PARTICIPATION AGREEMENT
                          McMoRan 1997 Exploration Program

                                                                     PAGE

          I.        DEFINITIONS                                       4

          II.       PURPOSE; OPERATIONS                               7
                    2.1  Purpose                                      7
                    2.2  McMoRan's Efforts                            8
                    2.3  Operator                                     9

          III.      INTERESTS OF THE PARTIES                          9
                    3.1  Sharing of Exploration Expenditures          9
                    3.2  Ownership Interests                          10

          IV.       EXPLORATION EXPENDITURES                          10
                    4.1  Exploration Expenditures                     10

          V.        ACQUISITION OF LEASEHOLD INTERESTS                13
                    5.1  Acquisition of Additional Leasehold Interest 13
                    5.2  Excluded Areas                               13
                    5.3  Obligation                                   14

          VI.       EXPLORATION FUND                                  15
                    6.1  General                                      15
                    6.2  Limitations on McMoRan's Authority to Commit
                         Exploration Fund                             15
                    6.3  Budget Meetings and Reports                  16

          VII.      SCIENTIFIC STUDIES AND INFORMATION                16

          VIII.     PROSPECTS                                         18
                    8.1  Prospects                                    18
                    8.2  Designation of Prospects After Program Term  20

          IX.       DRILLING OF EXPLORATORY WELLS                     20
                    9.1  During Program Term                          20
                    9.2  After Program Term                           22

          X.        FARMOUT OR PARTICIPATION AGREEMENTS               22
                    10.1 Participation Agreements                     22
                    10.2 Farmout Agreements                           23
                    10.3 Trade Agreements                             24

          XI.       BURDENS                                           24

          XII.      OPERATING AGREEMENT                               25

          XIII.     AREA OF MUTUAL INTEREST                           26
                    13.1 Third Party Area of Mutual Interest
                         Agreements                                   26
                    13.2 Program Area of Mutual Interest Agreement    26

          XIV.      OWNERSHIP OF PRODUCTION; GAS BALANCING AGREEMENT  28
                    14.1 Ownership of Production                      28

          XV.       RELATIONSHIP OF THE PARTIES                       29
                    15.1 Tax Partnerships                             29

          XVI.      BILLINGS; NOTICES                                 30

          XVII.     SPECIAL NON-CONSENT ELECTIONS                     30
                    17.1 Casing Point Election - Onshore Prospects    30
                    17.2 Elections Prior to Platform Installation -
                         Offshore Prospects                           31
                    17.3 Time Period                                  31
                    17.4 Completion Attempt by Participant - Onshore  31

          XVIII.    PROGRAM TERM                                      32
                    18.1 Program Term                                 32
                    18.2 Unfunded Prospects                           32

          XIV.      OPERATIONS AFTER PROGRAM TERM                     33
                    19.1 General                                      33
                    19.2 Exploratory Wells                            33
                    19.3 Development Expenditures                     33
                    19.4 Provisions Which Do Not Survive the End of
                         the Program Term                             34

          XX.       CONFIDENTIALITY                                   34

          XXI.      INSURANCE                                         35
                    21.1 Insurance for Program                        35

          XXII.     RECORD TITLE, ASSIGNMENT                          37
                    22.1 Record Title                                 37
                    22.2 Assignment                                   38

          XXIII.    SUBSEQUENT INTERESTS                              39

          XXIV.     GENERAL                                           40
                    24.1 Records                                      40
                    24.2 Access                                       41
                    24.3 Claims & Litigation                          41
                    24.4 Good Faith                                   42
                    24.5 Governing Law                                42
                    24.6 Failure to Respond                           42
                    24.7 Conflicts                                    43
                    25.8 Binding Effect                               43




                                      EXHIBITS

                   I)    PROGRAM OPERATING AGREEMENT (OFFSHORE)
                  II)    PROGRAM OPERATING AGREEMENT (ONSHORE)
                 III)    CERTAIN EXCLUDED AREAS
                  IV)    PROVISIONS CONCERNING TAXATION





                                 PARTICIPATION AGREEMENT
                             McMoRan 1997 Exploration Program



                    This Participation Agreement ("the Agreement") is  made

               as of the 1st  day of April, 1997 between McMoRan Oil &  Gas

               Co.  ("McMoRan")  and Freeport-McMoRan  Resources  Partners,

               Limited Partnership ("Participant").



                                       WITNESSETH:


                                            I.

                                       Definitions


                    As used in  this Agreement, the  following terms  shall
               have the meanings set forth below:



          1.1  Affiliate means, with  respect to any person, a person  that
               directly or indirectly through one or more intermediaries,
               controls  or is controlled  by, or is  under common  control
               with the person specified.


          1.2  Area of  Mutual Interest or AMI means, with respect to  any
               Prospect,  the geographic area  more particularly  described
               in Article XIII.


          1.3  Casing Point means the point at which determination is  made
               either  to run  production string  of casing  and attempt  a
               completion, or to abandon the well.


          1.4  Committed List means the list  described in Paragraph  18.1
               hereof.

          1.5  Development Expenditures means those charges applicable  to
               each Prospect which are not Exploration Expenditures.

          1.6  Development Well means any well which is not an  Exploratory
               Well.

          1.7  Excluded Area means any of the areas described in  Paragraph
               5.2 hereof.

          1.8  Exploration  Expenditures means those  charges described  in
               Article IV.

          1.9  Exploration  Fund means the  fund  created by  McMoRan  and
               Participant   for  the   acquisition  and   exploration   of
               Leasehold   Interests  and   the  other   purposes  of   the
               Exploration Program  as more fully described in Article  VI,
               together  with  any  cash  contributions  received  by   the
               Program from third parties.

          1.10 Exploration  Program  or Program  means the McMoRan  operated
               program pursuant  to which McMoRan  and Participant have  or
               will  acquire  and  explore  Prospects  in  the  Exploration
               Program  Area  during the  Program  Term  pursuant  to  this
               Agreement.

          1.11 Exploratory Well means any well drilled  by the Program  on
               an Onshore Prospect  prior to the completion thereon by  the
               Exploration  Program  of a  well  capable of  production  in
               Paying Quantities or, as to an Offshore Prospect, means  the
               first  and/or  second well  drilled  on a  Prospect  by  the
               Program  prior  to the  first  installation thereon  by  the
               Program of a drilling and/or production platform.

          1.12 Initial Leasehold Inventory means those Leasehold  Interests
               described in Paragraph 2.1 hereof.

          1.13 Leasehold  Interest means  any  right,  title  or  interest
               acquired in, to and under any oil or gas lease or any  other
               interest  in  oil or  gas,  including,  without  limitation,
               contractual rights,  which confer on the holder thereof  the
               right  to share,  or  acquire the  right  to share,  in  the
               production  or the  proceeds of  production of  oil or  gas.

          1.14 Leasehold   Interest  Costs means,  with   respect  to   a
               particular Leasehold  interest, the actual cost incurred  by
               the   Program  for   acquisition  thereof,   in  each   case
               including, without  limitation, all bonuses, delay  rentals,
               brokerage fees, and outside attorney's fees.

          1.15 Non-Operator  means,   as  to  any  Leasehold  Interest   or
               Prospect,  a working interest owner therein who is not
               designated to act as Operator.

          1.16 OCS means the outer continental shelf of the Gulf of  Mexico
               under Federal leasing jurisdiction.

          1.17 Offshore  Prospect means any  Prospect located  in the  OCS,
               and/or  in that  portion of  the Gulf  of Mexico  under  the
               leasing jurisdiction of the adjacent states.

          1.18 Onshore  Prospect means a  Prospect located  in the  Program
               Area which is not an Offshore Prospect.

          1.19 Operator means,  as to any  Leasehold Interest or  Prospect,
               the  party hereto  designated to  manage and  supervise  the
               drilling  and/or  completion and  operation  of oil  or  gas
               wells thereon.

          1.20 Participant   means  Freeport-McMoRan  Resources   Partners,
               Limited Partnership.

          1.21 Paying  Quantities means  production of  oil and/or  gas  in
               quantities  sufficient  to  yield  a  return  in  excess  of
               operating cost.

          1.22 Program Area means the OCS, and that portion of the Gulf  of
               Mexico  under  the  leasing  jurisdiction  of  the  adjacent
               states  and  the balance  of  the  lower 48  states  of  the
               continental United States, except the Excluded Areas.

          1.23 Program  Operating  Agreement means  the  Joint   Operating
               Agreement  (Offshore)  or  the  Joint  Operating   Agreement
               (Onshore)   attached   hereto   as   Exhibits   I   and   II
               respectively, depending upon whether the relevant  operation
               is  with  respect to  an  Offshore Prospect  or  an  Onshore
               Prospect.

          1.24 Program Term means  the period beginning on the date  hereof
               and ending  at the end of the Program  Term as set forth  in
               Article XVIII.

