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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, 2005**                      |
| **OR**                                                                               |
| **[                ]**                                                               | **                                    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF                THE** |
| **SECURITIES                EXCHANGE ACT OF 1934**                                   |
| **For                the transition period from**                                    |   | **to** |
| **Commission                File Number: 001-07791**                                 |
|                                                                                 |
|                                                                                      |
|                                                                                 |
| **McMoRan                Exploration Co.**                                           |
| (Exact                name of registrant as specified in its                charter) |

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

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|------------------------------------------------------------------------------------------------------------------------------------|
| **McMoRan                Exploration Co.**                                                                                         |
| **TABLE                OF CONTENTS**                                                                                               |
|                                                                                                                               |
|                                                                                                                               | Page |
|                                                                                                                               |   |
| Part                I. Financial Information                                                                                       |   |
|                                                                                                                               |   |
| Financial                Statements:                                                                                               |   |
|                                                                                                                               |   |
| Condensed                Consolidated Balance Sheets                (Unaudited)                                                    | 3 |
|                                                                                                                               |   |
| Consolidated                Statements of Operations                (Unaudited)                                                    | 4 |
|                                                                                                                               |   |
| Consolidated                Statements of Cash Flow                (Unaudited)                                                     | 5 |
|                                                                                                                               |   |
| Notes                to Consolidated Financial                Statements                                                           | 6 |
|                                                                                                                               |   |
| Remarks                                                                                                                            | 11 |
|                                                                                                                               |   |
| Report                of Independent Registered Public Accounting                Firm                                              | 12 |
|                                                                                                                               |   |
| Management's                Discussion and Analysis of                Financial Condition and Results of                Operations |  13 |
|                                                                                                                               |   |
| Quantitative                and Qualitative Disclosures about Market                Risks                                          | 23 |
|                                                                                                                               |   |
| Controls                and Procedures                                                                                             | 23 |
|                                                                                                                               |   |
| Part                II. Other Information                                                                                          | 23 |
|                                                                                                                               |   |
| Signature                                                                                                                          | 24 |
|                                                                                                                               |   |
| Exhibit                Index                                                                                                       | E-1 |

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Table          of Contents

**McMoRan      Exploration Co.**

**Part      I. FINANCIAL INFORMATION**

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

**McMoRan      EXPLORATION CO.**

**CONDENSED      CONSOLIDATED BALANCE SHEETS(Unaudited)**

|                                                                                       | June                            30,       |    | December                            31, |   |
|--------------------------------------------------------------------------------------------|-------------------------------------------|---------|-----------------------------------------|--------|
|                                                                                       | 2005                                      |    | 2004                                    |   |
|                                                                                       | (In                            Thousands) |    |
| ASSETS                                                                                     |                                      |    |                                    |   |   |   |
| Cash                            and cash equivalents:                                      |                                      |    |                                    |   |   |   |
| Continuing                            operations, includes restricted cash of $3.1 million |                                      |    |                                    |   |   |   |
| at                            June 30, 2005 and $3.7 million at December 31, 2004          | $                                         | 166,224 |                                    | $      | 203,035 |   |
| Discontinued                            operations, all restricted                         |                                      | 990     |                                    |   | 980 |   |
| Restricted                            investments                                     |                                      | 15,150  |                                    |   | 15,150 |   |
| Accounts                            receivable                                             |                                      | 26,229  |                                    |   | 27,403 |   |
| Inventories                                                                                |                                      | 2,909   |                                    |   | 854 |   |
| Prepaid                            expenses                                                |                                      | 1,944   |                                    |   | 1,122 |   |
| Current                            assets from discontinued operations, excluding cash     |                                      | 2,649   |                                    |   | 2,563 |   |
| Total                            current assets                                            |                                      | 216,095 |                                    |   | 251,107 |   |
| Property,                            plant and equipment, net                              |                                      | 133,530 |                                    |   | 97,262 |   |
| Sulphur                            business assets                                         |                                      | 312     |                                    |   | 312 |   |
| Restricted                            investments and cash                                 |                                      | 17,786  |                                    |   | 24,779 |   |
| Other                            assets                                               |                                      | 9,427   |                                    |   | 10,460 |   |
| Total                            assets                                                    | $                                         | 377,150 |                                    | $      | 383,920 |   |
|                                                                                       |                                      |    |                                    |   |   |   |
| LIABILITIES                            AND STOCKHOLDERS’ DEFICIT                     |                                      |    |                                    |   |   |   |
| Accounts                            payable                                                | $                                         | 37,715  |                                    | $      | 33,997 |   |
| Accrued                            liabilities                                             |                                      | 29,694  |                                    |   | 28,197 |   |
| Accrued                            interest                                                |                                      | 5,635   |                                    |   | 5,635 |   |
| Current                            portion of accrued oil and gas reclamation costs        |                                      | -       |                                    |   | 238 |   |
| Current                            portion of accrued sulphur reclamation cost             |                                      | 2,550   |                                    |   | 2,550 |   |
| Current                            liabilities from discontinued operations                |                                      | 5,026   |                                    |   | 4,601 |   |
| Total                            current liabilities                                       |                                      | 80,620  |                                    |   | 75,218 |   |
| 6%                            convertible senior notes                                     |                                      | 130,000 |                                    |   | 130,000 |   |
| 5¼%                            convertible senior notes                               |                                      | 140,000 |                                    |   | 140,000 |   |
| Accrued                            sulphur reclamation costs                               |                                      | 12,566  |                                    |   | 12,086 |   |
| Accrued                            oil and gas reclamation costs                           |                                      | 22,018  |                                    |   | 14,191 |   |
| Contractual                            postretirement obligation                           |                                      | 15,189  |                                    |   | 15,695 |   |
| Other                            long-term liabilities                                     |                                      | 15,794  |                                    |   | 16,711 |   |
| Mandatorily                            redeemable convertible preferred stock              |                                      | 28,903  |                                    |   | 29,565 |   |
| Stockholders'                            deficit                                           |                                      | (67,940 | )                                       |   | (49,546 | ) |
| Total                            liabilities and stockholders' deficit                     | $                                         | 377,150 |                                    | $      | 383,920 |   |
|                                                                                       |                                      |    |                                    |   |   |   |

