SECURITIES AND EXCHANGE COMMISSION
                       Washington, D.C. 20549
                             Form 10-K
          [X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
               OF THE SECURITIES EXCHANGE ACT OF 1934
            For the fiscal year ended December 31, 1997

                                 or

          [  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
               OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to ________________

                   Commission file number 0-23870

                       McMoRan Oil & Gas Co.
       (Exact name of registrant as specified in its charter)

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

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

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

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

                                  None

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

                            Common Stock
                  Preferred Stock Purchase Rights

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

     Yes [X]        No [  ]

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

     The aggregate market value of the voting stock held by non-
affiliates of the registrant was approximately $133,930,000 on March
16, 1998.

     On March 16, 1998, there were issued and outstanding 42,795,538
shares of the registrant's Common Stock, par value $0.01 per share.

                  DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the registrant's Proxy Statement submitted to the
registrant's stockholders in connection with the registrant's 1998
Annual Meeting of Stockholders to be held on May 12, 1998 are
incorporated by reference into Part III of this Report.



                       McMoRan Oil & Gas Co.
                   Annual Report on Form 10-K for
              the Fiscal Year ended December 31, 1997

                         TABLE OF CONTENTS

Part I                                                           Page
                                                                 ----

Items 1. and 2. Business and Properties                             1
Item 3. Legal Proceedings                                          12
Item 4. Submission of Matters to a Vote of Security Holders        12
        Executive Officers of the Registrant                       12

Part II

Item 5. Market for Registrant's Common Equity and Related
        Stockholder Matters                                        13
Item 6. Selected Financial Data                                    14
Items 7.and 7A.  Management's Discussion and Analysis of Financial
        Condition and Results of Operations and Disclosures about
        Market Risks                                               14
Item 8. Financial Statements and Supplementary Data                19 
Item 9. Changes in and Disagreements with Accountants on Accounting
        and Financial Disclosure                                   30

Part III.

Item 10. Directors and Executive Officers of the Registrant        30
Item 11. Executive Compensation                                    30
Item 12. Security Ownership of Certain Beneficial Owners and
         Management                                                30
Item 13. Certain Relationships and Related Transactions            30

Part IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on
         Form 8-K                                                  31

Signatures                                                        S-1

Exhibit Index                                                     E-1



                               PART I

Items 1 and 2.  Business and Properties

                              OVERVIEW

McMoRan Oil & Gas Co. (the "Company" or "MOXY") is an independent
oil and gas company engaged in the exploration, development and
production of oil and natural gas.  The Company's operations are
conducted  offshore in the Gulf of Mexico (the"Gulf") and onshore
in the Gulf Coast area.  The Company commenced operations in May
1994 following the distribution of all of the Company's common stock
to the stockholders of Freeport-McMoRan Inc. ("FTX") in order to
carry on substantially all of the oil and natural gas exploration
activities previously conducted by FTX.  The Company and its
predecessors have conducted exploration, development and production
operations offshore in the Gulf and onshore in the Gulf Coast and
other areas for more than 25 years, which have provided the Company
an extensive geological and geophysical database and extensive
technical and operational expertise.

The Company's business strategy is to create value for its
stockholders through the discovery of oil and gas reserves in its
exploration and development activities.  MOXY expects to concentrate
its efforts in selected geographic areas where the Company's
management team has significant exploration experience.  The Company
evaluates substantially all of its exploratory prospects with 3-D
seismic surveys prior to drilling.  MOXY intends to continue to
generate exploratory prospects and evaluate selected opportunities
to acquire producing oil and gas properties and to maximize its
geological and geophysical experience and expertise by using 3-D
seismic data and other state of the art technology. 

In 1995, MOXY entered into an agreement with MCN Energy Group Inc.
("MCN") establishing a $65 million oil and gas exploration and
development program in the offshore Gulf of Mexico area (the
"MOXY/MCN Program").  After considering a range of options, in 1997
MOXY management decided to undertake a $100 million rights offering
(the"Rights Offering") to raise funds that would allow it to recapitalize,
restructure its exploration and development operations and engage in a
significantly expanded and more diversified, multi-year exploratory drilling
program.  In November 1997 MOXY completed the Rights Offering,
raising $92.2 million of net proceeds and enabling it to repay all
borrowings under the MOXY/MCN Program, acquire the interest
previously held by MCN in the Vermilion Block 160 and 410 fields and
provide a portion of its share of funding under a newly-formed
exploration program with Phosphate Resource Partners Limited
Partnership ("PLP"), formerly Freeport-McMoRan Resource Partners,
Limited Partnership.  See "Oil and Gas Properties" and "Exploration
and Development Programs" below.

                     OIL AND GAS PROPERTIES

As of March 2, 1998, the Company owned interests in 102 oil and gas
leases in the Gulf and onshore Louisiana and Texas covering
approximately 159,400 gross acres (approximately 53,400 net acres to
the Company).  The Company's exploratory drilling has established
estimated proved reserves attributable to the Company's interest in
its leases of approximately 40 billion cubic feet of gas and 463,000
barrels ("Bbls") of condensate as of December 31, 1997 based on a
reserve report prepared by Ryder Scott Company, an independent
petroleum engineering firm ("Ryder Scott").

Proved Properties

*    Vermilion Block 160 Field Unit.  Gross production from the
field unit   averaged 14.8 million cubic feet ("Mmcf") of natural gas
and 537 Bbls of condensate per day during 1997. Production from
three new development wells drilled earlier in 1997 commenced during
the 1997 fourth quarter, increasing the field average gross
production rates as of December 31, 1997 to approximately 53 million
cubic feet (Mmcf) of gas and 1,600 barrels of condensate per day.
During the 1997 fourth quarter MOXY, as operator, drilled and saved
the Vermilion Block 160 #4 sidetrack development well at a location
remote from the existing platform and outside of the field unit
area. The well encountered 106 feet of net gas pay in four sands.
Fabrication of a platform is in progress, and development of these
new reserves is planned for 1998.  MOXY has a 58 percent net revenue
interest in the #4 sidetrack well, subject to a 12.7 percent net
profits interest, and a 25.5 percent net revenue interest, subject
to a 2.6 percent net profits interest, in the Vermilion 160 field
unit as a result of final re-determination. The Vermilion Block 160
field is located approximately 155 miles west southwest of New
Orleans, Louisiana in approximately 100 feet of water.  The

[Page]  1

Vermilion Block 160 field unit is comprised of portions of four 
leases (Vermilion Blocks 143, 144, 159, and 160) totaling 5,625
acres.

*    Vermilion Block 410 Field. In late 1996, the operator completed
installation of the production platforms and related facilities and
commenced production from one of two platforms.  Production began
from the second platform in February 1997.  MOXY has a 37.5 percent
working interest and a 28 percent net revenue interest in this
field. Daily gross production averaged approximately 57 Mmcf of
natural gas during the 1997 fourth quarter. The lease blocks cover a
total of 11,015 acres.

