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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      March 31, 2009          |
| OR                                                          |
| [  ]                                              | TRANSITION REPORT PURSUANT TO      SECTION 13 OR 15(d) OF THE |
| SECURITIES EXCHANGE ACT OF      1934                        |
| For the transition period      from                         |   | to |
| Commission File Number:      001-07791                      |
|                                                        |
|                                                             |
|                                                        |
| McMoRan Exploration      Co.                                |
| (Exact      name of registrant as specified in its charter) |
|                                                        |

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

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

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|                                                                                      |
|-------------------------------------------------------------------------------------------|
| McMoRan      Exploration Co.                                                              |
| TABLE OF CONTENTS                                                                         |
|                                                                                      |
|                                                                                      | Page |
|                                                                                      |   |
| Part      I.  Financial Information                                             |   |
|                                                                                      |   |
| Item 1.   Financial      Statements:                                       |   |
|                                                                                      |   |
| Condensed Consolidated Balance Sheets      (Unaudited)                                    | 3 |
|                                                                                      |   |
| Consolidated Statements of Operations      (Unaudited)                                    | 4 |
|                                                                                      |   |
| Consolidated Statements of Cash Flow      (Unaudited)                                     | 5 |
|                                                                                      |   |
| Notes to Consolidated Financial    Statements                                             | 6 |
|                                                                                      |   |
|   Report of Independent Registered Public Accounting      Firm                  | 21 |
|                                                                                      |   |
| Item 2.   Management's Discussion and      Analysis                        |   |
| of Financial Condition and Results of      Operations                                     | 22 |
|                                                                                      |   |
| Item 3.   Quantitative and Qualitative      Disclosures about Market Risks | 32 |
|                                                                                      |   |
| Item 4.   Controls and      Procedures                                     | 32 |
|                                                                                      |   |
| Part      II.  Other Information                                                |   |
|                                                                                      |   |
| Item 1.   Legal    Proceedings                                             | 32 |
|                                                                                      |   |
| Item 1A. Risk Factors                                                                     | 32 |
|                                                                                      |   |
| Item 2.   Unregistered Sales of      Equity Securities and Use of Proceeds | 33 |
|                                                                                      |   |
| Item 6.   Exhibits                                                         | 33 |
|                                                                                      |   |
| Signature                                                                                 | 34 |
|                                                                                      |   |
| Exhibit      Index                                                                        | E-1 |

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TABLE OF CONTENTS

Part I.  FINANCIAL INFORMATION

| Item      1. | Consolidated Financial  Statements. |
|--------------|-------------------------------------|

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

CONDENSED CONSOLIDATEDBALANCE SHEETS 

|                                                                           |   | March      31,      |      | December      31, |   |
|--------------------------------------------------------------------------------|--------|---------------------|-----------|-------------------|--------|
|                                                                           |   | 2009                |      | 2008              |   |
|                                                                           |   | (In      Thousands) |      |
| ASSETS                                                                         |   |                |      |              |   |   |   |
| Cash      and cash equivalents                                                 |   | $                   | 95,435    |              | $      | 93,486 |   |
| Accounts      receivable                                                       |   |                | 95,327    |              |   | 112,684 |   |
| Inventories                                                                    |   |                | 44,135    |              |   | 31,284 |   |
| Prepaid      expenses                                                          |   |                | 9,159     |              |   | 13,819 |   |
| Fair      value of oil and gas derivative contracts                            |   |                | 32,230    |              |   | 31,624 |   |
| Current      assets from discontinued operations, primarily restricted    cash |   |                |      |              |   |   |   |
| of      $0.5 million                                                           |   |                | 514       |              |   | 516 |   |
| Total      current assets                                                      |   |                | 276,800   |              |   | 283,413 |   |
| Property,      plant and equipment, net                                        |   |                | 932,569   |              |   | 992,563 |   |
| Restricted      investments and cash                                           |   |                | 33,561    |              |   | 29,789 |   |
| Sulphur      business assets                                                   |   |                | 3,010     |              |   | 3,012 |   |
| Deferred      financing costs                                                  |   |                | 14,769    |              |   | 15,658 |   |
| Fair      value of oil and gas derivative contracts                            |   |                | 6,018     |              |   | 5,847 |   |
| Total      assets                                                              |   | $                   | 1,266,727 |              | $      | 1,330,282 |   |
|                                                                           |   |                |      |              |   |   |   |
| LIABILITIES      AND STOCKHOLDERS’ EQUITY                                |   |                |      |              |   |   |   |
| Accounts      payable                                                          |   | $                   | 66,924    |              | $      | 77,009 |   |
| Accrued      liabilities                                                       |   |                | 79,102    |              |   | 89,565 |   |
| Accrued      interest and dividends payable                                    |   |                | 17,409    |              |   | 7,586 |   |
| Current      portion of accrued oil and gas reclamation costs                  |   |                | 64,380    |              |   | 103,550 |   |
| Current      portion of accrued sulphur reclamation costs                      |   |                | 785       |              |   | 785 |   |
| Current      liabilities from discontinued operations                          |   |                | 1,344     |              |   | 1,317 |   |
| Total      current liabilities                                                 |   |                | 229,944   |              |   | 279,812 |   |
| 5¼%      convertible senior notes                                         |   |                | 74,720    |              |   | 74,720 |   |
| 11.875%      senior notes                                                      |   |                | 300,000   |              |   | 300,000 |   |
| Accrued      oil and gas reclamation costs                                     |   |                | 360,245   |              |   | 317,651 |   |
| Accrued      sulphur reclamation costs                                         |   |                | 22,719    |              |   | 22,218 |   |
| Other      long-term liabilities from discontinued operations                  |   |                | 6,842     |              |   | 6,835 |   |
| Other      long-term liabilities                                               |   |                | 20,138    |              |   | 20,023 |   |
| Total      liabilities                                                         |   |                | 1,014,608 |              |   | 1,021,259 |   |
| Stockholders'      equity                                                      |   |                | 252,119   |              |   | 309,023 |   |
| Total      liabilities and stockholders' equity                                |   | $                   | 1,266,727 |              | $      | 1,330,282 |   |
|                                                                           |   |                |      |              |   |   |   |