          1.25 Prospect  means  an area  designated  as  such  pursuant  to
               Paragraph 8.1.

          1.26 Technical   Consultants means   those   geologists    and
               geophysicists  and related personnel  working therewith  who
               are hired or retained by McMoRan as independent  consultants
               some  portion of whose  efforts are to  develop or  evaluate
               Prospects hereunder.


                                         II.

                                 Purpose; Operations


                    2.1  Purpose. This Agreement has  been entered into  to
          provide  Participant  a   means  of   acquiring,  exploring   and
          developing oil and gas Prospects  in the Program Area,  including
          but not  limited  to the  acquisition  of the  Initial  Leasehold
          Inventory, during the Program Term.

               On August 4, 1997, Participant acquired all of the interests
          of MCNIC Oil & Gas Properties, Inc. and affiliates ("MCN") in the
          McMoRan Participation & Exploration Program Agreement and McMoRan
          and Participant entered into an amendment thereto dated the same
          date (as amended, the "Prior Program").  McMoRan and Participant
          thereafter continued the Prior Program on an interim basis until
          the date hereof.

               The parties hereto hereby contribute to the Program all of
          their rights respecting each of the properties and assets of the
          Prior Program excluding only those properties and assets
          associated with the properties which are located in an Excluded
          Area ("Excluded Properties") and the loan (the "Loan") paid the
          date hereof due Participant by McMoRan under said Prior Program.
          The Leasehold Interests owned by McMoRan and Participant under
          the Prior Program, excluding those which are Excluded Properties,
          shall be the Initial Leasehold Inventory hereunder.  The costs
          incurred by McMoRan and Participant with respect to those
          Leasehold Interests which are included in the Initial Leasehold
          Inventory and as to which Participant acquired its interest from
          MCN shall be deemed to have an initial cost as of April 1, 1997
          of $8,333,333, $5,000,000 of which was paid by Participant and
          $3,333,333 of which was paid by McMoRan, which amount shall be
          deemed to have been expended from the Exploration Fund.  All
          other expenditures under the Prior Program by McMoRan and
          Participant together, other than with respect to the Excluded
          Areas and the Loan, shall likewise be treated as having been
          expended from the Exploration Fund.

               2.2  McMoRan Efforts. McMoRan agrees to devote a substantial
          portion of its oil  and gas exploration  effort to the  operation
          and management of the Program, which shall include all prospects,
          except those in the Excluded Areas,  acquired and to be  acquired
          by McMoRan  during  the Program  Term  within the  Program  Area,
          including but  not limited  to the  Initial Leasehold  Inventory.
          McMoRan will  at  all times  have  a staff  adequate  in  number,
          experience and competence  to perform  its obligations  hereunder
          and accomplish the purposes of the Exploration Program.

               2.3  Operator. McMoRan shall  be the overall  manager of  the
          Program.



                                        III.

                         Sharing of Exploration Expenditures
                             and Interest of the Parties


               3.1  Sharing of Exploration  Expenditures. Except as  other-
          wise provided in this  Agreement, Exploration Expenditures  shall
          be shared as follows:

                              Participant         McMoRan
                                  60%               40%


          If more  than one  Exploratory Well  is drilled  on a  particular
          Onshore Prospect, Exploration Expenditures in connection with the
          drilling of any  second and subsequent  Exploratory Well on  such
          particular  onshore  Prospect   shall  not  be   shared  in   the
          percentages set forth in this Paragraph 3.1  but shall be  shared
          in the percentages set forth  in Paragraph 3.2 hereof;  provided,
          however, if the first Exploratory Well in such particular Onshore
          Prospect fails  to reach  objective depth  because it  encounters
          impenetrable substances,  heaving  shale, domal  material,  salt,
          excessive salt water  flow or  other formation  or conditions  or
          develops  mechanical  difficulty   which  would  render   further
          drilling impractical and McMoRan elects to drill a substitute for
          such well, the cost involved in  the drilling of such  substitute
          well shall  be  shared  in the  percentages  set  forth  in  this
          Paragraph 3.1 in the same manner as if such substitute well  were
          the first  Exploratory Well  on the  particular Onshore  Prospect
          involved.

               3.2  Ownership Interests.  Except as  otherwise provided  in
          this Agreement, the ownership of all Leasehold Interest and other
          properties and production acquired by the Program shall be shared
          as follows:

                             Participant         McMoRan

                                  50%              50%



                                         IV.

                              Exploration Expenditures


               4.1  Exploration Expenditures.  Subject to  the  limitations
          provided in this Agreement, McMoRan  shall be entitled to  expend
          monies for Exploration Expenditures of  the Program on behalf  of
          itself and Participant without the prior approval of Participant.
          The term  "Exploration  Expenditures" means  all  actual  charges
          allocable to each Prospect in accordance with generally  accepted
          industry standards,  which charges  are incurred  by the  Program
          prior to (i) the completion of the first Exploratory Well drilled
          by the Program on an Onshore Prospect that is completed as a well
          capable of production in Paying Quantities or (ii) the  plugging,
          or the temporary  abandonment if not  plugged, of  the first  two
          Exploratory Wells drilled by the Program on an Offshore Prospect,
          as applicable,  and such  other costs  applicable to  exploration
          activities in the Program Area as  are otherwise provided for  in
          this Agreement, which  charges, among others,  shall include  the
          following:


               (a)  The cost of acquisition  of all Leasehold Interests  in
          the Program  Area,  including  but not  limited  to  the  Initial
          Leasehold Inventory  and any  Leasehold  Interest Costs  paid  by
          McMoRan to third party program operators in connection therewith;

               (b)  The  cost  of  any  geological,  geophysical  or  other
          scientific, exploration or engineering work, services or data  on
          the Prospect;

               (c)  The cost of copies  of all seismic records,  geological
          and geophysical maps and  other exploration data and  information
          furnished to Participant;

               (d)  Rental and  other  lease maintenance  payments  on  the
          Leasehold Interests;

               (e)  All necessary independent legal  expenses and costs  of
          title searches and title  investigation whether or not  Leasehold
          Interests are  acquired, together  with the  costs of  copies  of
          title opinions and other title reports furnished to Participant;

               (f)  The cost of drilling  Exploratory Wells in a  Prospect,
          including the cost of plugging and abandoning or capping same, if
          no completion attempt is made;

               (g)  Any   other   expenditures   properly   chargeable   as
          Exploration Expenditures  under  this  Agreement, or  as  may  be
          specified in the accounting procedure attached to the  applicable
          Program  Operating  Agreement  and  which  are  attributable   to
          exploration activities, but excluding  all overhead provided  for
          in such  Program  Operating  Agreement until  such  time  as  the
          Exploration Fund has been fully committed;

               (h)  Notwithstanding the foregoing,  the cost of  completing
          an Exploratory  Well  shall  not  be  considered  an  Exploration
          Expenditure; and

               (i)  In addition to the foregoing, McMoRan shall be entitled
          to charge  as Exploration  Expenditures those  expenditures  that
          McMoRan incurs annually for salaries of employees, including  but
          not limited to costs of  benefits programs related thereto,  cost
          of  retained  consultants,  including  but  not  limited  to  its
          Technical Consultants,  office rent,  office supplies,  insurance
          and other general  and  administrative costs that McMoRan  incurs
          in the conduct of  its activities, including  but not limited  to
          costs  allocated  to  MOXY  from  FM  Services  Company  or   its
          Affiliates, less a reasonable portion of such costs that  McMoRan
          allocates to  the  Excluded Areas.    Prior to  committing  to  a
          material increase  in the  aggregate costs  contemplated by  this
          subparagraph  (i) McMoRan shall confer with Partcipant and in
          good faith consider any comments or suggestions that  Participant
          may offer in regard to such contemplated material change.

               The term Exploration Expenditures shall also include any  of
          the foregoing  costs incurred  by the  Program in  attempting  to
          locate or  acquire  Leasehold  Interests  in  Prospects  for  the
          Program in the Program  Area whether or not  the Program owns  or
          acquires  Leasehold  Interest  in   such  area  or   subsequently
          designates a Prospect under Paragraph 8.1 for such area.

               Except as may be expressly provided to the contrary in  this
          Agreement, all  Exploration Expenditures  shall be  invoiced  and
          accounted  for  in  accordance  with  the  accounting   procedure
          attached to the Program Operating Agreement, including the period
          of time set forth for joint interest auditing and adjustment.

               McMoRan shall  further be  entitled to  reimbursement as  an
          Exploration Expenditure  or as  a  proper expenditure  under  the
          applicable Program  Operating  Agreement,  as  appropriate,  from
          Participant for its share of  reasonable inventories of pipe  and
          equipment (it being  the intention of  the parties  to keep  such
          inventories at a minimum level consistent  with the needs of  the
          Program).

