SECURITIES AND EXCHANGE COMMISSION

                        Washington, D.C. 20549

                             Form 10-K/A
                           Amendment No. 1

          [X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

                OF THE SECURITIES EXCHANGE ACT OF 1934

             For the fiscal year ended December 31, 1996

                                  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 0-23870

                        McMoRan Oil & Gas Co.

        (Exact name of registrant as specified in its charter)

             DELAWARE                          72-1266477
     (State or other jurisdiction of        (I.R.S. Employer
     incorporation or organization)        Identification No.)

          1615 Poydras Street
        New Orleans, Louisiana                      70112
  (Address of principal executive offices)        (Zip Code)

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

     Securities registered pursuant to Section 12(b) of the  Act:

                                 None

     Securities registered pursuant to Section 12(g) of the  Act:

                             Common Stock
                   Preferred Stock Purchase Rights


     Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.

     Yes [X]        No [  ]

     Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K. [  ]

     The aggregate market value of the voting stock held by non-
affiliates of the registrant was approximately $49,350,000 on March
14, 1997.

     On March 14, 1997, there were issued and outstanding 14,025,390
shares of the registrant's Common Stock, par value $0.01 per share.

     DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the registrant's proxy statement filed with the
Securities and Exchange Commission in connection with the registrant's
1997 annual meeting of stockholders are incorporated by reference into
Part III hereof.

                        McMoRan Oil & Gas Co.
                    Annual Report on Form 10-K for
               the Fiscal Year Ended December 31, 1996


      This Amendment No. 1 to the Annual Report on Form 10-K is being filed
by McMoRan Oil & Gas Co. ("MOXY" or the "Company") to amend the following
items:

Item 6.         Selected Financial Data
Item 7.         Management's Discussion and Analysis of
                 Financial Condition and Results of Operations
Item 8.         Financial Statements and Supplementary Data

Signatures

Exhibit Index




Item 6.  Selected Financial Data

     The following table sets forth selected historical financial data
for the Company for each of the three years in the period ended
December 31, 1996 (since inception).  The annual historical
information is derived from the audited financial statements of the
Company and is not necessarily indicative of future results.  The
following data should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" and the Company's historical financial statements and
notes thereto.
<TABLE>
<CAPTION>
                                         Years Ended December 31,
                                     --------------------------------
                                         1996          1995       1994
                                     ----------    ----------    ----------
<S>                                 (In thousands, except per share amounts)
Statement of Operations Data:
Revenues:                            <C>           <C>           <C>
  Oil and gas sales                  $    2,434    $    2,722    $      174
  Management fees                         1,636           545             -
                                     ----------    ----------    ----------
  Total revenues                          4,070         3,267           174
                                     ----------    ----------    ----------
Costs and expenses:
  Production and delivery, including
   depreciation and amortization          1,500         2,623             -
  Exploration expenses                    9,818        11,756        15,518 
  General and administrative
   expenses                               2,635         3,687         2,338 
                                     ----------    ----------    ----------
  Total costs and expenses               13,953        18,066        17,856 
                                     ----------    ----------    ----------
Operating loss                           (9,883)      (14,799)      (17,682)
Interest expense                           (403)            -             -
Other income, net                           424           164         2,482 
                                     ----------    ----------    ----------
Net loss                             $   (9,862)   $  (14,635)   $  (15,200)
                                     ==========    ==========    ==========

Net loss per share                   $    (0.71)   $    (1.06)   $    (1.10)
                                     ==========    ==========    ==========

Average shares outstanding               13,898        13,772        13,770 
                                     ==========    ==========    ==========

Balance Sheet Data (at end of period):
Working capital                      $    2,972    $    8,257    $   15,063
Oil and gas properties, net              18,231         9,878        17,094
Production loan, less current
 portion                                 12,391           530             -
Total assets                             30,980        21,633        34,425
Stockholders' equity                      8,246        17,605        32,157

(1)  Reflects the period since inception (May 1994).

</TABLE>

Item 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

OVERVIEW

     MOXY is an independent oil and gas company engaged in the
exploration, development and production of oil and natural gas.  MOXY
commenced operations in May 1994 following the distribution of its
common stock to the stockholders of Freeport McMoRan Inc. (FTX) in
order to carry on substantially all of the oil and gas exploration
activities previously conducted by FTX.  MOXY and its predecessors
have conducted exploration, development and production operations
offshore in the Gulf of Mexico and onshore in the Gulf Coast and other
areas for more than 25 years, which have provided MOXY with an
extensive geological and geophysical database and significant
technical and operational expertise.  MOXY expects to continue to
concentrate its efforts in this selected geographic area where its
management team has significant exploration experience.

OPERATIONAL ACTIVITIES

     During 1995, MOXY established two separate joint venture
arrangements (Note 3) through which substantially all of its
operations have taken place.  MOXY's activities in the Gulf of Mexico
have been conducted primarily through its 40 percent owned exploration
and development program with MCN Corporation (MCN).  During 1996, the
MOXY/MCN program had the following operational activities:

*    Daily gross production at the Vermilion Block 160 field unit
averaged 14.9 million cubic feet (Mmcf) of gas and 687 barrels of
condensate during 1996.  During the fourth quarter of 1996, a
development well discovered new reserves (Note 7) from eight gas sands
with approximately 215 feet of net pay.  Drilling on this well was
completed in the first quarter of 1997, discovering an additional 47
feet of net pay.  MOXY immediately began drilling an additional well
to develop the shallower reserves which were discovered.  After
completion of all drilling activity from the platform, the wells will
be completed and could be on stream as early as mid-1997, depending on
the number of wells drilled.  The MOXY/MCN program has a 28 percent
revenue interest in this field unit which is subject to re-
determination subsequent to final development drilling.  In addition,
the MOXY/MCN program's interest in two of the four blocks within the
Vermilion Block 160 field unit is subject to a 30 percent net profits
interest.

