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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      September 30, 2008      |
| OR                                                          |
| [  ]                                              | TRANSITION REPORT PURSUANT TO      SECTION 13 OR 15(d) OF THE |
| SECURITIES EXCHANGE ACT OF      1934                        |
| For the transition period      from                         |   | to |
| Commission File Number:      001-07791                      |
|                                                        |
|                                                             |
|                                                        |
| McMoRan Exploration      Co.                                |
| (Exact      name of registrant as specified in its charter) |
|                                                        |

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

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

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|                                                             |
|------------------------------------------------------------------|
| McMoRan      Exploration Co.                                     |
| TABLE OF CONTENTS                                                |
|                                                             |
|                                                             | Page |
|                                                             |   |
| Part      I.  Financial Information                    |   |
|                                                             |   |
| Financial Statements:                                            |   |
|                                                             |   |
| Condensed Consolidated Balance Sheets      (Unaudited)           | 3 |
|                                                             |   |
| Consolidated Statements of Operations      (Unaudited)           | 4 |
|                                                             |   |
| Consolidated Statements of Cash Flow      (Unaudited)            | 5 |
|                                                             |   |
| Notes to Consolidated Financial    Statements                    | 6 |
|                                                             |   |
| Report of Independent Registered Public Accounting      Firm     | 27 |
|                                                             |   |
| Management's Discussion and Analysis                             |   |
| of Financial Condition and Results of      Operations            | 28 |
|                                                             |   |
| Quantitative and Qualitative Disclosures about Market      Risks | 44 |
|                                                             |   |
| Controls and Procedures                                          | 45 |
|                                                             |   |
| Part      II.  Other Information                       | 45 |
|                                                             |   |
| Signature                                                        | 46 |
|                                                             |   |
| Exhibit      Index                                               | E-1 |

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TABLE OF CONTENTS

Part I.  FINANCIAL INFORMATION

| Item      1. | FinancialStatements. |
|--------------|----------------------|

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

CONDENSED CONSOLIDATEDBALANCE SHEETS 

|                                                                           |   | September      30,  |      | December      31, |   |
|--------------------------------------------------------------------------------|--------|---------------------|-----------|-------------------|--------|
|                                                                           |   | 2008                |      | 2007              |   |
|                                                                           |   | (In      Thousands) |      |
| ASSETS                                                                         |   |                |      |              |   |   |   |
| Cash      and cash equivalents                                                 |   | $                   | 160,635   |              | $      | 4,830 |   |
| Accounts      receivable                                                       |   |                | 115,712   |              |   | 128,690 |   |
| Inventories                                                                    |   |                | 33,153    |              |   | 11,507 |   |
| Prepaid      expenses                                                          |   |                | 19,171    |              |   | 14,331 |   |
| Fair      value of oil and gas derivative contracts                            |   |                | 11,035    |              |   | 16,623 |   |
| Current      assets from discontinued operations, including restricted    cash |   |                |      |              |   |   |   |
| of      $0.5 million                                                           |   |                | 3,175     |              |   | 3,029 |   |
| Total      current assets                                                      |   |                | 342,881   |              |   | 179,010 |   |
| Property,      plant and equipment, net                                        |   |                | 1,316,850 |              |   | 1,503,359 |   |
| Sulphur      business assets, net                                              |   |                | 339       |              |   | 349 |   |
| Restricted      investments and cash                                           |   |                | 26,073    |              |   | 7,036 |   |
| Fair      value of oil and gas derivative contracts                            |   |                | 1,182     |              |   | 4,317 |   |
| Deferred      financing costs                                                  |   |                | 16,620    |              |   | 21,217 |   |
| Total      assets                                                              |   | $                   | 1,703,945 |              | $      | 1,715,288 |   |
|                                                                           |   |                |      |              |   |   |   |
| LIABILITIES      AND STOCKHOLDERS’ EQUITY                                |   |                |      |              |   |   |   |
| Accounts      payable                                                          |   | $                   | 105,606   |              | $      | 97,821 |   |
| Accrued      liabilities                                                       |   |                | 95,807    |              |   | 68,292 |   |
| 6%      convertible senior notes                                               |   |                | -         |              |   | 100,870 |   |
| Other      short term borrowings                                               |   |                | -         |              |   | 10,665 |   |
| Accrued      interest and dividends payable                                    |   |                | 17,622    |              |   | 13,055 |   |
| Current      portion of accrued oil and gas reclamation costs                  |   |                | 202,342   |              |   | 80,839 |   |
| Current      portion of accrued sulphur reclamation cost                       |   |                | 10,719    |              |   | 12,145 |   |
| Fair      value of oil and gas derivative contracts                            |   |                | 11,444    |              |   | 14,001 |   |
| Current      liabilities from discontinued operations                          |   |                | 1,715     |              |   | 2,624 |   |
| Total      current liabilities                                                 |   |                | 445,255   |              |   | 400,312 |   |
| Senior      secured revolving credit facility                                  |   |                | -         |              |   | 274,000 |   |
| 5¼%      convertible senior notes                                         |   |                | 74,720    |              |   | 115,000 |   |
| 11.875%      senior notes                                                      |   |                | 300,000   |              |   | 300,000 |   |
| Accrued      oil and gas reclamation costs                                     |   |                | 222,021   |              |   | 213,898 |   |
| Accrued      sulphur reclamation costs                                         |   |                | 9,670     |              |   | 9,155 |   |
| Contractual      postretirement obligation                                     |   |                | 5,911     |              |   | 6,216 |   |
| Fair      value of oil and gas derivative contracts                            |   |                | 5,751     |              |   | 7,516 |   |
| Other      long-term liabilities                                               |   |                | 22,315    |              |   | 16,962 |   |
| Total      liabilities                                                         |   |                | 1,085,643 |              |   | 1,343,059 |   |
| Stockholders'      equity                                                      |   |                | 618,302   |              |   | 372,229 |   |
| Total      liabilities and stockholders' equity                                |   | $                   | 1,703,945 |              | $      | 1,715,288 |   |
|                                                                           |   |                |      |              |   |   |   |

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TABLE OF CONTENTS

CONSOLIDATED STATEMENTS OFOPERATIONS 

|                                                              | Three      Months Ended                       |    | Nine      Months Ended |   |
|-------------------------------------------------------------------|-----------------------------------------------|---------|------------------------|--------|
|                                                              | September      30,                            |    | September      30,     |   |
|                                                              | 2008                                          |    | 2007                   |   | 2008 |   | 2007 |   |
|                                                              | (In      Thousands, Except Per Share Amounts) |    |
| Revenues:                                                         |                                          |    |                   |   |   |   |   |   |   |   |   |   |
| Oil      and gas                                                  | $                                             | 282,688 |                   | $      | 131,018 |   | $ | 946,955 |   | $ | 227,381 |   |
| Service                                                           |                                          | 2,557   |                   |   | 2,234 |   |   | 9,274 |   |   | 2,916 |   |
| Total      revenues                                               |                                          | 285,245 |                   |   | 133,252 |   |   | 956,229 |   |   | 230,297 |   |
| Costs      and expenses:                                          |                                          |    |                   |   |   |   |   |   |   |   |   |   |
| Production      and delivery costs                                |                                          | 69,923  |                   |   | 38,197 |   |   | 195,074 |   |   | 72,543 |   |
| Depletion,      depreciation and amortization                     |                                          | 250,124 |                   |   | 85,014 |   |   | 492,457 |   |   | 127,579 |   |
| Exploration      expenses                                         |                                          | 15,092  |                   |   | 37,060 |   |   | 49,385 |   |   | 52,163 |   |
| (Gain)      loss on oil and gas derivative contracts              |                                          | (80,399 | )                      |   | (10,695 | ) |   | 35,607 |   |   | (10,695 | ) |
| General      and administrative expenses                          |                                          | 10,720  |                   |   | 6,992 |   |   | 37,969 |   |   | 17,804 |   |
| Start-up      costs for Main Pass Energy Hub™               |                                          | 1,728   |                   |   | 2,345 |   |   | 4,990 |   |   | 7,802 |   |
| Insurance      recovery                                           |                                          | -       |                   |   | - |   |   | (3,391 | ) |   | - |   |
| Total      costs and expenses                                     |                                          | 267,188 |                   |   | 158,913 |   |   | 812,091 |   |   | 267,196 |   |
| Operating      income (loss)                                      |                                          | 18,057  |                   |   | (25,661 | ) |   | 144,138 |   |   | (36,899 | ) |
| Interest      expense, net                                        |                                          | (10,870 | )                      |   | (22,887 | ) |   | (40,501 | ) |   | (34,296 | ) |
| Other      income (expense), net                                  |                                          | 202     |                   |   | (2,457 | ) |   | (2,322 | ) |   | (876 | ) |
| Income      (loss) from continuing operations before income taxes |                                          | 7,389   |                   |   | (51,005 | ) |   | 101,315 |   |   | (72,071 | ) |
| Provision      for income taxes                                   |                                          | (1,284  | )                      |   | - |   |   | (3,149 | ) |   | - |   |
| Income      (loss) from continuing operations                     |                                          | 6,105   |                   |   | (51,005 | ) |   | 98,166 |   |   | (72,071 | ) |
| Income (loss) from discontinued      operations                   |                                          | (1,356  | )                      |   | (1,179 | ) |   | (2,960 | ) |   | 50 |   |
| Net      income (loss)                                            |                                          | 4,749   |                   |   | (52,184 | ) |   | 95,206 |   |   | (72,021 | ) |
| Preferred      dividends, amortization of convertible preferred   |                                          |    |                   |   |   |   |   |   |   |   |   |   |
| stock      issuance costs and inducement payments for the         |                                          |    |                   |   |   |   |   |   |   |   |   |   |
| early      conversion of preferred stock                          |                                          | (10,881 | )                      |   | - |   |   | (19,604 | ) |   | (1,552 | ) |
| Net      income (loss) applicable to common stock                 | $                                             | (6,132  | )                      | $      | (52,184 | ) | $ | 75,602 |   | $ | (73,573 | ) |
|                                                              |                                          |    |                   |   |   |   |   |   |   |   |   |   |
| Basic      net income (loss) per share of common stock:           |                                          |    |                   |   |   |   |   |   |   |   |   |   |
| Continuing      operations                                        |                                          | $(0.08  | )                      |   | $(1.47 | ) |   | $1.34 |   |   | $(2.40 | ) |
| Discontinued      operations                                      |                                          | (0.02   | )                      |   | (0.03 | ) |   | (0.05 | ) |   | 0.00 |   |
| Net      income (loss) per share of common stock                  |                                          | $(0.10  | )                      |   | $(1.50 | ) |   | $1.29 |   |   | $(2.40 | ) |
|                                                              |                                          |    |                   |   |   |   |   |   |   |   |   |   |
| Diluted      net income (loss) per share of common stock:         |                                          |    |                   |   |   |   |   |   |   |   |   |   |
| Continuing      operations                                        |                                          | $(0.08  | )                      |   | $(1.47 | ) |   | $1.17 |   |   | $(2.40 | ) |
| Discontinued      operations                                      |                                          | (0.02   | )                      |   | (0.03 | ) |   | (0.03 | ) |   | 0.00 |   |
| Net      income (loss) per share of common stock                  |                                          | $(0.10  | )                      |   | $(1.50 | ) |   | $1.14 |   |   | $(2.40 | ) |
|                                                              |                                          |    |                   |   |   |   |   |   |   |   |   |   |
| Average      common shares outstanding :                          |                                          |    |                   |   |   |   |   |   |   |   |   |   |
| Basic                                                             |                                          | 64,446  |                   |   | 34,693 |   |   | 58,617 |   |   | 30,644 |   |
| Diluted                                                           |                                          | 64,446  |                   |   | 34,693 |   |   | 87,718 |   |   | 30,644 |   |