*    West Cameron Block 616. During the fourth quarter of 1997,
MOXY, as operator, drilled and saved the West Cameron Block 616 #3
exploratory well.  This well encountered a total of 426 feet of net
gas pay in eight sands.  MOXY subsequently drilled and saved for
future production the West Cameron Block 616 #4 well to develop
reserves discovered by the #3 well.  In March 1998 MOXY completed
drilling the #5 well, a development well planned to develop the
reserves discovered by the West Cameron Block 616 #2 well.  The #2
well, drilled in 1996 and located approximately one mile southeast
of the #5 well, encountered 190 feet of net gas pay in a different
fault block.  The West Cameron Block 616 #5 well encountered three
gas sands not seen in the #2 well and was credited with a total of
324 feet of net gas pay in eight sands.  MOXY has acquired a
previously owned platform for use in developing these reserves.
First production is expected to commence during the fourth quarter
of 1998.  MOXY has a 39 percent net revenue interest in the #3 and
#4 wells and a 37 percent net revenue interest in the #5 well.
Additionally, MOXY initiated drilling an exploratory well on an
offset block, West Cameron 617, during the first quarter of 1998.
MOXY's net revenue interest in this block is 19 percent.  West
Cameron Blocks 616 and 617 are located in approximately 300 feet of
water in the Gulf of Mexico, approximately 130 miles offshore
Louisiana.  These two blocks total 10,000 acres.

*    East Fiddler's Lake/North Bay Junop.  MOXY has a 25% working
interest and 18% net revenue interest in approximately 4,229 acres
of leasehold in the East Fiddler's Lake/North Bay Junop prospect
area in Terrebonne Parish, Louisiana, and owns a proprietary 3-D
seismic data survey covering approximately 35,000 acres.  Operations
have been conducted by a joint venture owned 50% by the operator,
Phillips Petroleum Company, 25% by PLP and 25% by MOXY.  See
"Business and Properties-Exploration and Development Programs."  In
the 1997 second quarter, MOXY drilled the North Bay Junop well but
did not encounter commercial hydrocarbons in the primary objective
zones.  The well was completed in a shallower zone with
approximately 25 feet of net gas pay.  The well began production
during the 1998 first quarter.  Because of the complexity of salt
dome geology and potentially limited reservoir size, production
performance will be required to determine the reserve volumes
associated with this completion.

Exploration Properties 

MOXY is continually evaluating its current exploration prospects, as
well as others offered by third parties, and will drill those
considered to have the highest potential.  Exploratory activities on
prospects during 1997 and early 1998 are summarized below. 

*    West Cameron Block 492. During the 1997 fourth quarter MOXY's
West Cameron 492 #1 exploratory well  discovered 93 feet of net
hydrocarbon pay in five sands.  Additionally, the West Cameron 492
#3 well, which  was successfully drilled as a delineation well,
encountered 83 feet of net hydrocarbon pay in two sands, 57 feet of
which was in a new sand.  Both wells were saved for future
production and further drilling in 1998 is contemplated on this
block.  MOXY, as operator, owns a 19 percent net revenue interest in
this block, which is located in approximately 150 feet of water
offshore in the Gulf of Mexico approximately 110 miles south of Lake
Charles, Louisiana, and encompasses 5,000 acres.

*    West Cameron Block 157. In early January 1998 MOXY, as
operator, initiated drilling of the West Cameron Block 157 #1
exploratory well to a proposed total measured depth of approximately
15,000 feet. This well was determined to be unsuccessful in March, 1998
and will be plugged and abandoned. MOXY owns a 38 percent net revenue
interest in this block, which contains 2,170 acres, and in West Cameron
Block 156, which contains 5,000 acres, both of which are located offshore in
the Gulf of

[Page]  2

Mexico approximately 60 miles southwest of Lake Charles, Louisiana in
approximately 30 feet of water.

*    Brazos Block A-19.  During the 1997 fourth quarter the operator
commenced drilling the Brazos A-19 #2 exploratory well to
a proposed total measured depth of approximately 19,000 feet.
Pursuant to a joint venture agreement MOXY will earn 13.3 percent
net revenue interest, limited in depth, in this block, which
contains 5,760 acres and is located in approximately 135 feet of
water offshore in the Gulf of Mexico approximately 95 miles
southwest of Galveston, Texas.  MOXY also owns a 48 percent working
interest and a 39 percent net revenue interest in the adjacent
Brazos Block A-26, which contains 5,760 acres.

*    West Cameron Block 503. In April 1997, MOXY sold its interest
in West Cameron Block 503 for $2.9 million, recognizing a $2.3
million gain ($0.12 per share).  The proceeds were used to repay
borrowings from MCN.

*    Vermilion Block 391/392/408.  MOXY  has a 14.4  percent
working interest and 11.6 percent net revenue interest in Vermilion
Blocks 392/408 and a 15.3 percent working interest and 12.3 percent
net revenue interest in Vermilion Block 391. The operator drilled an
unsuccessful exploratory well in the third quarter of 1996 on
Vermilion Block 391. MOXY acquired the Vermilion Block 392 lease in
the Central Gulf of Mexico lease sale in 1996 and acquired the
shallow rights on Vermilion Block 408 by trading the deep rights at
Vermilion Block 392.  Vermilion Blocks 391/392/408 cover a total of
15,000 acres and are located four miles from the Vermilion Block 410 
field, which  is approximately 115 miles offshore Louisiana, in
approximately 360 feet of water.

*    Lease Sale.  MOXY was high bidder on seven tracts at the
Central Gulf of Mexico lease sale held in March 1997 for high bids
totaling $5.5 million. As part of the MOXY Exploration Program the
related acquisition and exploration costs will be shared 37.6
percent by MOXY, 56.4 percent by PLP and 6 percent by an individual
investor (see "Business and Properties-Exploration and Development
Programs").

*    Other. During 1997 exploratory drilling on the Eugene Island
Block 19, Vermilion Block 159 and Grand Isle Block 65 prospects
concluded without discovery of commercial hydrocarbons.  MOXY has
farmed out the related acreage in Grand Isle Block 65.

Oil and Gas Reserves

Estimates of the Company's total proved developed and proved
undeveloped reserves of oil and gas as of December 31, 1997 by Ryder
Scott were as follows:

           Gas (Mmcf)                   Oil (Bbls)
  ------------------------     -------------------------
    Proved       Proved         Proved         Proved
  Developed    Undeveloped     Developed     Undeveloped
  ---------    -----------     ---------     -----------
    23,086        17,148        383,000         80,300


The Company's wells at the Vermilion Block 160 field unit field have
limited production history.  Estimates of proved undeveloped
reserves that may be developed and produced in the future are based
upon volumetric calculations and upon analogy to similar types of
reserves rather than upon actual production history.  Estimates
based on these methods are generally less reliable than those based
on actual production history.  Subsequent evaluation of the same
reserves based upon production history will result in variations,
which may be substantial, in the estimated reserves.  Further, the
Company's proved undeveloped reserves will require additional
capital to develop and produce.  See "Cautionary Statements" below,
and "Management's Discussion and Analysis of Financial Condition and
Results of Operations and Disclosures about Market Risks" included
herein under Items 7 and 7A.

The following table sets forth as of December 31, 1997, the
estimated future net cash flows before income taxes and the present
value of estimated future net cash flows before income taxes,
discounted at 10% per annum, from the production and sale of the
proved developed and undeveloped reserves attributable to the
Company's interest in gas and oil properties as of such date, as
determined by Ryder Scott.

[Page]  3

<TABLE>
<CAPTION>
                                     Proved      Proved       Total  
                                   Developed   Undeveloped    Proved     
                                   ---------   -----------    -------
<S>                                 <C>          <C>          <C>
Estimated future net cash
flows before income taxes (1)       $39,253      $20,207      $59,460

Present value of estimated
future net cash flows before
income taxes (1)                     33,933       11,690       45,623  

</TABLE>

(1)  In preparing such estimates, Ryder Scott used prices of $17.60
per barrel of oil and $2.57 per Mcf of gas as of December 31, 1997,
the weighted average prices that the Company estimates it would have
received, assuming production from all of its properties with proved
reserves.

