |         | -      |         |   | - |   |   | 2,843 |   |
| Loss from continuing operations before   |   |           |     |   |   |     |   |         |   |         |   |   |   |   |   |   |
| income taxes                             |   |           | (97,740  | )      |   | (82,544  | )      |         | (343   | )            |   | 85,937 |   |   | (94,690 | ) |
| Provision for income taxes               |   |           | (17      | )      |   | -        |   |         | -      |         |   | - |   |   | (17 | ) |
| Loss from continuing operations          |   |           | (97,757  | )      |   | (82,544  | )      |         | (343   | )            |   | 85,937 |   |   | (94,707 | ) |
| Loss from discontinued operations        |   |           | -        |   |   | -        |   |         | (3,050 | )            |   | - |   |   | (3,050 | ) |
| Net loss                                 |   |           | (97,757  | )      |   | (82,544  | )      |         | (3,393 | )            |   | 85,937 |   |   | (97,757 | ) |
| Preferred dividends                      |   |           | (2,855   | )      |   | -        |   |         | -      |         |   | - |   |   | (2,855 | ) |
| Net loss applicable to common stock      |   | $              | (100,612 | )      | $      | (82,544  | )      | $            | (3,393 | )            | $      | 85,937 |   | $ | (100,612 | ) |
|                                     |   |           |     |   |   |     |   |         |   |         |   |   |   |   |   |   |

----

TABLE OF CONTENTS

|                                     |   |           |     |   |   | Freeport |   |         |   | Consolidated |   |
|------------------------------------------|--------|----------------|----------|--------|--------|----------|--------|--------------|--------|--------------|--------|
|                                     |   | Parent         |     | MOXY   |   | Energy   |   | Eliminations |   | McMoRan      |   |
|                                     |   | (In Thousands) |     |
| Revenues:                                |   |           |     |   |   |     |   |         |   |         |   |   |   |   |   |   |
| Oil and gas                              |   | $              | -        |   | $      | 189,147  |   | $            | -      |         | $      | - |   | $ | 189,147 |   |
| Service                                  |   |           | -        |   |   | 4,781    |   |         | -      |         |   | - |   |   | 4,781 |   |
| Total revenues                           |   |           | -        |   |   | 193,928  |   |         | -      |         |   | - |   |   | 193,928 |   |
| Costs and expenses:                      |   |           |     |   |   |     |   |         |   |         |   |   |   |   |   |   |
| Production and delivery costs            |   |           | -        |   |   | 97,873   |   |         | (27    | )            |   | - |   |   | 97,846 |   |
| Depreciation and amortization            |   |           | -        |   |   | 167,367  |   |         | -      |         |   | - |   |   | 167,367 |   |
| Exploration expenses                     |   |           | -        |   |   | 75,262   |   |         | -      |         |   | - |   |   | 75,262 |   |
| Gain on oil and gas derivative contracts |   |           | -        |   |   | (15,886  | )      |         | -      |         |   | - |   |   | (15,886 | ) |
| General and administrative expenses      |   |           | 3,285    |   |   | 20,049   |   |         | 28     |         |   | - |   |   | 23,362 |   |
| Start-up costs for Main Pass             |   |           |     |   |   |     |   |         |   |         |   |   |   |   |   |   |
| Energy Hub™                        |   |           | -        |   |   | -        |   |         | 1,116  |         |   | - |   |   | 1,116 |   |
| Insurance recoveries                     |   |           | -        |   |   | (18,742  | )      |         | -      |         |   | - |   |   | (18,742 | ) |
| Total costs and expenses                 |   |           | 3,285    |   |   | 325,923  |   |         | 1,117  |         |   | - |   |   | 330,325 |   |
| Operating loss                           |   |           | (3,285   | )      |   | (131,995 | )      |         | (1,117 | )            |   | - |   |   | (136,397 | ) |
| Interest expense                         |   |           | (20,568  | )      |   | (373     | )      |         | -      |         |   | - |   |   | (20,941 | ) |
| Equity in earnings of consolidated       |   |           |     |   |   |     |   |         |   |         |   |   |   |   | - |   |
| subsidiaries                             |   |           | (134,413 | )      |   | -        |   |         | -      |         |   | 134,413 |   |   | - |   |
| Other income (expense), net              |   |           | (17      | )      |   | 3,189    |   |         | -      |         |   | - |   |   | 3,172 |   |
| Loss from continuing operations before   |   |           |     |   |   |     |   |         |   |         |   |   |   |   |   |   |
| income taxes                             |   |           | (158,283 | )      |   | (129,179 | )      |         | (1,117 | )            |   | 134,413 |   |   | (154,166 | ) |
| Provision for income taxes               |   |           | (33      | )      |   | -        |   |         | -      |         |   | - |   |   | (33 | ) |
| Loss from continuing operations          |   |           | (158,316 | )      |   | (129,179 | )      |         | (1,117 | )            |   | 134,413 |   |   | (154,199 | ) |
| Loss from discontinued operations        |   |           | -        |   |   | -        |   |         | (4,117 | )            |   | - |   |   | (4,117 | ) |
| Net loss                                 |   |           | (158,316 | )      |   | (129,179 | )      |         | (5,234 | )            |   | 134,413 |   |   | (158,316 | ) |
| Preferred dividends                      |   |           | (5,537   | )      |   | -        |   |         | -      |         |   | - |   |   | (5,537 | ) |
| Net loss applicable to common stock      |   | $              | (163,853 | )      | $      | (129,179 | )      | $            | (5,234 | )            | $      | 134,413 |   | $ | (163,853 | ) |
|                                     |   |           |     |   |   |     |   |         |   |         |   |   |   |   |   |   |