*    Installation of the platforms and facilities at the Vermilion
Block 410 field was completed and production began in late December
1996 from one of the two platforms.  Production from the second
platform began in early 1997 and daily gross production from both
platforms combined currently approximates 85 Mmcf of gas.  The
MOXY/MCN program has a 28 percent revenue interest in this field.

*    An exploratory well discovered gas on West Cameron Block 616
during the year.  Drilling is scheduled on West Cameron Blocks 616 and
617 during 1997.  Gas was also discovered on West Cameron Block 503
and Grand Isle Block 65 during 1996.  In March 1997, the MOXY/MCN
program agreed to sell its interest in West Cameron Block 503 for $7.2
million, $2.9 million net to MOXY.  MOXY would recognize a $2.3
million gain upon the completion of the sale and the proceeds would be
used to repay borrowings from MCN.  MOXY is currently evaluating
options for future activities at Grand Isle Block 65.

*    Drilling on the East Cameron Block 119 and Vermilion Block 391
prospects during the year did not result in the discovery of
commercial hydrocarbons.

     MOXY's activities in the onshore Gulf Coast region have taken
place through its 25 percent owned joint venture with Phillips
Petroleum Company (Phillips), which covers a project area in south
Louisiana, as follows:

*    Drilling operations on the North Bay Junop prospect were
initiated during the fourth quarter.  The well is expected to reach
its total depth of 19,500 feet in the second quarter of 1997.

*    MOXY completed its first exploratory well at the East Fiddler's
Lake prospect.  Although the well was unsuccessful in discovering
commercial hydrocarbons, the geological data from this well is
assisting drilling activity in the project area.

*    Interpretation of the 3-D seismic survey performed over the
project area continues and has identified additional leads that may
develop into potential prospects.

     Activity outside of the joint venture arrangements during 1996
included MOXY drilling an exploratory well at its West Cameron Block
519 prospect which did not encounter commercial hydrocarbons.  In
addition, MOXY relinquished its interest in the Tungkal prospect, a
1.7 million acre concession area in Indonesia, where previous drilling
results had not discovered hydrocarbons in commercial quantities.

RESULTS OF OPERATIONS

MOXY reported a net loss of $9.9 million ($0.71 per share) for 1996
compared with losses of $14.6 million ($1.06 per share) for 1995 and
$15.2 million ($1.10 per share) for the eight-month period of 1994.

                                        1994 (1)     1995         1996
                                     ----------    ----------    ----------
Revenues (in millions):
  Oil and gas sales                  $       .2    $      2.7    $      2.4
  Management fees                             -            .6           1.7
                                     ----------    ----------    ----------
                                     $       .2    $      3.3    $      4.1
                                     ==========    ==========    ==========
Production quantities:
  Gas (Mcf)                                   -     1,093,000       631,000
  Oil (barrels)                               -        45,000        29,000

Average realization:
  Gas (per Mcf)                               -    $     1.63    $     2.72
  Oil (per barrel)                            -    $    18.83    $    22.22

  (1)  Inception (May 1994) through December 31,1994.

     MOXY's revenues upon formation were limited to amounts received
form various overriding royalty interests.  In late March 1995, MOXY
began production from its Vermilion Block 160 field.  In mid-September
1995, MOXY formed the MOXY/MCN Program which resulted in 60% of MOXY's
revenues in the Vermilion Block 160 field being conveyed to MCN.  The
commencement of production at the Vermilion Block 410 field, discussed
earlier, will benefit MOXY's future revenue levels.

     MCN agreed to pay MOXY a total management fee of $3.0 million
covering an approximate two-year period following formation of the
MOXY/MCN Program.  MOXY is recognizing this as management fee income
equally over this period.

                                       1994 (1)       1995         1996
                                     ----------    ----------    ---------
                                   (In millions, except per share amounts)

Production and delivery, including
 depreciation and amortization       $        -    $      2.6    $      1.5
Exploration Expenses:
  Geological and geophysical         $      6.0    $      9.8    $      6.3
  Exploratory drilling and
   leasehold costs                          9.5           2.0           5.6
  Reimbursement of previously
   expensed costs (Note 3)                    -             -          (2.1)
                                     ----------    ----------    ----------
                                     $     15.5    $     11.8    $      9.8
                                     ==========    ==========    ==========
Operating loss                       $    (17.7)   $    (14.8)   $     (9.9)
Net loss                             $    (15.2)   $    (14.6)   $     (9.9)
Net loss per share                   $    (1.10)   $    (1.06)   $     (.71)

(1)  Inception (May 1994) through December 31, 1994.

     The fluctuations in MOXY's production and delivery costs and
depreciation and amortization expenses are consistent with the changes
in production quantities referenced above.

     MOXY's geological and geophysical costs, which consist primarily
of costs to acquire and interpret 3-D seismic data, increased during
1995 primarily because of the significant acquisition of 3-D seismic
survey data covering the project area owned by MOXY's joint venture
with Phillips and FRP.  MOXY's unsuccessful exploratory drilling and
leasehold costs fluctuate from period to period based on the related
drilling results and the amount of costs involved in the project.
Exploratory drilling and leasehold costs in 1994 included costs
related to four unsuccessful drilling projects, whereas 1995 included
only one unsuccessful drilling project.  There were four unsuccessful
drilling projects during 1996.