In accordance with applicable requirements of the Securities and
Exchange Commission (the "Commission"), the estimated discounted
future net revenues from estimated proved reserves are based on
prices and costs at fiscal year end.  Actual future prices and costs
may be materially higher or lower.  See "Cautionary Statements"
below.

In accordance with methodology specified by the Commission, certain
assumptions were applied in the computation of the reserve
evaluation estimates.  Under this methodology, future net cash flows
are determined by reducing estimated future gross cash inflows to
the Company for oil and gas sales by the estimated costs to develop
and produce the underlying reserves, including future capital
expenditures, operating costs, transportation costs, net profits
interests, royalty and overriding royalty burdens on certain of the
Company's properties.  Future net cash flows were discounted at 10%
per annum to arrive at discounted future net cash flows.  The
present value of future net cash flows shown above should not be
construed as the current market value as of December 31, 1997, or
any prior date, of the estimated oil and gas reserves attributable
to the Company's properties.  See "Cautionary Statements" below.

The Company is periodically required to file estimates of its oil
and gas reserve data with various governmental regulatory
authorities and agencies.  In addition, estimates are from time to
time furnished to governmental agencies in connection with specific
matters pending before such agencies.  The basis for reporting
estimates of reserves to these agencies, in some cases, is not
comparable to that furnished above because of the nature of the
various reports required.  The major variations include differences
in when such estimates are made, in the definition of reserves, in
the requirements to report in some instances on a gross, net or
total operator basis and in the requirements to report in terms of
smaller geographical units.

Production, Unit Prices and Costs 

The following table sets forth certain information regarding the
production volumes of, average sales prices received for and average
production costs for the Company's sale of oil and gas for each of
the years ended December 31, 1997, 1996 and 1995:

<TABLE>
<CAPTION>
                                   1997           1996           1995     
                                ---------       -------       ---------
<S>                             <C>             <C>           <C>
Net gas production (Mcf)        4,061,000       631,000       1,093,000
Net crude oil and condensate
production (Bbls)                  34,000        29,000          45,000

Sales price:
Natural gas (per Mcf)              $ 2.62        $ 2.72          $ 1.63
Crude oil and condensate
(per Bbl)                          $19.19        $22.22          $18.83
Production (lifting) costs
per Mcf equivalent(1)               $0.16         $0.75           $0.68

</TABLE>

(1)  Production costs were converted to an Mcf equivalent on the
basis of one barrel of oil being equivalent to six Mcf of natural
gas.  Production costs exclude all depreciation and amortization
associated with property and equipment.  The components of
production costs may vary substantially among wells depending on the
production characteristics of the particular producing formation and
method of recovery employed and other factors, but include charges
under transportation agreements and all lease operating expenses.
                   ____________________

The relationship between the Company's sales prices and its
production (lifting) costs depicted by the table above is not
necessarily indicative of future results of operations expected by
the Company.  See "Cautionary Statements" below.

[Page]  4

Acreage

The following table sets forth the oil and gas acreage in which the
Company held an interest as of December 31, 1997:

<TABLE>
<CAPTION>
                                  Developed(1)         Undeveloped        
                                ----------------    ------------------- 
                                Gross(2)   Net(3)   Gross(2)     Net(3)
                                Acres     Acres     Acres        Acres
                                ------    ------    -------      ------
<S>                             <C>       <C>       <C>          <C>
Offshore (federal waters)       32,981    12,631    101,787      32,670   
Onshore Louisiana and
 Texas                            -         -         5,448       1,434    
                                ------    ------    -------      ------
Total                           32,891    12,631    107,235      34,104  
                                ======    ======    =======      ======
</TABLE>

(1)  "Developed" acreage includes acreage by lease, unit or offshore
block in which there are one or more producing wells or shut-in
wells capable of commercial production and/or acreage with
established reserves in quantities deemed sufficient to develop.

(2)  The term "Gross" refers to acres in which the Company owns a
working interest and/or operating rights.

(3)  The term "Net" refers to gross acres multiplied by the
percentage of the working interest and/or operating rights owned
therein.
                       ____________________

Oil and Gas Drilling Activity

The following table sets forth the gross and net number of
productive, dry and total exploratory wells and development wells
that the Company drilled in each of the years ended December 31,
1997, 1996 and 1995:

<TABLE>
<CAPTION>
                      1997            1996           1995
                  ------------    ------------   ------------
                  Gross   Net     Gross   Net    Gross   Net
                  -----  -----    -----  -----   -----  -----    
<S>                <C>   <C>       <C>   <C>      <C>   <C>
Exploratory
Productive         4.0   1.251     4.0   0.910    1.0   0.375
Dry                3.0   0.737     4.0   0.948      -       -
                  -----  -----    -----  -----   -----  -----           
Total              7.0   1.988     8.0   1.858    1.0   0.375
                  =====  =====    =====  =====   =====  =====

Development
Productive         5.0   2.484       -       -    5.0   1.875
Dry                  -       -       -       -      -       -
                  -----  -----    -----  -----   -----  -----
Total              5.0   2.484       -       -    5.0   1.875
                  =====  =====    =====  =====   =====  =====

</TABLE>

Operating Hazards and Insurance

The Company's operations are subject to the usual hazards incident
to the drilling and production of natural gas and crude oil, such as
blowouts, cratering, explosions, uncontrollable flows of oil, gas or
well fluids, fires, pollution, releases of toxic gas and other
environmental hazards and risks.  Offshore oil and gas operations
are subject to the additional hazards of marine operations, such as
capsizing, collision and adverse weather and sea conditions.  These
hazards can cause personal injury and loss of life, severe damage to 
and destruction of property and equipment, environmental damages and
suspension of operations.

Drilling activities are subject to numerous risks, including the
risk that no commercially productive hydrocarbon reserves will be
encountered.  The cost of drilling, completing and operating wells
and installing production facilities and pipelines is often
uncertain.  The Company's drilling operations may be curtailed,
delayed or canceled as a result of numerous factors, including,
weather conditions, compliance with governmental requirements and
shortages or delays in the delivery of equipment.

The Company maintains insurance of various types that it considers
to be adequate to cover its operations.  Such insurance is subject
to deductibles that the Company considers reasonable and not

[Page]  5

excessive.  Consistent with insurance coverage generally available
to the industry, the Company's insurance policies do not provide
coverage for losses or liabilities relating to pollution, except for
sudden and accidental occurrences.

Competition

Competition in the oil and gas industry is intense.  In seeking to
obtain desirable new leases and exploration prospects, the Company
faces competition from both major and independent oil and gas
companies.  Many of these competitors have financial and other
resources substantially in excess of those available to the Company
and may, accordingly, be better positioned to acquire and exploit
prospects, hire personnel and market production.  In addition, many
of the Company's larger competitors may be better able to withstand
the effect of changes in factors such as worldwide oil and natural
gas prices and levels of production, the cost and availability of
alternative fuels and the application of government regulations,
which affect demand for the Company's oil and natural gas production
and are beyond the control of the Company.

Marketing
The Company's gas sales are currently made in the "spot market" at
prevailing prices.  Prices on the spot market fluctuate with demand.
Crude oil and condensate production is generally sold one month at a
time at prevailing prices.

                EXPLORATION AND DEVELOPMENT PROGRAMS

In 1995, MOXY entered into an agreement with MCN that
established the MOXY/MCN Program.  Under the MOXY/MCN Program
revenues and costs were shared 60 percent by MCN and 40 percent by
MOXY, with MOXY borrowing its share of costs from MCN.  The
Company's 40 percent share of future revenues from the MOXY/MCN
Program was dedicated to repaying the loan amounts which bore
interest at the annual base rate quoted from time to time by the
Chase Manhattan Bank plus 2 percent.  The Company's obligation to
repay loans under the MOXY/MCN Program was non-recourse, except to 
the properties contributed to and developed under the MOXY/MCN
Program.  