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CONSOLIDATED STATEMENTS OFCASH FLOW 

|                                                                    |   | Nine      Months Ended |     |
|-------------------------------------------------------------------------|--------|------------------------|----------|
|                                                                    |   | September      30,     |     |
|                                                                    |   | 2008                   |     | 2007 |   |
|                                                                    |   | (In      Thousands)    |     |
| Cash      flow from operating activities:                               |   |                   |     |   |   |   |   |
| Net      income (loss)                                                  |   | $                      | 95,206   |   | $ | (72,021 | ) |
| Adjustments      to reconcile net income (loss) to net cash provided by |   |                   |     |   |   |   |   |
| operating      activities:                                              |   |                   |     |   |   |   |   |
| (Income)      loss from discontinued operations                         |   |                   | 2,960    |   |   | (50 | ) |
| Depletion,      depreciation and amortization                           |   |                   | 492,457  |   |   | 127,579 |   |
| Exploration      drilling and related expenditures                      |   |                   | 15,692   |   |   | 21,663 |   |
| Compensation      expense associated with stock-based awards            |   |                   | 25,546   |   |   | 10,905 |   |
| Amortization      of deferred financing costs                           |   |                   | 3,675    |   |   | 4,441 |   |
| Unrealized      loss on oil and gas derivative contracts                |   |                   | 2,548    |   |   | (10,695 | ) |
| Loss      on induced conversion of convertible senior notes             |   |                   | 2,663    |   |   | - |   |
| Reclamation      expenditures, net of payments by third parties         |   |                   | (6,500   | ) |   | (4,186 | ) |
| Increase      in restricted cash                                        |   |                   | (11,364  | ) |   | - |   |
| Payment      to fund terminated pension plan                            |   |                   | (2,291   | ) |   | - |   |
| Purchase      of oil and gas derivative contracts and other             |   |                   | 83       |   |   | (4,716 | ) |
| (Increase)      decrease in working capital:                            |   |                   |     |   |   |   |   |
| Accounts      receivable                                                |   |                   | 18,229   |   |   | (72,533 | ) |
| Accounts      payable and accrued liabilities                           |   |                   | 30,661   |   |   | 78,632 |   |
| Prepaid      expenses and inventories                                   |   |                   | (35,299  | ) |   | 23,375 |   |
| Net      cash provided by continuing operations                         |   |                   | 634,266  |   |   | 102,394 |   |
| Net      cash provided by discontinued operations                       |   |                   | 1,897    |   |   | 673 |   |
| Net      cash provided by operating activities                          |   |                   | 636,163  |   |   | 103,067 |   |
| Cash      flow from investing activities:                               |   |                   |     |   |   |   |   |
| Exploration,      development and other capital expenditures            |   |                   | (186,904 | ) |   | (109,165 | ) |
| Acquisition      of oil and gas properties                              |   |                   | (613     | ) |   | (1,051,302 | ) |
| Proceeds      from restricted investments                               |   |                   | -        |   |   | 3,037 |   |
| Increase      in restricted investments                                 |   |                   | -        |   |   | (126 | ) |
| Net      cash used in continuing operations                             |   |                   | (187,517 | ) |   | (1,157,556 | ) |
| Net      cash from discontinued operations                              |   |                   | -        |   |   | - |   |
| Net      cash used in investing activities                              |   |                   | (187,517 | ) |   | (1,157,556 | ) |
| Cash flow from financing      activities:                               |   |                   |     |   |   |   |   |
| (Payments)      borrowings under senior secured revolving credit        |   |                   |     |   |   |   |   |
| facility,      net                                                      |   |                   | (274,000 | ) |   | 284,250 |   |
| Proceeds      from unsecured bridge loan facility                       |   |                   | -        |   |   | 800,000 |   |
| Proceeds      from senior secured term loan                             |   |                   | -        |   |   | 100,000 |   |
| Repayment      of senior secured term loan                              |   |                   | -        |   |   | (100,000 | ) |
| Financing      costs                                                    |   |                   | -        |   |   | (31,216 | ) |
| Dividend      and inducement payments on convertible preferred stock    |   |                   | (20,883  | ) |   | (1,121 | ) |
| Payments      for induced conversion of convertible senior notes        |   |                   | (2,663   | ) |   | - |   |
| Proceeds      from exercise of stock options and other                  |   |                   | 4,705    |   |   | 1,065 |   |
| Net      cash (used in) provided by continuing operations               |   |                   | (292,841 | ) |   | 1,052,978 |   |
| Net      cash from discontinued operations                              |   |                   | -        |   |   | - |   |
| Net      cash (used in) provided by financing activities                |   |                   | (292,841 | ) |   | 1,052,978 |   |
| Net      increase (decrease) in cash and cash equivalents               |   |                   | 155,805  |   |   | (1,511 | ) |
| Cash      and cash equivalents at beginning of year                     |   |                   | 4,830    |   |   | 17,830 |   |
| Cash      and cash equivalents at end of period                         |   | $                      | 160,635  |   | $ | 16,319 |   |

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

| Cash      paid for acquired assets at closing (August 6, 2007) | $      | 1,076,286 |    |
|----------------------------------------------------------------|--------|-----------|---------|
| Estimated      oil & gas reclamation costs                 |   | 268,766   |    |
| Net      assets acquired at closing                            |   | 1,345,052 |    |
| Post      closing adjustments                                  |   | (38,645   | )a      |
| Other      acquisition related costs                           |   | 17,124    |  b |
| Net      assets acquired                                       | $      | 1,323,531 |    |

| a.   | Represents      net cash flow from the operation of the acquired properties during the      period from July 1, 2007 (effective date) to August 6, 2007 (closing      date). |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | Includes      $3.5 million contingency settled in the first quarter of    2008. |
|----------------|---------------------------------------------------------------------------------|

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| Accounts      receivable                                       | $      | 35,649    |   |
|----------------------------------------------------------------|--------|-----------|--------|
| Oil      and gas property, plant and equipment                 |   | 1,322,819 |   |
| Asset      retirement obligations                              |   | (268,766  | )      |
| Other      accrued liabilities                                 |   | (13,416   | )      |
| Cash      paid for acquired assets at closing (August 6, 2007) | $      | 1,076,286 |   |

|                                                      | Third      Quarter |    |   | Nine      Months |   |
|-----------------------------------------------------------|--------------------|---------|--------|------------------|--------|
|                                                      | 2007               |    |   | 2007             |   |
| Revenues                                                  | $                  | 202,753 |   |             | $      | 637,680 |   |
| Operating      income                                     |               | 11,818  |   |             |   | 68,811 |   |
| Net      loss                                             |               | (25,695 | )      |             |   | (37,479 | ) |
| Basic      and diluted net loss per share of common stock | $                  | (0.74   | )      |             | $      | (1.22 | ) |

|                                            | September      30, |    | December      31, |   |
|-------------------------------------------------|--------------------|---------|-------------------|--------|
|                                            | 2008               |    | 2007              |   |
| Senior      secured revolving credit facility   | $                  | -       |              | $      | 274,000 |   |
| 11.875%      senior notes due 2014              |               | 300,000 |              |   | 300,000 |   |
| 5¼%      convertible senior notes due 2011 |               | 74,720  |              |   | 115,000 |   |
| 6%      convertible senior notes due 2008       |               | -       |              |   | 100,870 |   |
| Other                                           |               | -       |              |   | 10,665 |   |
| Total      debt                                 |               | 374,720 |              |   | 800,535 |   |
| Less      current maturities                    |               | -       |              |   | (111,535 | ) |
| Long-term      debt                             | $                  | 374,720 |              | $      | 689,000 |   |

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| 4.   | EARNINGS      PER SHARE |
|----------------|-------------------------|

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TABLE OF CONTENTS

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

|                                                                |   | Third   |   | Third   |   | Nine   |   |
|---------------------------------------------------------------------|--------|---------|--------|---------|--------|--------|--------|
|                                                                |   | Quarter |   | Quarter |   | Months |   |
|                                                                |   | 2008    |   | 2007    |   |
| Stock      options a,      b                                        |   | 2,947   |   | 709     |   | 663    |   |
| Stock      warrants a,      c                                       |   | 20      |   | 1,550   |   | 1,538  |   |
| Assumed      conversion of 6¾% mandatory convertible preferred |   |    |   |    |   |   |   |
| stock      d                                                        |   | 16,899  |   | -       |   | -      |   |
| 5%      mandatorily redeemable convertible preferred stock g        |   | -       |   | -       |   | -      |   |
| 6%      convertible senior notes e                                  |   | 66      |   | 7,079   |   | 7,079  |   |
| 5¼%      convertible senior notes f                            |   | 4,508   |   | 6,938   |   | 6,938  |   |

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

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

| c.   | Includes      in-the-money stock warrants issued to K1 USA Energy Production Corporation      (K1) in December 2002 (1.74 million shares) and September 2003 (0.76      million shares).  The warrants were exercisable for McMoRan      common stock at any time over their respective five-year terms at an      exercise price of $5.25 per share.  In December 2007, K1      exercised the stock warrant for 1.74 |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| d.   | In      the third quarter of 2008, McMoRan induced conversion of approximately      $99.0 million of its 6¾% preferred stock.  See Note 8 of the      2007 Form 10-K for information regarding McMoRan’s 6¾% preferred      stock. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| e.   | The      6% notes, issued in July 2003, were convertible at the option of the      holder at any time prior to their maturity on July 2, 2008 into shares of      McMoRan common stock at a conversion price of $14.25 per      share.  Net interest expense on the 6% notes totaled zero and      $1.6 million during the third quarter of 2008 and 2007, respectively, and      $1.5 million and $4.7 million for the nine month periods ended September      30, 2008 and 2007, respectively.  On July 2, 2008, the remaining      holders converted the 6% notes into shares of McMoRan common      stock.  Additional information regarding the 6% notes is      discussed in Note 6 of the 2007 Form10-K. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| f.   | The      5¼% notes, issued in October 2004, are convertible at the option of the      holder at any time prior to their maturity on October 6, 2011 into shares      of McMoRan common stock at a conversion price of $16.575 per      share.   Net interest expense on the 5¼% notes totaled $1.0      million and $1.5 million during the third quarter of 2008 and 2007,      respectively, and $3.5 million and $4.4 million for the nine month periods      ended September 30, 2008 and 2007, respectively. Additional information      regarding the 5¼% notes is discussed in Note 6 of the 2007 Form      10-K. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| g.   | All      of the remaining shares of McMoRan’s 5% preferred stock were converted      into approximately 6.2 million shares of McMoRan common stock in the      second quarter of 2007.  The conversion of the 5% preferred      stock, which occurred in June 2007, did not have a material impact on the      average shares outstanding for the third quarter and nine months ended      September 30, 2007.  See Note 8 of the 2007 Form 10-K for      additional information regarding the 5% preferred  stock. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                    |   | Third      Quarter |   |   | Nine      Months |   |
|-----------------------------------------|--------|--------------------|--------|--------|------------------|--------|
|                                    |   | 2008               |   |   | 2007             |   |   | 2008 |   |   | 2007 |   |
| Outstanding      options (in thousands) |   |               | 40     |   |             |   | 5,378 |   |   |   | 45 |   |   |   | 5,378 |   |
| Average      exercise price             |   | $                  | 31.92  |   |             | $      | 17.38 |   |   | $ | 31.08 |   |   | $ | 17.38 |   |

| 5.   | DERIVATIVE      CONTRACTS |
|----------------|---------------------------|

|   | Natural      Gas Positions (million MMbtu)                                        |   |
|--------|-----------------------------------------------------------------------------------|--------|
|   | Open      Swap Positions a                                                        |   | Put      Options b |   |
|   |                                                                              |   | Average |   |   |   | Average |   |
|   | Volumes                                                                           |   | Swap      Price      d |   | Volumes |   | Floor      d |   |
| 2008c  | 2.7                                                                               |   | $ | 9.16 |   | 1.5 |   | $ |  6.00 |   |
| 2009   |              7.3 |   | $ |  8.97 |   |              3.2 |   | $ |  6.00 |   |
| 2010   |              2.6 |   | $ |  8.63 |   |              1.2 |   | $ |  6.00 |   |