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TABLE OFCONTENTS

CONSOLIDATED STATEMENTSOF OPERATIONS (Unaudited)

|                                                                     |   | Three      Months Ended  March 31,  |    |
|--------------------------------------------------------------------------|--------|-----------------------------------------------|---------|
|                                                                     |   | 2009                                          |    | 2008 |   |
|                                                                     |   | (In      Thousands, Except Per Share Amounts) |    |
| Revenues:                                                                |   |                                          |    |   |   |   |   |
| Oil      and natural gas                                                 |   | $                                             | 95,082  |   | $ | 291,946 |   |
| Service                                                                  |   |                                          | 2,294   |   |   | 3,530 |   |
| Total      revenues                                                      |   |                                          | 97,376  |   |   | 295,476 |   |
| Costs      and expenses:                                                 |   |                                          |    |   |   |   |   |
| Production      and delivery costs                                       |   |                                          | 49,046  |   |   | 55,646 |   |
| Depletion,      depreciation and amortization expense                    |   |                                          | 93,397  |   |   | 121,332 |   |
| Exploration      expenses                                                |   |                                          | 28,426  |   |   | 6,813 |   |
| (Gain)      loss on oil and gas derivative contracts                     |   |                                          | (18,858 | ) |   | 45,231 |   |
| General      and administrative expenses                                 |   |                                          | 12,446  |   |   | 9,012 |   |
| Start-up      costs for Main Pass Energy Hub™                      |   |                                          | 765     |   |   | 1,617 |   |
| Insurance      recoveries                                                |   |                                          | (18,707 | ) |   | - |   |
| Total      costs and expenses                                            |   |                                          | 146,515 |   |   | 239,651 |   |
| Operating      income (loss)                                             |   |                                          | (49,139 | ) |   | 55,825 |   |
| Interest      expense, net                                               |   |                                          | (10,666 | ) |   | (17,111 | ) |
| Other      income (expense), net                                         |   |                                          | 329     |   |   | (627 | ) |
| Income      (loss) from continuing operations before income taxes        |   |                                          | (59,476 | ) |   | 38,087 |   |
| Provision      for income taxes                                          |   |                                          | (16     | ) |   | (856 | ) |
| Income      (loss) from continuing operations                            |   |                                          | (59,492 | ) |   | 37,231 |   |
| Loss      from discontinued operations                                   |   |                                          | (1,067  | ) |   | (856 | ) |
| Net      income (loss)                                                   |   |                                          | (60,559 | ) |   | 36,375 |   |
| Preferred      dividends and amortization of convertible preferred stock |   |                                          |    |   |   |   |   |
| issuance      costs                                                      |   |                                          | (2,682  | ) |   | (4,366 | ) |
| Net      income (loss) applicable to common stock                        |   | $                                             | (63,241 | ) | $ | 32,009 |   |
|                                                                     |   |                                          |    |   |   |   |   |
| Basic      net income (loss) per share of common stock:                  |   |                                          |    |   |   |   |   |
| Continuing      operations                                               |   |                                          | $(0.88  | ) |   | $0.61 |   |
| Discontinued      operations                                             |   |                                          | (0.02   | ) |   | (0.02 | ) |
| Net      income (loss) per share of common stock                         |   |                                          | $(0.90  | ) |   | $0.59 |   |
|                                                                     |   |                                          |    |   |   |   |   |
| Diluted      net income (loss) per share of common stock:                |   |                                          |    |   |   |   |   |
| Continuing      operations                                               |   |                                          | $(0.88  | ) |   | $0.47 |   |
| Discontinued      operations                                             |   |                                          | (0.02   | ) |   | (0.01 | ) |
| Net      income (loss) per share of common stock                         |   |                                          | $(0.90  | ) |   | $0.46 |   |
|                                                                     |   |                                          |    |   |   |   |   |
| Average      shares outstanding:                                         |   |                                          |    |   |   |   |   |
| Basic                                                                    |   |                                          | 70,475  |   |   | 53,956 |   |
| Diluted                                                                  |   |                                          | 70,475  |   |   | 85,154 |   |

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CONSOLIDATED STATEMENTS OFCASH FLOW (Unaudited

|                                                                     |   | Three      Months Ended |    |
|--------------------------------------------------------------------------|--------|-------------------------|---------|
|                                                                     |   | March      31,          |    |
|                                                                     |   | 2009                    |    | 2008 |   |
|                                                                     |   | (In      Thousands)     |    |
| Cash      flow from operating activities:                                |   |                    |    |   |   |   |   |
| Net      income (loss)                                                   |   | $                       | (60,559 | ) | $ | 36,375 |   |
| Adjustments      to reconcile net income (loss) to net cash provided     |   |                    |    |   |   |   |   |
| by      operating activities:                                            |   |                    |    |   |   |   |   |
| Loss      from discontinued operations                                   |   |                    | 1,067   |   |   | 856 |   |
| Depletion,      depreciation, and amortization                           |   |                    | 93,397  |   |   | 121,332 |   |
| Exploration      drilling and related expenditures (reimbursements), net |   |                    | 16,226  |   |   | (735 | ) |
| Compensation      expense associated with stock-based awards             |   |                    | 6,347   |   |   | 1,941 |   |
| Amortization      of deferred financing costs                            |   |                    | 931     |   |   | 1,256 |   |
| Unrealized      (gain) loss on oil and gas derivative contracts          |   |                    | (778    | ) |   | 41,591 |   |
| Loss      on induced conversion of convertible senior notes              |   |                    | -       |   |   | 699 |   |
| Reclamation      expenditures, net of prepayments by third parties       |   |                    | (12,351 | ) |   | 3,234 |   |
| Increase      in restricted cash                                         |   |                    | (3,772  | ) |   | (3,783 | ) |
| Other                                                                    |   |                    | 64      |   |   | (320 | ) |
| (Increase)      decrease in working capital:                             |   |                    |    |   |   |   |   |
| Accounts      receivable                                                 |   |                    | 14,697  |   |   | (38,924 | ) |
| Accounts      payable and accrued liabilities                            |   |                    | (12,846 | ) |   | 10,035 |   |
| Prepaid      expenses and inventories                                    |   |                    | (8,193  | ) |   | 2,204 |   |
| Net      cash provided by continuing operations                          |   |                    | 34,230  |   |   | 175,761 |   |
| Net      cash used in discontinued operations                            |   |                    | (436)   |   |   | (2,945 | ) |
| Net      cash provided by operating activities                           |   |                    | 33,794  |   |   | 172,816 |   |
|                                                                     |   |                    |    |   |   |   |   |
| Cash      flow from investing activities:                                |   |                    |    |   |   |   |   |
| Exploration,      development and other capital expenditures             |   |                    | (29,163 | ) |   | (51,379 | ) |
| Acquisition      of properties, net                                      |   |                    | -       |   |   | (3,500 | ) |
| Net      cash used in continuing operations                              |   |                    | (29,163 | ) |   | (54,879 | ) |
| Net      cash activity from discontinued operations                      |   |                    | -       |   |   | - |   |
| Net      cash used in investing activities                               |   |                    | (29,163 | ) |   | (54,879 | ) |
|                                                                     |   |                    |    |   |   |   |   |
| Cash      flow from financing activities:                                |   |                    |    |   |   |   |   |
| Payments      under senior secured revolving credit facility, net        |   |                    | -       |   |   | (111,000 | ) |
| Dividends      paid on convertible preferred stock                       |   |                    | (2,682  | ) |   | (4,755 | ) |
| Payments      for induced conversion of convertible senior notes         |   |                    | -       |   |   | (699 | ) |
| Proceeds      from exercise of stock options and other                   |   |                    | -       |   |   | 66 |   |
| Net      cash used in continuing operations                              |   |                    | (2,682  | ) |   | (116,388 | ) |
| Net      cash activity from discontinued operations                      |   |                    | -       |   |   | - |   |
| Net      cash used in financing activities                               |   |                    | (2,682  | ) |   | (116,388 | ) |
| Net      increase in cash and cash equivalents                           |   |                    | 1,949   |   |   | 1,549 |   |
| Cash      and cash equivalents at beginning of year                      |   |                    | 93,486  |   |   | 4,830 |   |
| Cash      and cash equivalents at end of period                          |   | $                       | 95,435  |   | $ | 6,379 |   |