In 1997,  MOXY management decided to undertake the Rights Offering to
raise funds that would allow it to recapitalize, restructure its exploration 
and development operations and engage in a significantly expanded and more
diversified, multi-year exploratory drilling program. In November 1997,
MOXY received net proceeds of $92.2 million from the sale of a total of
28.6 million shares of common stock at $3.50 per share under the terms of
the Rights Offering to existing stockholders.  PLP purchased 3.9 million
of these shares, representing approximately 9 percent of total MOXY shares
outstanding, for $13.5 million in fulfillment of its commitment to
purchase any shares relating to unexercised rights from the Rights
Offering (the"Stand-By Commitment").  MOXY concurrently used $44.5
million of these proceeds, including $0.8 million of interest costs,
to acquire from PLP certain assets of and repay MOXY's borrowings
under the MOXY/MCN Program.  PLP had purchased the assets from, and
repaid the debt due, MCN in August 1997 for an equivalent amount,
before interest costs.  The assets consisted of MCN's interest in
the Vermilion Block 160 and 410 oil and gas fields ($24.5 million),
and the debt represented MOXY's borrowings to fund MOXY's share of
program costs ($20.0 million). MOXY paid PLP a $6.0 million Stand-By
Commitment fee for acquiring and holding the MOXY/MCN Program assets
referred to above until completion of the Rights Offering, entering
into the Stand-By Commitment and agreeing to enter into the MOXY
Exploration Program (see below).

MOXY is using the remaining net Rights Offering proceeds to
fund a portion of its share of an aggregate $210 million, multi-year
oil and gas exploration program to explore and develop prospects
primarily offshore in the Gulf of Mexico and onshore in the Gulf
Coast region formed upon completion of the Rights Offering to
replace the MOXY/MCN Program (the"MOXY Exploration Program").  MOXY
manages the program, selecting all prospects and drilling
opportunities, and serves as operator.  MOXY and PLP contributed to
the MOXY Exploration Program their interests in all exploration
properties formerly part of the MOXY/MCN Program and their joint
interests in certain other properties.  Under this program most
exploration expenditures will be shared 56.4 percent by PLP, 37.6
percent by MOXY and 6 percent by an individual investor who is a
director of MOXY, with all other costs and revenues shared 47
percent by PLP, 48 percent by MOXY and 5 percent by the individual
investor.  Exploration costs consist of all costs associated with
leasehold acquisition and maintenance, geological and geophysical
studies, seismic surveys, drilling exploratory wells, overhead
reimbursements, and all other aspects of identifying prospects and
drilling exploratory wells. MOXY and PLP have agreed to apply an
aggregate of $8.3 million of certain exploratory costs against their
program commitment.  The MOXY Exploration Program will terminate
after initial exploration program expenditures of $210 million have
been committed or on March

[Page]  6

31, 2002, whichever is earlier. 

On December 22, 1997, FTX, the administrative managing general
partner and owner of a 51.6 percent interest in PLP, merged into IMC
Global Inc. ("IGL") (the "Merger").  As a result of the Merger, IGL
acquired control of FTX and PLP and became the administrative
managing partner of PLP.  The Merger had no impact on the terms and
conditions of the MOXY Exploration Program.

                               REGULATION

General

The oil and gas industry is extensively regulated by federal and
state authorities in the United States.  Legislation affecting the
oil and gas industry is under constant review and, relevant statutes
are constantly being adopted, expanded or amended.  Further,
numerous departments and agencies, both federal and state, have
issued rules and regulations binding on the oil and gas industry and
its individual members, some of which carry substantial penalties
for the failure to comply.  The regulatory burden on the oil and gas
industry increases its cost of doing business and, consequently,
affects its profitability.

Exploration, Production and Development

The exploration, production and development operations of the
Company are subject to regulation at both the federal and state
levels.  Such regulation requires operators to obtain permits to
drill wells and to meet certain bonding and insurance requirements
in order to drill or operate wells.  Such regulation also controls
the location of wells, the method of drilling and casing wells, the
surface use and restoration of properties upon which wells are
drilled and the plugging and abandoning of wells.  The Company's
exploration, production and development operations are also subject
to various conservation laws and regulations.  These include the
regulation of the size of drilling and spacing units or proration
units, the density of wells that may be drilled, the levels of
production, and the unitization or pooling of oil and gas
properties.

The Company presently has interests in or rights to 34 offshore
leases located in federal waters on the outer continental shelf
("OCS"). Federal leases are administered by the Mineral Management
Service  ("MMS").  Individuals and entities must qualify with the
MMS prior to owning and operating any leasehold or right-of-way
interest in federal waters.  Such qualification with the MMS
generally involves filing certain documents with the MMS and
obtaining performance bonds.  For offshore operations, lessees must
obtain MMS approval for exploration plans and development and
production plans prior to the commencement of such operations.  In
addition to permits required from other agencies (such as the Coast
Guard, the Army Corp of Engineers and the Environmental Protection
Agency ("EPA")), lessees must obtain a permit from the MMS prior to
the commencement of drilling.  The MMS has promulgated regulations 
requiring offshore production facilities located on the OCS to meet
stringent engineering and construction specifications, and has
recently proposed and/or promulgated additional safety-related
regulations concerning the design and operating procedures of OCS
production platforms and pipelines.  The MMS also has regulations
restricting the flaring or venting of natural gas, and has proposed
amendments to such regulations that would prohibit the flaring of
liquid hydrocarbons and oil without prior authorization.  Similarly,
the MMS has promulgated other regulations governing the plugging and
abandonment of offshore wells and the removal of all production
facilities.  To cover the various obligations of an OCS lease, the
MMS generally requires that lessees post substantial bonds or other
acceptable assurances that such obligations will be met.  The cost
of such bonds or other security can be substantial and there is no
assurance that bonds or other surety can be obtained in all cases.
Under certain circumstances, the MMS may require all Company
operations on federal leases to be suspended or terminated.  Any
such suspension or termination would materially adversely affect the
Company's financial condition and operations.
Environmental
General.  The Company's operations are subject to extensive federal,
state and local regulatory requirements relating to environmental
affairs, health, safety and waste management and chemical products.
These laws and regulations require the acquisition of permits before
construction or drilling commences, limit or prohibit construction
and drilling activities on certain lands lying within wilderness or
wetlands and other protected areas and impose substantial
liabilities for pollution resulting from the Company's operations.

Moreover, the recent trend toward stricter standards in
environmental legislation and regulations is likely to continue.
For instance, legislation has been proposed in Congress from time to
time to reclassify oil and gas production wastes as "hazardous
waste."  If such legislation were to be enacted, it could have

[Page]  7

a significant impact on the operating costs of the Company, as well as
the oil and gas industry in general.  State initiatives to further
regulate the disposal of oil and gas wastes are also pending in
certain states and could have a similar impact on the Company.
Management believes that compliance with current applicable
environmental laws and regulations will not have a material adverse
impact on the Company.  The Company believes that its operations are
and will continue to be in substantial compliance with applicable
environmental laws, regulations and ordinances.

It is possible, however, that future developments such as stricter
environmental laws or regulations could adversely affect the
Company's operations.  Moreover, some risk of environmental costs
and liabilities is inherent in the Company's operations as it is
with other companies engaged in similar or related businesses, and
there can be no assurance that material costs and liabilities,
including substantial fines or criminal sanctions for violation of 
environmental laws and regulations, will not be incurred by the
Company.