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|   | Oil      Positions (thousand bbls)                                          |   |
|--------|-----------------------------------------------------------------------------|--------|
|   | Open      Swap Positions a                                                  |   | Put      Options b |   |
|   |                                                                        |   | Average |   |   |   | Average |   |
|   | Volumes                                                                     |   | Swap      Price      e |   | Volumes |   | Floor      e |   |
| 2008c  | 120                                                                         |   | $ | 72.30 |   | 66 |   | $ |  50.00 |   |
| 2009   |             322 |   | $ |  71.82 |   |             125 |   | $ |  50.00 |   |
| 2010   |             118 |   | $ |  70.89 |   |               50 |   | $ |  50.00 |   |

| a.   | Covering      periods January-June and November-December of the respective      years.  Contracts for the January-June 2008 period have been      settled, resulting in realized losses of $31.2 million for the nine months      ended September 30, 2008. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | Covering      periods July-October of the respectiveyears. |
|----------------|------------------------------------------------------------|

| c.   | For      the fourth quarter. |
|----------------|------------------------------|

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

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

|                                       | Third      Quarter |    |
|--------------------------------------------|--------------------|---------|
|                                       | 2008               |    | 2007 |   |
|                                       |               |    |   |   |   |   |
| Realized      loss                         |               |    |   |   |   |   |
| Gas      puts                              | $                  | 1,579   |   | $ | - |   |
| Oil      puts                              |               | 274     |   |   | - |   |
| Gas      swaps                             |               | -       |   |   | - |   |
| Oil      swaps                             |               | 3       |   |   | - |   |
| Total      realized loss                   |               | 1,856   |   |   | - |   |
|                                       |               |    |   |   |   |   |
| Unrealized      (gain) loss                |               |    |   |   |   |   |
| Gas      puts                              |               | (2,356  | ) |   | 170 |   |
| Oil      puts                              |               | (357    | ) |   | 367 |   |
| Gas      swaps                             |               | (58,752 | ) |   | (14,489 | ) |
| Oil      swaps                             |               | (20,790 | ) |   | 3,257 |   |
| Total      unrealized gain                 |               | (82,255 | ) |   | (10,695 | ) |
| (Gain)      loss on oil and gas derivative |               |    |   |   |   |   |
| contracts                                  | $                  | (80,399 | ) | $ | (10,695 | ) |
|                                       |               |    |   |   |   |   |

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|                                       | Nine      Months |   |
|--------------------------------------------|------------------|--------|
|                                       | 2008             |   | 2007 |   |
|                                       |             |   |   |   |   |   |
| Realized      loss                         |             |   |   |   |   |   |
| Gas      puts                              | $                | 1,579  |   | $ | - |   |
| Oil      puts                              |             | 274    |   |   | - |   |
| Gas      swaps                             |             | 10,777 |   |   | - |   |
| Oil      swaps                             |             | 20,429 |   |   | - |   |
| Total      realized loss                   |             | 33,059 |   |   | - |   |
|                                       |             |   |   |   |   |   |
| Unrealized      (gain) loss                |             |   |   |   |   |   |
| Gas      puts                              |             | (32    | ) |   | 170 |   |
| Oil      puts                              |             | (304   | ) |   | 367 |   |
| Gas      swaps                             |             | 7,048  |   |   | (14,489 | ) |
| Oil      swaps                             |             | (4,164 | ) |   | 3,257 |   |
| Total      unrealized (gain) loss          |             | 2,548  |   |   | (10,695 | ) |
| (Gain)      loss on oil and gas derivative |             |   |   |   |   |   |
| contracts                                  | $                | 35,607 |   | $ | (10,695 | ) |

|                             | September      30, 2008 |   |
|----------------------------------|-------------------------|--------|
|                             | Puts                    |   | Swaps |   |   |   |   |
|                             | Gas                     |   | Oil |   | Gas |   | Oil |   | Total |   |
| Current      assets              | $                       | 485    |   | $ | 49 |   | $ | 10,501 |   | $ | - |   | $ | 11,035 |   |
| Other      assets                |                    | 423    |   |   | 66 |   |   | 693 |   |   | - |   |   | 1,182 |   |
| Current      liabilities         |                    | -      |   |   | - |   |   | - |   |   | (11,444 | ) |   | (11,444 | ) |
| Other      long-term liabilities |                    | -      |   |   | - |   |   | (577 | ) |   | (5,174 | ) |   | (5,751 | ) |
| Fair      value of contracts     | $                       | 908    |   | $ | 115 |   | $ | 10,617 |   | $ | (16,618 | ) | $ | (4,978 | ) |

|                             | December      31, 2007 |   |
|----------------------------------|------------------------|--------|
|                             | Puts                   |   | Swaps |   |   |   |   |
|                             | Gas                    |   | Oil |   | Gas |   | Oil |   | Total |   |
| Current      assets              | $                      | 1,350  |   | $ | 4 |   | $ | 15,269 |   | $ | - |   | $ | 16,623 |   |
| Other      assets                |                   | 1,105  |   |   | 81 |   |   | 3,131 |   |   | - |   |   | 4,317 |   |
| Current      liabilities         |                   | -      |   |   | - |   |   | - |   |   | (14,001 | ) |   | (14,001 | ) |
| Other      long-term liabilities |                   | -      |   |   | - |   |   | (735 | ) |   | (6,781 | ) |   | (7,516 | ) |
| Fair      value of contracts     | $                      | 2,455  |   | $ | 85 |   | $ | 17,665 |   | $ | (20,782 | ) | $ | (577 | ) |

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|                                                    | Oil      and     |    |    |   |
|---------------------------------------------------------|------------------|---------|---------|--------|
|                                                    | Natural      Gas |    | Sulphur |   |
|                                                    |             |    |    |   |   |   |
| Asset      retirement obligation at beginning of year   | $                | 294,737 |    | $      | 21,300 |   |
| Liabilities      settled                                |             | (24,487 | )a      |   | (1,560 | ) |
| Accretion      expense                                  |             | 22,371  |    |   | 649 |   |
| Reclamation      costs assumed from third parties       |             | 2,859   | b       |   | - |   |
| Incurred      liabilities                               |             | 2,185   |    |   | - |   |
| Revision      for changes in estimates                  |             | 126,698 | c       |   | - |   |
| Asset      retirement obligations at September 30, 2008 | $                | 424,363 |    | $      | 20,389 |   |

|   | a.  Includes      $15.1 million of costs included in accounts payable at September 30, 2008      for completed work. |
|--------|--------------------------------------------------------------------------------------------------------------------------------|

|   | b.  Represents      reimbursement paid to McMoRan for future reclamation      expenditures.  McMoRan has assumed the third parties’      reclamation liability in these specificfields. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | c.  Primarily      represents estimated future abandonment costs associated with damaged      structures and well abandonment related to Hurricane  Ike. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                   | Third      Quarter |   | Nine      Months |   |
|----------------------------------------|--------------------|--------|------------------|--------|
|                                   | 2008               |   | 2007             |   | 2008 |   | 2007 |   |
| Interest      cost                     | $                  | 81     |             | $      | 97 |   | $ | 65 |   | $ | 126 |   |
| Service      cost                      |               | -      |             |   | - |   |   |   |   |   | - |   |
| (Return)      loss on plan assets      |               | (5     | )                |   | (25 | ) |   | (23 | ) |   | (72 | ) |
| Change      in plan payout assumptions |               | -      |             |   | - |   |   | - |   |   | - |   |
| Net      periodic benefit expense      | $                  | 76     |             | $      | 72 |   | $ | 42 |   | $ | 54 |   |

|                                     | Third      Quarter |   | Nine      Months |   |
|------------------------------------------|--------------------|--------|------------------|--------|
|                                     | 2008               |   | 2007             |   | 2008 |   | 2007 |   |
| Interest      cost                       | $                  | 84     |             | $      | 86 |   | $ | 251 |   | $ | 258 |   |
| Service      cost                        |               | 7      |             |   | 5 |   |   | 20 |   |   | 14 |   |
| Amortization      of prior service costs |               |   |             |   |   |   |   |   |   |   |   |   |
| and      actuarial gains                 |               | (1     | )                |   | 14 |   |   | (4 | ) |   | 42 |   |
| Net      periodic benefit expense        | $                  | 90     |             | $      | 105 |   | $ | 267 |   | $ | 314 |   |

|                                                       | Third      Quarter |   |   | Nine      Months |   |
|------------------------------------------------------------|--------------------|--------|--------|------------------|--------|
|                                                       | 2008               |   | 2007   |             |   | 2008 |   | 2007 |   |
| Cost      of options awarded to employees (including       |               |   |   |             |   |   |   |   |   |   |   |   |   |
| directors)                                                 | $                  | 4,329  |   | $                | 2,007  |   |   | $ | 24,389 | a | $ | 10,382 | a |
| Cost      of options awarded to non-employees and advisory |               |   |   |             |   |   |   |   |   |   |   |   |   |
| directors                                                  |               | 261    |   |             | 133    |   |   |   | 991 |   |   | 492 |   |
| Cost      of restricted stock units                        |               | 81     |   |             | 25     |   |   |   | 166 |   |   | 31 |   |
| Total      compensation cost                               | $                  | 4,671  |   | $                | 2,165  |   |   | $ | 25,546 |   | $ | 10,905 |   |

| a.   | Includes      compensation charges associated with immediately vested stock options      totaling $16.2 million and $4.4 million, respectively, for the nine months      ended September 30, 2008 and 2007.  These compensation costs      include the stock options granted to McMoRan’s Co-Chairmen in lieu of      receiving any cash compensation during the respective periods and the      compensation costs related to stock options granted to retiree-eligible      employees, which resulted in one-year’s compensation expense being      immediately recognized at the effective date of the stock option      grant. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                 | Third      Quarter |   |   | Nine      Months |    |
|------------------------------------------------------|--------------------|--------|--------|------------------|---------|
|                                                 | 2008               |   | 2007   |             |    | 2008 |   | 2007 |   |
| Net      income (loss)                               | $                  | (6,132 | )      | $                | (52,184 | ) |   | $ | 75,602 |   | $ | (73,573 | ) |
| Other      comprehensive income (loss)               |               |   |   |             |    |   |   |   |   |   |   |   |   |
| Amortization      of previously unrecognized pension |               |   |   |             |    |   |   |   |   |   |   |   |   |
| components,      net                                 |               | (1     | )      |             | 14      |   |   |   | (4 | ) |   | 42 |   |
| Comprehensive      income (loss)                     | $                  | (6,133 | )      | $                | (52,170 | ) |   | $ | 75,598 |   | $ | (73,531 | ) |