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TABLE OF CONTENTS

|                                     |   |           |    |   |   | Freeport |   |         |   | Consolidated |   |
|------------------------------------------|--------|----------------|---------|--------|--------|----------|--------|--------------|--------|--------------|--------|
|                                     |   | Parent         |    | MOXY   |   | Energy   |   | Eliminations |   | McMoRan      |   |
|                                     |   | (In Thousands) |    |
| Revenues:                                |   |           |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| Oil and gas                              |   | $              | -       |   | $      | 372,321  |   | $            | -      |         | $      | - |   | $ | 372,321 |   |
| Service                                  |   |           | -       |   |   | 3,187    |   |         | -      |         |   | - |   |   | 3,187 |   |
| Total revenues                           |   |           | -       |   |   | 375,508  |   |         | -      |         |   | - |   |   | 375,508 |   |
| Costs and expenses:                      |   |           |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| Production and delivery costs            |   |           | -       |   |   | 69,517   |   |         | (12    | )            |   | - |   |   | 69,505 |   |
| Depreciation and amortization            |   |           | -       |   |   | 121,001  |   |         | -      |         |   | - |   |   | 121,001 |   |
| Exploration expenses                     |   |           | -       |   |   | 27,480   |   |         | -      |         |   | - |   |   | 27,480 |   |
| Loss on oil and gas derivative contracts |   |           | -       |   |   | 70,775   |   |         | -      |         |   | - |   |   | 70,775 |   |
| General and administrative expenses      |   |           | 1,763   |   |   | 16,407   |   |         | 67     |         |   | - |   |   | 18,237 |   |
| Start-up costs for Main Pass             |   |           |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| Energy Hub™                        |   |           | -       |   |   | -        |   |         | 1,645  |         |   | - |   |   | 1,645 |   |
| Insurance recovery                       |   |           | -       |   |   | (3,391   | )      |         | -      |         |   | - |   |   | (3,391 | ) |
| Total costs and expenses                 |   |           | 1,763   |   |   | 301,789  |   |         | 1,700  |         |   | - |   |   | 305,252 |   |
| Operating income (loss)                  |   |           | (1,763  | )      |   | 73,719   |   |         | (1,700 | )            |   | - |   |   | 70,256 |   |
| Interest expense                         |   |           | (10,732 | )      |   | (1,788   | )      |         | -      |         |   | - |   |   | (12,520 | ) |
| Equity in earnings of consolidated       |   |           |    |   |   |     |   |         |   |         |   |   |   |   | - |   |
| subsidiaries                             |   |           | 69,541  |   |   | -        |   |         | -      |         |   | (69,541 | ) |   | - |   |
| Other income (expense), net              |   |           | (1,955  | )      |   | 58       |   |         | -      |         |   | - |   |   | (1,897 | ) |
| Income (loss) from continuing operations |   |           |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| before income taxes                      |   |           | 55,091  |   |   | 71,989   |   |         | (1,700 | )            |   | (69,541 | ) |   | 55,839 |   |
| Provision for income taxes               |   |           | (1,009  | )      |   | -        |   |         | -      |         |   | - |   |   | (1,009 | ) |
| Income (loss) from continuing operations |   |           | 54,082  |   |   | 71,989   |   |         | (1,700 | )            |   | (69,541 | ) |   | 54,830 |   |
| Loss from discontinued operations        |   |           | -       |   |   | -        |   |         | (748   | )            |   | - |   |   | (748 | ) |
| Net income (loss)                        |   |           | 54,082  |   |   | 71,989   |   |         | (2,448 | )            |   | (69,541 | ) |   | 54,082 |   |
| Preferred dividends                      |   |           | (4,357  | )      |   | -        |   |         | -      |         |   | - |   |   | (4,357 | ) |
| Net income (loss) applicable to          |   |           |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| common stock                             |   | $              | 49,725  |   | $      | 71,989   |   | $            | (2,448 | )            | $      | (69,541 | ) | $ | 49,725 |   |
|                                     |   |           |    |   |   |     |   |         |   |         |   |   |   |   |   |   |