Table            of Contents

**McMoRan      EXPLORATION CO.**

**CONSOLIDATED      STATEMENTS OF OPERATIONS (Unaudited**

|                                                                         | Three                        Months Ended                       |    | Six                        Months Ended |   |
|------------------------------------------------------------------------------|-----------------------------------------------------------------|---------|-----------------------------------------|--------|
|                                                                         | June                        30,                                 |    | June                        30,         |   |
|                                                                         | 2005                                                            |    | 2004                                    |   | 2005 |   | 2004 |   |
| Revenues:                                                                    | (In                        Thousands, Except Per Share Amounts) |    |
| Oil                        and gas                                           | $                                                               | 30,875  |                                    | $      | 2,923 |   | $ | 42,255 |   | $ | 6,514 |   |
| Service                                                                      |                                                            | 3,077   |                                    |   | 6,512 |   |   | 6,364 |   |   | 7,031 |   |
| Total                        revenues                                        |                                                            | 33,952  |                                    |   | 9,435 |   |   | 48,619 |   |   | 13,545 |   |
| Costs                        and expenses:                                   |                                                            |    |                                    |   |   |   |   |   |   |   |   |   |
| Production                        and delivery costs                         |                                                            | 4,670   |                                    |   | 1,562 |   |   | 8,370 |   |   | 3,088 |   |
| Depreciation                        and amortization                         |                                                            | 9,013   |                                    |   | 1,012 |   |   | 12,929 |   |   | 2,388 |   |
| Exploration                        expenses                                  |                                                            | 28,497  |                                    |   | 10,106 |   |   | 36,033 |   |   | 13,432 |   |
| General                        and administrative expenses                   |                                                            | 5,246   |                                    |   | 3,712 |   |   | 9,636 |   |   | 6,389 |   |
| Start-up                        costs for Main Pass Energy Hub™        |                                                            | 2,601   |                                    |   | 1,711 |   |   | 4,885 |   |   | 5,994 |   |
| Insurance                        recovery                                    |                                                            | (3,857  | )                                       |   | (1,074 | ) |   | (8,900 | ) |   | (1,074 | ) |
| Total                        costs and expenses                              |                                                            | 46,170  |                                    |   | 17,029 |   |   | 62,953 |   |   | 30,217 |   |
| Operating                        loss                                        |                                                            | (12,218 | )                                       |   | (7,594 | ) |   | (14,334 | ) |   | (16,672 | ) |
| Interest                        expense                                      |                                                            | (4,094  | )                                       |   | (2,180 | ) |   | (7,881 | ) |   | (4,412 | ) |
| Equity                        in K-Mc Venture I LLC’s income           |                                                            | -       |                                    |   | 409 |   |   | - |   |   | 443 |   |
| Other                        income, net                                     |                                                            | 1,421   |                                    |   | 228 |   |   | 3,020 |   |   | 377 |   |
| Loss                        from continuing operations                       |                                                            | (14,891 | )                                       |   | (9,137 | ) |   | (19,195 | ) |   | (20,264 | ) |
| Loss                        from discontinued operations                     |                                                            | (938    | )                                       |   | (1,692 | ) |   | (1,967 | ) |   | (3,409 | ) |
| Net                        loss                                              |                                                            | (15,829 | )                                       |   | (10,829 | ) |   | (21,162 | ) |   | (23,673 | ) |
| Preferred                        dividends and amortization of convertible   |                                                            |    |                                    |   |   |   |   |   |   |   |   |   |
| preferred                        stock issuance costs                        |                                                            | (404    | )                                       |   | (410 | ) |   | (815 | ) |   | (822 | ) |
| Net                        loss applicable to common stock                   | $                                                               | (16,233 | )                                       | $      | (11,239 | ) | $ | (21,977 | ) | $ | (24,495 | ) |
|                                                                         |                                                            |    |                                    |   |   |   |   |   |   |   |   |   |
| Basic                        and diluted net loss per share of common stock: |                                                            |    |                                    |   |   |   |   |   |   |   |   |   |
| Continuing                        operations                                 |                                                            | $(0.62  | )                                       |   | $(0.55 | ) |   | $(0.82 | ) |   | $(1.23 | ) |
| Discontinued                        operations                               |                                                            | (0.04   | )                                       |   | (0.10 | ) |   | (0.08 | ) |   | (0.20 | ) |
| Net                        loss per share of common stock                    |                                                            | $(0.66  | )                                       |   | $(0.65 | ) |   | $(0.90 | ) |   | $(1.43 | ) |
|                                                                         |                                                            |    |                                    |   |   |   |   |   |   |   |   |   |
| Basic                        and diluted average shares outstanding          |                                                            | 24,615  |                                    |   | 17,170 |   |   | 24,500 |   |   | 17,102 |   |

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Table            of Contents