     General and administrative expenses totaled $2.6 million in 1996,
$3.7 million in 1995 and $2.3 million in the 1994 period.  The decline
from 1995 resulted from steps taken in the third quarter of 1995 to
reduce costs.  These actions included a reduction in the number of
employees and in the costs of consulting arrangements and
administrative and managerial services (Note 4).

     Interest expense totaled $0.4 million for the 1996 year versus
zero for 1995 and 1994, reflecting the increased borrowings from MCN
(initiated in mid-1996) to fund MOXY's share of exploration and
development expenditures.

     As a result of anticipated future exploration expenditures, MOXY
expects to continue to report operating losses for a least the near
future.


CAPITAL RESOURCES AND LIQUIDITY

     The MCN and Phillips joint ventures resulted in MOXY receiving a
significant inflow of funds which enabled MOXY to secure funding for
its exploration and development activities for 1996 and 1997.
However, by the end of 1997 MOXY will have expended essentially all of
its capital resources on its currently committed exploration and
development expenditures. The primary funding source for MOXY's
capital expenditures has been the MOXY/MCN program loan.  MOXY
believes obtaining sufficient additional capital for any subsequent
exploration or development expenditures, as well as for additional
exploration opportunities yet to be specifically identified, is
necessary to provide enhanced opportunity for growth in reserves,
production and cash flow.  If additional capital is not obtained, MOXY
will be forced to forgo such growth opportunities, and a significant
portion of MOXY's cash flow will be dedicated to repaying MCN for
amounts borrowed by MOXY for its currently committed expenditures.

     Management is currently evaluating options to obtain additional
long-term funding for its future exploration and development
activities, none of which can be considered assured, including
entering into one or more new long-term exploration joint ventures,
issuing additional equity or undertaking a business combination with
another entity.  Management believes the opportunities for MOXY to
discover meaningful oil and gas reserves are significant and that
these opportunities can best be achieved through the use of advanced
3-D seismic technology, applied in conjunction with a larger, longer-
term exploration program.  As such, MOXY entered into an agreement
with a geophysical services company pursuant to which MOXY committed
to purchase 3-D seismic surveys covering a significant number of lease
blocks over a multi-year period.

     The $35 million exploration portion of the MOXY/MCN program's
funding is expected to be reached in mid-1997 ($25.9 million had been
spent at December 31, 1996).  The MOXY/MCN program agreement contains
an option for MCN to extend the program by joining in for an
additional commitment of $32.5 million in exploration expenditures and
the continued availability of MOXY's line of credit.  However, MCN did
not participate in the new 3-D seismic program discussed above and
will have no right to any of the leases acquired as a result of this
new seismic data.  Furthermore, MCN did not wish to enter into the
type of long-term agreement MOXY believes is necessary to best pursue
its future exploration activities.  MCN will continue to provide
funding for future development costs on the MOXY/MCN program's
properties without any extension of the program agreement.  However,
MOXY will be forced to secure alternative sources of financing to
support its operations and fund any future explorations and
development activities beyond the financing available under the
MOXY/MCN program.  Such alternative sources could include additional
debt or equity financing, the sale of all or part of MOXY's assets
(MOXY's share of net revenues generated from Vermilion Blocks 160 and
410 is dedicated to repaying indebtedness incurred under the MOXY/MCN
program) or other partnership or joint venture transactions.  There
can be no assurance that alternative financing will be available on
acceptable terms, if at all, or that MOXY will be a viable enterprise.
No payment of dividends to MOXY's shareholders is presently
contemplated.

     MOXY was high bidder on seven of the eight leases on which it bid
at the OCS Lease Sale 166, held in March 1997.  Awarding of the leases
is subject to approval, and is expected to commence by March 31, 1997.
MOXY's seven high bids totaled $5.5 million. Freeport-McMoRan Resource
Partners, Limited Partnership (FRP), a 51.6 percent owned affiliate of
FTX, entered into an agreement with MOXY pursuant to which FRP will
acquire a 50 percent working interest ownership in these leases and
will bear 60 percent of the associated acquisition and exploration
costs.  MCN will have no interest in any of these new leases.

     MOXY incurred $20.7 million of cash exploration and development
expenditures during 1996, consisting principally of $7.0 million for
development at Vermilion Block 410, $2.8 million for capitalized
drilling costs, $5.7 million of geological and geophysical costs and
$5.0 million in expensed drilling and leasehold costs.  Cash
expenditures for 1995 totaled $21.0 million and consisted principally
of $6.7 million for development at Vermilion Block 410, $1.8 million
for development at Vermilion Block 160 and $9.8 million of geological
and geophysical costs.  MOXY has committed expenditures of
approximately $8.7 million for 1997 which will be funded by the
remaining available borrowings under the MOXY/MCN program and MOXY's
working capital.

ENVIRONMENTAL

     Although MOXY has no known environmental liabilities,  increasing
emphasis on environmental matters could result in additional costs,
which would be charged against MOXY's operations in future periods.
Present and future environmental laws and regulations applicable to
MOXY's operations could require substantial capital expenditures or
could adversely affect its operations in other ways that cannot be
accurately predicted at this time.