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TABLE OF CONTENTS

|                                     |   |           |    |   |   | Freeport |   |         |   | Consolidated |   |
|------------------------------------------|--------|----------------|---------|--------|--------|----------|--------|--------------|--------|--------------|--------|
|                                     |   | Parent         |    | MOXY   |   | Energy   |   | Eliminations |   | McMoRan      |   |
|                                     |   | (In Thousands) |    |
| Revenues:                                |   |           |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| Oil and gas                              |   | $              | -       |   | $      | 664,267  |   | $            | -      |         | $      | - |   | $ | 664,267 |   |
| Service                                  |   |           | -       |   |   | 6,717    |   |         | -      |         |   | - |   |   | 6,717 |   |
| Total revenues                           |   |           | -       |   |   | 670,984  |   |         | -      |         |   | - |   |   | 670,984 |   |
| Costs and expenses:                      |   |           |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| Production and delivery costs            |   |           | -       |   |   | 125,177  |   |         | (26    | )            |   | - |   |   | 125,151 |   |
| Depreciation and amortization            |   |           | -       |   |   | 242,333  |   |         | -      |         |   | - |   |   | 242,333 |   |
| Exploration expenses                     |   |           | -       |   |   | 34,293   |   |         | -      |         |   | - |   |   | 34,293 |   |
| Loss on oil and gas derivative contracts |   |           | -       |   |   | 116,006  |   |         | -      |         |   | - |   |   | 116,006 |   |
| General and administrative expenses      |   |           | 3,663   |   |   | 23,415   |   |         | 171    |         |   | - |   |   | 27,249 |   |
| Start-up costs for Main Pass             |   |           |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| Energy Hub™                        |   |           | -       |   |   | -        |   |         | 3,262  |         |   | - |   |   | 3,262 |   |
| Insurance recovery                       |   |           | -       |   |   | (3,391   | )      |         | -      |         |   | - |   |   | (3,391 | ) |
| Total costs and expenses                 |   |           | 3,663   |   |   | 537,833  |   |         | 3,407  |         |   | - |   |   | 544,903 |   |
| Operating income (loss)                  |   |           | (3,663  | )      |   | 133,151  |   |         | (3,407 | )            |   | - |   |   | 126,081 |   |
| Interest expense                         |   |           | (23,138 | )      |   | (6,493   | )      |         | -      |         |   | - |   |   | (29,631 | ) |
| Equity in earnings of consolidated       |   |           |    |   |   |     |   |         |   |         |   |   |   |   | - |   |
| subsidiaries                             |   |           | 121,760 |   |   | -        |   |         | -      |         |   | (121,760 | ) |   | - |   |
| Other income (expense), net              |   |           | (2,637  | )      |   | 113      |   |         | -      |         |   | - |   |   | (2,524 | ) |
| Income (loss) from continuing operations |   |           |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| before income taxes                      |   |           | 92,322  |   |   | 126,771  |   |         | (3,407 | )            |   | (121,760 | ) |   | 93,926 |   |
| Provision for income taxes               |   |           | (1,865  | )      |   | -        |   |         | -      |         |   | - |   |   | (1,865 | ) |
| Income (loss) from continuing operations |   |           | 90,457  |   |   | 126,771  |   |         | (3,407 | )            |   | (121,760 | ) |   | 92,061 |   |
| Loss from discontinued operations        |   |           | -       |   |   | -        |   |         | (1,604 | )            |   | - |   |   | (1,604 | ) |
| Net income (loss)                        |   |           | 90,457  |   |   | 126,771  |   |         | (5,011 | )            |   | (121,760 | ) |   | 90,457 |   |
| Preferred dividends                      |   |           | (8,723  | )      |   | -        |   |         | -      |         |   | - |   |   | (8,723 | ) |
| Net income (loss) applicable to          |   |           |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| common stock                             |   | $              | 81,734  |   | $      | 126,771  |   | $            | (5,011 | )            | $      | (121,760 | ) | $ | 81,734 |   |
|                                     |   |           |    |   |   |     |   |         |   |         |   |   |   |   |   |   |