**McMoRan      EXPLORATION CO.**

**CONSOLIDATED      STATEMENTS OF CASH FLOW (Unaudited**

|                                                                                                                            |   | Six                    Months Ended |    |
|---------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|---------|
|                                                                                                                            |   | June                    30,         |    |
|                                                                                                                            |   | 2005                                |    | 2004 |   |
|                                                                                                                            |   | (In                    Thousands)   |    |
| **Cash                    flow from operating activities:**                                                                     |   |                                |    |   |   |   |   |
| Net                    loss                                                                                                     |   | $                                   | (21,162 | ) | $ | (23,673 | ) |
| Adjustments                    to reconcile net loss to net cash provided by (used in) operating                    activities: |   |                                |    |   |   |   |   |
| Loss                    from discontinued operations                                                                            |   |                                | 1,967   |   |   | 3,409 |   |
| Depreciation                    and amortization                                                                                |   |                                | 12,929  |   |   | 2,388 |   |
| Exploration                    drilling and related expenditures                                                                |   |                                | 28,920  |   |   | 7,542 |   |
| Compensation                    expense associated with stock-based awards                                                      |   |                                | 1,019   |   |   | 564 |   |
| Reclamation                    and mine shutdown expenditures                                                                   |   |                                | (4      | ) |   | (281 | ) |
| Amortization                    of deferred financing costs                                                                     |   |                                | 1,112   |   |   | 704 |   |
| Equity                    in K-Mc Venture I LLC’s income                                                                  |   |                                | -       |   |   | (443 | ) |
| Other                                                                                                                           |   |                                | (366    | ) |   | 245 |   |
| (Increase)                    decrease in working capital:                                                                      |   |                                |    |   |   |   |   |
| Accounts                    receivable                                                                                          |   |                                | 2,784   |   |   | 1,989 |   |
| Accounts                    payable, accrued liabilities and other                                                              |   |                                | 11,189  |   |   | 10,200 |   |
| Inventories                    and prepaid expenses                                                                             |   |                                | (2,878  | ) |   | 371 |   |
| Net                    cash provided by continuing operations                                                                   |   |                                | 35,510  |   |   | 3,015 |   |
| Net                    cash used in discontinued operations                                                                     |   |                                | (1,591  | ) |   | (3,215 | ) |
| Net                    cash provided by (used in) operating activities                                                          |   |                                | 33,919  |   |   | (200 | ) |
|                                                                                                                            |   |                                |    |   |   |   |   |
| **Cash                    flow from investing activities**:                                                                     |   |                                |    |   |   |   |   |
| Exploration,                    development and other capital expenditures                                                      |   |                                | (79,212 | ) |   | (12,332 | ) |
| Proceeds                    from restricted investments                                                                         |   |                                | 7,575   |   |   | 3,900 |   |
| Increase                    in restricted investments                                                                           |   |                                | (320    | ) |   | (109 | ) |
| Net                    cash used in continuing operations                                                                       |   |                                | (71,957 | ) |   | (8,541 | ) |
| Net                    cash used in discontinued operations                                                                     |   |                                | -       |   |   | (5,920 | ) |
| Net                    cash used in investing activities                                                                        |   |                                | (71,957 | ) |   | (14,461 | ) |
|                                                                                                                            |   |                                |    |   |   |   |   |
| **Cash                    flow from financing activities:**                                                                     |   |                                |    |   |   |   |   |
| Dividends                    paid on convertible preferred stock                                                                |   |                                | (757    | ) |   | (765 | ) |
| Proceeds                    from exercise of stock options and other                                                            |   |                                | 1,994   |   |   | 435 |   |
| Net                    cash provided by (used in) continuing operations                                                         |   |                                | 1,237   |   |   | (330 | ) |
| Net                    cash used in discontinued operations                                                                     |   |                                | -       |   |   | - |   |
| Net                    cash provided by (used in) financing activities                                                          |   |                                | 1,237   |   |   | (330 | ) |
| Net                    decrease in cash and cash equivalents                                                                    |   |                                | (36,801 | ) |   | (14,991 | ) |
| Cash                    and cash equivalents at beginning of year                                                               |   |                                | 204,015 |   |   | 101,899 |   |
| Cash                    and cash equivalents at end of period                                                                   |   |                                | 167,214 |   |   | 86,908 |   |
| Less                    restricted cash from continuing operations                                                              |   |                                | (3,135  | ) |   | - |   |
| Less                    restricted cash from discontinued operations                                                            |   |                                | (990    | ) |   | (971 | ) |
| Unrestricted                    cash and cash equivalents at end of period                                                      |   | $                                   | 163,089 |   | $ | 85,937 |   |

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Table            of Contents

**McMoRan      EXPLORATION CO.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**1.      **

**BASIS      OF PRESENTATION**

** **

**2.      EARNINGS PER SHARE**

|                                                          |   | Second                Quarter |   |   | Six                Months |   |
|---------------------------------------------------------------|--------|-------------------------------|--------|--------|---------------------------|--------|
|                                                          |   | 2005                          |   |   | 2004                      |   |   | 2005 |   |   | 2004 |   |
| In-the-money                stock options a                ,b |   |                          | 1,470  |   |                      |   | 821 |   |   |   | 1,421 |   |   |   | 895 |   |
| Stock                warrants a,c                             |   |                          | 1,815  |   |                      |   | 1,633 |   |   |   | 1,811 |   |   |   | 1,674 |   |
| 5%                convertible preferred stock d               |   |                          | 6,214  |   |                      |   | 6,365 |   |   |   | 6,214 |   |   |   | 6,365 |   |
| 6%                convertible senior notes e                  |   |                          | 9,123  |   |                      |   | 9,123 |   |   |   | 9,123 |   |   |   | 9,123 |   |
| 5¼%                convertible senior notes f            |   |                          | 8,446  |   |                      |   | N/A |   |   |   | 8,446 |   |   |   | N/A |   |

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

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

| c.   | Includes                stock warrants issued to K1 USA Energy Production Corporation in                December                2002 (1.74 million shares) and September 2003 (0.76 million shares).                The                warrants are exercisable for McMoRan common stock at any time over                their                respective five-year terms at an exercise price of $5.25 per share.                See                Note 4 of McMoRan’s 2004 Form 10-K for additional information regarding                the warrants. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| d.   | At                the election of the holder, and before the shares mature on June                30, 2012,                each outstanding share of 5% mandatorily redeemable convertible preferred                stock (1.2 million shares outstanding as of June 30, 2005) is convertible                into 5.1975 shares of McMoRan common stock. For additional information                regarding McMoRan’s convertible preferred stock see Note 5 of McMoRan’s                2004 Form 10-K. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table            of Contents

| e.   | The                  notes, issued in July 2003, are convertible at the option of the                  holder at                  any time prior to their maturity on July 2, 2008 into shares of                  McMoRan                  common stock at a conversion price of $14.25 per share. Additional                  information regarding McMoRan’s 6% convertible senior notes is disclosed                  in Note 5 of its 2004 Form 10-K. Accrued interest on the 6% convertible                  senior notes totaled $2.0 million during the second quarters of                  2005 and                  2004 and $3.9 million for the six-month periods ended June 30,                  2005 and                  2004. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| f.   | The                notes, issued in October 2004, are convertible at the option of the                holder                at any time prior to their maturity on October 6, 2011 into shares                of                McMoRan common stock at a conversion price of $16.575 per share.                Additional information regarding McMoRan’s 5¼% convertible senior notes is                disclosed in Note 5 of its 2004 Form 10-K. Accrued interest on the                5¼%                convertible senior notes totaled $1.8 million and $3.7 million for                the                second quarter and six months ended June 30, 2005,                respectively. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                              |   | Second                Quarter |   |   | Six                Months |   |
|---------------------------------------------------|--------|-------------------------------|--------|--------|---------------------------|--------|
|                                              |   | 2005                          |   |   | 2004                      |   |   | 2005 |   |   | 2004 |   |
| Outstanding                options (in thousands) |   |                          | 420    |   |                      |   | 2,628 |   |   |   | 420 |   |   |   | 2,629 |   |
| Average                exercise price             |   | $                             | 21.71  |   |                      | $      | 17.25 |   |   | $ | 21.71 |   |   | $ | 17.24 |   |