Solid Waste.  The Company's operations may generate or involve the
transport of both hazardous and nonhazardous solid wastes that are
subject to the requirements of the Federal Resource Conservation and
Recovery Act and comparable state statutes.  In addition, the EPA is
presently in the process of developing stricter disposal standards
for nonhazardous waste.  Changes in these regulations may result in
additional expenditures or operating expenses by the Company.

Hazardous Substances.  The Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA") and comparable state
statutes, also known as "Superfund" laws, impose liability on
certain classes of persons that contribute to the release of a
"hazardous substance" into the environment.  These persons include
the owner or operator of a site, and companies that transport,
dispose of or arrange for the disposal of, the hazardous substances
found at the site.  CERCLA also authorizes the EPA, and in some
cases, third parties to take actions in response to threats to the
public health or the environment and to recover their costs from the
responsible classes of persons.  Despite the "petroleum exclusion"
of CERCLA that encompasses wastes directly associated with crude oil
and gas production, the Company may generate or transport "hazardous
substances" within the meaning of CERCLA or comparable state
statutes in the course of its ordinary operations. Thus, the Company
may be responsible under CERCLA or the state equivalents for all or
part of the costs required to clean up sites where a release has
occurred.

Air.  The Company's operations may also be subject to the Clean Air
Act ("CAA") and comparable state statutes.  Amendments to the CAA
were adopted in 1990 and contain provisions that may result in the
gradual imposition of certain pollution control requirements with
respect to air emissions from operations.  The EPA has been
developing regulations to implement these requirements.  The Company
may be required to incur certain capital expenditures in the next
several years for air pollution control equipment in connection with
maintaining or obtaining operating permits and approvals addressing
other air emission-related issues.

Water.  The Federal Water Pollution Control Act ("FWPCA") strictly
regulates the unauthorized discharge of produced waters and other
oil and gas wastes into navigable waters.  The FWPCA provides for
civil and criminal penalties for any unauthorized discharges of oil
and other hazardous substances in reportable quantities and imposes
substantial potential liability for the costs of removal,
remediation and damages.  Similarly, the Oil Pollution Act of 1990
(the "OPA") imposes liability for the discharge of oil into or upon
navigable waters or adjoining shorelines. Among other things, the
OPA raises liability limits, narrows defenses to liability and
provides more instances in which a responsible party is subject to
unlimited liability.  State laws for the control of water pollution
also provide varying civil and criminal penalties and liabilities in 
the case of an unauthorized discharge of petroleum or its
derivatives into state waters.  Further, the Coastal Zone Management
Act authorizes state implementation and development of programs or
management measures for nonpoint source pollution to restore and
protect coastal waters.

Endangered Species.  Several federal laws impose regulations
designed to ensure that endangered or threatened plant and animal
species are not jeopardized and their critical habitats are neither
destroyed nor modified.  These laws may restrict the Company's
exploration, development and production operations and impose civil
or criminal penalties for non-compliance.

Safety and Health Regulations

The Company is also subject to laws and regulations concerning
occupational safety and health.  It is not anticipated that the
Company will be required in the near future to expend amounts that
are material in the aggregate to the Company's overall operations by
reason of occupational safety and health laws and regulations, but
inasmuch as such laws and regulations are frequently changed, the
Company is

[Page]  8

unable to predict the ultimate cost of compliance.


                             EMPLOYEES

At March 2, 1998, the Company had 16 employees.  All of the
Company's employees are devoted primarily to managerial, land and
geological functions.  The Company intends to continue its policy of
limiting its number of permanent employees and, to that end,
generally utilizes the services of independent consultants and
contractors to perform various professional services, particularly
in the areas of construction, design, well site surveillance and
environmental assessment.  Field and on-site production operation
services such as pumping, maintenance, dispatching, inspection and
testing, are also generally provided by independent contractors.
Currently, a major portion of the Company's geological and
geophysical services are performed by CLK Company, L.L.C. ("CLK").
Under the Company's exclusive agreement with CLK,  the Company pays
CLK an annual fee of $2.2 million, with $0.5 million of this fee
paid in Company common stock, and reimburses CLK's direct expenses
incidental to its work for the Company and for its office space.  In
addition, CLK receives a 3% overriding royalty interest on all new
domestic prospects accepted by the Company.  For the year ended
December 31, 1997, the Company incurred $3.0 million of expenses
under its agreement with CLK.

Other than those functions performed by the Company's employees and
those provided under third party contracts, since January 1, 1996
numerous services necessary for the business and operations of the
Company, including certain executive, technical, administrative,
accounting, financial, tax and other services, have been performed
by FM Services Company ("FMS"), currently owned 25 percent by MOXY,
pursuant to a services agreement between FMS and the Company (the
"Services Agreement").  Prior to 1996, substantially the same 
services were provided by FTX.  From September 1995 through
December, 1997 these services were provided for a fixed annual fee
of $1.0 million, subject to annual cost of living increases
beginning in the first quarter of 1997.  Prior to September 1995,
such services were provided on a cost reimbursement basis.  For the
year ended December 31, 1997, the Company incurred $1.0 million of
expenses under its agreement with FMS.  As of January 1, 1998, MOXY
and FMS  amended the Services Agreement whereby FMS provides
services on a cost reimbursement basis.  The Services Agreement is
terminable by the Company at any time upon 90 days notice.

                       CAUTIONARY STATEMENTS

This report includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934.  Forward-looking statements are all
statements other than statements of historical fact included in this
report, including, without limitation, the statements under the
headings "Business and Properties," "Market for Registrant's Common
Equity and Related Stockholder Matters," and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations and Disclosures about Market Risks" regarding MOXY's
financial position and liquidity, payment of dividends, MOXY's
strategic alternatives, future capital needs, development and
capital expenditures (including the amount and nature thereof), the
drilling of wells, reserve estimates and future net revenues
attributable thereto, business strategies, and other plans and
objectives of management of the Company for future operations and
activities.

Forward-looking statements are based on certain assumptions and
analyses made by the Company in light of its experience and its
perception of historical trends, current conditions, expected future
developments and other factors it believes are appropriate under the
circumstances.  These statements are subject to a number of
assumptions, risks and uncertainties, including the risk factors
discussed below and in the Company's other filings with the
Commission, general economic and business conditions, the business
opportunities that may be presented to and pursued by the Company,
changes in law or regulations and other factors, many of which are
beyond the control of the Company.  Readers are cautioned that any
such statements are not guarantees of future performance and the
actual results or developments may differ materially from those
projected in the forward-looking statements.  All subsequent written
and oral forward-looking statements attributable to MOXY or persons
acting on its behalf are expressly qualified in their entirety by
these cautionary statements.  Important factors that could cause
actual results to differ materially from MOXY's expectations
include, among others, the following.

Limited Operating History and
Significant Historical Operating Losses 

The Company commenced operations in 1994.  In addition, the Company
has only two significant producing fields, which have been on
production for only a limited time, making proved reserves and
levels of future production attributable to these fields less
susceptible to estimation.  Also, as a result of the expensing of
non-productive exploratory drilling and related costs from the
Company's exploratory

[Page]  9

program, the Company has incurred significant operating losses to date. 
The Company's viability must be considered in light of the risks and
difficulties frequently encountered by companies engaged in the early
stages of their oil and gas exploration, development and production
activities.

Substantial Capital Requirements

The development of the Company's business will continue to require
substantial expenditures.    The Company's future financial results
depend on its ability to locate hydrocarbons in commercial
quantities and on the market prices for oil and gas.  There can be
no assurance that the Company will achieve or sustain profitability
or positive cash flows from operating activities in the future.