CAUTIONARY STATEMENT

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

     Important factors that could cause actual results to differ
materially from MOXY's expectations include, without limitation,
exploratory drilling results, economic and business conditions,
general development risks and hazards and risks inherent with the
production of oil and gas, such as fires, natural disasters, blowouts
and the encountering of formations with abnormal pressures, changes in
laws or regulations and other factors, many of which are beyond the
control of MOXY.  Further information regarding these and other
factors that may cause MOXY's future performance to differ from that
projected in the forward-looking statements are described in more
detail in MOXY's Form 10-K for the year ended December 31, 1996.

                      __________________________

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

                         REPORT OF MANAGEMENT

     McMoRan Oil & Gas Co. (MOXY) is responsible for the preparation
of the financial statements and all other information contained in
this Annual Report.  The financial statements have been prepared in
conformity with generally accepted accounting principles and include
amounts that are based on management's informed judgments and
estimates.

     MOXY maintains a system of internal accounting controls designed
to provide reasonable assurance at reasonable costs that assets are
safeguarded against loss or unauthorized use, that transactions are
executed in accordance with management's authorization and that
transactions are recorded and summarized properly.  The system is
tested and evaluated on a regular basis by MOXY's internal auditors,
Price Waterhouse LLP.  In accordance with generally accepted auditing
standards, MOXY's independent public accountants, Arthur Andersen LLP,
have developed an overall understanding of our accounting and
financial controls and have conducted other tests as they consider
necessary to support their opinion on the financial statements.

     The Board of Directors, through its Audit Committee composed
solely of non-employee directors, is responsible for overseeing the
integrity and reliability of MOXY's accounting and financial reporting
practices and the effectiveness of its system of internal controls.
Arthur Andersen LLP and Price Waterhouse LLP meet regularly with, and
have access to, this committee, with and without management present,
to discuss the results of their audit work.

James R. Moffett              Richard C. Adkerson
Co-Chairman of the Board      Co-Chairman of the Board and
                              Chief Executive Officer

Item 8.  Financial Statements and Supplementary Data

                        McMoRan OIL & GAS CO.
                            BALANCE SHEETS

<TABLE>
<CAPTION>
                                           December 31,
                                     ------------------------
                                        1996          1995
                                     ----------    ----------
<S>                                       (In Thousands)
ASSETS
Current assets:                      <C>           <C>
Cash and cash equivalents            $   10,500    $   10,323
Accounts receivable and other             2,249         1,432
                                     ----------    ----------
  Total current assets                   12,749        11,755
                                     ----------    ----------
Oil and gas properties -successful
 efforts method:
  Unevaluated                             2,173         1,869
  Proved                                 17,341         8,661
                                     ----------    ----------
                                         19,514        10,530
Less accumulated depreciation and
 amortization                             1,283           652
                                     ----------    ----------
  Net oil and gas properties             18,231         9,878
                                     ----------    ----------
Total assets                         $   30,980    $   21,633
                                     ==========    ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
 liabilities                         $    9,411    $    3,405
Current portion of production loan          366            93
                                     ----------    ----------
  Total current liabilities               9,777         3,498
Production loan, less current
 portion                                 12,391           530
Other liabilities                           566             -
Stockholders' equity:
Preferred stock, par value $0.01,
 50,000,000 shares authorized
 and unissued                                 -             -
Common stock, par value $0.01,
 150,000,000 shares authorized,
 13,989,317 shares and 13,798,784
 shares issued and outstanding              140           138
Capital in excess of par value of
 common stock                            47,803        47,302
Accumulated deficit                     (39,697)      (29,835)
                                     ----------    ----------
                                          8,246        17,605
                                     ----------    ----------
Total liabilities and
 stockholders' equity                $   30,980    $   21,633
                                     ==========    ==========

</TABLE>
The accompanying notes are an integral part of these financial
statements.

                        McMoRan OIL & GAS CO.
                       STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                                 Inception
                                                                  through
                                     Years Ended December 31,    December 31,
                                     ------------------------    ----------
                                         1996         1995          1994
                                     ----------    ----------    ----------
<S>                                  (In Thousands, Except Per Share Amounts)
Revenues:                            <C>           <C>           <C>
Oil and gas sales                    $    2,434    $    2,722    $      174
Management fees                           1,636           545             -
                                     ----------    ----------    ----------
  Total revenues                          4,070         3,267           174
                                     ----------    ----------    ----------
Costs and expenses:
Production and delivery, including
 depreciation and amortization            1,500         2,623             -
Exploration expenses                      9,818        11,756        15,518 
General and administrative expenses       2,635         3,687         2,338 
                                     ----------    ----------    ----------
  Total costs and expenses               13,953        18,066        17,856 
                                     ----------    ----------    ----------
Operating loss                           (9,883)      (14,799)      (17,682)
Other income, net                            21           164         2,482 
                                     ----------    ----------    ----------
Net loss                             $   (9,862)   $  (14,635)   $  (15,200)
                                     ==========    ==========    ==========

Net loss per share                   $    (0.71)   $    (1.06)   $    (1.10)
                                     ==========    ==========    ==========

Average shares outstanding               13,898        13,772        13,770 
                                     ==========    ==========    ==========
</TABLE>
The accompanying notes are an integral part of these financial
statements.