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TABLE OF CONTENTS

|                                          |   |           |     |   |   | Freeport |   | Consolidated |   |
|-----------------------------------------------|--------|----------------|----------|--------|--------|----------|--------|--------------|--------|
|                                          |   | Parent         |     | MOXY   |   | Energy   |   | McMoRan      |   |
|                                          |   | (In Thousands) |     |
|                                          |   |           |     |   |   |     |   |         |   |   |   |   |   |
| Cash flow from operating activities:          |   |           |     |   |   |     |   |         |   |   |   |   |   |
| Net cash provided by (used in) continuing     |   |           |     |   |   |     |   |         |   |   |   |   |   |
| operations                                    |   | $              | (160,217 | )      | $      | 216,358  |   | $            | (955   | ) | $ | 55,186 |   |
| Net cash used in discontinued operations      |   |           | -        |   |   | -        |   |         | (1,655 | ) |   | (1,655 | ) |
| Net cash provided by (used in) operating      |   |           |     |   |   |     |   |         |   |   |   |   |   |
| activities                                    |   |           | (160,217 | )      |   | 216,358  |   |         | (2,610 | ) |   | 55,531 |   |
|                                          |   |           |     |   |   |     |   |         |   |   |   |   |   |
| Cash flow from investing activities:          |   |           |     |   |   |     |   |         |   |   |   |   |   |
| Exploration, development and other            |   |           |     |   |   |     |   |         |   |   |   |   |   |
| capital expenditures                          |   |           | -        |   |   | (84,331  | )      |         | -      |   |   | (84,331 | ) |
| Net cash used in investing activities         |   |           | -        |   |   | (84,331  | )      |         | -      |   |   | (84,331 | ) |
|                                          |   |           |     |   |   |     |   |         |   |   |   |   |   |
| Cash flow from financing activities:          |   |           |     |   |   |     |   |         |   |   |   |   |   |
| Proceeds from the sale of common stock        |   |           | 84,934   |   |   | -        |   |         | -      |   |   | 84,934 |   |
| Proceeds from the sale of 8% preferred stock  |   |           | 83,228   |   |   | -        |   |         | -      |   |   | 83,228 |   |
| Dividends paid on convertible preferred stock |   |           | (5,365   | )      |   | -        |   |         | -      |   |   | (5,365 | ) |
| Investment from parent                        |   |           | (2,605   | )      |   | -        |   |         | 2,605  |   |   | - |   |
| Net cash provided by financing activities     |   |           | 160,192  |   |   | -        |   |         | 2,605  |   |   | 162,797 |   |
|                                          |   |           |     |   |   |     |   |         |   |   |   |   |   |
| Net increase (decrease) in cash and cash      |   |           |     |   |   |     |   |         |   |   |   |   |   |
| equivalents                                   |   |           | (25      | )      |   | 132,027  |   |         | (5     | ) |   | 131,997 |   |
| Cash and cash equivalents at beginning        |   |           |     |   |   |     |   |         |   |   |   |   |   |
| of year                                       |   |           | 35       |   |   | 93,442   |   |         | 9      |   |   | 93,486 |   |
| Cash and cash equivalents at end of year      |   | $              | 10       |   | $      | 225,469  |   | $            | 4      |   | $ | 225,483 |   |
|                                          |   |           |     |   |   |     |   |         |   |   |   |   |   |