| ·   | Level      1:  valuations consist of unadjusted quoted prices in active markets      for identical assets and liabilities and has the highest      priority; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Level      2:  valuations rely on quoted prices in markets that are not active      or observable inputs over the full term of the asset or      liability; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Level      3:  valuations are based on prices or third party or internal      valuation models that require inputs that are significant to the fair      value measurement and are less observable and thus have the lowest      priority. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                  |   |                |      |   |   | Freeport  |   |         |    | Consolidated |   |
|-------------------------------------------------------|--------|---------------------|-----------|--------|--------|-----------|--------|--------------|---------|--------------|--------|
|                                                  |   | Parent              |      | MOXY   |   | Energy    |   | Eliminations |    | McMoRan      |   |
|                                                  |   | (in      Thousands) |      |
| ASSETS                                                |   |                |      |   |   |      |   |         |    |         |   |   |   |   |   |   |
| Current      assets:                                  |   |                |      |   |   |      |   |         |    |         |   |   |   |   |   |   |
| Cash      and cash equivalents                        |   | $                   | 19        |   | $      | 160,590   |   | $            | 26      |         | $      | - |   | $ | 160,635 |   |
| Accounts      receivable                              |   |                | -         |   |   | 115,712   |   |         | -       |         |   | - |   |   | 115,712 |   |
| Inventories                                           |   |                | -         |   |   | 33,153    |   |         | -       |         |   | - |   |   | 33,153 |   |
| Prepaid      expenses                                 |   |                | 17,757    |   |   | 1,414     |   |         | -       |         |   | - |   |   | 19,171 |   |
| Fair      value of oil and gas derivative             |   |                |      |   |   |      |   |         |    |         |   |   |   |   |   |   |
| contracts                                             |   |                | -         |   |   | 11,035    |   |         | -       |         |   | - |   |   | 11,035 |   |
| Current      assets from discontinued                 |   |                |      |   |   |      |   |         |    |         |   |   |   |   |   |   |
| operations                                            |   |                | -         |   |   | -         |   |         | 3,175   |         |   | - |   |   | 3,175 |   |
| Total      current assets                             |   |                | 17,776    |   |   | 321,904   |   |         | 3,201   |         |   | - |   |   | 342,881 |   |
| Property,      plant and equipment, net               |   |                | -         |   |   | 1,316,819 |   |         | 31      |         |   | - |   |   | 1,316,850 |   |
| Sulphur      business assets, net                     |   |                | -         |   |   | -         |   |         | 339     |         |   | - |   |   | 339 |   |
| Investment      in subsidiaries                       |   |                | 1,137,447 |   |   | -         |   |         | -       |         |   | (1,137,447 | ) |   | - |   |
| Amounts      due from affiliates                      |   |                | -         |   |   | 146,605   |   |         | (1,054  | )            |   | (145,551 | ) |   | - |   |
| Deferred      financing costs and other               |   |                |      |   |   |      |   |         |    |         |   |   |   |   |   |   |
| assets                                                |   |                | 11,526    |   |   | 32,222    |   |         | 127     |         |   | - |   |   | 43,875 |   |
| Total      assets                                     |   | $                   | 1,166,749 |   | $      | 1,817,550 |   | $            | 2,644   |         | $      | (1,282,998 | ) | $ | 1,703,945 |   |
|                                                  |   |                |      |   |   |      |   |         |    |         |   |   |   |   |   |   |
| LIABILITIES      AND STOCKHOLDERS’ EQUITY       |   |                |      |   |   |      |   |         |    |         |
| Currentliabilities:                                   |   |                |      |   |   |      |   |         |    |         |   |   |   |   |   |   |
| Accounts      payable                                 |   |                | 255       |   |   | 104,960   |   |         | 391     |         |   | - |   | $ | 105,606 |   |
| Accrued      liabilities                              |   |                | 1,270     |   |   | 93,754    |   |         | 783     |         |   | - |   |   | 95,807 |   |
| Current      portion of oil and gas                   |   |                |      |   |   |      |   |         |    |         |   |   |   |   |   |   |
| accrued      reclamation costs                        |   |                | -         |   |   | 202,342   |   |         | -       |         |   | - |   |   | 202,342 |   |
| Other      current liabilities                        |   |                | 16,722    |   |   | 12,344    |   |         | -       |         |   | - |   |   | 29,066 |   |
| Current      liabilities from discontinued            |   |                |      |   |   |      |   |         |    |         |   |   |   |   |   |   |
| operations                                            |   |                | -         |   |   | -         |   |         | 12,434  |         |   | - |   |   | 12,434 |   |
| Total      current liabilities                        |   |                | 18,247    |   |   | 413,400   |   |         | 13,608  |         |   | - |   |   | 445,255 |   |
| Long-term      debt                                   |   |                | 374,720   |   |   | -         |   |         | -       |         |   | - |   |   | 374,720 |   |
| Amounts      due to affiliates                        |   |                | 145,551   |   |   | -         |   |         | -       |         |   | (145,551 | ) |   | - |   |
| Accrued      oil and gas reclamation costs            |   |                | -         |   |   | 222,021   |   |         | -       |         |   | - |   |   | 222,021 |   |
| Accrued      sulphur reclamation costs                |   |                | -         |   |   | -         |   |         | 9,670   |         |   | - |   |   | 9,670 |   |
| Other      long-term liabilities                      |   |                | 9,929     |   |   | 15,054    |   |         | 8,994   |         |   | - |   |   | 33,977 |   |
| Total      liabilities                                |   |                | 548,447   |   |   | 650,475   |   |         | 32,272  |         |   | (145,551 | ) |   | 1,085,643 |   |
| Commitments      and contingencies                    |   |                |      |   |   |      |   |         |    |         |   |   |   |   |   |   |
| Stockholders’      equity (deficit)             |   |                | 618,302   |   |   | 1,167,075 |   |         | (29,628 | )            |   | (1,137,447 | ) |   | 618,302 |   |
| Total      liabilities and stockholders’ equity |   | $                   | 1,166,749 |   | $      | 1,817,550 |   | $            | 2,644   |         | $      | (1,282,998 | ) | $ | 1,703,945 |   |

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|                                                  |   |                |    |   |   | Freeport  |   |         |    |    |   |
|-------------------------------------------------------|--------|---------------------|---------|--------|--------|-----------|--------|--------------|---------|---------|--------|
|                                                  |   | McMoRan             |    | MOXY   |   | Energy    |   | Eliminations |    | McMoRan |   |
|                                                  |   | (in      Thousands) |    |
| ASSETS                                                |   |                |    |   |   |      |   |         |    |    |   |   |   |   |   |   |
| Current      assets:                                  |   |                |    |   |   |      |   |         |    |    |   |   |   |   |   |   |
| Cash      and cash equivalents                        |   | $                   | 143     |   | $      | 3,446     |   | $            | 1,241   |    | $      | - |   | $ | 4,830 |   |
| Accounts      receivable                              |   |                | 885     |   |   | 127,805   |   |         | -       |    |   | - |   |   | 128,690 |   |
| Inventories                                           |   |                | -       |   |   | 11,507    |   |         | -       |    |   | - |   |   | 11,507 |   |
| Prepaid      expenses                                 |   |                | 12,833  |   |   | 1,498     |   |         | -       |    |   | - |   |   | 14,331 |   |
| Fair      value of derivative contracts               |   |                | -       |   |   | 16,623    |   |         | -       |    |   | - |   |   | 16,623 |   |
| Current      assets from discontinued                 |   |                |    |   |   |      |   |         |    |    |   |   |   |   |   |   |
| operations                                            |   |                | -       |   |   | -         |   |         | 3,029   |    |   | - |   |   | 3,029 |   |
| Total      current assets                             |   |                | 13,861  |   |   | 160,879   |   |         | 4,270   |    |   | - |   |   | 179,010 |   |
| Property,      plant and equipment, net               |   |                | -       |   |   | 1,503,328 |   |         | 31      |    |   | - |   |   | 1,503,359 |   |
| Sulphur      business assets, net                     |   |                | -       |   |   | -         |   |         | 349     |    |   | - |   |   | 349 |   |
| Investment      in subsidiaries                       |   |                | 971,176 |   |   | -         |   |         | -       |    |   | (971,176 | ) |   | - |   |
| Amounts      due from affiliates                      |   |                | -       |   |   | 68,341    |   |         | 5,987   |    |   | (74,328 | ) |   | - |   |
| Deferred      financing costs and other               |   |                |    |   |   |      |   |         |    |    |   |   |   |   |   |   |
| Assets                                                |   |                | 14,135  |   |   | 18,308    |   |         | 127     |    |   | - |   |   | 32,570 |   |
| Total      assets                                     |   | $                   | 999,172 |   | $      | 1,750,856 |   | $            | 10,764  |    | $      | (1,045,504 | ) | $ | 1,715,288 |   |
|                                                  |   |                |    |   |   |      |   |         |    |    |   |   |   |   |   |   |
| LIABILITIES      AND STOCKHOLDERS’ EQUITY       |   |                |    |   |   |      |   |         |    |    |
| Currentliabilities:                                   |   |                |    |   |   |      |   |         |    |    |   |   |   |   |   |   |
| Accounts      payable                                 |   |                | 222     |   |   | 97,300    |   |         | 299     |    |   | - |   | $ | 97,821 |   |
| Accrued      liabilities                              |   |                | 2,110   |   |   | 65,006    |   |         | 1,176   |    |   | - |   |   | 68,292 |   |
| Current      portion of debt                          |   |                | 111,535 |   |   | -         |   |         | -       |    |   | - |   |   | 111,535 |   |
| Current      portion of oil and gas                   |   |                |    |   |   |      |   |         |    |    |   |   |   |   |   |   |
| accrued      reclamation costs                        |   |                | -       |   |   | 80,839    |   |         | -       |    |   | - |   |   | 80,839 |   |
| Other      current liabilities                        |   |                | 11,723  |   |   | 15,333    |   |         | -       |    |   | - |   |   | 27,056 |   |
| Current      liabilities from discontinued            |   |                |    |   |   |      |   |         |    |    |   |   |   |   |   |   |
| operations                                            |   |                | -       |   |   | -         |   |         | 14,769  |    |   | - |   |   | 14,769 |   |
| Total      current liabilities                        |   |                | 125,590 |   |   | 258,478   |   |         | 16,244  |    |   | - |   |   | 400,312 |   |
| Long-term      debt                                   |   |                | 415,000 |   |   | 274,000   |   |         | -       |    |   | - |   |   | 689,000 |   |
| Amounts      due to affiliates                        |   |                | 74,328  |   |   | -         |   |         | -       |    |   | (74,328 | ) |   | - |   |
| Accrued      oil and gas reclamation costs            |   |                | -       |   |   | 213,898   |   |         | -       |    |   | - |   |   | 213,898 |   |
| Accrued      sulphur reclamation costs                |   |                | -       |   |   | -         |   |         | 9,155   |    |   |   |   |   | 9,155 |   |
| Other      long-term liabilities                      |   |                | 12,025  |   |   | 9,245     |   |         | 9,424   |    |   | - |   |   | 30,694 |   |
| Total      liabilities                                |   |                | 626,943 |   |   | 755,621   |   |         | 34,823  |    |   | (74,328 | ) |   | 1,343,059 |   |
| Commitments      and contingencies                    |   |                |    |   |   |      |   |         |    |    |   |   |   |   |   |   |
| Stockholders’      equity (deficit)             |   |                | 372,229 |   |   | 995,235   |   |         | (24,059 | )       |   | (971,176 | ) |   | 372,229 |   |
| Total      liabilities and stockholders’ equity |   | $                   | 999,172 |   | $      | 1,750,856 |   | $            | 10,764  |    | $      | (1,045,504 | ) | $ | 1,715,288 |   |