                        McMoRan OIL & GAS CO.
                       STATEMENTS OF CASH FLOW
<TABLE>
<CAPTION>                                                        Inception
                                                                  through
                                     Years Ended December 31,    December 31,
                                     ------------------------    ----------
                                         1996         1995          1994
                                     ----------    ----------    ----------
<S>                                              (In Thousands)
Cash flow from operating activities: <C>           <C>           <C>
Net loss                             $   (9,862)   $  (14,635)   $  (15,200)
Adjustments to reconcile net loss to
 net cash provided by (used in)
 operating activities:
  Depreciation and amortization             741         1,525             -
  Exploration expenses                    9,818        11,756        15,518 
  Gain on sale of Canadian oil and
   gas interests                              -             -        (1,691)
  (Increase) decrease in working
   capital:
    Accounts receivable and other          (988)       (1,347)            -
    Accounts payable and accrued
     liabilities                          6,954         1,555           340 
                                     ----------    ----------    ----------
Net cash provided by (used in)
 operating activities                     6,663        (1,146)       (1,033)
                                     ----------    ----------    ----------

Cash flow from investing activities:
Exploration and development
 expenditures                           (20,678)      (20,957)      (18,768)
Proceeds from joint venture
 arrangements                             2,059        14,472             -
Proceeds from sale of Canadian
 oil and gas interests                        -             -         1,691 
                                     ----------    ----------    ----------
Net cash used in investing
 activities                             (18,619)       (6,485)      (17,077)
                                     ----------    ----------    ----------

Cash flow from financing activities:
Proceeds from production loan            12,927           750             -
Payments on production loan                (794)         (127)            -
Cash transferred from
 Freeport-McMoRan Inc.                        -             -        35,441 
                                     ----------    ----------    ----------
Net cash provided by financing
 activities                              12,133           623        35,441
                                     ----------    ----------    ----------
Net increase (decrease) in cash and
 cash equivalents                           177        (7,008)       17,331 
Cash and cash equivalents at
 beginning of year                       10,323        17,331             -
                                     ----------    ----------    ----------
Cash and cash equivalents at
 end of year                         $   10,500    $   10,323    $   17,331 
                                     ==========    ==========    ==========

Interest paid                        $      304    $        -    $        -
                                     ==========    ==========    ==========
</TABLE>

The accompanying notes, which include information in Notes 1, 3, 4 and
5 regarding noncash transactions, are an integral part of these
financial statements.

                        McMoRan OIL & GAS CO.
            STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                            (In Thousands)
<TABLE>
<CAPTION>
                                         Capital
                                           in
                                          Excess
             Preferred       Common       of Par      Accumulated
               Stock         Stock        Value         Deficit         Total
<S>          ----------    ----------    ----------    ----------    ----------
Distribution
 of Common   <C>           <C>           <C>           <C>           <C>       
 Stock       $        -    $      138    $   47,219    $        -    $   47,357
  Net loss            -             -             -       (15,200)      (15,200)
             ----------    ----------    ----------    ----------    ----------
Balance at
 December
 31, 1994             -           138        47,219       (15,200)       32,157
  Stock
   payment
   to CLK
  and Other           -             -            83             -            83
  Net loss            -             -             -       (14,635)      (14,635)
             ----------    ----------    ----------    ----------    ----------
Balance at
 December
 31, 1995             -           138        47,302       (29,835)       17,605
  Stock
   payment
   to CLK
   and other          -             2           501             -           503
  Net loss            -             -             -        (9,862)       (9,862)
             ----------    ----------    ----------    ----------    ----------
Balance at
 December
 31, 1996    $        -    $      140    $   47,803    $  (39,697)   $    8,246
             ==========    ==========    ==========    ==========    ==========
</TABLE>
The accompanying notes are an integral part of these financial
statements.

                        McMoRan OIL & GAS CO.
                    NOTES TO FINANCIAL STATEMENTS

1.  ORGANIZATION

McMoRan Oil & Gas Co. (MOXY) was formed in 1994 as a wholly owned
subsidiary of Freeport-McMoRan Inc. (FTX).  In May 1994, FTX
distributed one MOXY common share for each ten FTX common shares.  The
net assets transferred, at FTX's historical cost, follow (in
thousands):

Cash and cash equivalents                      $   35,441 
Property, plant and equipment                      13,052 
Current liabilities                                (1,138)
                                               ----------
                                               $   47,355 
                                               ==========
2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Consolidation.  Investments in joint ventures and
partnerships are reflected using the proportionate consolidation
method in accordance with standard industry practice.

Use of Estimates.  The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Cash and Cash Equivalents.  Highly liquid investments purchased with a
maturity of three months or less are considered cash equivalents.

Exploration and Development Costs.  MOXY follows the successful
efforts method of accounting for its oil and gas operations.  Costs of
exploratory wells are capitalized pending determination of whether the
wells find proved reserves.  Costs of leases, productive exploratory
wells and development activities are also capitalized.  Other
exploration costs are expensed.  Depreciation and amortization is
determined on a field-by-field basis using the unit-of-production
method.  Gains or losses are included in earnings when properties are
sold.

     In 1995, the Financial Accounting Standards Board issued
Statement No. 121 (FAS 121) which requires a reduction of the carrying
amount of long-lived assets to fair value when events indicate that
the carrying amount may not be recoverable.  Measurement of the
impairment loss is based on the fair value of the asset.  Generally,
MOXY determines fair value using valuation techniques such as expected
future cash flows.  MOXY adopted FAS 121 effective January 1, 1995,
and since that time has not incurred any impairment losses.

Financial Instruments.  The carrying amounts of receivables, other
current assets and accounts payable reported in the balance sheet
approximate fair value.  The production loan's interest rate is
variable (Note 3) and thus approximates fair value.