               McMoRan shall not have an  obligation to spend a  particular
          portion of the Program  Fund during any  Program Year but  rather
          McMoRan shall  commit Exploration  Expenditures as  the  occasion
          arises  to  secure  Prospects   which  McMoRan  deems  would   be
          appropriate  for  the   Exploration  Program,   subject  to   the
          provisions of Paragraph 6.1 hereof.

               McMoRan agrees to make  available its entire geological  and
          geophysical data base for use in operations under the Program  at
          no cost to the Participant, except to the extent setforth in  the
          immediately  following  sentence.     The  amounts  expended   in
          acquiring seismic data from  Western Geophysical pursuant to  the
          Licensing Agreement between McMoRan and Western Geophysical dated
          November 20, 1996 shall constitute proper charges to  Exploration
          Expenditures, notwithstanding the   fact that  some of the  costs
          incurred pursuant to  such agreement were  incurred prior to  the
          beginning of the Program Term, except  to the extent that any  of
          such seismic data so acquired relates to Excluded Areas.

               Participant agrees  to bear  its proportionate  part of  all
          Exploration  Expenditures  of   the  Program,   subject  to   the
          limitations hereinafter set forth under Article VI.


                                         V.

                         Acquisition of Leasehold Interests


               5.1  Acquisition of  Leasehold Interest.  On behalf  of  the
          Program and subject to the limitations and guidelines herein  set
          forth, McMoRan shall evaluate and acquire Leasehold Interests  in
          the Program Area during the Program Term which it believes to  be
          potentially productive of oil or gas.

               5.2  Excluded Areas. McMoRan and Participant agree that  the
          following areas ("Excluded  Areas") shall not  be subject to  the
          terms of this Agreement unless any such area, or portion thereof,
          has been recommended for inclusion  herein by McMoRan in  writing
          and Participant has concurred in writing in that recommendation:

               (a)  Any Leasehold Interest  or prospect  lying outside  the
          Program Area;

               (b)  Any Leasehold Interest or Prospect which at the time of
          acquisition contains proven reserves  unless (i) the then  proven
          reserves do  not  constitute  a  material  consideration  in  the
          acquisition, and (ii) the primary objective of the acquisition is
          to explore for oil and gas other than the then proven reserves;

               (c)  Those areas  identified on  attached Exhibit  III;  and

               (d)  Any Leasehold  Interest  or prospect  acquired  through
          merger, acquisition,  corporate reorganization  or  consolidation
          with or  purchase  of  substantially all  of  the  assets  of  an
          individual, a  corporation or  a partnership,  provided that  the
          primary purpose  of  such  merger,  acquisition,  reorganization,
          consolidation or purchase is not  to acquire a specific  Prospect
          or Leasehold Interest  which otherwise would  be subject to  this
          Agreement; provided, however, if  in such an acquisition  McMoRan
          acquires an  inventory of  exploratory prospects  not  associated
          with any proven production acquired in such acquisition,  McMoRan
          shall meet with Participant and, in  good faith, attempt to  have
          the exploratory prospects transferred to the Exploration Program

               5.3  Obligation.  Subject  to   the  limitations   otherwise
          provided in this Agreement, Participant agrees to participate for
          its proportionate  share of  Exploration Expenditures  as to  all
          Leasehold Interest acquired  or committed  to by  McMoRan in  the
          Program Area  during  the  Program Term.    Without  limiting  or
          altering the effect of the AMI provisions of Article XIII hereof,
          from and after the end of the Program Term, McMoRan shall not  be
          obligated to search for and offer to Participant any interest  in
          Leasehold Interests within the Program Area.


                                         VI.

                                  Exploration Fund

               6.1  General.  The   Program   shall  have   a   budget   of
          $200,000,000 for  Exploration  Expenditures  to  be  incurred  or
          committed during  the  Program  Term  (the  _Exploration  Fund_).
          Notwithstanding that  the  Exploration  Fund is  for  the  entire
          Program Term, unless McMoRan  and Participant agree otherwise  in
          writing, McMoRan will schedule its activities so that Exploration
          Expenditures are not likely to exceed  on a cumulative basis  one
          hundred fifty  percent (150%)  of $40,000,000  per twelve  months
          period times  the  number  of twelve  months  periods  that  have
          elapsed since the Program Term commenced.

               6.2  Limitations   on   McMoRan's   Authority   to    Commit   
          Exploration Fund. In  addition to the  other limitations  imposed
          upon McMoRan's authority  to commit  Participant hereunder,  once
          the actual  and  committed  Exploration  Expenditures  reach  the
          budgeted total, it is understood and agreed that McMoRan (i) will
          not undertake any  additional drilling commitments  on behalf  of
          the Exploration Program, and (ii) will not acquire any additional
          Leasehold  Interests  on  behalf  of  the  Exploration   Program.
          Additionally, McMoRan shall not make any commitment on behalf  of
          the Program for the drilling of any well which is anticipated  to
          commence more than six  (6) months after the  end of the  Program
          Term.

               6.3  Budget Meetings and Reports.

               (a)  On a quarterly basis, McMoRan  shall hold a meeting  in
          McMoRan's offices with  Participant to  discuss the  contemplated
          activities of  the Program  for the  following period.   In  such
          meetings, McMoRan shall advise Participant of the amounts of  the
          Exploration Fund which have been committed to Prospects on  which
          an Exploratory Well  has not yet  commenced.   Such advise  shall
          include the name of the Prospect,  the amount of the  Exploration
          Fund  anticipated  to  be  spent  thereon  and  the   anticipated
          commencement date of the Exploratory Well to be drilled  thereon.
          On a monthly  basis, McMoRan  shall provide  Participant with  an
          accounting of the Exploration Expenditures of the prior month and
          Program Term  to  date  reconciling prior  billings  and  advance
          billings  with  expenditures.    McMoRan  will  promptly   advise
          Participant in  writing  when McMoRan  reasonably  believes  that
          actual and  committed  Exploration Expenditures  of  the  Program
          equal the  Exploration  Fund  and will  furnish  reasonable  data
          supporting such  conclusion.    In  addition  to  the  foregoing,
          McMoRan will furnish Participant on request and at  Participant's
          expense any other  data or information  needed by Participant  to
          comply  with  any  governmental  laws,  rules  and   regulations,
          including  those  promulgated  by  the  Securities  and  Exchange
          Commission.


                                        VII.

                         Scientific Studies and Information


               7.1  Scientific Studies and Information. During the  Program
          Term, McMoRan shall conduct geological, geophysical, engineering
          and other  scientific studies  with  respect to  the  acquisition
          and/or exploration of  Leasehold Interest ("Scientific  Studies")
          in the Program  Area and the  cost thereof  shall be  Exploration
          Expenditures.

               It is agreed that any seismic records, and other exploration
          data (not including any interpretation thereof by McMoRan or  its
          Technical Consultants) that may be acquired by McMoRan under  the
          terms of  this  Agreement  shall  become  and  remain  the  joint
          property of McMoRan  and Participant.   If  McMoRan designates  a
          Prospect under Paragraph 8.1 hereof affecting such acquired data,
          McMoRan shall at such time furnish copies of all such data,  upon
          written  request   of  Participant,   including  geological   and
          geophysical maps,  to Participant  unless McMoRan  is  prohibited
          from furnishing a copy or disclosing it to Participant under  the
          agreement by  which  McMoRan  acquired  such  data.    Except  as
          otherwise  provided  in  this  Agreement,  Participant  shall  be
          permitted full access  to such data  in McMoRan's offices  unless
          prohibited from doing  so under  the agreement  by which  McMoRan
          acquires such data.  McMoRan shall not be precluded from entering
          into  data  exchange  agreements  which  McMoRan  in  good  faith
          believes will benefit the Program and all data acquired  pursuant
          to any such  exchange agreement shall  be the  joint property  of
          McMoRan and  Participant.   During and  after the  Program  Term,
          McMoRan shall  have the  exclusive right  to sell  any such  data
          which McMoRan  in good  faith believes  no  longer must  be  kept
          confidential for the purposes of the Program and the proceeds  of
          such sale shall be shared by  the Participant and McMoRan on  the
          same basis as the said parties own such data.  At the end of  the
          Program Term, McMoRan  shall identify seismic  records and  other
          pertinent acquired data (not including any interpretation thereof
          by McMoRan or  its Technical Consultants)  as to which  Prospects
          have not  been designated  during the  Program Term  and  McMoRan
          shall, upon written request by Participant, provide it copies  of
          all or any  part of such  data, unless prohibited  from doing  so
          under  the  agreement  by  which  McMoRan  acquired  such   data.
          Notwithstanding anything  herein  to  the  contrary,  Participant
          shall  not  have  or  acquire   any  property  interest  in   any
          interpretations by McMoRan  or its Technical  Consultants of  any
          seismic or other  exploration data  unless and  until a  Prospect
          based thereon has been designated by McMoRan hereunder.


                                        VIII.