The Company makes, and will continue to make, substantial
capital expenditures for the exploration, development and production
of oil and natural gas reserves and related projects.  If the
Company fails to discover significant reserves, experiences
operating difficulties or if oil and gas prices decline and reduce
cash generated from operations, the Company may be required to
obtain additional financing to fund its operations.  No assurance
can be given that such financing will be available, and if it is not
available, the Company may be required to curtail its operations.

Volatility of Oil and Gas Prices

The Company's revenues substantially depend on the prevailing
prices for natural gas and, to a lesser extent, oil.  In recent
years, natural gas and oil prices and, therefore, the level of
industrywide drilling, exploration, development and production, have
been extremely volatile.  Prices are affected by market supply and
demand factors as well as actions of state and local agencies, U.S.
and foreign governments and international cartels.  All of these
factors are beyond the control of the Company.  Any significant or
extended decline in natural gas and oil prices will have a material
adverse effect on the Company's financial condition and operations
and could impair access to capital.

Exploration and Development Risks

Exploration and development of natural gas and oil involve a high
degree of risk that no commercial production will be obtained or
that the production will be insufficient to recover drilling and
completion costs.  The cost of drilling, completing and operating
wells is often uncertain, and cost overruns in offshore operations 
can adversely affect the economics of a project.  The Company's
drilling operations may be curtailed, delayed or canceled as a
result of numerous factors, including title problems, weather
conditions, compliance with governmental requirements and shortages
or delays in the delivery of equipment.  Furthermore, completion of
a well does not ensure a profit on the investment or a recovery of
drilling, completion and operating costs.

Replacement of Reserves

MOXY's future performance depends in part upon its ability to
acquire, find and develop oil and gas reserves that are economically
recoverable.  Without successful exploration or development
activities, MOXY's reserves will be depleted.  No assurances can be
given that MOXY will be able to find and develop additional reserves
on an economic basis.

MOXY's business is capital intensive and significant operating cash
flow must be reinvested in development or exploration activities in
order for MOXY to maintain its asset base of proved oil and gas
reserves.  To the extent cash flow from operations is reduced and
external sources of capital become limited or unavailable, MOXY's
ability to make the necessary capital investments to maintain or
expand its asset base will be impaired.  Without such investment,
MOXY's oil and gas reserves will be depleted.

Although the Company currently emphasizes reserve growth through
exploratory drilling, it may make acquisitions form time to time of
producing properties and properties with proved undeveloped
reserves.  Evaluation of recoverable reserves of natural gas and
oil, which is an integral part of the property selection process,
depends on evaluation of geological, engineering and production
data, some or all of which may proved to be unreliable or not
indicative of future performance.

Reserves and Future Net Cash Flow

Information relating to proved oil and gas reserves owned by MOXY is
based upon engineering estimates.  Reserve engineering is a
subjective process of estimating the recovery from underground
accumulations of oil and natural gas that cannot be measured in an
exact manner, and the accuracy of any reserve estimate is a function
of the quality of available data and of engineering and geological

[Page] 10

interpretation and judgment.  Estimates of economically recoverable
oil and gas reserves and of future net cash flows necessarily depend
upon a number of variable factors and assumptions, such as
historical production from the area compared with production from
other producing areas, the assumed effects of  governmental
regulations and assumptions concerning future oil and gas prices,
future operating costs, severance and excise taxes, development
costs and workover and remedial costs, all of which may in fact vary
considerably from actual results.  Because all reserve estimates are
to some degree speculative, the quantities of oil and natural gas
that are ultimately recovered, production and operation costs, the 
amount and timing of future development expenditures and future oil
and natural gas sales prices may all vary from those assumed in
these estimates and such variances may be material.  In addition,
different reserve engineers may make different estimates of reserve
quantities and cash flows based upon the same available data.  See
"Business and Properties - Reserves."

The present values of estimated future net cash flows referred to in
this report should not be construed as the current market value of
the estimated proved oil and gas reserves attributable to MOXY's
properties.  In accordance with applicable requirements of the
Commission, the estimated discounted future net cash flows from
proved reserves are generally based on prices and costs as of the
date of the estimate, while actual future prices and costs may be
materially higher or lower.  Actual future net cash flows also will
be affected by factors such as the amount and timing of actual
production, supply and demand for oil and gas, curtailments or
increases in consumption by gas purchasers and changes in
governmental regulations or taxation.  The timing of actual future
net cash flows from proved reserves, and thus their actual present
value, will be affected by the timing of the production and the
incurrence of expenses in connection with development and production
of oil and gas properties.  In addition, the 10% discount factor,
which is required by the Commission to be used to calculate
discounted future net cash flows for reporting purposes, is not
necessarily the most appropriate discount factor based on interest
rates in effect from time to time and risks associated with the oil
and gas properties owned by MOXY or the oil and gas industry in
general.

Shortages of Supplies and Equipment

The Company's ability to conduct its operations in a timely and cost
effective manner is subject to the availability of oil and gas field
supplies, equipment and service crews.  The industry is currently
experiencing a shortage of certain types of drilling rigs and work
boats in the Gulf .  This shortage could result in delays in the
Company's operations as well as higher operating and capital costs.
Shortages of other drilling equipment, tubular goods, drilling
service crews and seismic crews could occur from time to time,
further hindering the Company's ability to conduct its operations as
planned.

Operating Hazards; Limited Insurance Coverage

MOXY's operations are subject to hazards and risks inherent in
drilling for and production and transporting natural gas and oil,
such as fires, natural disasters, encountering formations with
abnormal pressures, blowouts, cratering, pipeline ruptures and
spills, any of which can result in environmental pollution, personal
injuries, property damage and substantial losses to MOXY. Moreover,
MOXY's operations in the Gulf are subject to a variety of operating
risks peculiar to the marine environment, such as to hurricanes or
other adverse weather conditions, more extensive governmental 
regulation, (including regulations that may, in certain
circumstances, impose strict liability for pollution damage) and
interruption or termination of operations by governmental
authorities based on environmental or other considerations.

MOXY maintains insurance coverage against some, but not all,
potential losses.  MOXY's coverages include, but are not limited to,
operator's extra expense, physical damage on certain assets,
employer's liability, comprehensive general liability, automobile,
workers' compensation and loss of production income insurance and
limited coverage for sudden environmental damages. MOXY does not
believe that insurance coverage is available at a reasonable cost
for environmental damages  that occur over time or the full
liability that could be caused by sudden environmental damages.
Accordingly, MOXY may be subject to liabilities or may lose
substantial portions of its properties in the event of environmental
damages.  The occurrence of an event that is not fully covered by
insurance could have an adverse impact on MOXY's financial condition
and results of operations.

Governmental Regulation

MOXY's operations are affected by political developments and federal
and state laws and regulations.  In particular, oil and natural gas
production, operations and economics are or have been affected by
price controls, taxes and other laws relating to the oil and natural
gas industry, by changes in such laws and by changes in
administrative regulations.  MOXY cannot predict how existing laws
and regulations may be interpreted by enforcement agencies or court
rulings, whether additional laws and

[Page] 11

regulations will be adopted, or the effect such changes may have on
its business or financial condition.