3.  EXPLORATION AGREEMENTS

In September 1995, MOXY entered into an agreement with MCN
establishing a $65 million oil and gas exploration and development
program in the offshore Gulf of Mexico area.  Revenues and costs are
shared 40 percent by MOXY and 60 percent by MCN.  MCN is funding its
60 percent share of the expenditures and is loaning funds for MOXY's
40 percent share at prime plus two percent (average rate of 10.3
percent for 1996).  As of December 31, 1996, MOXY had $12.8 million of
borrowings outstanding from MCN, with an additional $6.6 million of
borrowings available for past expenditures.  MOXY's borrowings under
this loan are payable only out of the future net revenues from the
program properties, which are dependent on production levels, oil and
gas prices and numerous other factors.  Accordingly, no scheduled
maturities or sinking fund requirements are determinable.

     In late 1996, MOXY entered into an agreement with a geophysical
services company in which MOXY committed to purchase 3-D seismic
survey covering a significant number of lease blocks over a multi-year
period. MCN did not participate in this new 3-D seismic program and
will have no right to any of the leases acquired as a result of the
new seismic data.  MCN will continue to provide funding for future
development costs on the MOXY/MCN Program's properties without any
extension of the program agreement.

     In June 1995, MOXY and Phillips Petroleum Company (Phillips)
entered into an exploration agreement covering a project area in south
Louisiana.  MOXY conveyed one-half of its interest in the area to
Phillips for $3.8 million.  In June 1996, MOXY sold one-half of its
remaining 50 percent leasehold interest to Freeport-McMoRan Resource
Partners, Limited Partnership (FRP), an affiliate of MOXY, for $2.1
million.  This payment from FRP represented a reimbursement of
previously expensed exploration costs by MOXY in connection with this
project area and accordingly was recorded as a reduction to
exploration expenses.  MOXY sold the interest to FRP on the same
proportionate basis as the prior Phillips sale.  The project area,
with the exception of the North Bay Junop and the East Fiddler's Lake
prospects (discussed earlier), is subject to a possible 25 percent
participation by a mineral rights owner.

4.  TRANSACTIONS WITH FTX AND EMPLOYEE BENEFITS

Management Services.  FTX provides certain management and
administrative services for MOXY.  During 1995, MOXY restructured its
management services agreement with FTX to provide specified services
for an annual fee of $1.0 million.  Costs of services provided by FTX,
included in general and administrative expenses, totaled $1.0 million
in 1996, $1.3 million in 1995 and $1.2 million in the 1994 period.
MOXY believes that the above expenses do not differ materially from
those costs which would have been incurred had the relevant personnel
providing these services been employed directly by MOXY.

     MOXY has a contract with CLK Company (CLK), a company
independently owned by its employees, to provide geological and
geophysical services to MOXY on an exclusive basis.  The contract was
amended during 1997 to provide for an annual retainer fee of $2.2
million ($0.5 million of the annual fee paid in MOXY common stock,
recorded at fair market value), plus certain expenses and an
overriding royalty interest in prospects accepted by MOXY.  Costs of
services provided by CLK, included in exploration expenses, totaled
$3.1 million in 1996, $3.5 million in 1995 and $3.9 million in 1994.

Stock Options.  MOXY's Stock Option Plan and Stock Option Plan for
Non-Employee Directors (the Plans) authorize MOXY to grant stock
options to purchase up to 1.25 million shares of MOXY stock at no less
than market value at time of grant.  Generally, stock options are
exercisable in 25 percent annual increments beginning one year from
the date of grant and expire 10 years after the date of grant.  Also,
in connection with the FTX distribution of MOXY shares, stock options
were granted to employees and directors of FTX.  A summary of stock
options outstanding follows:

                            1996                   1995
                    ----------------------   -----------------------
                                  Average                  Average
                   Number of       Option   Number of       Option
                     Options        Price     Options        Price
                     ----------    -------   ----------      ------
Beginning of year     2,257,828     $3.92     1,829,867       $4.26
Granted                  24,904      2.54       529,028        2.85
Exercised                  (581)     3.03             -          -
Expired/forfeited      (142,457)     4.33      (101,067)       4.39
                     ----------              ----------
End of year           2,139,694      3.88     2,257,828        3.92
                     ==========              ==========
     At December 31, 1996, options for approximately 550,000 shares
were available for new grants under the Plans.  Summary information of
fixed stock options outstanding at December 31, 1996 follows:

                          Weighted       Weighted            Weighted
Range of      Number       Average        Average             Average
Exercise        of        Remaining       Option   Number     Option
Prices       Options        Life          Price    Options     Price
----------   -------      -------        ------    ------     ------
$1.94
 to $2.81    515,000       9 years       $2.80     126,250    $2.81
$2.94
 to $3.88    214,394       8 years        3.58      98,718     3.66
$4.66
 to $5.50   1,410,300      7 years        4.32   1,300,305     4.67
            ----------                           ----------
            2,139,694                            1,525,273
            ==========                           ==========
     MOXY has adopted the disclosure-only provisions of FAS 123 and
continues to apply APB Opinion No. 25 and related interpretations in
accounting for its stock-based compensation plans.  Accordingly, no
compensation cost has been recognized for MOXY's fixed stock option
grants.  Had compensation cost for MOXY's fixed stock option grants
been determined based on the fair value at the grant dates for awards
under those plans consistent with FAS 123, MOXY's pro forma net loss
would have been $10.1 million ($0.73 per share) in 1996 and $14.7
million ($1.06 per share) in 1995.  For the pro forma computations,
the fair values of the fixed option grants were estimated on the dates
of grant using the Black-Scholes option pricing model.  The weighted
average fair value for fixed stock option grants was $1.69 per option
in 1996 and $2.15 per option in 1995.  The weighted average
assumptions used include a risk-free interest rate of 6.6 percent in
1996 and 6.4 percent in 1995, expected volatility of 45 percent in
1996 and 60 percent in 1995 and expected lives of 10 years.  The pro
forma effects on net income for 1996 and 1995 are not representative
of future years because they do not take into consideration grants
made prior to 1995.  No other discounts or restrictions related to
vesting or the likelihood of vesting of fixed stock options were
applied.