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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| Assumed      conversion of preferred stock a |   |   | 12,817 |   |
|----------------------------------------------|--------|--------|--------|--------|
| 5¼%      notes b                        |   |   | 4,508  |   |

| Basic      net income from continuing operations                                                 |   | $      | 32,865 |   |
|--------------------------------------------------------------------------------------------------|--------|--------|--------|--------|
| Add:  Preferred      dividends from assumed conversion of  preferred stock a |   |   | 4,366  |   |
| Add:  Net      interest from assumed conversion of 6% notes c                          |   |   | 1,297  |   |
| Add:  Net      interest from assumed conversion of 5¼% notes b                    |   |   | 1,565  |   |
| Diluted      net income from continuing operations                                               |   |   | 40,093 |   |
| Loss      from discontinued operations                                                           |   |   | (856   | )      |
| Diluted      net income applicable to common stock                                               |   | $      | 39,237 |   |

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| Weighted      average common shares outstanding for purpose of    calculating |   |   |   |   |
|-------------------------------------------------------------------------------|--------|--------|--------|--------|
| basic      net income per share                                               |   |   | 53,956 |   |
| Assumed      exercise of dilutive stock options d,      e                     |   |   | 1,008  |   |
| Assumed      exercise of stock warrants d,      f                             |   |   | 504    |   |
| Assumed      conversion of preferred stock      a                             |   |   | 17,389 |   |
| Assumed      conversion of 6% notes      c                                    |   |   | 5,359  |   |
| Assumed      conversion of 5¼% notes b                                   |   |   | 6,938  |   |
| Weighted      average common shares outstanding                               |   |   |   |   |
| for      purposes of calculating diluted net income per share                 |   |   | 85,154 |   |
|                                                                          |   |   |   |   |
| Diluted      net income per share from continuing operations                  |   |   | $0.47  |   |
| Diluted      net loss per share from discontinued operations                  |   |   | (0.01  | )      |
| Diluted      net income per share                                             |   |   | $0.46  |   |

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

| b.   | Net      interest expense on the 5¼% notes totaled $1.0 million and $1.6 million      during the first quarter of 2009 and 2008, respectively. Additional      information regarding McMoRan’s 5¼% notes is disclosed in Note 8 of the      2008 Form 10-K. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c.   | The      6% notes matured on July 2, 2008.  Net interest expense on the      6% notes totaled $1.3 million during the first quarter of 2008. Additional      information regarding McMoRan’s 6% notes is disclosed in Note 8 of the      2008 Form 10-K. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| d.   | McMoRan      uses the treasury stock method to determine total shares relating to      in-the-money stock options and stock warrants to include in its diluted      earning per share calculation. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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

|                                    |   | First      Quarter |   |
|-----------------------------------------|--------|--------------------|--------|
|                                    |   | 2009               |   |   | 2008 |   |
| Outstanding      options (in thousands) |   |               | 8,480  |   |   |   | 4,416 |   |
| Average      exercise price per share   |   | $                  | 15.40  |   |   | $ | 18.01 |   |

|   | Natural      Gas Positions (million MMbtu)                                        |   |
|--------|-----------------------------------------------------------------------------------|--------|
|   | Open      Swap Positions a                                                        |   | Put      Options b |   |
|   | Annual                                                                            |   | Average |   | Annual |   | Average |   |
|   | Volumes                                                                           |   | Swap      Price      c |   | Volumes |   | Floor      c |   |
| 2009   | 3.9                                                                               |   | $ | 8.93 |   |              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 |   |
|   | Annual                                                                      |   | Average |   | Annual |   | Average |   |
|   | Volumes                                                                     |   | Swap      Price d |   | Volumes |   | Floor      d |   |
| 2009   | 171                                                                         |   | $ | 71.73 |   |             125 |   | $ |  50.00 |   |
| 2010   |             118 |   | $ |  70.89 |   |               50 |   | $ |  50.00 |   |

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

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

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

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

|                                                 | First      Quarter |    |
|------------------------------------------------------|--------------------|---------|
|                                                 | 2009               |    | 2008 |   |
| Realized      (gain) loss                            |               |    |   |   |   |   |
| Gas      puts                                        | $                  | -       |   | $ | - |   |
| Oil      puts                                        |               | -       |   |   | - |   |
| Gas      swaps                                       |               | (13,716 | ) |   | (3,872 | ) |
| Oil      swaps                                       |               | (4,364  | ) |   | 7,512 |   |
| Total      realized (gain) loss                      |               | (18,080 | ) |   | 3,640 |   |
|                                                 |               |    |   |   |   |   |
| Unrealized      (gain) loss                          |               |    |   |   |   |   |
| Gas      puts                                        |               | (4,241  | ) |   | 1,597 |   |
| Oil      puts                                        |               | 358     |   |   | 6 |   |
| Gas      swaps                                       |               | 13      |   |   | 40,596 |   |
| Oil      swaps                                       |               | 3,092   |   |   | (608 | ) |
| Total      unrealized (gain) loss                    |               | (778    | ) |   | 41,591 |   |
| (Gain)      loss on oil and gas derivative contracts | $                  | (18,858 | ) | $ | 45,231 |   |

|                             | March      31, 2009 |   |
|----------------------------------|---------------------|--------|
|                             | Puts                |   | Swaps |   |   |   |   |
|                             | Gas                 |   | Oil |   | Gas |   | Oil |   | Total |   |
| Current      assets              | $                   | 6,349  |   | $ | 598 |   | $ | 21,572 |   | $ | 3,711 |   | $ | 32,230 |   |
| Other      assets                |                | 1,315  |   |   | 256 |   |   | 3,952 |   |   | 495 |   |   | 6,018 |   |
| Current      liabilities         |                | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Other      long-term liabilities |                | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Fair      value of contracts     | $                   | 7,664  |   | $ | 854 |   | $ | 25,524 |   | $ | 4,206 |   | $ | 38,248 |   |