----

TABLE OFCONTENTS

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

----

TABLE OFCONTENTS

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

----

TABLE OFCONTENTS

|                                          |   |                |    |   |   | Freeport |   |         |   | Consolidated |   |
|-----------------------------------------------|--------|---------------------|---------|--------|--------|----------|--------|--------------|--------|--------------|--------|
|                                          |   | Parent              |    | MOXY   |   | Energy   |   | Eliminations |   | McMoRan      |   |
|                                          |   | (In      Thousands) |    |
| Revenues:                                     |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| Oil      and gas                              |   | $                   | -       |   | $      | 131,018  |   | $            | -      |         | $      | - |   | $ | 131,018 |   |
| Service                                       |   |                | -       |   |   | 2,234    |   |         | -      |         |   | - |   |   | 2,234 |   |
| Total      revenues                           |   |                | -       |   |   | 133,252  |   |         | -      |         |   | - |   |   | 133,252 |   |
| Costs      and expenses:                      |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| Production      and delivery costs            |   |                | -       |   |   | 38,209   |   |         | (12    | )            |   | - |   |   | 38,197 |   |
| Depreciation      and amortization            |   |                | -       |   |   | 85,014   |   |         | -      |         |   | - |   |   | 85,014 |   |
| Exploration      expenses                     |   |                | -       |   |   | 37,060   |   |         | -      |         |   | - |   |   | 37,060 |   |
| General      and administrative expenses      |   |                | 1,147   |   |   | 5,789    |   |         | 56     |         |   | - |   |   | 6,992 |   |
| Gain      on oil and gas derivative contracts |   |                | -       |   |   | (10,695  | )      |         | -      |         |   | - |   |   | (10,695 | ) |
| Start-up      costs for Main Pass             |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| Energy      Hub™                        |   |                | -       |   |   | -        |   |         | 2,345  |         |   | - |   |   | 2,345 |   |
| Total      costs and expenses                 |   |                | 1,147   |   |   | 155,377  |   |         | 2,389  |         |   | - |   |   | 158,913 |   |
| Operating      loss                           |   |                | (1,147  | )      |   | (22,125  | )      |         | (2,389 | )            |   | - |   |   | (25,661 | ) |
| Interest      expense                         |   |                | (16,351 | )      |   | (6,536   | )      |         | -      |         |   | - |   |   | (22,887 | ) |
| Equity      in losses of                      |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| consolidated      subsidiaries                |   |                | (35,047 | )      |   | -        |   |         | -      |         |   | 35,047 |   |   | - |   |
| Other      income, net                        |   |                | 361     |   |   | (2,818   | )      |         | -      |         |   | - |   |   | (2,457 | ) |
| Income      (loss) from continuing operations |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| before      income taxes                      |   |                | (52,184 | )      |   | (31,479  | )      |         | (2,389 | )            |   | 35,047 |   |   | (51,005 | ) |
| Provision      for income taxes               |   |                | -       |   |   | -        |   |         | -      |         |   | - |   |   | - |   |
| Income      (loss) from continuing operations |   |                | (52,184 | )      |   | (31,479  | )      |         | (2,389 | )            |   | 35,047 |   |   | (51,005 | ) |
| Income      from discontinued operations      |   |                | -       |   |   | -        |   |         | (1,179 | )            |   | - |   |   | (1,179 | ) |
| Net      income (loss)                        |   |                | (52,184 | )      |   | (31,479  | )      |         | (3,568 | )            |   | 35,047 |   |   | (52,184 | ) |
| Preferred      dividends and amortization     |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| of      convertible preferred stock           |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| issuance      costs                           |   |                | -       |   |   | -        |   |         | -      |         |   | - |   |   | - |   |
| Net      income (loss) applicable to          |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| common      stock                             |   | $                   | (52,184 | )      | $      | (31,479  | )      | $            | (3,568 | )            | $      | 35,047 |   | $ | (52,184 | ) |
|                                          |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |

----

TABLE OFCONTENTS

|                                          |   |                |    |   |   | Freeport |   |         |   | Consolidated |   |
|-----------------------------------------------|--------|---------------------|---------|--------|--------|----------|--------|--------------|--------|--------------|--------|
|                                          |   | Parent              |    | MOXY   |   | Energy   |   | Eliminations |   | McMoRan      |   |
|                                          |   | (In      Thousands) |    |
| Revenues:                                     |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| Oil      and gas                              |   | $                   | -       |   | $      | 227,381  |   | $            | -      |         | $      | - |   | $ | 227,381 |   |
| Service                                       |   |                | -       |   |   | 2,916    |   |         | -      |         |   | - |   |   | 2,916 |   |
| Total      revenues                           |   |                | -       |   |   | 230,297  |   |         | -      |         |   | - |   |   | 230,297 |   |
| Costs      and expenses:                      |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| Production      and delivery costs            |   |                | -       |   |   | 72,582   |   |         | (39    | )            |   | - |   |   | 72,543 |   |
| Depreciation      and amortization            |   |                | -       |   |   | 127,579  |   |         | -      |         |   | - |   |   | 127,579 |   |
| Exploration      expenses                     |   |                | -       |   |   | 52,163   |   |         | -      |         |   | - |   |   | 52,163 |   |
| General      and administrative expenses      |   |                | 3,417   |   |   | 14,232   |   |         | 155    |         |   | - |   |   | 17,804 |   |
| Gain      on oil and gas derivative contracts |   |                | -       |   |   | (10,695  | )      |         | -      |         |   | - |   |   | (10,695 | ) |
| Start-up      costs for Main Pass             |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| Energy      Hub™                        |   |                | -       |   |   | -        |   |         | 7,802  |         |   | - |   |   | 7,802 |   |
| Total      costs and expenses                 |   |                | 3,417   |   |   | 255,861  |   |         | 7,918  |         |   | - |   |   | 267,196 |   |
| Operating      loss                           |   |                | (3,417  | )      |   | (25,564  | )      |         | (7,918 | )            |   | - |   |   | (38,899 | ) |
| Interest      expense                         |   |                | (23,287 | )      |   | (11,009  | )      |         | -      |         |   | - |   |   | (34,296 | ) |
| Equity      in losses of                      |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| consolidated      subsidiaries                |   |                | (46,695 | )      |   | -        |   |         | -      |         |   | 46,695 |   |   | - |   |
| Other      income, net                        |   |                | 1,378   |   |   | (2,254   | )      |         | -      |         |   | - |   |   | (876 | ) |
| Income      (loss) from continuing operations |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| before      income taxes                      |   |                | (72,021 | )      |   | (38,827  | )      |         | (7,918 | )            |   | 46,695 |   |   | (72,071 | ) |
| Provision      for income taxes               |   |                | -       |   |   | -        |   |         | -      |         |   | - |   |   | - |   |
| Income      (loss) from continuing operations |   |                | (72,021 | )      |   | (38,827  | )      |         | (7,918 | )            |   | 46,695 |   |   | (72,071 | ) |
| Income      from discontinued operations      |   |                | -       |   |   | 301      |   |         | (251   | )            |   | - |   |   | 50 |   |
| Net      income (loss)                        |   |                | (72,021 | )      |   | (38,526  | )      |         | (8,169 | )            |   | 46,695 |   |   | (72,021 | ) |
| Preferred      dividends and amortization     |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| of      convertible preferred stock           |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| issuance      costs                           |   |                | (1,552  | )      |   | -        |   |         | -      |         |   | - |   |   | (1,552 | ) |
| Net      income (loss) applicable to          |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| common      stock                             |   | $                   | (73,573 | )      | $      | (35,526  | )      | $            | (8,169 | )            | $      | 46,695 |   | $ | (73,573 | ) |
|                                          |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |

----

TABLE OFCONTENTS

|                                            |   |                |    |   |   | Freeport |   | Consolidated |   |
|-------------------------------------------------|--------|---------------------|---------|--------|--------|----------|--------|--------------|--------|
|                                            |   | Parent              |    | MOXY   |   | Energy   |   | McMoRan      |   |
|                                            |   | (In      Thousands) |    |
|                                            |   |                |    |   |   |     |   |         |   |   |   |   |   |
| Cash      flow from operating activities:       |   |                |    |   |   |     |   |         |   |   |   |   |   |
| Net      cash provided by (used in)             |   |                |    |   |   |     |   |         |   |   |   |   |   |
| continuing      operations                      |   | $                   | 20,519  |   | $      | 618,661  |   | $            | (4,914 | ) | $ | 634,266 |   |
| Net      cash provided by discontinued          |   |                |    |   |   |     |   |         |   |   |   |   |   |
| operations                                      |   |                | -       |   |   | -        |   |         | 1,897  |   |   | 1,897 |   |
| Net      cash provided by (used in)             |   |                |    |   |   |     |   |         |   |   |   |   |   |
| operating      activities                       |   |                | 20,519  |   |   | 618,661  |   |         | (3,017 | ) |   | 636,163 |   |
|                                            |   |                |    |   |   |     |   |         |   |   |   |   |   |
| Cash      flow from investing activities:       |   |                |    |   |   |     |   |         |   |   |   |   |   |
| Exploration,      development and other         |   |                |    |   |   |     |   |         |   |   |   |   |   |
| capital      expenditures                       |   |                | -       |   |   | (186,904 | )      |         | -      |   |   | (186,904 | ) |
| Acquisition      of oil and gas properties, net |   |                | -       |   |   | (613     | )      |         | -      |   |   | (613 | ) |
| Net      cash used in investing activities      |   |                | -       |   |   | (187,517 | )      |         | -      |   |   | (187,517 | ) |
|                                            |   |                |    |   |   |     |   |         |   |   |   |   |   |
| Cash      flow from financing activities:       |   |                |    |   |   |     |   |         |   |   |   |   |   |
| Net      payments under revolving credit        |   |                |    |   |   |     |   |         |   |   |   |   |   |
| facility                                        |   |                | -       |   |   | (274,000 | )      |         | -      |   |   | (274,000 | ) |
| Dividends      and inducement payments on       |   |                |    |   |   |     |   |         |   |   |   |   |   |
| convertible      preferred stock                |   |                | (20,883 | )      |   | -        |   |         | -      |   |   | (20,883 | ) |
| Payments      for induced conversion of         |   |                |    |   |   |     |   |         |   |   |   |   |   |
| convertible      senior notes                   |   |                | (2,663  | )      |   | -        |   |         | -      |   |   | (2,663 | ) |
| Proceeds      from exercise of stock            |   |                |    |   |   |     |   |         |   |   |   |   |   |
| options,      warrants and other                |   |                | 4,705   |   |   | -        |   |         | -      |   |   | 4,705 |   |
| Investment      from parent                     |   |                | (1,802  | )      |   | -        |   |         | 1,802  |   |   | - |   |
| Net      cash provided by (used in)             |   |                |    |   |   |     |   |         |   |   |   |   |   |
| financing      activities                       |   |                | (20,643 | )      |   | (274,000 | )      |         | 1,802  |   |   | (292,841 | ) |
|                                            |   |                |    |   |   |     |   |         |   |   |   |   |   |
| Net      increase (decrease) in cash and        |   |                |    |   |   |     |   |         |   |   |   |   |   |
| Cash      equivalents                           |   |                | (124    | )      |   | 157,144  |   |         | (1,215 | ) |   | 155,805 |   |
| Cash      and cash equivalents at beginning     |   |                |    |   |   |     |   |         |   |   |   |   |   |
| of      year                                    |   |                | 143     |   |   | 3,446    |   |         | 1,241  |   |   | 4,830 |   |
| Cash      and cash equivalents at end of        |   |                |    |   |   |     |   |         |   |   |   |   |   |
| year                                            |   | $                   | 19      |   | $      | 160,590  |   | $            | 26     |   | $ | 160,635 |   |
|                                            |   |                |    |   |   |     |   |         |   |   |   |   |   |