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TABLE OF CONTENTS

|                                          |   |           |   |   |   | Freeport |   | Consolidated |   |
|-----------------------------------------------|--------|----------------|--------|--------|--------|----------|--------|--------------|--------|
|                                          |   | Parent         |   | MOXY   |   | Energy   |   | McMoRan      |   |
|                                          |   | (In Thousands) |   |
|                                          |   |           |   |   |   |     |   |         |   |   |   |   |   |
| Cash flow from operating activities:          |   |           |   |   |   |     |   |         |   |   |   |   |   |
| Net cash provided by continuing operations    |   | $              | 8,812  |   | $      | 376,432  |   | $            | 1,240  |   | $ | 386,484 |   |
| Net cash used in discontinued operations      |   |           | -      |   |   | -        |   |         | (4,259 | ) |   | (4,259 | ) |
| Net cash provided by (used in) operating      |   |           |   |   |   |     |   |         |   |   |   |   |   |
| activities                                    |   |           | 8,812  |   |   | 376,432  |   |         | (3,019 | ) |   | 382,225 |   |
|                                          |   |           |   |   |   |     |   |         |   |   |   |   |   |
| Cash flow from investing activities:          |   |           |   |   |   |     |   |         |   |   |   |   |   |
| Exploration, development and other capital    |   |           |   |   |   |     |   |         |   |   |   |   |   |
| expenditures                                  |   |           | -      |   |   | (111,059 | )      |         | -      |   |   | (111,059 | ) |
| Other                                         |   |           | -      |   |   | 1,112    |   |         | -      |   |   | 1,112 |   |
| Net cash used in investing activities         |   |           | -      |   |   | (109,947 | )      |         | -      |   |   | (109,947 | ) |
|                                          |   |           |   |   |   |     |   |         |   |   |   |   |   |
| Cash flow from financing activities:          |   |           |   |   |   |     |   |         |   |   |   |   |   |
| Net payments under revolving credit facility  |   |           | -      |   |   | (269,500 | )      |         | -      |   |   | (269,500 | ) |
| Dividends paid on convertible preferred stock |   |           | (9,108 | )      |   | -        |   |         | -      |   |   | (9,108 | ) |
| Payments for induced conversion of            |   |           |   |   |   |     |   |         |   |   |   |   |   |
| convertible senior notes                      |   |           | (2,663 | )      |   | -        |   |         | -      |   |   | (2,663 | ) |
| Proceeds from exercise of stock options,      |   |           |   |   |   |     |   |         |   |   |   |   |   |
| warrants and other                            |   |           | 4,686  |   |   | -        |   |         | -      |   |   | 4,686 |   |
| Investment from parent                        |   |           | (1,802 | )      |   | -        |   |         | 1,802  |   |   | - |   |
| Net cash provided by (used in) financing      |   |           |   |   |   |     |   |         |   |   |   |   |   |
| activities                                    |   |           | (8,887 | )      |   | (269,500 | )      |         | 1,802  |   |   | (276,585 | ) |
|                                          |   |           |   |   |   |     |   |         |   |   |   |   |   |
| Net decrease in cash and cash equivalents     |   |           | (75    | )      |   | (3,015   | )      |         | (1,217 | ) |   | (4,307 | ) |
| Cash and cash equivalents at beginning        |   |           |   |   |   |     |   |         |   |   |   |   |   |
| of year                                       |   |           | 143    |   |   | 3,446    |   |         | 1,241  |   |   | 4,830 |   |
| Cash and cash equivalents at end of year      |   | $              | 68     |   | $      | 431      |   | $            | 24     |   | $ | 523 |   |
|                                          |   |           |   |   |   |     |   |         |   |   |   |   |   |

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TABLE OF CONTENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