MOXY's operations are subject to numerous laws and regulations
governing the discharge of materials into the environment or
otherwise relating to environmental protection.  These laws and
regulations require the acquisition of a permit before drilling
commences, restrict the types, quantities and concentration of
various substances that can be released into the environment in
connection with drilling and production, limit or prohibit drilling
activities  on certain lands lying within wilderness, wetlands and
other protected areas, and impose substantial liabilities for
pollution which might result from MOXY's operations.  Moreover, the
recent trend toward stricter standards in environmental legislation
and regulation is likely to continue. Initiatives to further
regulate the disposal of crude oil and natural gas wastes are also
pending in certain states and  could have a similar impact.  MOXY
could incur substantial costs to comply with environmental laws and
regulations.  In addition to compliance costs, government entities
and other third parties may assert substantial liabilities against
owners and operators of oil and gas properties for oil spills,
discharges of hazardous materials, remediation and cleanup costs and
other environmental damages, including damages caused by previous
property owners.  The imposition of any such liabilities on MOXY 
could have a material adverse effect on MOXY's financial condition
and results of operations.

Competition

MOXY operates in the highly competitive areas of natural gas and oil
production, development and exploration with many other companies,
many of which have significantly greater financial and other
resources than MOXY.  Factors affecting MOXY's ability to compete in
the marketplace include the availability of capital, access to
information relating to a property and the standards established by
MOXY for the minimum projected return on investment.  MOXY's
competitors include major integrated oil companies and a substantial
number of independent energy companies, many of which may have
substantially larger financial resources, staffs and facilities than
MOXY.

Item 3.  Legal Proceedings

Although the Company may from time to time be involved in various
legal proceedings of a character normally incident to the ordinary
course of its business, the Company believes that potential
liability from any such pending or threatened proceedings will not
have a material adverse effect on the financial condition or results
of operations of the Company.  The Company maintains liability
insurance to cover some, but not all, of the potential liabilities
normally incident to the ordinary course of its businesses as well
as other insurance coverages customary in its business, with such
coverage limits as management deems prudent.

Item 4.  Submission of Matters to a Vote of Security Holders

A Special Meeting of Stockholders of the Company was held on
October 9, 1997, as more fully described in Part II, Item 4 of the
Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997 and incorporated herein by reference.

Executive Officers of the Registrant

Listed below are the names and ages, as of March 2, 1998, of the
present executive officers of the Company together with the
principal positions and offices with the Company held by each.  All
officers of the Company serve at the pleasure of the Board of
Directors of the Company.

      Name             Age    Position or Office
      ----             ---    ------------------

James R. Moffett        59    Co-Chairman of the Board

Richard C. Adkerson     51    Co-Chairman of the Board and Chief 
                              Executive Officer

C. Howard Murrish       57    President and Chief Operating Officer 

John G. Amato           54    General Counsel

Glenn A. Kleinert       55    Senior Vice President

James H. Lee            40    Senior Vice President


[Page] 12

James R. Moffett has served as Co-Chairman of the Board of the
Company since April 1994.  He also serves as Chairman of the Board
and Chief Executive Officer of Freeport-McMoRan Copper & Gold Inc.
("FCX"), as Co-Chairman of the Board of Freeport-McMoRan Sulphur
Inc. ("FSC") and as a director of IMC Global Inc.  Mr. Moffett
served as Chairman of the Board of FTX from May 1992 to December
1997 and as President of FTX from May 1992 to April 1993.

Richard C. Adkerson has served as Co-Chairman of the Board and Chief
Executive Officer of the Company since April 1994.  Mr. Adkerson is
President, Chief Operating Officer and Chief Financial Officer of
FCX, Chairman of the Board and Chief Executive Officer of FM
Properties ("FMPO"), and Vice Chairman of the Board of FSC.  Mr.
Adkerson served as Executive Vice President of FCX from July 1995 to
April 1997 and as Senior Vice President of FCX from February 1994 to
July 1995.  He served as Vice Chairman of the Board of FTX from
August 1995 until December 1997 and as Senior Vice President of FTX
from May 1992 to August 1995.

C. Howard Murrish has served as President and Chief Operating
Officer of the Company since September 1994.  He was a partner in
CLK until September 1994.  He was a Senior Executive Vice President
of the oil and gas division of FTX from 1986 until February 1992.

John G. Amato has served as General Counsel of the Company since
April 1994.  Mr. Amato also serves as General Counsel of FMPO and
FSC.  Prior to August 1995, Mr. Amato served as General Counsel of
FCX and FTX.  Mr. Amato currently provides legal and business
advisory services to FCX under a consulting arrangement.

Glenn A. Kleinert has served as Senior Vice President of the Company
since May 1994.  Mr. Kleinert was a Senior Vice President of the oil
and gas division of FTX and held that position from December 1990
until December 1997.

James H. Lee has served as Senior Vice President of the Company
since November 1996.  Mr. Lee was a Director of Finance and Business
Development of FTX from August 1993 until December 1997 and a Vice
President of the oil and gas division of FTX from 1994 until
December 1997.

                                 PART II

Item 5.  Market for Registrant's Common Equity and Related
Stockholder Matters

The Company's Common Stock is listed on the Nasdaq National Market
under the symbol "MOXY."  The following table sets forth, for the 
periods indicated, the range of high and low closing bid prices, as
reported by the Nasdaq National Market.  The quotes represent
"inter-dealer" prices without adjustment or mark-ups, mark-downs or
commissions and may not represent actual transactions.

<TABLE>
<CAPTION>
                                          High        Low
                                       --------     ---------
  <S>                                  <C>           <C>
  1997
  First Quarter                        $3 15/16      $2 1/16
  Second Quarter                        3 13/16       2 5/16
  Third Quarter                         5 1/2         3 5/16
  Fourth Quarter                        5 3/4         3

  1996
  First Quarter                        $3 3/4        $2 13/16
  Second Quarter                        3 7/8         2 1/2
  Third Quarter                         2 15/16       1 3/4
  Fourth Quarter                        3 1/16        1 1/2

</TABLE>

 As of March 23, 1998 there were 10,636 record holders of the
Company's Common Stock.

The Company has not in the past, and does not anticipate in the
future, paying cash dividends on its Common Stock.  The Company
currently intends to reinvest its available cash in the
identification, exploration and development of additional oil and
gas properties.  The decision whether or not to pay dividends and in
what amounts is solely within the discretion of the Company's Board
of Directors.

[Page] 13

Item 6.  Selected Financial Data

The following table sets forth selected historical financial
and operating data for the Company for each of the three years in
the period ended December 31, 1997 and for the period from inception
(May 1994) through December 31, 1994.  The historical financial
information is derived from the audited financial statements of the
Company and is not necessarily indicative of future results.  The
following data should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" and the Company's historical financial statements and
notes thereto.

<TABLE>
<CAPTION>
                                1997         1996         1995       1994
                             ----------    --------    ----------  --------
                                 (In thousands, except per share amounts)
<S>                          <C>           <C>         <C>         <C>
Financial Data
Periods Ended December 31:
Revenues                     $   13,552    $  4,070    $    3,267  $    174a
Exploration expenses             11,966       9,818b       11,756    15,518
Operating loss                   (9,904)     (9,883)      (14,799)  (17,682) 
Net loss                        (10,538)     (9,862)      (14,635)  (15,200)

Net loss per share                (0.56)      (0.71)        (1.06)    (1.10)

Average shares
outstanding                      18,847      13,895        13,772    13,770

At December 31:
Working capital              $   33,749d   $  2,972    $    8,257  $ 15,063
Property, plant and
equipment, net                   57,705d     18,231         9,878c   17,094
Total assets                    101,088d     30,980        21,633c   34,425
Production loan, less current
portion                            -   d     12,391           530      -
Stockholders' equity             90,698d      8,246        17,605    32,157

Operating Data
Production:
     Gas (thousand cubic                          
     feet, or Mcf)            4,061,000     631,000     1,093,000      -
     Oil (barrels)               34,000      29,000        45,000      -
Average realization:
     Gas (per Mcf)           $     2.62    $   2.72    $     1.63  $   -
     Oil (per barrel)             19.19       22.22         18.83      -

</TABLE>

a.   Represents miscellaneous net royalty income; no production
quantities or average realizations shown since amounts are not
meaningful.
b.   Includes a reduction of $2.1 million ($0.15 per share)
resulting from reimbursement of previously expensed costs.
c.   After giving effect to transfer of property interests to MCN in
connection with formation of MOXY/MCN Program.
d.   Reflects net proceeds of Rights Offering, which were used to
purchase producing property interests and repay borrowings, with the
remainder held to fund MOXY Exploration Program commitments.