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

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| Oil and Natural Gas                                   |   |    |   |
|-------------------------------------------------------|--------|---------|--------|
| Asset      retirement obligation at beginning of year | $      | 421,201 |   |
| Liabilities      settled                              |   | (5,890  | )      |
| Accretion      expense                                |   | 7,814   |   |
| Reclamation      costs assumed from third parties     |   | 524     |   |
| Incurred      liabilities                             |   | 682     |   |
| Revision      for changes in estimates                |   | 294     |   |
| Asset      retirement obligations at March 31, 2009   | $      | 424,625 |   |

|                                                   |   |   |   |
|--------------------------------------------------------|--------|--------|--------|
| Sulphur                                                |   |   |   |
| Asset      retirement obligations at beginning of year | $      | 23,003 |   |
| Liabilities      settled                               |   | -      |   |
| Accretion      expense                                 |   | 501    |   |
| Revision      for changes in estimates                 |   | -      |   |
| Asset      retirement obligation at March 31, 2009     | $      | 23,504 |   |

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TABLE OF CONTENTS

|                                     | Pension      Benefits |   | Other      Benefits |   |
|------------------------------------------|-----------------------|--------|---------------------|--------|
|                                     | 2009                  |   | 2008                |   | 2009 |   | 2008 |   |
| Service      cost                        | $                     | -      |                | $      | - |   | $ | 13 |   | $ | 7 |   |
| Interest      cost                       |                  | -      |                |   | 22 |   |   | 72 |   |   | 84 |   |
| Return      on plan assets               |                  | -      |                |   | (9 | ) |   | - |   |   | - |   |
| Amortization      of prior service costs |                  | -      |                |   |   |   |   |   |   |   |   |   |
| and      actuarial gains                 |                  | -      |                |   | - |   |   | (10 | ) |   | (1 | ) |
| Net      periodic benefit expense        | $                     | -      |                | $      | 13 |   | $ | 75 |   | $ | 90 |   |

|                                                               |   | First      Quarter |   |
|--------------------------------------------------------------------|--------|--------------------|--------|
|                                                               |   | 2009               |   | 2008 |   |
| Stock      options awarded to employees (including directors)      |   | $                  | 6,013  |   | $ | 1,781 |   |
| Stock      options awarded to non-employees and advisory directors |   |               | 253    |   |   | 128 |   |
| Restricted      stock units                                        |   |               | 81     |   |   | 32 |   |
| Total      compensation cost                                       |   | $                  | 6,347  |   | $ | 1,941 |   |

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TABLE OF CONTENTS

|                                                 | First      Quarter |    |
|------------------------------------------------------|--------------------|---------|
|                                                 | 2009               |    | 2008 |   |
| Net      income (loss)                               | $                  | (60,559 | ) | $ | 36,375 |   |
| Other      comprehensive income (loss)               |               |    |   |   |   |   |
| Amortization      of previously unrecognized pension |               |    |   |   |   |   |
| components,      net                                 |               | (10     | ) |   | (1 | ) |
| Comprehensive      income (loss)                     | $                  | (60,569 | ) | $ | 36,374 |   |

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TABLE OF CONTENTS

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

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

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

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

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TABLE OF CONTENTS

|                                                  |   |                |    |   |   | Freeport  |   |         |    | Consolidated |   |
|-------------------------------------------------------|--------|---------------------|---------|--------|--------|-----------|--------|--------------|---------|--------------|--------|
|                                                  |   | Parent              |    | MOXY   |   | Energy    |   | Eliminations |    | McMoRan      |   |
|                                                  |   | (In      Thousands) |    |
| ASSETS                                                |   |                |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| Current      assets:                                  |   |                |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| Cash      and cash equivalents                        |   | $                   | 70      |   | $      | 95,231    |   | $            | 134     |         | $      | - |   | $ | 95,435 |   |
| Accounts      receivable                              |   |                | -       |   |   | 95,327    |   |         | -       |         |   | - |   |   | 95,327 |   |
| Inventories                                           |   |                | -       |   |   | 44,135    |   |         | -       |         |   | - |   |   | 44,135 |   |
| Prepaid      expenses                                 |   |                | 6,773   |   |   | 2,386     |   |         | -       |         |   | - |   |   | 9,159 |   |
| Fair      value of derivative contracts               |   |                | -       |   |   | 32,230    |   |         | -       |         |   | - |   |   | 32,230 |   |
| Current      assets from discontinued                 |   |                |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| operations                                            |   |                | -       |   |   | -         |   |         | 514     |         |   | - |   |   | 514 |   |
| Total      current assets                             |   |                | 6,843   |   |   | 269,309   |   |         | 648     |         |   | - |   |   | 276,800 |   |
| Property,      plant and equipment, net               |   |                | -       |   |   | 932,538   |   |         | 31      |         |   | - |   |   | 932,569 |   |
| Discontinued      sulphur assets                      |   |                | -       |   |   | -         |   |         | 3,010   |         |   | - |   |   | 3,010 |   |
| Investment      in subsidiaries                       |   |                | 800,747 |   |   | -         |   |         | -       |         |   | (800,747 | ) |   | - |   |
| Amounts      due from affiliates                      |   |                | -       |   |   | 167,165   |   |         | (3,233  | )            |   | (163,932 | ) |   | - |   |
| Deferred      financing costs and other assets        |   |                | 10,768  |   |   | 43,580    |   |         | -       |         |   | - |   |   | 54,348 |   |
| Total      assets                                     |   | $                   | 818,358 |   | $      | 1,412,592 |   | $            | 456     |         | $      | (964,679 | ) | $ | 1,266,727 |   |
|                                                  |   |                |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| LIABILITIES      AND STOCKHOLDERS’ EQUITY       |   |                |    |   |   |      |   |         |    |         |
| Currentliabilities:                                   |   |                |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| Accounts      payable                                 |   | $                   | 305     |   | $      | 66,414    |   | $            | 205     |         | $      | - |   | $ | 66,924 |   |
| Accrued      liabilities                              |   |                | 1,424   |   |   | 77,669    |   |         | 9       |         |   | - |   |   | 79,102 |   |
| Current      portion of oil and gas accrued           |   |                |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| reclamation      costs                                |   |                | -       |   |   | 64,380    |   |         | -       |         |   | - |   |   | 64,380 |   |
| Other      current liabilities                        |   |                | 16,721  |   |   | 688       |   |         | -       |         |   | - |   |   | 17,409 |   |
| Current      liabilities from discontinued            |   |                |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| operations                                            |   |                | -       |   |   | -         |   |         | 2,129   |         |   | - |   |   | 2,129 |   |
| Total      current liabilities                        |   |                | 18,450  |   |   | 209,151   |   |         | 2,343   |         |   | - |   |   | 229,944 |   |
| Long-term      debt                                   |   |                | 374,720 |   |   | -         |   |         | -       |         |   | - |   |   | 374,720 |   |
| Amounts      due to affiliates                        |   |                | 163,932 |   |   | -         |   |         | -       |         |   | (163,932 | ) |   | - |   |
| Accrued      oil and gas reclamation costs            |   |                | -       |   |   | 360,245   |   |         | -       |         |   | - |   |   | 360,245 |   |
| Accrued      sulphur reclamation costs                |   |                | -       |   |   | -         |   |         | 22,719  |         |   | - |   |   | 22,719 |   |
| Other      long-term liabilities                      |   |                | 9,137   |   |   | 9,386     |   |         | 8,457   |         |   | - |   |   | 26,980 |   |
| Total      liabilities                                |   |                | 566,239 |   |   | 578,782   |   |         | 33,519  |         |   | (163,932 | ) |   | 1,014,608 |   |
| Commitments      and contingencies                    |   |                |    |   |   |      |   |         |    |         |   |   |   |   |   |   |
| Stockholders’      equity (deficit)             |   |                | 252,119 |   |   | 833,810   |   |         | (33,063 | )            |   | (800,747 | ) |   | 252,119 |   |
| Total      liabilities and stockholders’ equity |   | $                   | 818,358 |   | $      | 1,412,592 |   | $            | 456     |         | $      | (964,679 | ) | $ | 1,266,727 |   |