----

TABLE OF CONTENTS

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

----

TABLE OF CONTENTS

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TABLE OF CONTENTS

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TABLE OF CONTENTS

|                                  | Second Quarter |   | Six Months |   |
|---------------------------------------|----------------|--------|------------|--------|
|                                  | 2009           |   | 2008       |   | 2009 |   | 2008 |   |
| Sales volumes:                        |           |   |       |   |   |   |   |   |
| Gas (thousand cubic feet, or Mcf)     | 11,206,000     |   | 17,858,000 |   | 23,371,600 |   | 35,401,400 |   |
| Oil (barrels)                         | 751,500        |   | 1,125,400  |   | 1,500,700 |   | 2,214,500 |   |
| Plant products (per Mcf equivalent) a | 1,301,700      |   | 2,114,000  |   | 2,419,800 |   | 4,479,000 |   |
| Average realizations b                |           |   |       |   |   |   |   |   |
| Gas (per Mcf)                         | $ 3.92         |   | $ 12.11    |   | $ 4.42 |   | $ 10.60 |   |
| Oil (per barrel)                      | 58.24          |   | 122.99     |   | 49.59 |   | 110.40 |   |

| a.   | Results include approximately $6.2 million and $11.2 million of revenues associated with plant products (ethane, propane, butane, etc.) during the second quarter and six months ended June 30, 2009, respectively.  Plant product revenues for the comparable prior year periods totaled $21.0 million and $44.1 million.  One Mcf equivalentis determined using the ratio of six Mcf of natural gas to one barrel of crude oil, condensate or natural gas liquids. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| b.   | Excludes the impact of realized gains (losses) resulting from settlements under our commodity derivative contracts which we report as a component of “Gains (losses) on oil and gas derivative contracts” in our accompanying consolidated statements of operations.  We received cash of $16.8 million and $34.9 million, respectively, associatedwith the settlement of contracts in the second quarter and six months ended June 30, 2009.  We paid cash of $27.6 million and $31.2 million, respectively, associated with the settlement of contracts in the second quarter and six months ended June 30, 2008. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                     |  Second |    |   | Six    |     |
|----------------------------------------------------------|--------------|---------|--------|--------|----------|
|                                                     | Quarter      |    |   | Months |     |
| Oil and natural gas revenues – prior year period   | $            | 372,321 |   | $      | 664,267  |   |
| Increase (decrease)                                      |         |    |   |   |     |   |
| Price realizations:                                      |         |    |   |   |     |   |
| Natural gas                                              |         | (92,450 | )      |   | (144,436 | ) |
| Oil and condensate                                       |         | (48,660 | )      |   | (91,258  | ) |
| Sales volumes:                                           |         |    |   |   |     |   |
| Natural gas                                              |         | (76,914 | )      |   | (127,516 | ) |
| Oil and condensate                                       |         | (45,986 | )      |   | (78,804  | ) |
| Plant products revenues                                  |         | (14,804 | )      |   | (32,885  | ) |
| Other                                                    |         | 558     |   |   | (221     | ) |
| Oil and natural gas revenues – current year period | $            | 94,065  |   | $      | 189,147  |   |

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TABLE OF CONTENTS|                                | Second Quarter |   | Six Months |
|-------------------------------------|----------------|--------|------------|
|                                |           |   | Per        |   |   |   | Per |   |   |   | Per |   |   |   | Per |
|                                | 2009           |   | Mcfe       |   | 2008 |   | Mcfe |   | 2009 |   | Mcfe |   | 2008 |   | Mcfe |
| Lease operating expense             | $29.1          |   | $1.71      |   | $36.8 |   | $1.37 |   | $56.0 |   | $1.60 |   | $68.8 |   | $1.29 |
| Workover costs                      | 5.1            |   | 0.30       |   | 16.7 |   | 0.62 |   | 7.0 |   | 0.20 |   | 21.0 |   | 0.40 |
| Hurricane related expenses          | 3.8            |   | 0.23       |   | - |   | - |   | 14.7 |   | 0.42 |   | - |   | - |
| Insurance                           | 5.6            |   | 0.33       |   | 4.9 |   | 0.18 |   | 11.3 |   | 0.33 |   | 12.8 |   | 0.24 |
| Transportation and production taxes | 4.8            |   | 0.28       |   | 10.4 |   | 0.40 |   | 9.2 |   | 0.27 |   | 21.0 |   | 0.39 |
| Other                               | 0.4            |   | 0.02       |   | 0.7 |   | 0.03 |   | (0.4 | ) | (0.01 | ) | 1.6 |   | 0.03 |
| Total production and delivery costs | $48.8          |   | $2.87      |   | $69.5 |   | $2.60 |   | $97.8 |   | $2.81 |   | $125.2 |   | $2.35 |