                                      Prospects


               8.1  Prospects.  From  time  to  time  McMoRan  will  obtain
          information upon which it can  determine and define a  particular
          portion of the Program Area with sufficient specificity as to  be
          identified as a Prospect.  The term "Prospect" means a contiguous
          area which can reasonably  be interpreted from geological  and/or
          geophysical  data   as  encompassing   a  geological   structure,
          stratigraphic trap or other  common geologic feature which  makes
          its treatment as  a single Prospect  for oil  and gas  production
          purposes reasonable  and  some  portion of  which  is  considered
          prospective  for  commercial  oil   or  gas  production  and   is
          designated as such pursuant to this Article VIII.  Based on  such
          information, McMoRan shall from time to time designate an area as
          a Prospect  of the  Program.   The size  and configuration  of  a
          Prospect, as  well  as all  details  incident thereto,  shall  be
          determined by McMoRan.   During the  Program Term, McMoRan  alone
          shall determine  the  time  when  an  area  is  designated  as  a
          Prospect,  whether or not Leasehold Interests have previously been
          acquired therein.  After the Program Term and in accordance  with
          Paragraph 8.2 hereof, McMoRan or Participant shall have the right
          to  designate  a  Prospect  which  includes  Leasehold  Interests
          theretofore acquired  through the  Program.   Without  the  prior
          consent of Participant, McMoRan shall  not commit to the  Program
          any Prospects  which (1)  McMoRan's economic  analysis  indicates
          will not have at least a  before taxes rate of return of  twenty-
          five (25) percent, or (2) the water depth for the first  expected
          platform location is greater than 1,000 feet.

               At the  time that  McMoRan designates  a Prospect  it  shall
          furnish to  Participant  a  land  plat  showing  the  approximate
          outline of the Prospect and the  proposed AMI therefor.   Subject
          to Paragraph 5.2, McMoRan shall  as soon as possible  thereafter,
          upon written request of Participant, furnish Participant (to  the
          extent not  previously furnished)  with all  pertinent data  then
          available with respect to the evaluation of such Prospect for oil
          or gas  development  excluding  only  such  data  as  McMoRan  is
          prohibited  from   disclosing   by  reason   of   confidentiality
          agreements with third  parties respecting such  data.  Such  data
          shall include a land and geophysical or geological report on such
          Prospect, including with respect to  the drillsite for the  first
          Exploratory Well proposed  to be  drilled thereon,  a land  plat,
          farmin, farmout  and other  trade agreements,  copies of  leases,
          drilling   title   opinions,   assignments,   unit    designation
          agreements, operating  agreements and  other documents  necessary
          for Participant  to maintain  adequate records  relative to  such
          Prospect and  operations  thereon,  together  with  such  of  the
          following, as and  when available, which  are applicable to  each
          such Prospect:

               (a)  An  itemized  list  of  all  Exploration   Expenditures
          charged to such Prospect;

               (b)  An itemized estimate of probable additional costs which
          may have to be incurred in connection with such Prospect;

               (c)  Any other information in McMoRan's possession  relevant
          to an  evaluation of  such Prospect,  including geological  data,
          including but not limited to cross-sections, maps, key logs,  and
          geophysical data,  including  copies of  proprietary  reprocessed
          data, sepias of lines; and

               (d)  A description  of the  primary geologic  objective  and
          prospective zone(s) for which the Prospect was acquired. At the
          time each such  Prospect is designated, McMoRan  will
          separately  allocate   to   it   all   Exploration   Expenditures
          theretofore incurred and properly attributable to such  Prospect,
          including but not limited to those expenditures made pursuant  to
          Paragraph 4.1 above.



              8.2 Designation of Prospects After Program Term. To the
          extent any Leasehold  Interests acquired by  the Program are  not
          included in Prospects designated  by McMoRan on  or prior to  the
          end of  the  Program  Term,  then  after  such  date  McMoRan  or
          Participant or their respective successors in interest shall have
          the right to propose a Prospect  at the time that it proposes  an
          Exploratory Well thereon.  The geographic limits of such Prospect
          so designated shall meet the criteria set forth in Paragraph  8.1
          and the  AMI  therefor shall  be  subject to  the  provisions  of
          Article XIII hereof.


                                        IX.

                            Drilling of Exploratory Wells


               9.1  During Program Term.  During the Program  Term, at  the
          same time as  McMoRan designates a  Prospect under Paragraph  8.1
          above or thereafter when it commits  the Exploration Fund to  the
          drilling of an Exploratory  Well thereon or  as soon as  possible
          after McMoRan  has  received  notice from  a  third  party  joint
          interest owner that it proposes the  drilling of a well  thereon,
          McMoRan shall provide to Participant (if not previously furnished
          and  requested   in  writing   by  Participant)   the   following
          information:

               (a)  An AFE  for such  well both  as  a dry  hole and  as  a
          completed well;

               (b)  A land plat  depicting the Prospect,  the proposed  AMI
          for such Prospect  and the Program's  Leasehold Interests  within
          the AMI for such prospect;

               (c)  A schedule of the Program's Leasehold Interests in  the
          Prospect AMI;

               (d)  Maps depicting  McMoRan's  geological  and  geophysical
          interpretations of the Prospect;

               (e)  McMoRan's economic analysis of the Prospect's potential
          and timing and estimated costs to develop, including  description
          of facilities to be used, if then known;

               (f)  Information as to whether  any other third party  joint
          interest owner has elected to join or not to join in the drilling
          of such well;

               (g)  The surface  location, proposed  bottom hole  location,
          proposed depth and well  prognosis including casing program,  mud
          program  and  logging  program  for  such  well  (to  the  extent
          available in those cases where a  third party is the operator  of
          the well)  and  any  other information  in  McMoRan's  possession
          relevant to an evaluation of such well; and

               (h)  Any acreage or cash contribution pledged in support  of
          the proposed operation.

               Beginning with the  permitting process  for any  Exploratory
          Well drilled hereunder, and  continuing through the drilling  and
          completion, temporary abandonment or plugging and abandonment for
          such well,  McMoRan shall  provide the  following information  if
          requested in writing by Participant  (to the extent available  to
          McMoRan and not previously furnished):

               (a)  name of  well,  name of  Prospect,  and  identification
          number;

               (b)  drilling permits, plugging and abandonment permits  and
          permission to produce;

               (c)  all daily drilling  reports, State completion  reports,
          well  completion  schematic  diagram,  stimulation  reports   and
          workover reports;

               (d)  all core analyses, fluid analyses, PVT. analyses, water
          sample analyses;

               (e)  all pressure survey, DST reports, and pressure  buildup
          or drawdown data;

               (f)  all well logs.


               9.2  After Program Term. After the Program Term, McMoRan  or
          Participant shall have the  right to propose  the drilling of  an
          Exploratory Well on any Prospect within which an Exploratory Well
          could be drilled consistent  with the definition of  "Exploratory
          Well" set out herein.  The terms and provisions of the applicable
          Program Operating Agreement shall govern any such proposal.



                                         X.

                         Farmout or Participation Agreements


               10.1 Participation Agreements. During  the Program Term,  if
          in  the  process  of  evaluation  of  a  Prospect  the  data  and
          information lead  McMoRan to  the good  faith determination  that
          because of  the large  expenditures required,  the  extraordinary
          risk involved  or  other facts  deemed  relevant by  McMoRan,  an
          outside venturer  should be  obtained in  such Prospect,  McMoRan
          shall have the right to undertake to negotiate an agreement  with
          a third party to join in the drilling of the Exploratory Well  on
          the Prospect and  thereby acquire  a portion  of the  Exploration
          Program's interest in such  Prospect; provided, however, that  if
          any such agreement would reduce  the interest of the  Exploration
          Program by more than fifty percent (50%), McMoRan must obtain the
          prior approval  of Participant.   McMoRan  shall give  notice  to
          Participant of its  intention to negotiate  an agreement with  an
          outside  venturer  which  would   reduce  the  interest  of   the
          Exploration Program by more than fifty percent (50%), stating the
          time within  which the  circumstances  require an  expression  of
          approval  or  disapproval  by   the  Participant.    Failure   of
          Participant to  disapprove the  proposed negotiation  within  the
          stated period of time may be deemed by McMoRan to be approval  by
          Participant.  Any agreement with an outside venturer shall be  on
          the basis of  the outside venturer  paying and  bearing not  less
          than the proportionate part of all drilling costs and expenses of
          the Exploratory  Well  attributable  to  the  undivided  interest
          transferred to such  outside venturer,  and the  interest in  the
          Prospect transferred to or earned by such outside venturer  shall
          reduce  the  respective  interests  of  McMoRan  and  Participant
          proportionately.  Any promotion  or other consideration  received
          by McMoRan incident  to such agreement  with an outside  venturer
          shall be held for the benefit of the Exploration Program and  the
          Participant  shall  be   entitled  to   participate  therein   in
          proportion to its interest in the Prospect.