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TABLE OF CONTENTS

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

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TABLE OF CONTENTS

|                                          |   |                |    |   |   | Freeport |   |         |   | Consolidated |   |
|-----------------------------------------------|--------|---------------------|---------|--------|--------|----------|--------|--------------|--------|--------------|--------|
|                                          |   | Parent              |    | MOXY   |   | Energy   |   | Eliminations |   | McMoRan      |   |
|                                          |   | (In      Thousands) |    |
| Revenues:                                     |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| Oil      and gas                              |   | $                   | -       |   | $      | 95,082   |   | $            | -      |         | $      | - |   | $ | 95,082 |   |
| Service                                       |   |                | -       |   |   | 2,294    |   |         | -      |         |   | - |   |   | 2,294 |   |
| Total      revenues                           |   |                | -       |   |   | 97,376   |   |         | -      |         |   | - |   |   | 97,376 |   |
| Costs      and expenses:                      |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| Production      and delivery costs            |   |                | -       |   |   | 49,058   |   |         | (12    | )            |   | - |   |   | 49,046 |   |
| Depreciation      and amortization            |   |                | -       |   |   | 93,397   |   |         | -      |         |   | - |   |   | 93,397 |   |
| Exploration      expenses                     |   |                | -       |   |   | 28,426   |   |         | -      |         |   | - |   |   | 28,426 |   |
| Gain      on oil and gas derivative contracts |   |                | -       |   |   | (18,858  | )      |         | -      |         |   | - |   |   | (18,858 | ) |
| General      and administrative expenses      |   |                | 1,777   |   |   | 10,648   |   |         | 21     |         |   | - |   |   | 12,446 |   |
| Start-up      costs for Main Pass             |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| Energy      HubTM                             |   |                | -       |   |   | -        |   |         | 765    |         |   | - |   |   | 765 |   |
| Insurance      recovery                       |   |                | -       |   |   | (18,707  | )      |         | -      |         |   | - |   |   | (18,707 | ) |
| Total      costs and expenses                 |   |                | 1,777   |   |   | 143,964  |   |         | 774    |         |   | - |   |   | 146,515 |   |
| Operating      loss                           |   |                | (1,777  | )      |   | (46,588  | )      |         | (774   | )            |   | - |   |   | (49,139 | ) |
| Interest      expense                         |   |                | (10,284 | )      |   | (382     | )      |         | -      |         |   | - |   |   | (10,666 | ) |
| Equity      in earnings of consolidated       |   |                |    |   |   |     |   |         |   |         |   |   |   |   | - |   |
| subsidiaries                                  |   |                | (48,476 | )      |   | -        |   |         | -      |         |   | 48,476 |   |   | - |   |
| Other      income (expense), net              |   |                | (6      | )      |   | 335      |   |         | -      |         |   | - |   |   | 329 |   |
| Loss      from continuing operations before   |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| income      taxes                             |   |                | (60,543 | )      |   | (46,635  | )      |         | (774   | )            |   | 48,476 |   |   | (59,476 | ) |
| Provision      for income taxes               |   |                | (16     | )      |   | -        |   |         | -      |         |   | - |   |   | (16 | ) |
| Loss      from continuing operations          |   |                | (60,559 | )      |   | (46,635  | )      |         | (774   | )            |   | 48,476 |   |   | (59,492 | ) |
| Loss      from discontinued operations        |   |                | -       |   |   | -        |   |         | (1,067 | )            |   | - |   |   | (1,067 | ) |
| Net      loss                                 |   |                | (60,559 | )      |   | (46,635  | )      |         | (1,841 | )            |   | 48,476 |   |   | (60,559 | ) |
| Preferred      dividends and amortization     |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| of      convertible preferred stock           |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| issuance      costs                           |   |                | (2,682  | )      |   | -        |   |         | -      |         |   | - |   |   | (2,682 | ) |
| Net      loss applicable to common stock      |   | $                   | (63,241 | )      | $      | (46,635  | )      | $            | (1,841 | )            | $      | 48,476 |   | $ | (63,241 | ) |
|                                          |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |

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TABLE OF CONTENTS

|                                          |   |                |    |   |   | Freeport |   |         |   | Consolidated |   |
|-----------------------------------------------|--------|---------------------|---------|--------|--------|----------|--------|--------------|--------|--------------|--------|
|                                          |   | Parent              |    | MOXY   |   | Energy   |   | Eliminations |   | McMoRan      |   |
|                                          |   | (In      Thousands) |    |
| Revenues:                                     |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| Oil      and gas                              |   | $                   | -       |   | $      | 291,946  |   | $            | -      |         | $      | - |   | $ | 291,946 |   |
| Service                                       |   |                | -       |   |   | 3,530    |   |         | -      |         |   | - |   |   | 3,530 |   |
| Total      revenues                           |   |                | -       |   |   | 295,476  |   |         | -      |         |   | - |   |   | 295,476 |   |
| Costs      and expenses:                      |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| Production      and delivery costs            |   |                | -       |   |   | 55,660   |   |         | (14    | )            |   | - |   |   | 55,646 |   |
| Depreciation      and amortization            |   |                | -       |   |   | 121,332  |   |         | -      |         |   | - |   |   | 121,332 |   |
| Exploration      expenses                     |   |                | -       |   |   | 6,813    |   |         | -      |         |   | - |   |   | 6,813 |   |
| Loss      on oil and gas derivative contracts |   |                | -       |   |   | 45,231   |   |         | -      |         |   | - |   |   | 45,231 |   |
| General      and administrative expenses      |   |                | 1,900   |   |   | 7,008    |   |         | 104    |         |   | - |   |   | 9,012 |   |
| Start-up      costs for Main Pass             |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| Energy      HubTM                             |   |                | -       |   |   | -        |   |         | 1,617  |         |   | - |   |   | 1,617 |   |
| Total      costs and expenses                 |   |                | 1,900   |   |   | 236,044  |   |         | 1,707  |         |   | - |   |   | 239,651 |   |
| Operating      income (loss)                  |   |                | (1,900  | )      |   | 59,432   |   |         | (1,707 | )            |   | - |   |   | 55,825 |   |
| Interest      expense                         |   |                | (12,406 | )      |   | (4,705   | )      |         | -      |         |   | - |   |   | (17,111 | ) |
| Equity      in earnings of consolidated       |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| subsidiaries                                  |   |                | 52,219  |   |   | -        |   |         | -      |         |   | (52,219 | ) |   | - |   |
| Other      income (expense), net              |   |                | (682    | )      |   | 55       |   |         |   |         |   |   |   |   | (627 | ) |
| Income      (loss) from continuing operations |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| before      income taxes                      |   |                | 37,231  |   |   | 54,782   |   |         | (1,707 | )            |   | (52,219 | ) |   | 38,087 |   |
| Provision      for income taxes               |   |                | (856    | )      |   | -        |   |         | -      |         |   | - |   |   | (856 | ) |
| Income      (loss) from continuing operations |   |                | 36,375  |   |   | 54,782   |   |         | (1,707 | )            |   | (52,219 | ) |   | 37,231 |   |
| Loss      from discontinued operations        |   |                | -       |   |   | -        |   |         | (856   | )            |   | - |   |   | (856 | ) |
| Net      income (loss)                        |   |                | 36,375  |   |   | 54,782   |   |         | (2,563 | )            |   | (52,219 | ) |   | 36,375 |   |
| Preferred      dividends and amortization     |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| of      convertible preferred stock           |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| issuance      costs                           |   |                | (4,366  | )      |   | -        |   |         | -      |         |   | - |   |   | (4,366 | ) |
| Net      income (loss) applicable to          |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |
| common      stock                             |   | $                   | 32,009  |   | $      | 54,782   |   | $            | (2,563 | )            | $      | (52,219 | ) | $ | 32,009 |   |
|                                          |   |                |    |   |   |     |   |         |   |         |   |   |   |   |   |   |

----

TABLE OF CONTENTS

|                                          |   |                |   |   |   | Freeport |   | Consolidated |   |
|-----------------------------------------------|--------|---------------------|--------|--------|--------|----------|--------|--------------|--------|
|                                          |   | Parent              |   | MOXY   |   | Energy   |   | McMoRan      |   |
|                                          |   | (In      Thousands) |   |
|                                          |   |                |   |   |   |     |   |         |   |   |   |   |   |
| Cash      flow from operating activities:     |   |                |   |   |   |     |   |         |   |   |   |   |   |
| Net      cash provided by (used in)           |   |                |   |   |   |     |   |         |   |   |   |   |   |
| continuing      operations                    |   | $                   | 4,067  |   | $      | 30,952   |   | $            | (789   | ) | $ | 34,230 |   |
| Net      cash used in discontinued operations |   |                | -      |   |   | -        |   |         | (436   | ) |   | (436 | ) |
| Net      cash provided by (used in)           |   |                |   |   |   |     |   |         |   |   |   |   |   |
| operating      activities                     |   |                | 4,067  |   |   | 30,952   |   |         | (1,225 | ) |   | 33,794 |   |
|                                          |   |                |   |   |   |     |   |         |   |   |   |   |   |
| Cash      flow from investing activities:     |   |                |   |   |   |     |   |         |   |   |   |   |   |
| Exploration,      development and other       |   |                |   |   |   |     |   |         |   |   |   |   |   |
| capital      expenditures                     |   |                | -      |   |   | (29,163  | )      |         | -      |   |   | (29,163 | ) |
| Net      cash used in investing activities    |   |                | -      |   |   | (29,163  | )      |         | -      |   |   | (29,163 | ) |
|                                          |   |                |   |   |   |     |   |         |   |   |   |   |   |
| Cash      flow from financing activities:     |   |                |   |   |   |     |   |         |   |   |   |   |   |
| Dividends      paid on convertible preferred  |   |                |   |   |   |     |   |         |   |   |   |   |   |
| stock                                         |   |                | (2,682 | )      |   | -        |   |         | -      |   |   | (2,682 | ) |
| Investment      from parent                   |   |                | (1,350 | )      |   | -        |   |         | 1,350  |   |   | - |   |
| Net      cash provided by (used in)           |   |                |   |   |   |     |   |         |   |   |   |   |   |
| financing      activities                     |   |                | (4,032 | )      |   | -        |   |         | 1,350  |   |   | (2,682 | ) |
|                                          |   |                |   |   |   |     |   |         |   |   |   |   |   |
| Net      increase in cash and cash            |   |                |   |   |   |     |   |         |   |   |   |   |   |
| equivalents                                   |   |                | 35     |   |   | 1,789    |   |         | 125    |   |   | 1,949 |   |
| Cash      and cash equivalents at beginning   |   |                |   |   |   |     |   |         |   |   |   |   |   |
| of      year                                  |   |                | 35     |   |   | 93,442   |   |         | 9      |   |   | 93,486 |   |
| Cash      and cash equivalents at end of      |   |                |   |   |   |     |   |         |   |   |   |   |   |
| year                                          |   | $                   | 70     |   | $      | 95,231   |   | $            | 134    |   | $ | 95,435 |   |
|                                          |   |                |   |   |   |     |   |         |   |   |   |   |   |