|                      | Second Quarter |   | Six Months |
|---------------------------|----------------|--------|------------|
|                      |           |   | Per        |   |   |   | Per |   |   |   | Per |   |   |   | Per |
|                      | 2009           |   | Mcfe       |   | 2008 |   | Mcfe |   | 2009 |   | Mcfe |   | 2008 |   | Mcfe |
| DD&A expense          | $51.0          |   | $2.99      |   | $106.3 |   | $3.97 |   | $97.4 |   | $2.80 |   | $221.6 |   | $4.17 |
| Accretion expense         | 8.4            |   | 0.50       |   | 7.3 |   | 0.27 |   | 16.5 |   | 0.47 |   | 13.3 |   | 0.25 |
| Impairment charges/losses | 14.6           |   | 0.86       |   | 7.4 |   | 0.28 |   | 53.5 |   | 1.54 |   | 7.4 |   | 0.14 |
| Total                     | $74.0          |   | $4.35      |   | $121.0 |   | $4.52 |   | $167.4 |   | $4.81 |   | $242.3 |   | $4.56 |

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|                                       | Second Quarter |   | Six Months |   |
|--------------------------------------------|----------------|--------|------------|--------|
|                                       | 2009           |   | 2008       |   | 2009 |   | 2008 |   |
| Geological and geophysical                 |           |   |       |   |   |   |   |   |   |   |   |   |
| including 3-D seismic purchases a          | $              | 6.9    |       | $      | 12.5 |   | $ | 16.8 |   | $ | 18.0 |   |
| Nonproductive exploratory costs, including |           |   |       |   |   |   |   |   |   |   |   |   |
| related lease costs                        |           | 38.1   | b          |   | 13.1 |   |   | 54.4 | b |   | 12.4 |   |
| Other                                      |           | 1.8    |       |   | 1.9 |   |   | 4.1 |   |   | 3.9 |   |
|                                       | $              | 46.8   |       | $      | 27.5 |   | $ | 75.3 |   | $ | 34.3 |   |

| a.   | Includes compensation costs associated with outstanding stock-based awards totaling $1.3 million in the second quarter of 2009 and $4.4 million in the six months ended June 30, 2009 compared with $9.2 million and $10.0 million of compensation costs during comparable periods in 2008 (see “Stock-Based Compensation” below). |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | Includes non-productive well costs of $24.4 million related to the Ammazzo well and $11.0 million related to the Cordage well in the second quarter of 2009 as well as $10.8 million related to the Tom Sauk well and $5.4 million related to the Gladstone East well in the first quarter of 2009. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  TABLE OF CONTENTS  | Six Months Ended |   |
|-------------------------------|------------------|--------|
|                          | June 30,         |   |
|                          | 2009             |   | 2008 |   |
| Continuing operations         |             |   |   |   |   |   |
| Operating                     | $                | 55.2   |   | $ | 386.5 |   |
| Investing                     |             | (84.3  | ) |   | (109.9 | ) |
| Financing                     |             | 162.8  |   |   | (276.6 | ) |

| Discontinued operations |   |                                        |   |   |                                        |   |
|-------------------------|--------|---------------------------------------------|--------|--------|---------------------------------------------|--------|
| Operating               |   | (1.7                                        | )      |   | (4.3                                        | )      |
| Investing               |   |        - |   |   |        - |   |
| Financing               |   |       -       |   |   |       -       |   |
|                    |   |                                        |   |   |                                        |   |
| Total cash flow         |   |                                        |   |   |                                        |   |
| Operating               |   | 53.5                                        |   |   | 382.2                                       |   |
| Investing               |   | (84.3                                       | )      |   | (109.9                                      | )      |
| Financing               |   | 162.8                                       |   |   | (276.6                                      | )      |

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|                                       | Second Quarter |   | Six Months |   |
|--------------------------------------------|----------------|--------|------------|--------|
|                                       | 2009           |   | 2008       |   | 2009 |   | 2008 |   |
| General and administrative expenses        | $              | 1,446  |       | $      | 9,140 |   | $ | 4,566 |   | $ | 10,121 |   |
| Exploration expenses                       |           | 1,309  |       |   | 9,158 |   |   | 4,355 |   |   | 10,047 |   |
| Main Pass Energy Hub™ start-up costs |           | 78     |       |   | 636 |   |   | 259 |   |   | 707 |   |
| Total stock-based compensation cost        | $              | 2,833  |       | $      | 18,934 |   | $ | 9,180 |   | $ | 20,875 |   |
|                                       |           |   |       |   |   |   |   |   |   |   |   |   |

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 Quantitative and Qualitative Disclosures about Market Risk.