               10.2 Farmout Agreements.  During  the Program  Term  McMoRan
          shall have the right to enter into farmout agreements with
          unrelated third parties  on such  terms as  it deems  appropriate
          respecting Leasehold Interests or portions thereof which are  not
          anticipated to  be drilled  or committed  to  be drilled  by  the
          Exploration Program during the  Program Term; provided,  however,
          McMoRan shall keep  Participant advised  as to  any such  farmout
          proposals or plans  and shall  honor the  request of  Participant
          that its interest in such Leasehold  Interest or Prospect not  be
          farmed out if Participant advises  McMoRan within ten (10)  days,
          or forty-eight (48) hours if a  drilling rig is on location  with
          stand-by  rig  charges  accumulating,  of  McMoRan's  notice   of
          intention to farmout that it will participate as to its ownership
          interest in the drilling of the anticipated farmout well.

               McMoRan shall not farmout any of Participant's Interest in a
          Prospect on which the  Program has a  producing well without  the
          prior consent of Participant.

               10.3 Trade  Agreements.   During   the  Program   Term,   in
          connection  with  the  drilling  of  an  Exploratory  Well  on  a
          Prospect, McMoRan  shall have  complete authority  to enter  into
          unit agreements,  acreage swap  agreements, bottom  hole and  dry
          hole contribution  agreements  and any  similar  agreements  with
          unrelated third parties.   The  cost or  proceeds of  any of  the
          forgoing  agreements  shall  be   credited  or  charged  to   the
          Participants (1) in  the proportion that  it participated in  the
          drilling of the affected  Exploratory Well, or  (2) if the  costs
          relate to the payment by the Exploratory Program of a dry hole or
          bottom hole contribution to a third party, in the proportion that
          Participant bears  Exploration  Expenditures hereunder,  and  any
          interest in leases or oil or gas thus acquired by exchange  shall
          constitute Leasehold  Interests subject  hereto and  be owned  by
          McMoRan and Participant in proportion to their ownership interest
          in such Prospect.


                                         XI.

                                       Burdens


               11.1 Burdens. The Leasehold Interests to be acquired by  the
          Program shall be subject to and McMoRan and Participant each 
          shall bear its proportionate part  of all third party  overriding
          royalties and  other  burdens on  Leasehold  Interest  (including
          subsequently acquired Leasehold  Interests in  the Prospect  AMI)
          which McMoRan  contracts for  incidental  to the  acquisition  or
          evaluation of such Leasehold Interests.  Participant acknowledges
          that McMoRan  has heretofore  entered into  a retainer  agreement
          with a Technical Consultant and may enter into similar agreements
          with others  during the  Program Term.   Without  the consent  of
          Participant, McMoRan agrees not to subject any Leasehold Interest
          to overriding royalty burdens to its Technical Consultants  which
          exceed  the  amounts   deliverable  to   its  current   Technical
          Consultant,  CLK   Company,  L.L.C.(CLK),under   their   existing
          agreement as described  in the  letter to  Participant dated  the
          date hereof.  McMoRan has provided Participant with a copy of its
          current consulting  agreement with  CLK   and Participant  agrees
          that it  will  bear  its proportionate  part  of  the  overriding
          royalties to which CLK is entitled pursuant to the terms of  said
          consulting  agreement  as  to  any  Leasehold  Interest  acquired
          hereunder as well as to  any Leasehold Interest that  Participant
          may acquire pursuant to an AMI agreement subject hereto.


                                        XII.

                                 Operating Agreement

               12.1 Operating Agreement.  Except as  otherwise provided  in
          this Agreement, all operations on  each Prospect will be  carried
          out in accordance  with the provisions  of the Program  Operating
          Agreement, Offshore or  Onshore as applicable,  with charges  and
          credits to the join account to  be made in accordance  therewith,
          including all overhead as to  the drilling of Development  Wells.
          In the  event  of  conflict between  the  terms  of  the  Program
          Operating  Agreement  and  the  terms  of  this  Agreement,  this
          Agreement shall  control.   A  particular Leasehold  Interest  or
          Prospect  may  be  subject  to  a  different  form  of  operating
          agreement (third  party)  with  one or  more  third  parties  not
          related to McMoRan, which operating agreement (third party) shall
          apply and control at the time  it becomes effective in the  event
          of conflict therewith  and the Program  Operating Agreement.   In
          the event  of conflict  between such  operating agreement  (third
          party)   and this  Agreement (other  than the  Program  Operating
          Agreement), this Agreement shall  control as between McMoRan  and
          Participant.


                                        XIII.

                               Area of Mutual Interest



               13.1 Third Party Area of Mutual Interest Agreements. McMoRan
          may be  obligated to  enter into  third party  AMI agreements  in
          connection with the acquisition  of additional Prospects for  the
          Program.  Participant  agrees to be  bound by  the provisions  of
          such AMI agreements.

               13.2 Program Area of Mutual Interest Agreement. At the  time
          a Prospect is  identified by  McMoRan pursuant  to Paragraph  8.1
          hereof, there shall be created an  Area of Mutual Interest  among
          McMoRan and Participant.   The lands within  such Area of  Mutual
          Interest shall include the involved  Prospect and shall be  fixed
          and determined in the following manner:

               (a)  McMoRan shall submit to Participant a plat  delineating
          the area which it determines on  a sound geological basis  should
          be  considered  as  the  area  which,  even  though  outside  the
          boundaries of  the  Prospect, should  be  considered an  area  of
          mutual interest in connection with the Prospect.

               (b)  In the  event  that  Participant does  not  accept  the
          proposed area  of  mutual  interest, consultation  shall  be  had
          between McMoRan and Participant in an effort to fix and determine
          the area to constitute the area of mutual interest.

               (c)  If McMoRan and  Participant are able  to agree on  such
          area, the area agreed  upon shall constitute  the Area of  Mutual
          Interest, or  if agreement  cannot be  reached, the  area of  the
          Leasehold Interests  as  to a  Prospect  all of  which  is  under
          Federal leasing jurisdiction,  or as  to any  other Prospect  the
          area within one-half (1/2)  mile surrounding the outer  perimeter
          of the Prospect,  shall constitute the  Area of Mutual  Interest;
          provided however, any such AMI shall  not include any portion  of
          an Excluded Area.

               The AMI shall be effective so long as any Leasehold Interest
          in such AMI is owned by any of the parties or is subject to  this
          Agreement, but  in  no  event longer  than  the  earlier  of  (i)
          December 31, 2006  or (ii) one  (1) year after  the plugging  and
          abandoning  of  an  Exploratory   Well  thereon  unless   another
          Exploratory Well  has  been  commenced  thereon  or  McMoRan  and
          Participant have  agreed to  install  a drilling  and  production
          platform on such Prospect within such one (1) year period.

               Any acquisition of Leasehold Interests within such AMI after
          the establishment thereof by McMoRan or Participant shall be made
          available to be shared  by McMoRan and  Participant.  Subject  to
          the rights of any third party under third party AMI agreements as
          described in  Paragraph  13.1, the  other  party shall  have  the
          option to  participate  in  any  such  acquisition  in  the  same
          proportion as such party's then interest in such Prospect,  which
          option is to be exercised in the following manner: the  acquiring
          party shall notify each of the other parties of such acquisition,
          furnish  a  copy  thereof  and  such  title  information  as  the
          acquiring party has, stating the cost of such acquisition  and/or
          obligations that must  be assumed in  connection therewith.   The
          other parties  shall have  a period  of  fifteen (15)  days  with
          respect to  the interests  not related  to a  drilling well,  and
          forty-eight (48) hours (or such lesser period as required by  the
          circumstances and stated in the notice) with respect to interests
          related to a drilling  well after receipt  of such notice  within
          which to elect and notify the acquiring party whether or not such
          party desires to  participate in  such acquisition.   Failure  to
          respond shall be deemed an election on the part of such party not
          to participate in such acquisition.  Upon election and payment to
          the acquiring party of such other party's share of the cost of
          such acquisition and assumption of its share of such obligations,
          such other  party shall  be entitled  to  an assignment  of  such
          party's interest in such acquisition.  The foregoing provision of
          this paragraph shall not apply nor shall they alter Participant's
          obligation to purchase  its proportionate part  of any  Leasehold
          Interests acquired by McMoRan hereunder in those cases where  the
          costs of acquiring such interests are Exploration Expenditures.

               In the event any party does  not elect to participate in  an
          interest  tendered   to  it   under  this   Paragraph  13.2   the
          participating parties may,  within twenty-four  (24) hours  after
          notice thereof, elect to take  their proportionate shares of  the
          non-participating party's interest.   Time  periods expressed  in
          this Paragraph 13.2 are inclusive of Saturdays, Sundays and legal
          holidays.

               The  provisions  of  this   Paragraph  13.2  shall  not   be
          applicable to acquisitions  by any  party hereto  of an  interest
          acquired   through    merger,   corporate    reorganization    or
          consolidation with or purchase of all or substantially all of the
          assets  of  a  corporation,  an  individual  or  a   partnership;
          provided, however,  that  the  primary purpose  of  such  merger,
          corporate reorganization,  consolidation or  purchase is  not  to
          acquire  Leasehold  Interests  in   a  specific  Prospect   which
          otherwise would be subject to this Agreement.