*Stock-Based      Compensation Plans.*
** **

|                                                                                                                                         |   | Three                    Months Ended |    | Six                    Months Ended |   |
|----------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|---------|-------------------------------------|--------|
|                                                                                                                                         |   | June                    30,           |    | June                    30,         |   |
|                                                                                                                                         |   | 2005                                  |    | 2004                                |   | 2005 |   | 2004 |   |
| Net                    loss applicable to common stock, as                                                                                   |   |                                  |    |                                |   |   |   |   |   |   |   |   |   |
| reported                                                                                                                                     |   | $                                     | (16,233 | )                                   | $      | (11,239 | ) | $ | (21,977 | ) | $ | (24,495 | ) |
| Add:                    Stock-based compensation expense                                                                                     |   |                                  |    |                                |   |   |   |   |   |   |   |   |   |
| included                    in reported net loss for restricted stock units and employee                    stock                    options |   |                                  | 652     |                                |   | 207 |   |   | 860 |   |   | 410 |   |
| Deduct:                    Total stock-based compensation                                                                                    |   |                                  |    |                                |   |   |   |   |   |   |   |   |   |
| expense                    determined under fair value-based method for all awards                                                           |   |                                  | (5,248  | )                                   |   | (1,406 | ) |   | (9,129 | ) |   | (6,037 | ) |
| Pro                    forma net income (loss) applicable to                                                                                 |   |                                  |    |                                |   |   |   |   |   |   |   |   |   |
| common                    stock                                                                                                              |   | $                                     | (20,829 | )                                   | $      | (12,438 | ) | $ | (30,246 | ) | $ | (30,122 | ) |
|                                                                                                                                         |   |                                  |    |                                |   |   |   |   |   |   |   |   |   |
| Earnings                    per share:                                                                                                       |   |                                  |    |                                |   |   |   |   |   |   |   |   |   |
| Basic                    and diluted - as reported                                                                                           |   | $                                     | (0.66   | )                                   | $      | (0.65 | ) | $ | (0.90 | ) | $ | (1.43 | ) |
| Basic                    and diluted - pro forma                                                                                             |   | $                                     | (0.85   | )                                   | $      | (0.72 | ) | $ | (1.23 | ) | $ | (1.76 | ) |

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Table            of Contents

|                                                 |   | Second                  Quarter |   | Six                  Months |   |
|------------------------------------------------------|--------|---------------------------------|--------|-----------------------------|--------|
|                                                 |   | 2005                            |   | 2004                        |   | 2005 |   | 2004 |   |
| Fair                  value of stock options         |   | $                               | 11.88  |                        | $      | 11.18 |   | $ | 11.45 |   | $ | 11.03 |   |
| Risk                  free interest rate             |   |                            | 4.5    | %                           |   | 4.0 | % |   | 4.3 | % |   | 3.9 | % |
| Expected                  volatility rate            |   |                            | 61.1   | %                           |   | 64.0 | % |   | 61.2 | % |   | 64.7 | % |
| Expected                  life of options (in years) |   |                            | 7      |                        |   | 7 |   |   | 7 |   |   | 7 |   |
| Assumed                  annual dividend             |   |                            | -      |                        |   | - |   |   | - |   |   | - |   |

**3.      OTHER MATTERS**

**Blueberry      Hill**

**Minuteman      **

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Table            of Contents

*Accounting      of Asset Retirement Obligations*

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Table            of Contents

|                                                      |   |   | Second                Quarter |   |   | Six                Months |   |
|-----------------------------------------------------------|--------|--------|-------------------------------|--------|--------|---------------------------|--------|
|                                                      |   |   | 2005                          |   |   | 2004                      |   |   | 2005 |   |   | 2004 |   |
| Interest                cost                              |   | $      | 50                            |   | $      | 113                       |   | $ | 83 |   | $ | 188 |   |
| Service                cost                               |   |   | -                             |   |   | -                         |   |   | - |   |   | - |   |
| Return                on plan assets                      |   |   | (67                           | )      |   | 24                        |   |   | (85 | ) |   | (61 | ) |
| Change                in plan payout assumptions          |   |   | -                             |   |   | -                         |   |   | - |   |   | - |   |
| Net                periodic (benefit)                cost |   | $      | (17                           | )      | $      | 137                       |   | $ | (2 | ) | $ | 127 |   |

**4.      NEW ACCOUNTING STANDARD**

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

Remark

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Table            of            Contents

REPORT      OF INDEPENDENT 

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Table            of Contents

Discussion and Analysis 

**OVERVIEW**

*In      management’s discussion and analysis “we,”“us,” and “our” refer to McMoRan      Exploration Co. and its wholly owned consolidated subsidiaries, McMoRan Oil      & Gas LLC (MOXY) and Freeport-McMoRan Energy LLC (Freeport Energy). You      should read the following discussions in conjunction with our consolidated      financial statements, the related discussion and analysis of financial condition      and results of operations and our discussion of “Business and Properties” in our      Form 10-K for the year ended December 31, 2004 (2004 Form 10-K), filed with      the      Securities and Exchange Commission. The results of operations reported and      summarized below are not necessarily indicative of future operating results.      Unless otherwise specified, all references to Notes refers to Consolidated      Notes      to Financial Statements included elsewhere in this Form 10-Q. *

**OIL      & GAS ACTIVITIES**

|                                                                                                |  **Working****Interest** | **Net****Revenue****Interest** |  **Prospect                  Acreage****a** | **Water                  Depth** | **Proposed                  Total****Depth****b** |  **Current                  Depth****c** | **Spud                  Date****d**** ** |
|-----------------------------------------------------------------------------------------------------|-------------------------------|--------------------------------|--------------------------------------------------|----------------------------------|---------------------------------------------------|-----------------------------------------------|-----------------------------------------------|
| **In                  Progress Wells:**                                                             |                          |                           |                                             |                             |                                              |                                          |                                          |
| West                  Cameron Block 43 No. 4 e                                                      | 23.4%                         | 18.0%                          | 2,500                                            | 30’                        | 18,500’                                     | 18,500’                                 | April                  25, 2005               |
| South                  Marsh Island Block 224“**JB                  Mountain Deep**”e,f | 27.5%                         | 19.4%                          | 2,200                                            | 10'                              | 23,000'                                           |  6,700’                            | July                  14, 2005                |
| Louisiana                  State Lease 18090“**Long                  Point**”f          | 37.5%                         | 26.8%                          |  5,000                                      | 8’                         | 20,000’                                     |  5,800’                            | July                  21, 2005                |
| Louisiana                  State Lease 18055“**Cane                  Ridge**”f          | 37.5%                         | 27.5%                          | 1,000                                            | N/Af                             | 16,500’                                     |  4,000’                            | July                  29, 2005                |
| **Near-Term                  Well:**                                                                |                          |                           |                                             |                             |                                              |                                          |                                          |
| Louisiana                  State Lease 18350“**Point                  Chevreuil**”      | 25.0%                         | 17.5%                          | 1,700                                            | 12’                        | 17,000’                                     | N/A                                           | Third                  Quarter2005            |