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|                                            |   |                |     |   |   | Freeport   |   | Consolidated |   |
|-------------------------------------------------|--------|---------------------|----------|--------|--------|------------|--------|--------------|--------|
|                                            |   | Parent              |     | MOXY   |   | Energy     |   | McMoRan      |   |
|                                            |   | (In      Thousands) |     |
|                                            |   |                |     |   |   |       |   |         |   |   |   |   |   |
| Cash      flow from operating activities:       |   |                |     |   |   |       |   |         |   |   |   |   |   |
| Net      cash provided by (used in)             |   |                |     |   |   |       |   |         |   |   |   |   |   |
| continuing      operations                      |   | $                   | (212     | )      | $      | 106,979    |   | $            | (4,373 | ) | $ | 102,394 |   |
| Net      cash provided by discontinued          |   |                |     |   |   |       |   |         |   |   |   |   |   |
| operations                                      |   |                | -        |   |   | 302        |   |         | 371    |   |   | 673 |   |
| Net      cash provided by (used in)             |   |                |     |   |   |       |   |         |   |   |   |   |   |
| operating      activities                       |   |                | (212     | )      |   | 107,281    |   |         | (4,002 | ) |   | 103,067 |   |
|                                            |   |                |     |   |   |       |   |         |   |   |   |   |   |
| Cash      flow from investing activities:       |   |                |     |   |   |       |   |         |   |   |   |   |   |
| Exploration,      development and other         |   |                |     |   |   |       |   |         |   |   |   |   |   |
| capital      expenditures                       |   |                | -        |   |   | (109,165   | )      |         | -      |   |   | (109,165 | ) |
| Acquisition      of oil and gas properties, net |   |                | -        |   |   | (1,051,302 | )      |         | -      |   |   | (1,051,302 | ) |
| Proceeds      from restricted investments       |   |                | 3,037    |   |   | -          |   |         | -      |   |   | 3,037 |   |
| Increase      in restricted investments         |   |                | (126     | )      |   | -          |   |         | -      |   |   | (126 | ) |
| Net      cash used in investing activities      |   |                | 2,911    |   |   | (1,160,467 | )      |         | -      |   |   | (1,157,556 | ) |
|                                            |   |                |     |   |   |       |   |         |   |   |   |   |   |
| Cash      flow from financing activities:       |   |                |     |   |   |       |   |         |   |   |   |   |   |
| Net      borrowings under revolving credit      |   |                |     |   |   |       |   |         |   |   |   |   |   |
| facility                                        |   |                | -        |   |   | 284,250    |   |         | -      |   |   | 284,250 |   |
| Proceeds      from unsecured bridge loan        |   |                |     |   |   |       |   |         |   |   |   |   |   |
| facility                                        |   |                | 800,000  |   |   | -          |   |         | -      |   |   | 800,000 |   |
| Proceeds      from senior secured term loan     |   |                |     |   |   | 100,000    |   |         |   |   |   | 100,000 |   |
| Repayment      of senior secured term loan      |   |                |     |   |   | (100,000   | )      |         |   |   |   | (100,000 | ) |
| Financing      costs                            |   |                | (18,268  | )      |   | (12,948    | )      |         | -      |   |   | (31,216 | ) |
| Dividends      paid on convertible preferred    |   |                |     |   |   |       |   |         |   |   |   |   |   |
| stock                                           |   |                | (1,121   | )      |   | -          |   |         | -      |   |   | (1,121 | ) |
| Proceeds      from exercise of stock            |   |                |     |   |   |       |   |         |   |   |   |   |   |
| options,      warrants and other                |   |                | 1,065    |   |   | -          |   |         | -      |   |   | 1,065 |   |
| Investment      from parent                     |   |                | (800,586 | )      |   | 781,786    |   |         | 18,800 |   |   | - |   |
| Net      cash provided by (used in)             |   |                |     |   |   |       |   |         |   |   |   |   |   |
| financing      activities                       |   |                | (18,910  | )      |   | 1,053,088  |   |         | 18,800 |   |   | 1,052,978 |   |
|                                            |   |                |     |   |   |       |   |         |   |   |   |   |   |
| Net      increase in cash and cash              |   |                |     |   |   |       |   |         |   |   |   |   |   |
| equivalents                                     |   |                | (16,211  | )      |   | (98        | )      |         | 14,798 |   |   | (1,511 | ) |
| Cash      and cash equivalents at beginning     |   |                |     |   |   |       |   |         |   |   |   |   |   |
| of      year                                    |   |                | 16,593   |   |   | 1,030      |   |         | 207    |   |   | 17,830 |   |
| Cash      and cash equivalents at end of        |   |                |     |   |   |       |   |         |   |   |   |   |   |
| year                                            |   | $                   | 382      |   | $      | 932        |   | $            | 15,005 |   | $ | 16,319 |   |

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTINGFIRM

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Management'sDiscussion and Analysis of Financial Condition and Results ofOperations.

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| Flatrock      Wells                                                     | Total      Pay Intervals | Net      Feet of Pay a | Status      b                                                                                                                                                                                   |
|-------------------------------------------------------------------------|--------------------------|------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| No.      1 – “A” locationDiscovery      Well          | 8                        | 260                    | Producing      from the Operc section                                                                                                                                                           |
|                                                                    |                     |                   |                                                                                                                                                                                            |
| No.      2 – “B” locationDelineation      Well        | 8                        | 289                    | Producing      from the primary Rob-L sand                                                                                                                                                      |
|                                                                    |                     |                   |                                                                                                                                                                                            |
| No.      3 – “D” locationDelineation      Well        | 8                        | 256                    | Producing      from the Operc section                                                                                                                                                           |
|                                                                    |                     |                   |                                                                                                                                                                                            |
| No.      4 – “C” locationDevelopment      Well        | 2                        | 116                    | Successful      production test in the primary Rob-L sand indicated a gross rate of      approximately 124 MMcfe/d, 23 MMcfe/d net to us; expected to commence      production by year end 2008 |
|                                                                    |                     |                   |                                                                                                                                                                                            |
| No.      5 – “E” location      cDevelopment      Well | 2                        | 100                    | Drilling      ahead at 16,700’ to a potential total depth of 18,400’                                                                                                                |
|                                                                    |                     |                   |                                                                                                                                                                                            |
| No.      6 – “F” location      dDelineation      Well | n/a                      | n/a                    | Spud      October 28, 2008; drilling below 3,100’ with proposed total depth of      19,700’                                                                                         |

| a.   | Confirmed      with wireline logs. |
|----------------|------------------------------------|

| b.   | Status      is reported as of November 4, 2008. |
|----------------|-------------------------------------------------|

| c.   | Located      1,800 feet west of the Flatrock No. 4 well and between the Flatrock No. 1      and No. 2 wells. |
|----------------|--------------------------------------------------------------------------------------------------------------|

| d.   | Located      on South Marsh Island Block 217 and 3,100 feet southeast of the Flatrock      No. 3 well. |
|----------------|--------------------------------------------------------------------------------------------------------|

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|                                            |               |    |             |   |
|-------------------------------------------------|--------------------|---------|------------------|--------|
|                                            | Third      Quarter |    | Nine      Months |   |
|                                            | 2008               |    | 2007             |   | 2008 |   | 2007 |   |
| Revenues:                                       |               |    |             |   |   |   |   |   |   |   |   |   |
| Oil      and natural gas                        | $                  | 185,408 |             | $      | 95,406 |   | $ | 672,563 |   | $ | 95,406 |   |
| Service                                         |               | 2,841   |             |   | 1,875 |   |   | 8,475 |   |   | 1,875 |   |
|    Total      revenues           |               | 188,249 |             |   | 97,281 |   |   | 681,038 |   |   | 97,281 |   |
| Cost      and Expenses:                         |               |    |             |   |   |   |   |   |   |   |   |   |
| Production      and delivery costs              |               | 44,925  | a                |   | 20,577 |   |   | 118,056 | b |   | 20,577 |   |
| Depreciation      and amortization              |               | 82,389  |             |   | 58,128 |   |   | 265,040 |   |   | 58,128 |   |
| Exploration      expenses                       |               | 299     |             |   | 28 |   |   | 3,602 |   |   | 28 |   |
| General      and administrative expenses c      |               | 1,372   |             |   | 1,000 |   |   | 3,753 |   |   | 1,000 |   |
|    Total      costs and expenses |               | 128,985 |             |   | 79,733 |   |   | 390,451 |   |   | 79,733 |   |
| Operating      income                           | $                  | 59,264  |             | $      | 17,548 |   | $ | 290,587 |   | $ | 17,548 |   |

| a.   | Includes      lease operating expenses of $29.7 million, $6.9 million for workover costs      and $8.3 million for transportation, production taxes and other related      costs for the third quarter of2008. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | Includes      lease operating expenses of $82.3 million, $14.0 million for workover      costs and $21.8 million for transportation, production taxes and other      related costs for the nine months ended September 30,  2008. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c.   | Only      includes cost directly allocated to the acquired properties and excludes      all compensation costs. Amounts primarily reflect costs related to our      office in Houston, Texas. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                       | Third      Quarter |   | Nine      Months |   |
|--------------------------------------------|--------------------|--------|------------------|--------|
|                                       | 2008a              |   | 2007             |   | 2008      a |   | 2007 |   |
| Sales      volumes:                        |               |   |             |   |   |   |   |   |
| Gas      (thousand cubic feet, or Mcf)     | 13,537,100         |   | 12,645,100       |   | 49,637,500 | b | 19,401,900 |   |
| Oil      (barrels)a                        | 811,900            |   | 671,300          |   | 3,027,800 | b | 1,323,900 |   |
| Plant      products (per Mcf equivalent) c | 2,288,100          |   | 320,100          |   | 6,959,300 | b | 1,000,700 |   |
| Average      realizations:                 |               |   |             |   |   |   |   |   |
| Gas      (per Mcf)                         | $      10.67       |   | $      6.17      |   | $      10.62 |   | $      6.74 |   |
| Oil      (per barrel)a                     | 124.05             |   | 75.08            |   | 114.07 |   | 66.80 |   |

| a.   | Sales      volumes associated with the properties acquired in August 2007 include the      following: |
|----------------|-------------------------------------------------------------------------------------------------------|

|                                     |               |      |             |   |
|------------------------------------------|--------------------|-----------|------------------|--------|
|                                     | Third      Quarter |      | Nine      Months |   |
|                                     | 2008               |      | 2007             |   | 2008 |   | 2007 |   |
| Gas      (Mcf)                           |               | 8,559,900 |             |   | 9,694,000 |   |   | 35,487,000 |   |   | 9,694,000 |   |
| Oil      (barrels)                       |               | 530,900   |             |   | 498,000 |   |   | 2,087,400 |   |   | 498,000 |   |
| Plant      products (per Mcf equivalent) |               | 1,534,700 |             |   | 211,000 |   |   | 5,164,500 |   |   | 211,000 |   |
|                                     |               |      |             |   |   |   |   |   |   |   |   |   |

| b.   | Results      include increases to natural gas volumes of 0.7 billion cubic feet (Bcf),      oil and condensate volumes of 1,400 barrels and plant product volumes of      0.2 Bcf to record royalty relief amounts associated with first and second      quarters.  Pursuant to Minerals Management Service (MMS)      regulations, if the annual average NYMEX market price for natural gas does      not exceed the MMS’s annual price threshold (currently $10.34 per MMbtu      for 2008), then relief is available under the program and royalties would      not be due to the MMS.  As previously disclosed, in the second      quarter of 2008, we suspended royalty relief recognition due to the      strength of natural gas prices during the quarter and the expectation that      prices would remain strong.  During the third quarter of 2008,      natural gas prices declined significantly.  Based on the year to      date average NYMEX market price and the forward price curve for natural      gas, we currently expect that we will be eligible to receive this relief      in 2008.  Sales volumes and realizations adjusted to include      royalty relief for the first and second quarters of 2008      follows: |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                     |             |        |
|------------------------------------------|------------------|-------------|
|                                     | 2008             |        |
|                                     | 1st      Quarter |        | 2nd      Quarter |   |
| Gas      (Mcf)                           |             | 17,875,400  |   |   | 18,225,000 |   |
| Oil      (barrels)                       |             | 1,089,800   |   |   | 1,126,100 |   |
| Plant      products (per Mcf equivalent) |             | 2,459,600   |   |   | 2,211,600 |   |
|                                     |             |        |   |   |   |   |
| Average      realizations:               |             |        |   |   |   |   |
| Gas      (per Mcf)                       |             | $      9.06 |   |   | $      12.12 |   |
| Oil      (per barrel)                    |             | 97.40       |   |   | 123.00 |   |
|                                     |             |        |   |   |   |   |