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|                              | 2009   |   | 2010   |   |
|-----------------------------------|--------|--------|--------|--------|
| Swaps                             |   |   |   |   |   |   |
|    +/- $1.00/MMbtu | $      | 1.1    |   | $      | 2.6 |   |
|    +/- $5.00/Bbl   |   | 0.2    |   |   | 0.6 |   |
| Puts                              |   |   |   |   |   |   |
|    +/- $1.00/MMbtu |   | 3.2    |   |   | 1.2 |   |
|    +/- $5.00/Bbl   |   | 0.6    |   |   | 0.3 |   |

 

Controls and Procedures

PART II––OTHER INFORMATION

Legal Proceedings

Risk Factors.

Unregistered Sales of Equity Securities and Use of Proceeds

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

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

Submission of Matters to a Vote of Security Holders

|                      | Votes Cast For | Authority Withheld |
|---------------------------|----------------|--------------------|
| 1. Election of Directors: |           |               |
| Richard C. Adkerson       | 64,609,971     | 1,093,709          |
| Robert A. Day             | 64,633,861     | 1,069,819          |
| Gerald J. Ford            | 63,741,101     | 1,962,579          |
| H. Devon Graham, Jr.      | 64,651,740     | 1,051,940          |
| Suzanne T. Mestayer       | 64,793,468     | 910,212            |
| James R. Moffett          | 64,593,516     | 1,110,164          |
| B. M. Rankin, Jr.         | 63,841,329     | 1,862,351          |

|                                                             | For               | Against                   | Abstentions |
|------------------------------------------------------------------|-----------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------|-------------|
| 2. Ratification of Ernst & Young LLP as independent auditors | 65,605,748                                                                              | 69,811                                                                                                              | 28,121      |

Exhibits.

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SIGNATURE

|                            | McMoRan Exploration Co.                        |
|---------------------------------|------------------------------------------------|
|                            |                                           |
|                            | By:  /s/ Nancy D. Parmelee           |
|                            | Nancy D. Parmelee                              |
|                            | Senior Vice President, Chief Financial Officer |
|                            | and Secretary                                  |
|                            | (authorized signatory and Principal            |
|                            | Financial Officer)                             |
|                            |                                           |
|                            |                                           |
|                            |                                           |
| Date:  August 7, 2009 |                                           |

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Exhibit Index

|    |                                                                                                                                                                                    | Filed     |                      |      |       |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------|---------------------------|-----------|------------|
| Exhibit |                                                                                                                                                                                    | with this | Incorporated by Reference |
| Number  | Exhibit Title                                                                                                                                                                           | Form 10-Q | Form                      | File No.  | Date Filed |
| 3.1     | Composite Certificate of Incorporation of McMoRan                                                                                                                                       | X         |                      |      |       |
| 3.2     | Amended and Restated By-Laws of McMoRan as amended effective January 30, 2006                                                                                                           |      | 8-K                       | 001-07791 | 02/03/2006 |
| 10.1    | Underwriting Agreement dates June 16, 2009 between McMoRan Exploration Co. and J.P. Morgan Securities Inc., as representative of the several underwriters named in Schedule 1 thereto   |      | 8-K                       | 001-07791 | 06/19/2009 |
| 10.2    | Underwriting Agreement dated June 16, 2009 between McMoRan Exploration Co. and J.P. Morgan Securities Inc., as a representative of the several underwriters named in Schedule 1 thereto |      | 8-K                       | 001-07791 | 06/19/2009 |
| 15.1    | Letter dated August 7, 2009 from Ernst & Young LLP regarding unaudited interim financial statements                                                                                 | X         |                      |      |       |
| 31.1    | Certification of Principal Executive Officer pursuant to Rule 13a–14(a)/15d-14(a)                                                                                                 | X         |                      |      |       |
| 31.2    | Certification of Principal Financial Officer pursuant to Rule 13a–14(a)/15d-14(a)                                                                                                 | X         |                      |      |       |
| 32.1    | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350                                                                                                         | X         |                      |      |       |
| 32.2    | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350                                                                                                         | X         |                      |      |       |

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