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|                                                                                                   |  **Working****Interest** | **Net****Revenue****Interest** |  **Prospect                Acreage****a** | **Water                Depth** | **Proposed                Total****Depth****b** |  **Current                Depth****c** | **Spud                Date**               |
|--------------------------------------------------------------------------------------------------------|-------------------------------|--------------------------------|------------------------------------------------|--------------------------------|-------------------------------------------------|---------------------------------------------|--------------------------------------------|
| **Development                Wells:**                                                                  |                          |                           |                                           |                           |                                            |                                        |                                       |
| Vermilion                Blocks 16/17“**King                Kong**”                No. 2 f | 40.0%                         | 29.2%                          | 1,850                                          | 12’                      | 13,750’                                   | N/A                                         | Second                Half 2005       |
| South                Marsh Island Block 225“**Hurricane**”                No. 2 f     | 27.5%                         | 19.4%                          | 7,700                                          | 12’                      | 16,000’                                   | N/A                                         | Second                Half  2005 |

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

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

| c.   | Approximate                total depth of well on August 3,                2005. |
|----------------|----------------------------------------------------------------------------------|

| d.   | Timing                of second-half 2005 development wells are subject to                change. |
|----------------|---------------------------------------------------------------------------------------------------|

| e.   | Depending                upon applicability of Deep Gas Royalty Relief eligibility criteria,                the                lease on which these wells are located could be eligible for royalty                relief up to 25 Bcf of gas production under current Minerals Management                Service (MMS) guidelines. Our net revenue interests would increase                during                the royalty relief period for eligible                leases. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| f.   | Wells                in which we are the operator or expect to be the                operator. |
|----------------|------------------------------------------------------------------------------------------------|

| g.   | Prospect                located onshore Louisiana. |
|----------------|----------------------------------------------------|

**King      Kong**

**Little      Bay**
**Korn**

**Delmonico**

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**Hurricane      Upthrown**

**Deep      Tern C-1**

**West      Cameron Block 43**

**Blueberry      Hill**

**Dawson      Deep**

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**MAIN      PASS ENERGY HUB**
**TM**

**      PROJECT**

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**RESULTS      OF OPERATIONS**

** **

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|                                                           | Three                      Months Ended |   | Six                      Months Ended |   |
|----------------------------------------------------------------|-----------------------------------------|--------|---------------------------------------|--------|
|                                                           | June                      30,           |   | June                      30,         |   |
|                                                           | 2005                                    |   | 2004                                  |   | 2005 |   | 2004 |   |
| Sales                      volumes:                            |                                    |   |                                  |   |   |   |   |   |
| Gas                      (thousand cubic feet, or Mcf)         | 2,764,700                               |   | 339,500                               |   | 4,175,200 |   | 748,000 |   |
| Oil,                      excluding Main Pass 299 (barrels)    | 79,800                                  |   | 11,900                                |   | 96,800 |   | 37,500 |   |
| Oil                      from Main Pass 299 (barrels) a        | 100,600                                 |   | -                                     |   | 100,600 |   | - |   |
| Plant                      products (equivalent barrels) b     | 28,400                                  |   | 5,200                                 |   | 35,500 |   | 11,800 |   |
| Average                      realizations:                     |                                    |   |                                  |   |   |   |   |   |
| Gas                      (per Mcf)                             | $                      7.51             |   | $                      6.51           |   | $                      7.28 |   | $                      6.19 |   |
| Oil,                      excluding Main Pass 299 (per barrel) | 51.78                                   |   | 38.00                                 |   | 51.52 |   | 36.02 |   |
| Oil                      from Main Pass 299 (per barrel)       | 46.52                                   |   | -                                     |   | 46.52 |   | - |   |

| a.                 | Main                Pass 299 resumed production on May 6, 2005 following successful                modification of existing storage tanks to accommodate transportation                of                oil from the field by barge. The oil operations at Main Pass 299                produced                at a gross rate of approximately 4,000 barrels per day (3,300 net                to us)                during the quarter. At June 30, 2005, we had approximately 107,000                barrels                of oil inventory attributable to the Main Pass 299 operations. |
|------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.                 | We                received approximately $1.2                million and $1.4 million of revenues associated with plant products                (ethane, propane, butane, etc.) during the second quarter of 2005                and six                months ending June 30, 2005, respectively, compared with $0.1 million                and                $0.3 million of plant product revenues in the comparable periods                last                year. The increase in plant product revenue in 2005 reflects commencement                of production from our recent discoveries, specifically production                from                the Hurricane and Deep Tern fields. |
|------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Oil      and Gas Operations**

|                                                        | SecondQuarter |   |   | SixMonths |   |
|-------------------------------------------------------------|---------------|--------|--------|-----------|--------|
| Oil                and gas revenues - prior year period     | $             | 2,923  |   | $         | 6,514  |   |
| Increase                in:                                 |          |   |   |      |   |   |
| Sales                volumes:                               |          |   |   |      |   |   |
| Oil,                excluding Main Pass 299                 |          | 2,580  |   |      | 2,136  |   |
| Gas                                                         |          | 15,788 |   |      | 21,214 |   |
| Price                realizations:                          |          |   |   |      |   |   |
| Oil,                excluding Main Pass 299                 |          | 1,100  |   |      | 1,500  |   |
| Gas                                                         |          | 2,765  |   |      | 4,551  |   |
| Revenue                from oil production at Main Pass 299 |          | 4,681  |   |      | 4,681  |   |
| Plant                products revenues                      |          | 1,037  |   |      | 1,118  |   |
| Other                                                       |          | 1      |   |      | 541    |   |
| Oil                and gas revenues - current year period   | $             | 30,875 |   | $         | 42,255 |   |