| c.   | Results      include approximately $27.8 million and $73.6 million of revenues      associated with plant products (ethane, propane, butane, etc.) during the      third quarter and nine months ended September 30, 2008,      respectively.  Plant product revenues for the comparable prior      year periods totaled $2.4 million and $7.7 million.  One Mcf      equivalent is determined using the ratio of six Mcf of natural gas to one      barrel of crude oil, condensate or natural gas  liquids. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                          |  Third |    |   | Nine   |    |
|---------------------------------------------------------------|-------------|---------|--------|--------|---------|
|                                                          | Quarter     |    |   | Months |    |
| Oil      and natural gas revenues – prior year period   | $           | 131,018 |   | $      | 227,381 |   |
| Increase      (decrease)                                      |        |    |   |   |    |   |
| Price      realizations:                                      |        |    |   |   |    |   |
| Natural      gas                                              |        | 18,574  |   |   | 45,318  |   |
| Oil      and condensate                                       |        | 14,575  |   |   | 46,807  |   |
| Sales      volumes:                                           |        |    |   |   |    |   |
| Natural      gas                                              |        | 15,246  |   |   | 33,088  |   |
| Oil      and condensate                                       |        | 5,151   |   |   | 4,886   |   |
| Properties      acquired in 2007                              |        | 90,002  |   |   | 577,156 |   |
| Plant      products revenues                                  |        | 8,160   |   |   | 12,069  |   |
| Other                                                         |        | (38     | )      |   | 250     |   |
| Oil      and natural gas revenues – current year period | $           | 282,688 |   | $      | 946,955 |   |

|                                     | Third      Quarter |   | Nine      Months |
|------------------------------------------|--------------------|--------|------------------|
|                                     |               |   | Per              |   |   |   | Per |   |   |   | Per |   |   |   | Per |
|                                     | 2008               |   | Mcfe             |   | 2007 |   | Mcfe |   | 2008 |   | Mcfe |   | 2007 |   | Mcfe |
| Lease      operating expense             | $37.7              |   | $1.82            |   | $20.1 |   | $1.18 |   | $106.4 |   | $1.42 |   | $36.0 |   | $1.27 |
| Workover      costs                      | 17.0               |   | 0.82             |   | 9.4 |   | 0.55 |   | 38.0 |   | 0.51 |   | 15.9 |   | 0.56 |
| Insurance                                | 4.7                |   | 0.23             |   | 7.2 |   | 0.43 |   | 17.6 |   | 0.23 |   | 14.1 |   | 0.50 |
| Transportation      and production taxes | 10.4               |   | 0.50             |   | 1.8 |   | 0.11 |   | 31.4 |   | 0.42 |   | 5.9 |   | 0.21 |
| Other                                    | 0.1                |   | 0.01             |   | (0.3 | ) | (0.02 | ) | 1.7 |   | 0.02 |   | 0.6 |   | 0.02 |
| Total      production and delivery costs | $69.9              |   | $3.38            |   | $38.2 |   | $2.25 |   | $195.1 |   | $2.60 |   | $72.5 |   | $2.56 |

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|                                    | Third      Quarter |   | Nine      Months |
|-----------------------------------------|--------------------|--------|------------------|
|                                    |               |   | Per              |   |   |   | Per |   |   |   | Per |   |   |   | Per |
|                                    | 2008               |   | Mcfe             |   | 2007 |   | Mcfe |   | 2008 |   | Mcfe |   | 2007 |   | Mcfe |
| Depletion      and depreciation expense | $      81.2        |   | $3.92            |   | $69.3 |   | $4.08 |   | $302.7 |   | $4.05 |   | $107.6 |   | $3.80 |
| Accretion      expense                  | 135.6              |   | 6.55             |   | 2.1 |   | 0.13 |   | 148.9 |   | 2.00 |   | 6.4 |   | 0.22 |
| Impairment      charges/losses          | 33.3               |   | 1.61             |   | 13.6 |   | 0.80 |   | 40.9 |   | 0.55 |   | 13.6 |   | 0.48 |
| Total                                   | $250.1             |   | $12.08           |   | $85.0 |   | $5.01 |   | $492.5 |   | $6.60 |   | $127.6 |   | $4.50 |

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|                                             | Third      Quarter |   | Nine      Months |   |
|--------------------------------------------------|--------------------|--------|------------------|--------|
|                                             | 2008               |   | 2007             |   | 2008 |   | 2007 |   |
| Geological      and geophysical                  |               |   |             |   |   |   |   |   |   |   |   |   |
| including      3-D seismic purchases a           | $                  | 8.6    |             | $      | 15.9 | b | $ | 26.5 |   | $ | 25.7 | b |
| Non-productive      exploratory costs, including |               |   |             |   |   |   |   |   |   |   |   |   |
| related      lease costs                         |               | 4.4    | c                |   | 20.3 | d |   | 16.8 | c |   | 21.7 | d |
| Other                                            |               | 2.1    |             |   | 0.9 |   |   | 6.1 |   |   | 4.8 |   |
|                                             | $                  | 15.1   |             | $      | 37.1 |   | $ | 49.4 |   | $ | 52.2 |   |

| a.   | Includes      compensation costs associated with outstanding stock-based awards totaling      $2.1 million in the third quarter of 2008 and $12.2 million in the nine      months ended September 30, 2008 compared with $1.0 million and $5.3      million of compensation costs during comparable periods in 2007 (see      “Stock-Based Compensation” below and Note8). |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | Includes      $12.5 million of seismic data purchases for the exploration acreage      associated with the 2007 oil and gas property  acquisition. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------|

| c.   | Includes      non-productive well costs of $4.3 million and $15.1 million related to the      Mound Point East well in the third quarter and nine months ended September      30, 2008, respectively.  In August 2008, the Mound Point East      well was determined to be non-productive and we charged $10.8 million to      exploration expense in the June 30, 2008 financial      statements.  In the third quarter of 2008, we charged an      additional $4.3 million to exploration expense for the additional costs      incurred. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| d.   | Primarily      reflects the non-productive exploratory well costs associated with the      “Cas” well at South Timbalier Block98. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------|

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|                       | Nine      Months Ended |   |
|----------------------------|------------------------|--------|
|                       | September      30,     |   |
|                       | 2008                   |   | 2007 |   |
| Continuing      operations |                   |   |   |   |   |   |
| Operating                  | $                      | 634.3  |   | $ | 102.4 |   |
| Investing                  |                   | (187.5 | ) |   | (1,157.6 | ) |
| Financing                  |                   | (292.8 | ) |   | 1,053.0 |   |

| Discontinued      operations |   |                                        |   |   |                                        |   |
|------------------------------|--------|---------------------------------------------|--------|--------|---------------------------------------------|--------|
| Operating                    |   | 1.9                                         |   |   | 0.7                                         |   |
| Investing                    |   |        - |   |   |        - |   |
| Financing                    |   |       -       |   |   |       -       |   |
|                         |   |                                        |   |   |                                        |   |
| Total cash      flow         |   |                                        |   |   |                                        |   |
| Operating                    |   | 636.2                                       |   |   | 103.1                                       |   |
| Investing                    |   | (187.5                                      | )      |   | (1,157.6                                    | )      |
| Financing                    |   | (292.8                                      | )      |   | 1,053.0                                     |   |

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|                                                 | Third      Quarter |   | Nine      Months |   |
|------------------------------------------------------|--------------------|--------|------------------|--------|
|                                                 | 2008               |   | 2007             |   | 2008 |   | 2007 |   |
| General      and administrative expenses             | $                  | 2,359  |             | $      | 1,084 |   | $ | 12,480 |   | $ | 5,228 |   |
| Exploration      expenses                            |               | 2,151  |             |   | 1,003 |   |   | 12,198 |   |   | 5,279 |   |
| Main      Pass Energy Hub™      start-up costs |               | 161    |             |   | 78 |   |   | 868 |   |   | 398 |   |
| Total      stock-based compensation cost             | $                  | 4,671  |             | $      | 2,165 |   | $ | 25,546 |   | $ | 10,905 |   |

| ·   | Level      1:  valuations consist of unadjusted quoted prices in active markets      for identical assets and liabilities and has the highest      priority; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Level      2:  valuations rely on quoted prices in markets that are not active      or observable inputs over the full term of the asset or      liability; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Level      3:  valuations are based on prices or third party or internal      valuation models that require inputs that are significant to the fair      value measurement and are less observable and thus have the lowest      priority. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Quantitative and Qualitative Disclosures about MarketRisk.

|   |   | +/-      $1.00/ MMbtu |   |   | +/-$5.00/Bbl |   |
|--------|--------|-----------------------|--------|--------|--------------|--------|
|   |   |                  |   |   |         |   |
| 2008   | $      | 2.7                   |   | $      | 0.6          |   |
| 2009   |   | 7.3                   |   |   | 1.6          |   |
| 2010   |   | 2.6                   |   |   | 0.6          |   |

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Controls and Procedures

PART II––OTHER INFORMATION

| (c) | Our      Board of Directors has approved an open market share purchase program for      up to 2.5 million shares.  The program does not have an      expiration date.  No shares were purchased during the      three-month period ended September 30, 2008, and 0.3 million shares remain      available for purchase. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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SIGNATURE

|                                   | McMoRan      Exploration Co.                        |
|----------------------------------------|-----------------------------------------------------|
|                                   |                                                |
|                                   | By:  /s/      Nancy D. Parmelee           |
|                                   | Nancy      D. Parmelee                              |
|                                   | Senior      Vice President, Chief Financial Officer |
|                                   | and      Secretary                                  |
|                                   | (authorized      signatory and Principal            |
|                                   | Financial      Officer)                             |
|                                   |                                                |
|                                   |                                                |
|                                   |                                                |
| Date:  November      5, 2008 |                                                |

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TABLE OFCONTENTS

Exhibit Index

|                              |                                                                                                                                                                                                                                                                                                                                                     | Filed          |                           |          |            |
|-----------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------|--------------------------------|---------------|-----------------|
| Exhibit                           |                                                                                                                                                                                                                                                                                                                                                     | with      this | Incorporated      by Reference |
| Number                            | Exhibit      Title                                                                                                                                                                                                                                                                                                                                       | Form      10-Q | Form                           | File      No. | Date      Filed |
|           2.1 | Agreement      and Plan of Merger dated as of August 1, 1998                                                                                                                                                                                                                                                                                             |           | S-4                            | 333-61171     | 10/06/1998      |
|           3.1 | Amended      and Restated Certificate of Incorporation of McMoRan                                                                                                                                                                                                                                                                                        |           | 10-K                           | 001-07791     | 03/25/1999      |
|           3.2 | Certificate      of Amendment to the Amended and Restated Certificate of Incorporation of      McMoRan                                                                                                                                                                                                                                                   |           | 10-Q                           | 001-07791     | 05/13/2003      |
|           3.3 | Amended      and Restated By-Laws of McMoRan as amended effective January 30,      2006                                                                                                                                                                                                                                                                  |           | 8-K                            | 001-07791     | 02/03/2006      |
| 4.1                               | Form      of Certificate of McMoRan Common Stock                                                                                                                                                                                                                                                                                                         |           | S-4                            | 333-61171     | 10/06/1998      |
| 4.2                               | Rights      Agreement dated as of November 13, 1998                                                                                                                                                                                                                                                                                                      |           | 10-K                           | 001-07791     | 03/25/1999      |
| 4.3                               | Amendment      to Rights Agreement dated December 28, 1998                                                                                                                                                                                                                                                                                               |           | 10-K                           | 001-07791     | 03/25/1999      |
| 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 |           | 10-Q                           | 001-07791     | 11/12/1999      |
| 4.5                               | Indenture      dated as of July 2, 2003 by and between McMoRan and The Bank of New York,      as trustee                                                                                                                                                                                                                                                 |           | 10-Q                           | 001-07791     | 08/14/2003      |
| 4.6                               | 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                                                                                                                                                       |           | 10-Q                           | 001-07791     | 08/14/2003      |
| 4.7                               | Purchase      Agreement dated September 30, 2004, by and among McMoRan Exploration Co.,      Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith      Incorporated, and J.P. Morgan Securities Inc                                                                                                                                        |           | 8-K                            | 001-07791     | 10/07/2004      |
| 4.8                               | Indenture      dated October 6, 2004 by and among McMoRan and the Bank of New York, as      trustee                                                                                                                                                                                                                                                      |           | 8-K                            | 001-07791     | 10/07/2004      |
| 4.9                               | 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                                                                                                                                                           |           | 8-K                            | 001-07791     | 10/07/2004      |
| 4.10                              | 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                                                                                             |           | 8-K                            | 001-07791     | 10/07/2004      |
| 10.1                              | Main      Pass 299 Sulphur and Salt Lease, effective May 1, 1988                                                                                                                                                                                                                                                                                         |           | 10-K                           | 001-07791     | 04/16/2002      |