                                        XIV.

                               Ownership of Production

               14.1 Ownership  of  Production.   All  the   oil,  gas   and
          casinghead  gas  produced  for  the  account  of  the   Leasehold
          Interests from any well shall be owned by McMoRan and Participant
          severally, in  proportion to  the  respective interests  of  each
          therein as set forth in Paragraph 3.2. above, except as otherwise
          provided in this  Agreement, and subject  to the  right, if  any,
          that others may  have under the  terms of this  Agreement or  any
          operating agreement  relating  to such  well.   Anything  to  the
          contrary herein notwithstanding,  each party shall  at all  times
          have the right  to take  in kind  or separately  dispose of  such
          party's share of the  production from any  such well, subject  to
          the provisions  of the  applicable Program  Operating  Agreement.
          McMoRan shall,  however, attempt  to  give Participant  at  least
          seven (7) days advance written notice of the anticipated date  of
          first deliveries of any production from a Prospect.


                                         XV.

                             Relationship of the Parties



               15.1 Tax Partnership.  This Agreement  is not  intended  and
          shall not  be  considered  to create  a  partnership  within  the
          meaning of the federal common law or under the applicable laws of
          any state  or under  the laws  of the  state in  which any  party
          hereto is incorporated,  organized or conducting  business or  to
          create a relationship whereby  any of the  parties shall be  held
          liable for the  acts, either of  omission or  commission, of  any
          other party thereto; provided, however, that in the event a party
          should suffer a  loss by  reason of  an unauthorized  act of  the
          other party hereto, the latter shall indemnify and save  harmless
          the former.

               The parties expressly  agree that no  party hereto shall  be
          responsible for the  obligations of any  other party, each  party
          being severally  responsible  only for  its  obligations  arising
          hereunder and liable only  for its allocated  share of the  costs
          and expenses  incurred  hereunder.   It  is not  the  purpose  or
          intention of this Agreement to create, and this Agreement  should
          never be construed as creating, a relationship whereby any of the
          parties shall  be held  liable for  acts, either  of omission  or
          commission, of  any  other  party hereto.    Notwithstanding  the
          foregoing, each party hereto agrees that this Agreement creates a
          partnership for Federal and  State income tax reporting  purposes
          only,  which  tax  partnership   shall  function  and  exist   in
          accordance with the terms and  provisions of Exhibit IV  attached
          hereto.  McMoRan agrees to provide  to the Participant on a  best
          efforts basis,  by  April  30th of  each  year,  any  information
          available to it relating to operations conducted pursuant to  the
          Program that is necessary for Participant to prepare Schedule K-1
          of its federal income tax return.


                                        XVI.

                                  Billings; Notices

               16.1 Billings;  Notices . All  billings and notices shall  be
          as provided in the applicable Program Operating Agreement.


                                        XVII.

                            Special Non-Consent Elections


               17.1 Casing Point Election - Onshore Prospects. At such time
          as an Exploratory Well has been drilled to the final total  depth
          on an Onshore Prospect, McMoRan shall notify Participant that the
          Casing Point has been  reached on such well,  and whether or  not
          McMoRan recommends that an attempt be made to complete such well.
          McMoRan  shall  also   furnish,  if  requested   in  writing   by
          Participant, the estimated costs of completing and equipping  the
          well and  plugging  and  abandoning same  if  the  completion  is
          unsuccessful,  and  all  well  logs,  core  analyses  and   other
          information in its possession not theretofore furnished  relevant
          to evaluation of a completion  attempt.  Within forty-eight  (48)
          hours (inclusive  of  Saturday,  Sunday and  legal  holidays)  of
          receipt of such recommendation, Participant shall advise  McMoRan
          whether or  not  it desires  to  participate in  the  recommended
          completion attempt. If McMoRan  and Participant agree to  attempt
          completion, McMoRan shall thereupon be authorized to proceed with
          the completion  attempt  and to  charge  the cost  thereof  as  a
          Development Expenditure; provided, however, the cost of  plugging
          and abandoning  the  well  shall be  charged  as  an  Exploration
          Expenditure if  the  completion  attempt  is  unsuccessful.    If
          Participant does  not elect  to  participate in  such  completion
          attempt, it  shall have  no further  rights hereunder  as to  the
          Prospect involved.  If  McMoRan recommends abandonment without  a
          completion attempt,  McMoRan  shall  have the  well  plugged  and
          abandoned,  charging   the  cost   thereof  as   an   Exploration
          Expenditure.   Additionally, if  Participant  does not  elect  to
          participate in  a  second or  subsequent  Exploratory Well  in  a
          particular Prospect,  Participant shall  have no  further  rights
          hereunder as to the Prospect involved.

               17.2 Elections Prior  to  Platform Installation  -  Offshore    
          Prospects. If Participant  does not elect  to participate in  (a)
          the drilling  of any  well on  an Offshore  Prospect proposed  by
          McMoRan to be  drilled after the  drilling of the  first two  (2)
          Exploratory Wells thereon  and prior to  the installation of  the
          first drilling and/or production platform on such Prospect or (b)
          Participant does not elect to participate in the installation  of
          the first drilling and/or  production platform on such  Prospect,
          the Participant shall have no further rights hereunder as to  the
          Prospect involved.

               17.3 Time Periods. Whenever an election right is provided in
          the body of  this Agreement and  no time period  for response  is
          stipulated then  the  applicable  time periods  provided  in  the
          applicable   Program    Operating    Agreement    shall    apply.

               17.4 Completion Attempt by Participant - Onshore. If McMoRan
          does not recommend the completion of an Onshore Exploratory  Well
          and Participant  advises McMoRan  within forty-eight  (48)  hours
          (inclusive of Saturday, Sunday and legal holidays) of the receipt
          by  Participant  of   such  recommendation   from  McMoRan   that
          Participant elects  to attempt  to  complete such  well,  McMoRan
          shall  undertake  the  completion  thereof,  and  any  subsequent
          plugging and abandoning thereof,  for the account of  Participant
          and Participant shall bear all costs, risks and expenses of  such
          completion attempt and abandonment thereof and Participant agrees
          to indemnify  and  hold  McMoRan harmless  therefrom.    If  such
          completion attempt is successful McMoRan will assign  Participant
          all of  its  interest  in  the borehole  of  such  well  and  any
          production therefrom, but  such assignment shall  not confer  any
          additional interest  to the  Participant in  the balance  of  the
          particular Prospect involved.


                                       XVIII.

                                    Program Term


               18.1 Program Term. The Program Term shall commence on  April
          1, 1997 and shall terminate, except for completion of  operations
          which were theretofore commenced or committed, on the earlier  of
          five (5) years from the date hereof, or the date that all of  the
          Exploration Fund has been spent or committed.  At the end of  the
          Program Term, McMoRan shall provide Participant with a list  (the
          "Committed List") of the  undrilled wells, Prospects and  farmout
          agreements as to  which it  has committed  the Exploration  Fund.
          Once such Committed  List has  been provided  to Participant,  no
          substitution shall  be made  by McMoRan  without the  consent  of
          Participant.

               18.2 Unfunded Prospects. At the same time as McMoRan submits
          the Committed List, McMoRan  shall also submit  a listing of  all
          Prospects which  would have  been  committed to  the  Exploration
          Program except for the  fact that the  Exploration Fund had  been
          fully expended and/or  committed.   Within fifteen  (15) days  of
          receipt of such listing from  McMoRan, Participant will have  the
          option to commit additional funds to the Exploration Fund for the
          drilling of the first  Exploratory Well on  any such Prospect  or
          Prospects or to advise MOXY that  it does not elect to so  commit
          any such additional funds.   If the  Participant does so  commit,
          the drilling of such first Exploratory  Well on a Prospect  where
          Participant commits  such additional  funds shall  be charged  as
          Exploration Expenditures  and shall  be  deemed included  in  the
          Committed List.  If  the Participant does  not commit such  addi-
          tional funds for a Prospect on such listing, MOXY shall have  the
          right to acquire Participant's interest in such Prospect, free of
          any liens, burdens, or overriding  royalties not provided for  by
          Article XI  hereof, by  reimbursing  Participant for  any  direct
          costs incurred by Participant in acquiring Leasehold Interests in
          such Prospect; if MOXY  so reimburses Participant, such  Prospect
          shall be excluded from this Agreement and Participant shall  have
          no further right hereunder as to such Prospect.


                                        XIX.

                            Operations After Program Term

 
               19.1 General. After the Program Term, all Leasehold
          Interests of the Program will be subject to the provisions of the
          applicable Program Operating Agreement and the provisions of this
          Agreement except as set forth in Paragraph 18.2 and this  Article
          XIX.  Any Leasehold Interest which  is included in a Prospect  on
          which an  Exploratory Well  has been  committed as  shown on  the
          Committed List shall become subject to this Article XIX after the
          drilling of such committed well.