5.  INCOME TAXES

MOXY has $26.5 million of net deferred tax assets as of December 31,
1996 resulting from temporary differences related to MOXY's and its
predecessor entities' exploration activities.  MOXY has provided a
valuation allowance equal to these tax assets because of the
expectation of incurring tax losses for at least the near future,
resulting in no tax benefits for the periods presented.  The
components of MOXY's deferred taxes follow:

                                           December 31,
                                     ------------------------
                                        1996          1995
                                     ----------    ----------
DEFERRED TAX ASSETS:
  Net operating loss
   carryforwards
   (expires 2006-2011)               $   17,976    $   12,253
  Capital losses (expire 1999)            5,511         5,511
  Other tax carryforwards                   303           184
  Property, plant and equipment           2,272         3,053
  Other                                     453           139
  Less valuation allowance              (26,515)      (21,140)
                                     ----------    ----------
    Total deferred tax assets        $        -    $        -
                                     ==========    ==========
6.  COMMITMENTS AND CONTINGENCIES
Commitments.  MOXY has expenditure commitments of approximately $8.7
million in 1997.  In addition, MOXY has minimum committed expenditures
under a multi-year agreement with a geophysical company to purchase 3-
D seismic surveys which totaled $2.1 million at December 31, 1996.

Environmental.  Although MOXY has no known environmental liabilities,
increasing emphasis on environmental matters could result in
additional costs, which would be charged against MOXY's operations in
future periods.  Present and future environmental laws and regulations
applicable to MOXY's operations could require substantial capital
expenditures or could adversely affect its operations in other ways
that cannot be accurately predicted at this time.

7.  SUPPLEMENTARY OIL AND GAS INFORMATION

The supplementary information presented below is prepared in
accordance with requirements prescribed by the Financial Accounting
Standards Board.

Costs Incurred in Oil and Gas Property Acquisition, Exploration, and
Development Activities.

                                                   Inception          
                                                    Through
                         Years Ended December 31,  December 31,            
                          ----------------------   ------------  
                             1996        1995         1994
                          ----------  ----------   ------------
Acquisition of properties
  Proved                          $-          $-          $-
  Unproved                     2,499         863         575
Exploration costs             11,672      13,928      14,918
Development costs              6,507       6,166       3,275
                          ----------  ----------   ------------
                             $20,678     $20,957     $18,768
                          ==========  ==========   ============
Proved Oil and Gas Reserves (Unaudited).  Proved oil and gas reserves
at December 31, 1996, have been estimated by independent petroleum
engineers in accordance with guidelines established by the Securities
and Exchange Commission (SEC).  Thus, the following reserve estimates
are based upon existing economic and operating conditions; they are
only estimates and should not be construed as being exact.  MOXY's
1996 proved reserves are located in offshore United States waters.
Oil, including condensate and plant products, is stated in thousands
of barrels and natural gas is in millions of cubic feet.

                                  Oil                       Gas
                         ----------------------    --------------------
                           1996         1995         1996       1995
                         ----------  ----------    --------   ---------
Proved reserves:
  Beginning of year          94           262         8,521      9,714
  Revisions of previous
   estimates                 31            54         1,155         88     
  Discoveries and
   extensions                72             -         7,009      4,999
  Production                (29)          (45)         (631)    (1,093)
  Transfer to MCN             -          (177)            -     (5,187)
                        ----------    ----------    ---------- ----------
  End of year               168            94        16,054      8,521
                        ==========    ==========    ========== ==========
Proved developed reserves:
  End of year                58            20         7,530        779
                        ==========    ==========    ========== ==========
Standardized Measure of Discounted Future Net Cash Flows From Proved
Oil and Gas Reserves (Unaudited).

MOXY's standardized measure of discounted future net cash flows and
changes therein relating to proved oil and gas reserves were computed
using reserve valuations based on regulations prescribed by the SEC.
These regulations provide for the use of current oil and gas prices
(escalated only when known and determinable price changes are provided
by contract and law) in the projection of future net cash flows.

                                           December 31,
                                     ------------------------
                                        1996          1995
                                     ----------    ----------
                                          (In Thousands)
Future cash flows                    $   66,260    $   22,397
Future costs applicable to
 future cash flows:
  Production costs                       (7,805)       (3,834)
  Development and
   abandonment costs                    (12,874)       (7,155)
                                     ----------    ----------
Future net cash flows before
 income taxes                            45,581        11,408
Future income taxes                           -             -
                                     ----------    ----------
Future net cash flows                    45,581        11,408
Discount for estimated timing
 of net cash flows
 (10% discount rate)                    (10,240)       (3,078)
                                     ----------    ----------
                                     $   35,341    $    8,330
                                     ==========    ==========
     Because MOXY has sufficient tax deductions and losses to utilize
against estimated future taxable income, in accordance with FAS 69 no
deductions for future income taxes have been made above.

     Oil and natural gas prices have declined subsequent to December
31, 1996.  The future cash flows from proved reserves presented above
do not reflect this decline.