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|                                            |   |                |   |   |   | Freeport |   | Consolidated |   |
|-------------------------------------------------|--------|---------------------|--------|--------|--------|----------|--------|--------------|--------|
|                                            |   | Parent              |   | MOXY   |   | Energy   |   | McMoRan      |   |
|                                            |   | (In      Thousands) |   |
|                                            |   |                |   |   |   |     |   |         |   |   |   |   |   |
| Cash      flow from operating activities:       |   |                |   |   |   |     |   |         |   |   |   |   |   |
| Net      cash provided by continuing            |   |                |   |   |   |     |   |         |   |   |   |   |   |
| operations                                      |   | $                   | 7,197  |   | $      | 168,434  |   | $            | 130    |   | $ | 175,761 |   |
| Net      cash used in discontinued operations   |   |                | -      |   |   | -        |   |         | (2,945 | ) |   | (2,945 | ) |
| Net      cash provided by (used in)             |   |                |   |   |   |     |   |         |   |   |   |   |   |
| operating      activities                       |   |                | 7,197  |   |   | 168,434  |   |         | (2,815 | ) |   | 172,816 |   |
|                                            |   |                |   |   |   |     |   |         |   |   |   |   |   |
| Cash      flow from investing activities:       |   |                |   |   |   |     |   |         |   |   |   |   |   |
| Exploration,      development and other         |   |                |   |   |   |     |   |         |   |   |   |   |   |
| capital      expenditures                       |   |                | -      |   |   | (51,379  | )      |         | -      |   |   | (51,379 | ) |
| Acquisition      of oil and gas properties, net |   |                | -      |   |   | (3,500   | )      |         | -      |   |   | (3,500 | ) |
| Net      cash used in investing activities      |   |                | -      |   |   | (54,879  | )      |         | -      |   |   | (54,879 | ) |
|                                            |   |                |   |   |   |     |   |         |   |   |   |   |   |
| Cash      flow from financing activities:       |   |                |   |   |   |     |   |         |   |   |   |   |   |
| Net      payments under revolving credit        |   |                |   |   |   |     |   |         |   |   |   |   |   |
| facility                                        |   |                | -      |   |   | (111,000 | )      |         | -      |   |   | (111,000 | ) |
| Dividends      paid on convertible preferred    |   |                |   |   |   |     |   |         |   |   |   |   |   |
| stock                                           |   |                | (4,755 | )      |   | -        |   |         | -      |   |   | (4,755 | ) |
| Payments      for induced conversion of         |   |                |   |   |   |     |   |         |   |   |   |   |   |
| convertible      senior notes                   |   |                | (699   | )      |   | -        |   |         | -      |   |   | (699 | ) |
| Proceeds      from exercise of stock            |   |                |   |   |   |     |   |         |   |   |   |   |   |
| options,      warrants and other                |   |                | 66     |   |   | -        |   |         | -      |   |   | 66 |   |
| Investment      from parent                     |   |                | (1,802 | )      |   | -        |   |         | 1,802  |   |   | - |   |
| Net      cash provided by (used in)             |   |                |   |   |   |     |   |         |   |   |   |   |   |
| financing      activities                       |   |                | (7,190 | )      |   | (111,000 | )      |         | 1,802  |   |   | (116,388 | ) |
|                                            |   |                |   |   |   |     |   |         |   |   |   |   |   |
| Net      increase (decrease) in cash and        |   |                |   |   |   |     |   |         |   |   |   |   |   |
| cash      equivalents                           |   |                | 7      |   |   | 2,555    |   |         | (1,013 | ) |   | 1,549 |   |
| Cash      and cash equivalents at beginning     |   |                |   |   |   |     |   |         |   |   |   |   |   |
| of      year                                    |   |                | 143    |   |   | 3,446    |   |         | 1,241  |   |   | 4,830 |   |
| Cash      and cash equivalents at end of        |   |                |   |   |   |     |   |         |   |   |   |   |   |
| year                                            |   | $                   | 150    |   | $      | 6,001    |   | $            | 228    |   | $ | 6,379 |   |
|                                            |   |                |   |   |   |     |   |         |   |   |   |   |   |

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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 Paya | Status                                                   |
|----------------------------------------|--------------------------|------------------|----------------------------------------------------------|
| No.      1 (#228)Discovery      Well   | 8                        | 260              | Workover      is in progress                             |
| No.      2 (#229)Delineation      Well | 8                        | 289              | Producing      from Primary Rob-L sand                   |
| No.      3 (#230)Delineation      Well | 8                        | 256              | Recompletion      planned for the second quarter of 2009 |
| No.      4 (#231)Development      Well | 2                        | 116              | Producing      from Primary Rob-L sand                   |
| No.      5 (#232)Development      Well | 8                        | 155              | Completing;      first production expected mid-year 2009 |
| No.      6 (#233)Delineation      Well | 2                        | 40               | Completing;      first production expected mid-year2009  |

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

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|                                   | First      Quarter            |
|----------------------------------------|-------------------------------|
|                                   | 2009                          |   | 2008 |
| Sales      Volumes                     |                          |   |   |
| Gas      (thousand cubic feet, or Mcf) | 12,165,600                    |   | 17,875,400 |
| Oil      (barrels)                     | 749,200                       |   | 1,089,100 |
| Plant      products (Mcf equivalent) a | 1,118,100                     |   | 2,486,300 |
| Average      Realization b             |                          |   |   |
| Gas      (per Mcf)                     | $    4.88 |   | $    9.06 |
| Oil      (per barrel)                  | 40.91                         |   | 97.40 |

| a.   | We      received approximately $5.0 million and $23.9 million of revenues      associated with plant products (ethane, propane, butane, etc.) during the      first quarters of 2009 and 2008, respectively (see “Oil and Gas      Operations” below).  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. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | Excludes      the impact of realized gains and losses of derivative      contracts. |
|----------------|-------------------------------------------------------------------------------------|

|                                                        |   | First   |    |
|-------------------------------------------------------------|--------|---------|---------|
|                                                        |   | Quarter |    |
| Oil      and natural gas revenues – prior year period |   | $       | 291,946 |   |
| Increase      (decrease)                                    |   |    |    |   |
| Price      realizations:                                    |   |    |    |   |
| Natural      gas                                            |   |    | (50,852 | ) |
| Oil      and condensate                                     |   |    | (42,322 | ) |
| Sales      volumes:                                         |   |    |    |   |
| Natural      gas                                            |   |    | (51,731 | ) |
| Oil      and condensate                                     |   |    | (33,106 | ) |
| Plant      products revenue                                 |   |    | (18,866 | ) |
| Other                                                       |   |    | 13      |   |
| Oil      and natural gas revenues - current year period     |   | $       | 95,082  |   |

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|                                     | First      Quarter |
|------------------------------------------|--------------------|
|                                     |               |   | Per |   |   |   | Per |
|                                     | 2009               |   | Mcfe |   | 2008 |   | Mcfe |
| Lease      operating expense             | $26.9              |   | $1.51 |   | $32.8 |   | $1.22 |
| Workover      costs                      | 2.0                |   | 0.11 |   | 3.9 |   | 0.14 |
| Hurricane      related expenses          | 10.8               |   | 0.61 |   | - |   | - |
| Insurance                                | 5.7                |   | 0.32 |   | 7.9 |   | 0.30 |
| Transportation      and production taxes | 4.4                |   | 0.25 |   | 10.7 |   | 0.40 |
| Other                                    | (0.8               | ) | (0.05 | ) | 0.3 |   | 0.01 |
| Total                                    | $49.0              |   | $2.75 |   | $55.6 |   | $2.07 |

|                                    | First      Quarter |
|-----------------------------------------|--------------------|
|                                    |               |   | Per |   |   |   | Per |
|                                    | 2009               |   | Mcfe |   | 2008 |   | Mcfe |
| Depletion      and depreciation expense | $46.3              |   | $2.61 |   | $115.3 |   | $4.29 |
| Accretion      expense                  | 8.1                |   | 0.46 |   | 6.0 |   | 0.22 |
| Impairment      charges/losses          | 39.0               |   | 2.19 |   | - |   | - |
| Total                                   | $93.4              |   | $5.26 |   | $121.3 |   | $4.51 |