               19.2 Exploratory Wells.  After  the  Program  Term,  McMoRan
          and/or Participant shall have the  right to propose the  drilling
          of an Exploratory Well on a Prospect in accordance with Paragraph
          9.2 hereof.

               19.3 Development Expenditures. All Development  Expenditures
          shall be borne  by the parties  according to  their interest  and
          subject to  the provisions  of the  applicable Program  Operating
          Agreement, whether incurred before or after the Program Term.

               19.4 Provisions Which Do Not Survive the End of the  Program    
          Term. From and after the end  of the Program Term, McMoRan  shall
          have no right to commit Participant to any expenditures except in
          accordance with the  applicable Program  Operating Agreement  and
          with respect  to the  conclusion of  then drilling  or  committed
          operations.  McMoRan shall have no obligation thereafter to offer
          Participant the right  to acquire any  Leasehold Interest  unless
          such acquisition is subject to an AMI agreement with Participant.
          Further,  McMoRan   shall  have   no   further  right   to   bind
          Participant's interest to  any trade agreement  except as may  be
          expressly authorized by Participant.


                                         XX.

                                  Confidentiality.


               20.1 Confidentiality. Except to the  extent provided to  the
          contrary hereunder  and  subject  to any  agreements  with  third
          parties entered into pursuant to  the Program, each party  agrees
          that at all times prior to, but not after, December 31, 2007,  it
          will take all  reasonable steps to  keep secret and  confidential
          and not disclose  to any third  party, geological or  geophysical
          data, progress reports or other information which it may  receive
          as a  result  of operations  carried  out under  this  Agreement;
          provided, however,  that these  restrictions shall  not apply  to
          information which  (i) is  in, or  has entered  into, the  public
          domain without breach of the  provisions of this Paragraph  20.1;
          (ii) is in the possession of  a party receiving same as a  result
          of prior receipt thereof from another party (not a party to this
          Agreement)  prior  to  the  time  of  such  receipt  under   this
          Agreement, (iii) may lawfully be obtained as a matter of right by
          the party receiving same from another source, (iv) is required to
          be disclosed by law or the rules of any governmental agency or an
          applicable stock exchange, by McMoRan  or Participant, or (v)  is
          furnished to Affiliates, or to bona fide prospective  purchasers,
          mortgagees, prospective mortgagees, lenders, prospective lenders,
          prospective  joint  program  participants  and  consultants   for
          evaluation  purposes   provided   that   any   person   furnished
          information pursuant to this clause (v) agrees not to communicate
          such information to any  other party or to  use it for their  own
          benefit in a manner  adverse to the  interests of McMoRan  and/or
          Participant.     Notwithstanding  the   foregoing,  the   parties
          recognize that from time to time  information (such as logs)  may
          be acquired  by the  Program which  should  not be  disclosed  to
          anyone other than those persons  who must have such  information.
          Each party  shall  take  all  reasonable  steps  to  require  its
          employees and consultants to be bound  by the provisions of  this
          paragraph in the  same manner  as it  is bound  hereunder.   News
          releases concerning  discoveries  or operations  of  the  Program
          shall only be made in accordance with guidelines attached to  the
          applicable  Program   Operating   Agreement,   subject   to   the
          requirements of applicable laws and regulations and  requirements
          of applicable stock exchanges.


                                        XXI.

                                      Insurance


               21.1 Insurance for Program. McMoRan shall, at the expense of
          the Exploration Program,  procure and  maintain with  responsible
          companies insurance in  the amounts  and covering  the risks  set
          forth below:

               (a)  Worker's Compensation:
                    Such insurance shall be in full compliance with the law
                    in the state where the work is to take place and shall
                    contain a voluntary compensation endorsement and a
                    waiver of subrogation as to Participant.  Where
                    applicable, coverage shall also be provided to comply
                    with the:

                    (i)  U.S. Longshoremen's and Harbor Worker's
                         Compensation Act, and the
                    (ii) Outer Continental Shelf Lands Act.

               (b)  Employer's Liability:
                    Such insurance shall have a limit of liability of
                    $500,000 per accident and shall be endorsed, where
                    applicable, to provide:

                    (i)  Maritime (Amendment to Coverage B), to include
                         transportation, wages, maintenance and cure.
                    (ii) A claim "in rem" will be treated as a claim "in 
                         personam".
                    (iii)A waiver of subrogation as to Participant.

               (c)  Comprehensive General Liability Insurance:
                    Such insurance shall have a limit of $1,000,000 per
                    occurrence and shall be endorsed, where applicable, to
                    provide:

                    (i)  Deletion of the watercraft exclusion.
                    (ii) Contractual liability coverage.
                    (iii)That Participant be named as an additional
                         insured.

               (d)  Control of Well Insurance in the minimum amount of
                    $50,000,000 for the total loss, endorsed to name
                    Participant as an additional insured.

               (e)  All vessels owned or chartered by McMoRan shall be 
                    adequately covered by Hull and Protection and Indemnity
                    Insurance.

               (f)  No insurance other than as specified above shall be 
                    provided by McMoRan.

               (g)  McMoRan shall require contractors and subcontractors
                    performing work for the Program to provide such
                    insurance as deemed reasonable by McMoRan in relation
                    to the work to be performed by said contractors or
                    subcontractors.

               (h)  Upon request, certificates of insurance evidencing the
                    insurance obtained by McMoRan hereunder shall be
                    furnished to Participant.

               (i)  Unless otherwise agreed in writing, McMoRan and 
                    Participant shall separately carry their own 
                    policies of the following insurance:

                    (i)  Where applicable, Blanket Charters' Legal 
                         Liability and Cargo Legal Liability with a limit
                         of liability of $500,000.
                    (ii) Umbrella liability Insurance in the amount of 
                         $25,000,000 excess of all primary limits
                   (iii) Above insurance coverages including, but not 
                         limited to, any and all deductibles, self-insured 
                         retentions or primary layers, shall contain 
                         waivers of subrogation as to McMoRan and 
                         Participant.


                                        XXII.

                              Record Title, Assignment


               22.1 Record Title. For convenience, McMoRan shall  initially
          hold record title to the Leasehold Interests acquired  hereunder;
          provided however, upon  written request  by Participant,  McMoRan
          will, within 120 days following the completion by the Program  on
          an Onshore  Prospect of  a well  capable of  producing in  paying
          quantities, or within 120 days following the installation of  the
          first drilling and/or production platform on an Offshore Prospect
          by the Program, as applicable, execute and deliver to Participant
          a  recordable  assignment  of   Participant's  interest  in   all
          Leasehold Interests in such  Prospect, unless Participant has  no
          further rights  hereunder  as to  a  particular Prospect  as  the
          result of a  decision not  to participate  pursuant to  Paragraph
          17.1, Paragraph  17.2  or  Paragraph 18.2,  as  applicable.    In
          addition, at the end  of Program Term  McMoRan shall execute  and
          deliver to Participant a  recordable assignment of  Participant's
          interest in any  Leasehold Interest  not included  in a  Prospect
          during the  Program  Term  pursuant  to  any  provision  of  this
          Agreement.   Such  assignment  shall warrant  title  against  all
          parties claiming by, through or under McMoRan, but not otherwise;
          but McMoRan  shall  assign to  Participant,  with full  right  of
          subrogation, to the  extent so transferable,  the benefit of  and
          the right to enforce the covenants and warranties, if any,  which
          McMoRan is  entitled  to enforce  with  respect to  the  interest
          assigned or any part thereof.   Each assignment shall be  subject
          to this Agreement and shall be  charged with and burdened by  the
          proportionate part of  the royalties provided  for in each  lease
          covered thereby, any overriding royalty or similar interest  with
          which such  Leasehold Interests  are  burdened as  authorized  by
          Paragraph 11.1 hereof and any other contracts or agreements  with
          which  such  Leasehold  Interests  are  burdened  by  McMoRan  as
          expressly authorized by  other provisions of  this Agreement  and
          which continue to burden such Leasehold Interests at the time  of
          such  assignment.    If,  however,  there  are  restrictions   on
          assignability with respect  to a Prospect  or Leasehold  Interest
          prohibiting McMoRan as nominee for the Program from  transferring
          interests in such Prospect  or Leasehold Interest, McMoRan  shall
          continue to  hold record  title  in its  name  on behalf  of  the
          parties owning interests therein rather than for the Program, and
          at the request of such parties will execute a mutually acceptable
          nominee agreement.