     The reserve and cash flow information above includes amounts
attributable to MOXY's interest in West Cameron Block 503, which in
March 1997 MOXY agreed to sell for $2.9 million.  Proved undeveloped
reserves applicable to MOXY's interest in this field totaled
approximately 16 thousand barrels of oil and 3,300 million cubic feet
of gas with estimated discounted net cash flows of $3.4 million.  As
MOXY's book basis in this property totals approximately $0.6 million,
MOXY would recognize a book gain of approximately $2.3 million upon
completion of this sale.

Changes in Standardized Measure of Discounted Future Net Cash Flows
From Proved Oil and Gas Reserves (Unaudited).

                                    Years Ended December 31,
                                     ------------------------
                                        1996          1995
                                     ----------    ----------
                                          (In Thousands)
Beginning of year                    $    8,330    $    6,413
Discoveries and extensions, less
 related costs                           10,837         3,368
Development costs incurred
 during the year                          6,985         1,750
Revisions:
  Changes in prices                      12,894         7,815
  Accretion of discount                     833           641
  Other changes, including revised
   estimates of development costs
   and rates of production               (2,863)       (3,083)
Revenues, less production costs          (1,675)       (1,589)
Transfer to MCN                               -        (6,985)
                                     ----------    ----------
End of year                          $   35,341    $    8,330
                                     ==========    ==========
8.  QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

                                   Operating        Net         Net Income
                                     Income        Income         (Loss)
                      Revenues       (Loss)        (Loss)       Per Share
                     ----------    ----------    ----------     ----------
                           (In Thousands, Except Per Share Amounts)
1996
  1st Quarter        $    1,073    $   (4,453)   $   (4,330)       $(0.31)
  2nd Quarter               949           418a          525a         0.04a
  3rd Quarter               919        (2,087)       (2,148)        (0.15)
  4th Quarter             1,129        (3,761)       (3,909)        (0.28)
                     ----------    ----------    ----------
                     $    4,070    $  (9,883)b   $  (9,862)         (0.71)
                     ==========    ==========    ==========
1995
  1st Quarter        $       55    $   (4,051)   $   (3,764)       $(0.27)
  2nd Quarter             1,351        (6,134)       (6,251)        (0.45)
  3rd Quarter             1,029        (2,439)c      (2,621)c       (0.19)c
  4th  Quarter              832        (2,175)       (1,999)        (0.15)
                     ----------    ----------    ----------
                     $    3,267    $  (14,799)b  $ (14,635)         (1.06)
                     ==========    ==========    ==========
a.   Includes a reduction to exploration expense of $2.1 million
($0.15 per share) resulting from the reimbursement of previously
expensed costs.

b.   Foreign exploration costs totaled $0.4 million in 1996 and $0.5
million in 1995.

c.   Includes $0.4 million ($0.03 per share) for personnel severance
and other costs.

               REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

TO THE STOCKHOLDERS AND BOARD OF DIRECTORS OF McMoRan OIL & GAS CO.:

We have audited the accompanying balance sheets of McMoRan Oil & Gas
Co. (a Delaware Corporation) as of December 31, 1996 and 1995 and the
related statements of operations, cash flow and changes in
stockholders' equity for the years ended December 31, 1996 and 1995
and for the period from inception through December 31, 1994.  These
financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

     We conducted our audits in accordance with generally accepted
auditing standards.  Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation.  We believe that our audits provide a
reasonable basis for our opinion.

     In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of
McMoRan Oil & Gas Co. as of December 31, 1996 and 1995 and the results
of its operations and its cash flow for the years ended December 31,
1996 and 1995 and for the period from inception through December 31,
1994 in conformity with generally accepted accounting principles.

New Orleans, Louisiana,                      Arthur Andersen LLP

  January 21, 1997

                              SIGNATURES

     Pursuant to  the requirements  of Section  13 of  the  Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

                              McMoRan OIL & GAS Co.

                              By: /s/ Richard C. Adkerson 
                                   -----------------------
                                        Richard C. Adkerson
                                    Co-Chairman of the Board and
                                      Chief Executive Officer

     Pursuant to the requirements of  the Securities and Exchange  Act
of 1934, this report  has been signed below  by the following  persons
on behalf of the  registrant and the  capacities indicated, on  September
24, 1997.


______________*__________________Co-Chairman of the Board and Director
      James R. Moffett


   /s/ Richard C. Adkerson          Co-Chairman of the Board,
     -----------------------         Chief Executive Officer   
       Richard C. Adkerson                 and Director
                                   (Principal Executive Officer)
                                   (Principal Financial Officer)


/s/ C. Donald Whitmire                    Controller
     -------------------
    C. Donald Whitmire             (Principal Accounting Officer)


______________*__________________                      Director

   Robert W. Bruce III

______________*__________________                      Director

      Robert A. Day

______________*__________________                      Director

 William B. Harrison, Jr.

______________*__________________                      Director

     Bobby Lee Lackey

______________*__________________                      Director

  Gabrielle K. McDonald

______________*__________________                      Director



      George Putnam

______________*__________________                      Director

    R. M. Rankin, Jr.

______________*__________________                      Director

    J. Taylor Wharton

*By:  /s/ Richard C. Adkerson
        -----------------------
          Richard C. Adkerson
           Attorney-in-Fact

                        McMoRan Oil & Gas Co.
                            Exhibit Index

Exhibit Number
--------------

    23.1            Consent of Arthur Andersen LLP.