**Hurricane      Upthrown**
**Deep      Tern C-1**
**Deep      Tern C-2**
**Minuteman      **

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|                                                        | Second                  Quarter |   | Six                  Months |   |
|-------------------------------------------------------------|---------------------------------|--------|-----------------------------|--------|
|                                                        | 2005                            |   | 2004                        |   | 2005 |   | 2004 |   |
| Geological                  and geophysical                 | $                               | 1.0    |                        | $      | 2.6 |   | $ | 2.8 |   | $ | 3.5 |   |
| Nonproductive                  exploratory costs, including |                            |   |                        |   |   |   |   |   |   |   |   |   |
| related                  lease costs                        |                            | 26.0   | a                           |   | 6.8 | b |   | 28.9 | a,c |   | 7.5 | b |
| Other                                                       |                            | 1.5    | d                           |   | 0.7 |   |   | 4.3 | d |   | 2.4 |   |
|                                                        | $                               | 28.5   |                        | $      | 10.1 |   | $ | 36.0 |   | $ | 13.4 |   |

| a.   | Includes                nonproductive exploratory drilling and related costs associated with                the                “Korn” well at South Timbalier Blocks 97/98 ($6.9 million), the “Little                Bay” well at Louisiana State Lease 5097 ($11.0 million) and the                “Delmonico” well at Louisiana State Lease 1706 in the Lake Sand Field Area                ($7.5 million). |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | Reflects                $6.8 million of nonproductive exploratory well and related costs                for the                Lombardi Deep well during the second quarter of 2004 and $0.7 million                for                the costs incurred on the Hurricane well at South Marsh Island Block                217                during the first quarter of 2004. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c.   | Includes                nonproductive exploratory well costs associated with the “Caracara” well                at Vermilion Blocks 227/228 ($1.2 million), the “King of the Hill” well at                High Island Block 131 ($0.3 million), the “Gandalf ” well at Mustang                Island Block 829 ($0.2 million) and the deeper zones at both the                “Hurricane Upthrown” well at South Marsh Island Block 217 ($0.4 million)                and the West Cameron Block 43 No. 3 exploratory well ($0.4 million).                Amount also includes the write-off of approximately $0.4 million                of                leasehold costs associated with one onshore Louisiana prospect. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| d.   | Includes                insurance costs associated with our increasing exploration drilling                activities. Increase over 2004 periods also includes higher delay                rental                payments to maintain portions of our acreage                position. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Other        Financial Results**

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**CAPITAL      RESOURCES AND LIQUIDITY**

|                                   | Six                  Months EndedJune                  30 |   |
|----------------------------------------|-----------------------------------------------------------|--------|
|                                   | 2005                                                      |   |   | 2004 |   |
| Continuing                  operations |                                                      |   |   |   |   |   |   |
| Operating                              | $                                                         | 35.5   |   |   | $ | 3.0 |   |
| Investing                              |                                                      | (72.0  | ) |   |   | (8.5 | ) |
| Financing                              |                                                      | 1.2    |   |   |   | (0.3 | ) |

| Discontinued                  operations |   |   |   |   |   |   |   |
|------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
| Operating                                |   | (1.6   | )      |   |   | (3.2   | )      |
| Investing                                |   | -      |   |   |   | (5.9   | )      |
| Financing                                |   | -      |   |   |   |   |   |

| Total                  cash flow |   |   |   |   |   |   |   |
|----------------------------------|--------|--------|--------|--------|--------|--------|--------|
| Operating                        |   | 33.9   |   |   |   | (0.2   | )      |
| Investing                        |   | (72.0  | )      |   |   | (14.5  | )      |
| Financing                        |   | 1.2    |   |   |   | (0.3   | )      |

**Six-Month      2005 Cash Flows Compared with Six-Month 2004**

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**DISCONTINUED      OPERATIONS**

|                                               | Second                  Quarter |   | Six                  Months |   |
|----------------------------------------------------|---------------------------------|--------|-----------------------------|--------|
|                                               | 2005                            |   | 2004                        |   | 2005 |   | 2004 |   |
| Sulphur                  retiree costs a           | $                               | 184    |                        | $      | 717 |   | $ | 402 |   | $ | 1,298 |   |
| Legal                  expenses b                  |                            | 150    |                        |   | 593 |   |   | 386 |   |   | 1,149 |   |
| Caretaking                  costs                  |                            | 253    |                        |   | 232 |   |   | 443 |   |   | 424 |   |
| Accretion                  expense - sulphur       |                            |   |                        |   |   |   |   |   |   |   |   |   |
| reclamation                  obligations           |                            | 240    |                        |   | 217 |   |   | 480 |   |   | 434 |   |
| Insurance                                          |                            | 94     |                        |   | 122 |   |   | 184 |   |   | 252 |   |
| General                  and administrative        |                            | 58     |                        |   | 26 |   |   | 77 |   |   | 109 |   |
| Other                                              |                            | (41    | )                           |   | (215 | )c |   | (5 | ) |   | (257 | )c |
| Loss                  from discontinued operations | $                               | 938    |                        | $      | 1,692 |   | $ | 1,967 |   | $ | 3,409 |   |

| a.   | The                decreases during 2005 reflect lower expected costs associated with                an                obligation to reimburse a third party a portion of the postretirement                benefit costs relating to certain retired sulphur employees. The                decrease                primarily resulted from certain plan changes made by the plan sponsor                that                decreased the number of former employees covered by the obligation                and the                amount of future benefits to be                paid. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | The                decreases during 2005 reflect the July 2004 settlement of certain                litigation involving the reclamation of certain sulphur structures                at Main                Pass. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c.   | The                amounts during 2004 primarily reflect sublease income on railcars                following their purchase in January 2004. Sublease of railcars terminated                in second quarter of 2004. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**CAUTIONARY      STATEMENT**

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* *

Quantitative      and Qualitative 

Controls      and Procedures

PART      II--

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Table            of Contents

|                                     | Votes                Cast For | Authority                Withheld |
|------------------------------------------|-------------------------------|-----------------------------------|
| 1.                Election of Directors: |                          |                              |
| Richard                C. Adkerson       | 20,920,565                    | 186,029                           |
| Gerald                J. Ford            | 20,876,263                    | 230,331                           |
| H.                Devon Graham, Jr.      | 20,853,959                    | 252,635                           |
| James                R. Moffett          | 20,923,518                    | 183,076                           |
| B.                M. Rankin, Jr.         | 20,855,354                    | 251,240                           |

|                                                                              | For        | Against   | Abstentions | BrokerNon-Votes |
|-----------------------------------------------------------------------------------|------------|-----------|-------------|-----------------|
| 2.                  Ratification of Ernst & Young LLP as independent auditors | 21,063,677 | 22,736    | 20,181      | 0               |
| 3.                  Proposal to adopt 2005 Stock Incentive Plan                   | 10,169,049 | 4,189,151 | 52,729      | 6,695,665       |