               22.2 Assignment. Except  as  permitted  below,  without  the
          prior written consent  of the  other party,  neither McMoRan  nor
          Participant shall assign any rights in this Agreement.  Until the
          Program has  completed a  well capable  of production  in  Paying
          Quantities on  an  Onshore  Prospect or  prior  to  the  election
          provided in Paragraph XVII hereof as to an Offshore Prospect,  or
          the end of  the Program Term,  whichever first  occurs, no  party
          hereto may assign its interest in the Leasehold Interests  within
          said Prospect  acquired pursuant  to  the Program  without  first
          obtaining the consent of the  other party hereto (which  approval
          will not be unreasonable withheld);  provided that granting of  a
          lien or security  interest by any  party shall  not require  such
          consent.   The  assignees  of  any  Leasehold  Interest  acquired
          pursuant to the Program shall be  bound by all of the  assignor's
          obligations with respect  to such  Leasehold Interest  as to  the
          interest  assigned.     Notwithstanding  the  foregoing,   either
          Participant or McMoRan without the necessity of obtaining consent
          may transfer all or any part of its interests and rights in  this
          Agreement or in any Prospect to  any Affiliate provided that  the
          assigning party shall remain  liable hereunder.   Notwithstanding
          the foregoing,  if  a  Prospect involves  the  acquisition  of  a
          Leasehold interest  from a  third party,  the period  hereinabove
          provided for the  delivery of assignments  shall be extended,  if
          required, until 60 days following the receipt of an assignment of
          interest by McMoRan from such  third party; provided however,  in
          the event  that such  an assignment  requires the  approval of  a
          governmental authority then such period  will be extended for  60
          days following the  receipt by McMoRan  of the required  approval
          from the governmental authority.


                                       XXIII.

                                Subsequent Interests


               23.1 Subsequent Interest.  Except  with respect  to  burdens
          described in Paragraph  11.1, or  as otherwise  provided in  this
          Agreement, a party  who creates any  burden against such  party's
          interest in any  Leasehold Interest shall  be solely  responsible
          for such  burden;  and  in the  event  such  party  is  required,
          pursuant to  other provisions  of  this Agreement  including  the
          applicable Program Operating Agreement or a third party operating
          agreement, to assign  its interest in  any Leasehold Interest  to
          any other party, such assignment shall  convey and vest title  to
          such interest in such assignee free and clear of any such burden.


                                        XXIV.

                                       General


               24.1 Records. McMoRan shall  maintain complete and  accurate
          records of all Leasehold  Interests acquired and held  hereunder,
          the acquisition and disposition  of all equipment hereunder,  and
          of all expenditures made  hereunder in accordance with  generally
          accepted industry standards.  McMoRan will maintain complete  and
          accurate records of all correspondence with any operator who  may
          be operating  properties  in which  the  parties hereto  have  an
          interest under  this Agreement,  and will  retain a  copy of  all
          statements, bills  and other  instruments furnished  by any  such
          operator  in   accordance   with  generally   accepted   industry
          standards.  Such  records, together with  receipts, vouchers  and
          other supporting  evidence thereof  in McMoRan's  possession  and
          control, will be available for  inspection, copying and audit  by
          Participant or its duly authorized representatives on  reasonable
          notice at McMoRan's office during regular business hours then  in
          effect.  Participant's right to  audit McMoRan's records for  the
          purpose of  challenging the  correctness of  any charge  made  by
          McMoRan hereunder shall terminate  as provided in the  accounting
          procedure  attached   to   the   Program   Operating   Agreement.
          Participant shall be entitled to join  McMoRan in any audit  made
          by McMoRan of the records of third party operators of  properties
          in which Participant acquired  an interest under this  Agreement.
          At the request of Participant, McMoRan shall conduct or cause  to
          be conducted an  audit of  the records  of any  such third  party
          operator hereunder, said audit right to  be as specified in  such
          third  party  agreement  including  the  polling  of  other  non-
          operators to determine  if they desire  to participate, at  which
          time McMoRan may  decline to participate  and therefore not  bear
          any cost related to such audit.   In addition, Participant  shall
          have the same audit rights as  held by McMoRan under third  party
          agreements including  the right  to  elect participation  in  any
          audit performed by another non-operator if McMoRan elects not  to
          participate in such audit and Participant shall receive copies of
          all reports of joint venture audits which are conducted.

               24.2 Access.   Participant    or   its    duly    authorized
          representative shall have access at all reasonable times, at  its
          expense and risk, to the derrick floor of any well being  drilled
          hereunder in which Participant is participating; and  Participant
          shall have the  right to inspect  all materials on  hand for  the
          account of  the  Program  and  to  observe  any  such  operations
          conducted hereunder.

               24.3 Claims and  Litigation. Except  as to  matters  arising
          with respect to a particular Prospect after the Program Operating
          Agreement has  become applicable  as  to all  further  operations
          thereon under the provisions of this  Agreement (as to which  the
          provisions of such Program Operating Agreement will govern),  all
          investigation, litigation  and  settlements  in  connection  with
          titles, claims  and causes  of action  of  every kind  and  joint
          rights and interests  of McMoRan and  Participant in the  Program
          Area  in  connection  with  the  Program  shall  be  carried  on,
          conducted  and  defended  for  and  on  behalf  of  McMoRan   and
          Participant.  Each party  shall notify the  other of any  process
          served upon it in any such suit or claim.  Where a claim has been
          made or a suit has been filed against McMoRan or Participant  for
          damages caused by  or arising out  of operations  the expense  of
          which is charged  to the Exploration  Fund as authorized  herein,
          McMoRan shall retain legal counsel to handle the defense of  such
          suit or claim  and notify Participant  of the  retention of  such
          legal counsel.  The cost of such legal services shall be  charged
          in the  same  manner  as Exploration  Expenditures  are  charged.
          Participant may, if it so chooses, elect to retain its own  legal
          counsel (at Participant's expense) to defend its interests in any
          such suit or claim; and in such event the claim or suit shall  be
          defended by a committee of attorneys selected by and representing
          the separate  interests of  McMoRan  and Participant  (with  such
          party being  responsible for  the fees  and expenses  of its  own
          counsel), with McMoRan's counsel as chairperson.  All settlements
          of  suits  and  claims  shall  be  subject  to  the  approval  of
          Participant; except  that  McMoRan  may settle  any  claim  under
          $100,000 without first receiving Participant's approval, provided
          the payment is in  complete settlement.   The costs and  expenses
          involved in those matters which are subject to the provisions  of
          this Paragraph  24.3 shall  be shared  and  borne solely  by  the
          parties who participated in such operation or Leasehold  Interest
          in proportion to their respective participation in the applicable
          operation  or  Leasehold  Interest.    McMoRan  agrees  to   keep
          Participant advised as  to claims  for which  Participant may  be
          partly responsible hereunder.

               24.4 Good Faith.  McMoRan and  Participant agree  to act  in
          good faith with respect to their respective activities under this
          Agreement.

               24.5 Governing  Law.  This   Agreement  and  the   documents
          provided for  herein  shall be  deemed  to be  governed  by,  and
          construed in accordance with, the laws of the State of Louisiana.

               24.6 Failure to  Respond. Except  as provided  in  Paragraph
          10.1 hereof,  whenever under  this  Agreement (exclusive  of  the
          applicable Program Operating Agreement) Participant is given  the
          right to  approve  or disapprove  or  participate or  decline  to
          participate in a  proposed operation or  acquisition; failure  to
          respond shall be deemed  a response to  disapprove or decline  to
          participate in  the  proposed  operation  or  acquisition  unless
          McMoRan is recommending and electing to plug and abandon a  well,
          in which event failure  to respond shall be  an election to  plug
          and abandon.

               24.7 Conflicts. Should  there be  any conflict  between  the
          body of this  Agreement and  any Exhibit  hereto, the  provisions
          contained in the body of this Agreement shall control.

               24.8 Binding Effect. This  Agreement shall  be binding  upon
          and inure  to  the  benefit  of  the  parties  hereto  and  their
          respective successors  and  assigns; provided,  however,  nothing
          herein contained shall be  construed as permitting an  assignment
          contrary to the terms and provisions of this Agreement.



               IN WITNESS WHEREOF, this  Agreement is executed in  multiple

          copies each  of  which shall  be  deemed  to be  an  original  on

          November 14,  1997  but effective  as  of the  date  first  above

          written.



                                             McMoRan Oil & Gas Co.


                                             By:/s/ Glenn A. Kleinert
                                                    ----------------
                                                Glenn A. Kleinert
                                                Senior Vice President


                                             Freeport-McMoRan Resource
                                             Partners, Limited Partnership

                                             By:  Freeport-McMoRan Inc.,
                                                 its Administrative
                                                 Managing General Partner


                                             By:/s/ Rene L. Latiolais
                                                    -----------------
                                                Rene L. Latiolais
                                                President


               The remainder of the Exhibits to the Amendment to
          Participation Agreement McMoRan 1997 Exploration Program dated as
          of April 1, 1997 between McMoRan Oil & Gas Co. and Freeport-
          McMoRan Resource Partners, Limited Partnership, have been
          intentionally omitted and will be provided upon request.