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TABLE OFCONTENTS

|    |                                                                                                                                                                                                                                                                                                                                                                                     | Filed          |                           |          |            |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------|--------------------------------|---------------|-----------------|
| Exhibit |                                                                                                                                                                                                                                                                                                                                                                                     | with      this | Incorporated      by Reference |
| Number  | Exhibit      Title                                                                                                                                                                                                                                                                                                                                                                       | Form      10-Q | Form                           | File      No. | Date      Filed |
| 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                                                                                                                                                            |           | 10-Q                           | 001-07791     | 08/14/2002      |
| 10.3    | Amended      and Restated Services Agreement dated as of January 1, 2002 between      McMoRan and FM Services Company                                                                                                                                                                                                                                                                    |           | 10-Q                           | 001-07791     | 08/14/2003      |
| 10.4    | Letter      Agreement dated August 22, 2000 between Devon Energy Corporation and      Freeport Sulphur                                                                                                                                                                                                                                                                              |           | 10-Q                           | 001-07791     | 10/25/2000      |
| 10.5    | Asset      Purchase Agreement dated effective December 1, 1999 between SOI Finance      Inc., Shell Offshore Inc. and MOXY                                                                                                                                                                                                                                                               |           | 10-K                           | 001-07791     | 02/08/2000      |
| 10.6    | Employee      Benefits Agreement by and between Freeport-McMoRan Inc. and Freeport      Sulphur                                                                                                                                                                                                                                                                                     |           | 10-K                           | 001-07791     | 04/16/2002      |
| 10.7    | Purchase      and Sales agreement dated January 25, 2002 but effective January 1, 2002      by and between MOXY and Halliburton Energy Services,    Inc                                                                                                                                                                                                                             |           | 8-K                            | 001-07791     | 03/11/2002      |
| 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                                                                                                                                                                                                                              |           | 10-Q                           | 001-07791     | 05/10/2002      |
| 10.9    | Purchase      and Sale Agreement dated May 9, 2002 by and between MOXY and El Paso      Production Company                                                                                                                                                                                                                                                                          |           | 10-Q                           | 001-07791     | 08/14/2002      |
| 10.10   | Amendment      to Purchase and Sale Agreement dated May 22, 2002 by and between MOXY and      El Paso Production Company                                                                                                                                                                                                                                                            |           | 10-Q                           | 001-07791     | 08/14/2002      |
| 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                                                                                                                                                                                                                |           | 10-K                           | 001-07791     | 03/27/2003      |
| 10.12   | Purchase      and Sale Agreement dated June 20, 2007 by and between Newfield Exploration      Company as Seller and McMoRan Oil & Gas LLC as Buyer effective July 1,      2007                                                                                                                                                                                                  |           | 8-K                            | 001-07791     | 06/22/2007      |
| 10.13   | Amended      and Restated Credit Agreement dated as of August 6, 2007, among McMoRan      Exploration Co., as parent, McMoRan Oil & Gas LLC, as borrower,      JPMorgan Chase Bank, N.A. Merrill Lynch Capital, a division of Merrill      Lynch Business Financial Services, Inc., as syndication agent, BNP      Paribas, as documentation agent, and the lenders party    thereto |           | 10-Q                           | 001-07791     | 11/01/2007      |
| 10.14   | First      Amendment to Credit Agreement dated as of June 20, 2008, among McMoRan      Exploration Co., as borrower, JPMorgan Chase Bank, N.A., as administrative      agent, and the lenders party thereto                                                                                                                                                                              |           | 10-Q                           | 001-07791     | 08/07/2008      |

| 10.15 | Second      Amendment to Credit Agreement dated as of September 10, 2008, among      McMoRan Exploration Co., as borrower, JPMorgan Chase Bank, N.A., as      administrative agent, and the lenders party thereto | X |   |   |   |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---|--------|--------|--------|

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TABLE OF CONTENTS

|         |                                                                                                                                                                                                                                                       | Filed          |                           |          |            |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------|--------------------------------|---------------|-----------------|
| Exhibit      |                                                                                                                                                                                                                                                       | with      this | Incorporated      by Reference |
| Number       | Exhibit      Title                                                                                                                                                                                                                                         | Form      10-Q | Form                           | File      No. | Date      Filed |
| 10.16*       | McMoRan      Adjusted Stock Award Plan, as amended and restated                                                                                                                                                                                            |           | 10-Q                           | 001-07791     | 05/10/2007      |
| 10.17*       | McMoRan      1998 Stock Option Plan, as amended and restated                                                                                                                                                                                               |           | 10-Q                           | 001-07791     | 05/10/2007      |
| 10.18*       | McMoRan      1998 Stock Option Plan for non-Employee Directors                                                                                                                                                                                             |           | 10-Q                           | 001-07791     | 05/10/2007      |
| 10.      19* | McMoRan      Form of Notice of Grant of Nonqualified Stock Options under the 1998 Stock      Option Plan                                                                                                                                                   |           | 10-Q                           | 001-07791     | 08/04/2005      |
| 10.20*       | McMoRan      2000 Stock Incentive Plan, as amended and restated                                                                                                                                                                                            |           | 10-Q                           | 001-07791     | 05/10/2007      |
| 10.21*       | McMoRan      Form of Notice of Grant of Nonqualified Stock Options under the 2000 Stock      Incentive Plan                                                                                                                                                |           | 10-Q                           | 001-07791     | 08/04/2005      |
| 10.22*       | McMoRan      2001 Stock Incentive Plan, as amended and restated                                                                                                                                                                                            |           | 10-Q                           | 001-07791     | 05/10/2007      |
| 10.23*       | McMoRan      2003 Stock Incentive Plan, as amended and restated                                                                                                                                                                                            |           | 10-Q                           | 001-07791     | 05/10/2007      |
| 10.24*       | McMoRan’s      Performance Incentive Awards Program as amended effective February 1,      1999                                                                                                                                                       |           | 10-K                           | 001-07791     | 03/25/1999      |
| 10.25*       | McMoRan      Form of Notice of Grant of Nonqualified Stock Options under the 2001 Stock      Incentive Plan                                                                                                                                                |           | 10-Q                           | 001-07791     | 08/04/2005      |
| 10.26*       | McMoRan      Form of Restricted Stock Unit Agreement Under the 2001 Stock Incentive      Plan                                                                                                                                                              |           | 10-Q                           | 001-07791     | 08/09/2007      |
| 10.27*       | McMoRan      Exploration Co. Executive Services Program                                                                                                                                                                                                    |           | 8-K                            | 001-07791     | 05/05/2006      |
| 10.28*       | McMoRan      Form of Notice of Grants of Nonqualified Stock Options under the 2003      Stock Incentive Plan                                                                                                                                               |           | 10-Q                           | 001-07791     | 08/04/2005      |
| 10.29*       | McMoRan      Form of Restricted Stock Unit Agreement Under the 2003 Stock Incentive      Plan                                                                                                                                                              |           | 10-Q                           | 001-07791     | 08/09/2007      |
| 10.30*       | McMoRan      2004 Director Compensation Plan, as amended and restated                                                                                                                                                                                      |           | 10-Q                           | 001-07791     | 05/10/2007      |
| 10.31*       | Form      of Amendment No. 1 to Notice of Grant of Nonqualified Stock Options under      the 2004 Director Compensation Plan                                                                                                                               |           | 8-K                            | 001-07791     | 05/05/2006      |
| 10.32*       | Agreement      for Consulting Services between Freeport-McMoRan Inc. and B. M. Rankin,      Jr. effective as of January 1, 1991)(assigned to FM Services Company as of      January 1, 1996); as amended on December 15, 1997 and on December 7,      1998 |           | 10-K                           | 001-07791     | 03/25/1999      |
| 10.33*       | Supplemental      Letter Agreement between FM Services Company and B.M. Rankin, Jr.      effective as of January 1, 2008                                                                                                                                   |           | 10-K                           | 001-07791     | 03/17/2008      |
| 10.34*       | McMoRan      Director Compensation                                                                                                                                                                                                                         |           | 10-Q                           | 001-07791     | 08/07/2008      |
| 10.35*       | McMoRan      Exploration Co. 2005 Stock Incentive Plan                                                                                                                                                                                                     |           | 10-Q                           | 001-07791     | 05/10/2007      |

| 10.36* | Form      of Notice of Grant of Nonqualified Stock Options under the 2005 Stock      Incentive Plan |   | 8-K  | 001-07791 | 05/06/2005 |
|--------|-----------------------------------------------------------------------------------------------------|--------|------|-----------|------------|
| 10.37* | Form      of Restricted Stock Unit Agreement under the 2005 Stock Incentive      Plan               |   | 10-Q | 001-07791 | 08/09/2007 |

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TABLE OFCONTENTS

|    |                                                                                                                                                                                                      | Filed          |                           |          |            |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------|--------------------------------|---------------|-----------------|
| Exhibit |                                                                                                                                                                                                      | with      this | Incorporated      by Reference |
| Number  | Exhibit      Title                                                                                                                                                                                        | Form      10-Q | Form                           | File      No. | Date      Filed |
| 10.38*  | McMoRan      Exploration Co. Supplemental Executive Capital Accumulation      Plan                                                                                                                        |           | 10-Q                           | 001-07791     | 05/08/2008      |
| 10.39*  | McMoRan      Exploration Co. Supplemental Executive Capital Accumulation Plan Amendment      One                                                                                                          |           | 10-Q                           | 001-07791     | 05/08/2008      |
| 10.40*  | McMoRan      Exploration Co. 2008 Stock Incentive Plan.                                                                                                                                                   |           | 8-K                            | 001-07791     | 06/11/2008      |
| 10.41*  | Form      of Notice of Grant of Nonqualified Stock Options under the 2008 Stock      Incentive Plan.                                                                                                 |           | 8-K                            | 001-07791     | 06/11/2008      |
| 10.42*  | Form      of Restricted Stock Unit Agreement under the 2008 Stock Incentive      Plan.                                                                                                                    |           | 8-K                            | 001-07791     | 06/11/2008      |
| 10.43*  | Form      of Notice of Grant of Nonqualified Stock Options and Restricted Stock      Units under the 2008 Stock Incentive Plan (for grants made to      non-management directors and advisory directors). |           | 8-K                            | 001-07791     | 06/11/2008      |
| 12.1    | Computation      of Ratio of Earnings to Fixed Charges                                                                                                                                                    |           | 10-K                           | 001-07791     | 03/17/2008      |
| 14.1    | Ethics      and Business Conduct Policy                                                                                                                                                                   |           | 10-K                           | 001-07791     | 03/15/2004      |
| 15.1    | Letter      dated November 4, 2008 from Ernst & Young LLP regarding unaudited      interim financial statements                                                                                       | X              |                           |          |            |
| 31.1    | Certification      of Principal Executive Officer pursuant to Rule      13a–14(a)/15d-14(a)                                                                                                         | X              |                           |          |            |
| 31.2    | Certification      of Principal Financial Officer pursuant to Rule      13a–14(a)/15d-14(a)                                                                                                         | X              |                           |          |            |
| 32.1    | Certification      of Principal Executive Officer pursuant to 18 U.S.C. Section      1350                                                                                                                 | X              |                           |          |            |
| 32.2    | Certification      of Principal Financial Officer pursuant to 18 U.S.C. Section      1350                                                                                                                 | X              |                           |          |            |

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