SIGN

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Table      of Contents

**McMoRan      Exploration Co.**

**Exhibit      Index**

**Exhibit      Number**

| 2.1        | Agreement                  and Plan of Mergers dated as of August 1, 1998. (Incorporated by                  reference                  to Annex A to McMoRan’s Registration Statement on Form S-4 (Registration                  No. 333-61171) filed with the SEC on October 6, 1998 (the McMoRan                  S-4)).                                                                                                                                                                                                                                                                     |
|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 3.1        | Amended                  and Restated Certificate of Incorporation of McMoRan. (Incorporated                  by                  reference to Exhibit 3.1 to McMoRan’s 1998 Annual Report on Form 10-K (the                  McMoRan 1998 Form 10-K)).                                                                                                                                                                                                                                                                                                                                         |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 3.2        | Certificate                  of Amendment to the Amended and Restated Certificate of Incorporation                  of                  McMoRan. (Incorporated by reference to Exhibit 3.2 of McMoRan’s                  First-Quarter 2003 Form 10-Q).                                                                                                                                                                                                                                                                                                                                         |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 3.3        | Amended                  and Restated By-laws of McMoRan as amended effective February 2,                  2004.                  (Incorporated by reference to Exhibit 3.3 to McMoRan’s 2003 Annual Report                  on Form 10-K (the McMoRan 2003 Form 10-K)).                                                                                                                                                                                                                                                                                                                        |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.1        | Form                  of Certificate of McMoRan Common Stock (Incorporated by reference                  to                  Exhibit 4.1 of the McMoRan S-4).                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.2        | Rights                  Agreement dated as of November 13, 1998. (Incorporated by reference                  to                  Exhibit 4.2 to McMoRan 1998 Form 10-K).                                                                                                                                                                                                                                                                                                                                                                                                                              |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.3        | Amendment                  to Rights Agreement dated December 28, 1998. (Incorporated by reference                  to                  Exhibit 4.3 to McMoRan 1998 Form 10-K).                                                                                                                                                                                                                                                                                                                                                                                                                       |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.4        | Standstill                  Agreement dated August 5, 1999 between McMoRan and Alpine Capital,                  L.P.,                  Robert W. Bruce III, Algenpar, Inc, J.Taylor Crandall, Susan C.                  Bruce,                  Keystone, Inc., Robert M. Bass, the Anne T. and Robert M. Bass                  Foundation,                  Anne T. Bass and The Robert Bruce Management Company, Inc. Defined                  Benefit                  Pension Trust. (Incorporated by reference to Exhibit 4.4 to McMoRan’s                  Third Quarter 1999 Form 10-Q). |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.5        | Form                  of Certificate of McMoRan 5% Convertible Preferred Stock (McMoRan                  Preferred Stock). (Incorporated by reference to Exhibit 4.5 to                  McMoRan’s                  Second Quarter 2002 Form 10-Q).                                                                                                                                                                                                                                                                                                                                             |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.6        | Certificate                  of Designations of McMoRan Preferred Stock. (Incorporated by reference                  to                  Exhibit 4.6 to McMoRan’s Third-Quarter 2002 Form 10-Q).                                                                                                                                                                                                                                                                                                                                                                                                |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.7        | Warrant                  to Purchase Shares of Common Stock of McMoRan Exploration Co. dated                  December 16, 2002. (Incorporated by reference to Exhibit 4.7 to                  McMoRan’s                  2002 Form 10-K).                                                                                                                                                                                                                                                                                                                                                      |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.8        | Warrant                  to Purchase Shares of Common Stock of McMoRan Exploration Co. dated                  September 30, 2003. (Incorporated by reference to Exhibit 4.8 to                  McMoRan’s                  2003 Form 10-K),                                                                                                                                                                                                                                                                                                                                                     |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 4.9        | Registration                  Rights Agreement dated December 16, 2002 between McMoRan Exploration                  Co.                  and K1 USA Energy Production Corporation. (Incorporated by reference                  to                  Exhibit 4.8 to McMoRan’s 2002 Form 10-K).                                                                                                                                                                                                                                                                                                    |
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|  4.10 |  Indenture                  dated as of July 2, 2003 by and between McMoRan and The Bank of                  New York,                  as trustee. (Incorporated by reference to Exhibit 4.9 to McMoRan’s                  Second-Quarter 2003 Form 10-Q).                                                                                                                                                                                                                                                                                                                                |

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| 4.11   | Collateral                  Pledge and Security Agreement dated as of July 2, 2003 by and among                  McMoRan, as pledgor, The Bank of New York, as trustee, and the                  Bank of New                  York, as collateral agent. (Incorporated by reference to Exhibit                  4.11 to                  McMoRan’s Second-Quarter 2003 Form 10-Q).                                                                                           |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 4.12   | Indenture                  dated October 6, 2004 by and among McMoRan and the Bank of New                  York, as                  trustee. (Incorporated by reference to Exhibit 99.3 to McMoRan’s Current                  Report on Form 8-K dated October 6, 2004 (filed October 7,                  2004).                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 4.13   | Collateral                  Pledge and Security Agreement dated October 6, 2004 by and among                  McMoRan,                  as pledgor, The Bank of New York, as trustee and the Bank of New                  York, as                  collateral agent. (Incorporated by reference to Exhibit 99.4 to                  McMoRan’s                  Current Report on Form 8-K dated October 6, 2004 (filed October                  7,                  2004).  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 4.14   | Registration                  Rights Agreement dated October 6, 2004 by and among McMoRan, as                  issuer and                  Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan                  Securities Inc. and Jefferies & Company, Inc. as Initial Purchasers.                  (Incorporated by reference to Exhibit 99.5 to McMoRan’s Current Report on                  Form 8-K dated October 6, 2004 (filed October 7, 2004). |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.1   | Main                  Pass 299 Sulphur and Salt Lease, effective May 1, 1988. (Incorporated                  by                  reference to Exhibit 10.1 to McMoRan’s 2001 Annual Report on Form 10-K                  (the McMoRan 2001 Form                  10-K)).                                                                                                                                                                                                     |

| 10.2   | IMC                Global/FSC Agreement dated as of March 29, 2002 among IMC Global                Inc., IMC                Global Phosphate Company, Phosphate Resource Partners Limited Partnership,                IMC Global Phosphates MP Inc., MOXY and McMoRan. (Incorporated by                reference to Exhibit 10.10 to McMoRan’s Second Quarter 2002 Form                10-Q). |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.3   | Amended                and Restated Services Agreement dated as of January 1, 2002 between                McMoRan and FM Services Company. (Incorporated by reference to Exhibit                10.3 to McMoRan’s Second-Quarter 2003 Form 10-Q).                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.4   | Letter                Agreement dated August 22, 2000 between Devon Energy Corporation                and                Freeport Sulphur. (Incorporated by reference to Exhibit 10.36 to                McMoRan’s                Third-Quarter 2000 Form 10-Q).                                                                                                                              |