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|                                             | First      Quarter |   |
|--------------------------------------------------|--------------------|--------|
|                                             | 2009               |   | 2008 |   |
| Geological      and geophysical,                 |               |   |   |   |   |   |
| including      3-D seismic purchases a           | $                  | 9.9    |   | $ | 5.5 |   |
| Non      productive exploratory costs, including |               |   |   |   |   |   |
| related      lease costs                         |               | 16.2   | b |   | (0.7 | )c |
| Other                                            |               | 2.3    |   |   | 2.0 |   |
|                                             | $                  | 28.4   |   | $ | 6.8 |   |

| a.   | Includes      compensation costs associated with outstanding stock-based awards totaling      $3.0 million in the first quarter of 2009 and $0.9 million in the first      quarter of 2008 (see “Stock-Based Compensation” below and Note      7). |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | In      February 2009, the Gladstone East well was determined to be non-productive      and we charged $5.4 million of drilling costs incurred through December      31, 2008 to exploration expense in the December 31, 2008 financial      statements.  In the first quarter of 2009, we charged an      additional $5.4 million to exploration expense for costs incurred      subsequent to December 31, 2008.  We also charged $10.8 million      to exploration expense in the first quarter of 2009 for the Tom Sauk well,      which was also determined to benon-productive. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c.   | Primarily      reflects the reimbursement from third parties of nonproductive exploratory      well drilling and related costs previously charged to    expense. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                    | First      Quarter |                                        |
|-------------------------|--------------------|---------------------------------------------|
|                    | 2009               |                                        |   | 2008 |   |
| Continuing operations   |               |                                        |   |   |   |   |   |
| Operating               | $                  | 34.2                                        |   |   | $ | 175.7 |   |
| Investing               |               | (29.2                                       | ) |   |   | (54.9 | ) |
| Financing               |               | (2.7                                        | ) |   |   | (116.4 | ) |
|                    |               |                                        |   |   |   |   |   |
| Discontinued operations |               |                                        |   |   |   |   |   |
| Operating               |               | (0.4                                        | ) |   |   | (2.9 | ) |
| Investing               |               |        - |   |   |   |        - |   |
| Financing               |               |       -       |   |   |   |       - |   |
|                    |               |                                        |   |   |   |   |   |
| Total cash flow         |               |                                        |   |   |   |   |   |
| Operating               |               | 33.8                                        |   |   |   | 172.8 |   |
| Investing               |               | (29.2                                       | ) |   |   | (54.9 | ) |
| Financing               |               | (2.7                                        | ) |   |   | (116.4 | ) |

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|                                     |   | First      Quarter |   |
|------------------------------------------|--------|--------------------|--------|
|                                     |   | 2009               |   | 2008 |   |
| General      and administrative expenses |   | $                  | 3,120  |   | $ | 981 |   |
| Exploration      expenses                |   |               | 3,046  |   |   | 889 |   |
| Main      Pass Energy Hub start-up costs |   |               | 181    |   |   | 71 |   |
| Total      stock-based compensation cost |   | $                  | 6,347  |   | $ | 1,941 |   |
|                                     |   |               |   |   |   |   |   |

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Quantitative and Qualitative Disclosures about MarketRisk

|                                   |   | 2009   |   |   | 2010   |   |
|----------------------------------------|--------|--------|--------|--------|--------|--------|
| Swaps                                  |   |   |   |   |   |   |
|    +/-      $1.00/MMbtu | $      | 3.9    |   | $      | 2.6    |   |
|    +/-      $5.00/Bbl   |   | 0.9    |   |   | 0.6    |   |
| Puts                                   |   |   |   |   |   |   |
|    +/-      $1.00/MMbtu |   | 3.2    |   |   | 1.2    |   |
|    +/-      $5.00/Bbl   |   | 0.6    |   |   | 0.3    |   |

Controls and Procedures

PART II––OTHER INFORMATION

Legal Proceedings

Risk Factors

|   | • | fires; |
|--------|---------|--------|

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|   | • | natural      disasters; |
|--------|---------|-------------------------|

|   | • | abnormal      pressures in geologic formations; |
|--------|---------|-------------------------------------------------|

|   | • | blowouts; |
|--------|---------|-----------|

|   | • | cratering; |
|--------|---------|------------|

|   | • | pipeline      ruptures; and |
|--------|---------|----------------------------------|

|   | • | spills. |
|--------|---------|---------|

Unregistered Sales of Equity Securities and Use ofProceeds.

Exhibits.

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SIGNATURE

|                               | McMoRan      Exploration Co.                        |
|------------------------------------|-----------------------------------------------------|
|                               |                                                |
|                               | By:  /s/      Nancy D. Parmelee           |
|                               | Nancy      D. Parmelee                              |
|                               | Senior      Vice President, Chief Financial Officer |
|                               | and      Secretary                                  |
|                               | (authorized      signatory and Principal            |
|                               | Financial      Officer)                             |
|                               |                                                |
|                               |                                                |
|                               |                                                |
| Date:  May      11, 2009 |                                                |

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Exhibit Index

|    |                                                                                                                                                                                                         | Filed          |                           |          |            |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------|--------------------------------|---------------|-----------------|
| Exhibit |                                                                                                                                                                                                         | with      this | Incorporated      by Reference |
| Number  | Exhibit      Title                                                                                                                                                                                           | Form      10-Q | Form                           | File      No. | Date      Filed |
| 3.1     | Composite      Certificate of Incorporation of McMoRan                                                                                                                                                       | X              |                           |          |            |
| 3.2     | Amended      and Restated By-Laws of McMoRan as amended effective January 30,      2006                                                                                                                      |           | 8-K                            | 001-07791     | 02/03/2006      |
| 10.1    | Third      Amendment to Credit Agreement dated as of April 17, 2009, among McMoRan      Exploration Col, as borrower, JPMorgan Chase Bank, N.A., as administrative      agent, and the lenders party thereto | X              |                           |          |            |
| 10.2*   | McMoRan      Exploration Co. Director Compensation                                                                                                                                                           | X              |                           |          |            |
| 15.1    | Letter      dated May 5, 2009 from Ernst & Young LLP regarding unaudited interim      financial statements                                                                                               | X              |                           |          |            |
| 31.1    | Certification      of Principal Executive Officer pursuant to Rule      13a–14(a)/15d-14(a)                                                                                                            | X              |                           |          |            |
| 31.2    | Certification      of Principal Financial Officer pursuant to Rule      13a–14(a)/15d-14(a)                                                                                                            | X              |                           |          |            |
| 32.1    | Certification      of Principal Executive Officer pursuant to 18 U.S.C. Section      1350                                                                                                                    | X              |                           |          |            |
| 32.2    | Certification      of Principal Financial Officer pursuant to 18 U.S.C. Section      1350                                                                                                                    | X              |                           |          |            |

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