| 10.5   | Asset                Purchase Agreement dated effective December 1, 1999 between SOI Finance                Inc., Shell Offshore Inc. and MOXY. (Incorporated by reference to                Exhibit                10.33 in the McMoRan 1999 Form 10-K).                                                                                                |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                     |
| 10.6   | Employee                Benefits Agreement by and between Freeport-McMoRan Inc. and Freeport                Sulphur (Incorporated by reference to Exhibit 10.29 to McMoRan’s 2001 Form                10-K).                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                     |
| 10.7   | Purchase                and Sales agreement dated January 25, 2002 but effective January                1, 2002                by and between MOXY and Halliburton Energy Services, Inc. (Incorporated                by                reference to Exhibit 10.1 to McMoRan’s Current Report on Form 8-K dated                February 22, 2002). |

| 10.8   | Purchase                  and Sale Agreement dated as of March 29, 2002 by and among Freeport                  Sulphur, McMoRan, MOXY and Gulf Sulphur Services Ltd., LLP. (Incorporated                  by reference to Exhibit 10.37 to McMoRan’s First-Quarter 2002 Form 10-Q.)                            |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                 |
| 10.9   | Purchase                  and Sale Agreement dated May 9, 2002 by and between MOXY and El                  Paso                  Production Company. (Incorporated by reference to Exhibit 10.28                  to                  McMoRan’s Second Quarter 2002 Form 10-Q).                                |
|   |                                                                                                                                                                                                                                                                                                                 |
| 10.10  | Amendment                  to Purchase and Sale Agreement dated May 22, 2002 by and between                  MOXY and                  El Paso Production Company. (Incorporated by reference to Exhibit                  10.29 to                  McMoRan’s Second Quarter 2002 Form                  10-Q). |

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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.11  | Master                    Agreement dated October 22, 2002 by and among Freeport-McMoRan                    Sulphur                    LLC, K-Mc Venture LLC, K1 USA Energy Production Corporation and                    McMoRan                    Exploration Co. (Incorporated by reference to Exhibit 10.18 to                    McMoRan’s                    2002 Form 10-K).                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Executive                    and Director Compensation Plans and Arrangements (Exhibits 10.12                    through                    10.32).                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.12  | McMoRan                    Adjusted Stock Award Plan, as amended. (Incorporated by reference                    to                    Exhibit 10.15 to McMoRan’s 2003 Form 10-K)                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.13  | McMoRan                    1998 Stock Option Plan.                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.14  | McMoRan                    1998 Stock Option Plan for Non-Employee Directors.                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.15  | McMoRan                    Form of Notice of Grant of Nonqualified                    Stock Options and Limited Rights under the 1998 Stock Option                    Plan.                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.16  | McMoRan                    2000 Stock Incentive                    Plan.                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.17  | McMoRan                    Form of Notice of Grant of Nonqualified                    Stock Options and Limited Rights under the 2000 Stock Incentive                    Plan.                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.18  | McMoRan                    2001 Stock Incentive Plan.                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.19  | McMoRan                    2003 Stock Incentive                    Plan.                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.20  | McMoRan’s                    Performance Incentive Awards Program as amended effective February                    1,                    1999. (Incorporated by reference to Exhibit 10.18 to McMoRan’s 1998 Form                    10-K).                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.21  | McMoRan                    Form of Notice of Grant of Nonqualified                    Stock Options and Limited Rights under the 2001 Stock Incentive                    Plan.                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.22  | McMoRan                    Form of Restricted Stock Unit Agreement                    Under the 2001 Stock Incentive Plan.                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.23  | McMoRan                    Financial Counseling and Tax Return Preparation and Certification                    Program,                    effective September 30, 1998. (Incorporated by reference to Exhibit                    10.26                    to McMoRan’s First-Quarter 2003 Form 10-Q)                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.24  | McMoRan                    Form of Notice of Grants of Nonqualified                    Stock Options and Limited Rights under the 2003 Stock Incentive                    Plan.                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.25  | McMoRan                    Form of Restricted Stock Unit Agreement                    Under the 2003 Stock Incentive Plan.                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.26  | McMoRan                    2004 Director Compensation Plan. (Incorporated by reference to                    Exhibit                    10.29 to McMoRan’s Second-Quarter 2004 Form 10-Q)                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.27  | Agreement                    for Consulting Services between Freeport-McMoRan and B. M. Rankin,                    Jr.                    effective as of January 1, 1991)(assigned to FM Services as of                    January 1,                    1996); as amended on December 15, 1997 and on December 7, 1998.                    (Incorporated by reference to Exhibit 10.32 to McMoRan 1998 Form                    10-K). |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.28  | Supplemental                    Agreement between FM Services and B.M. Rankin, Jr. effective                    as of January                    1, 2005. (Incorporated by reference to Exhibit 10.1 to McMoRan’s Current                    Report on Form 8-K dated January 19, 2005 (filed January 24,                    2005).                                                                                               |

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Table                of Contents

|   |                                                                                                                                                                                                                                                                                                   |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.29  | McMoRan                    Director Compensation. (Incorporated by reference to Exhibit                    10.27 to                    McMoRan’s 2004 Form 10-K).                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                   |
| 10.30  | McMoRan                    Exploration Co. 2005 Stock Incentive Plan. (Incorporated by reference                    to                    Exhibit 10.1 to McMoRan’s Current Report on Form 8-K filed on May 6,                    2005).                                                         |
|   |                                                                                                                                                                                                                                                                                                   |
| 10.31  | Form                    of Notice of Grant of Nonqualified Stock Options under the 2005                    Stock                    Incentive Plan. (Incorporated by reference to Exhibit 10.2 to                    McMoRan’s                    Current Report on Form 8-K filed May 6, 2005). |
|   |                                                                                                                                                                                                                                                                                                   |
| 10.32  | Form                    of Restricted Stock Unit Agreement under the 2005 Stock Incentive                    Plan.                    (Incorporated by reference to Exhibit 10.3 to McMoRan’s Current Report on                    Form 8-K filed May 6, 2005).                                  |
|   |                                                                                                                                                                                                                                                                                                   |
| 15.1   | Letter                    dated August 3, 2005 from Ernst & Young                    LLP regarding unaudited interim financial                    statements.                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                   |
| 31.1   | Certification                    of Principal Executive Officer                    pursuant to Rule 13a-14(a)/15d-14(a).                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                   |
| 31.2   | Certification                    of Principal Financial Officer                    pursuant to Rule 13a-14(a)/15d-14(a).                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                   |
| 32.1   | Certification                    of Principal Executive Officer                    pursuant to 18 U.S.C. Section 1350.                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                   |
| 32.2   | Certification                    of Principal Financial Officer                    pursuant to 18 U.S.C. Section                    1350.                                                                                                                                                              |

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