Items 7 And 7A. Management's Discussion And Analysis Of Financial
Condition And Results Of Operations And Disclosures About Market
Risks

OVERVIEW

MOXY is an independent oil and gas company engaged in the
exploration, development and production of oil and natural gas. 
MOXY commenced operations in May 1994 following the distribution of
its common stock to the stockholders of FTX in order to carry on
substantially all of the oil and gas exploration activities
previously conducted by FTX.  MOXY and its predecessors have
conducted exploration, development and production operations
offshore in the Gulf of Mexico and onshore in the Gulf Coast region
and other areas for more than 25 years, which have provided MOXY
with an extensive geological and geophysical database and
significant technical and operational expertise.  MOXY expects

[Page] 14

to continue to concentrate its efforts in this selected geographic area
where its management team has significant exploration experience.

Management believes the opportunities for MOXY to discover
meaningful oil and gas reserves are significant and that these
opportunities can best be achieved through the use of advanced 3-D
seismic technology, applied in conjunction with a large, long-term
exploration program.  In 1995, MOXY entered into an agreement with
MCN that established the MOXY/MCN Program.  Under the MOXY/MCN Program
revenues and costs were shared 60 percent by MCN and 40 percent by
MOXY, with MOXY borrowing its share of costs from MCN. In 1997,  
MOXY management decided to undertake the Rights Offering to
raise funds that would allow it to recapitalize, restructure its
exploration and development operations and engage in a significantly
expanded and more diversified, multi-year exploratory drilling
program.  In November 1997 MOXY completed the Rights Offering,
raising $92.2 million of net proceeds and enabling it to repay all
borrowings under the MOXY/MCN Program, acquire the interest
previously owned by MCN in the Vermilion Block 160 and 410 fields
and provide its share of funding under a newly-formed exploration
program with PLP.  See further discussion under "Capital Resources
and Liquidity" and Note 2.

OPERATIONAL ACTIVITIES

The following significant operational activities occurred
during 1997.

*    Vermilion Block 160 - Production from three new development
wells commenced during the 1997 fourth quarter, with the field
averaging gross production rates as of December 31, 1997 of
approximately 53 million cubic feet (Mmcf) of gas and 1,600 barrels
of condensate per day. During the 1997 fourth quarter MOXY, as
operator, drilled and saved the Vermilion Block 160 #4 sidetrack
development well at a location remote from the existing platform and
outside of the field unit area. The well encountered 106 feet of net
gas pay in four sands.  Fabrication of a platform is in progress,
and development of these new reserves is planned for 1998.  MOXY has
a 58 percent net revenue interest in the #4 sidetrack well, subject
to a 12.7 percent net profits interest, and a 25.5 percent net
revenue interest, subject to a 2.6 percent net profits interest, in
the Vermilion 160 field unit as a result of final re-determination.
The Vermilion Block 160 field is located approximately 155 miles 
west southwest of New Orleans, Louisiana in approximately 100 feet
of water.

*    Vermilion Block 410 - In late 1996, the operator completed
installation of the production platforms and related facilities and
commenced production from one of the two platforms.  Production
began from the second platform in February 1997.  MOXY has a 28
percent net revenue interest in this field. Daily gross production
averaged approximately 57 Mmcf of natural gas during the 1997 fourth
quarter.

*    West Cameron Block 616 - During the fourth quarter of 1997,
MOXY, as operator, drilled and saved the West Cameron Block 616 #3
exploratory well.  This well encountered a total of 426 feet of net
gas pay in eight sands.  MOXY subsequently drilled and saved for
future production the West Cameron Block 616 #4 well to develop
reserves discovered by the #3 well.  In March 1998 MOXY completed
drilling the #5 well, a development well planned to develop the
reserves discovered by the West Cameron Block 616 #2 well.  The #2
well, drilled in 1996 and located approximately one mile southeast
of the #5 well, encountered 190 feet of net gas pay in a different
fault block.  The West Cameron Block 616 #5 well encountered three
gas sands not seen in the #2 well and was credited with a total of
324 feet of net gas pay in eight sands.  MOXY has acquired a
previously owned platform for use in developing these reserves.
First production is expected to commence during the fourth quarter
of 1998.  MOXY has a 39 percent net revenue interest in the #3 and
#4 wells and a 37 percent net revenue interest in the #5 well.
Additionally, MOXY initiated drilling an exploratory well on an
offset block, West Cameron 617, during the first quarter of 1998.
MOXY's net revenue interest in this block is 19 percent. West
Cameron Blocks 616 and 617 are located in approximately 300 feet of
water in the Gulf of Mexico, approximately 130 miles offshore
Louisiana.  These two blocks total 10,000 acres.

*    West Cameron Block 492 - During the 1997 fourth quarter MOXY's
West Cameron 492 #1 well  discovered 93 feet of net hydrocarbon pay
in five sands.  Additionally, the West Cameron 492 #3 well, which
was successfully drilled as a delineation well, encountered 83 feet
of net hydrocarbon pay in two sands, 57 feet of which was in a new
sand.  Both wells were saved for future production and

[Page] 15

further drilling in 1998 is contemplated on this block.  MOXY owns a 19
percent net revenue interest in this block, which is located in
approximately 150 feet of water offshore in the Gulf of Mexico
approximately 110 miles south of Lake Charles, Louisiana and
encompasses 5,000 acres.

*    West Cameron Block 157 - In early January 1998 MOXY initiated
drilling of the West Cameron Block 157 #1 exploratory well to a
proposed total measured depth of approximately 15,000 feet. This well
was determined to unsucessful in March, 1998 and will be plugged and
abandoned. MOXY owns a 38 percent net revenue interest in this block,
which contains 2,170 acres, and in West Cameron Block 156, which
contains 5,000 acres, both of which are located offshore in the Gulf
of Mexico approximately 60 miles southwest of Lake Charles, Louisiana in
approximately 30 feet of water.

*    Brazos Block A-19.  During the 1997 fourth quarter the operator
commenced drilling the Brazos A-19 #2 exploratory well to a proposed
total measured depth of approximately 19,000 feet.  Pursuant to a joint
venture agreement MOXY will earn 13.3 percent net revenue interest,
limited in depth, in this block, which contains 5,760 acres and is
located in approximately 135 feet of water offshore in the Gulf of
Mexico approximately 95 miles southwest of Galveston, Texas.  MOXY
also owns a 48 percent working interest and a 39 percent net revenue
interest in the adjacent Brazos Block A-26, which contains 5,760 acres.

*    Purchase of Property Interests - In September 1997 MOXY
purchased for $4.5 million cash all of the oil and gas interests
owned by FM Properties Inc. (FMPO), a publicly traded company
affiliated with MOXY because of common management and a common
director.  These properties are located in the offshore Gulf of
Mexico and in various onshore areas of the United States.  The
acquisition cost of interests in the most significant of three
exploration properties, which together represented $3.0 million of
the total $4.5 million acquisition price, was shared 60 percent by
PLP and 40 percent by MOXY and have been included in the MOXY
Exploration Program.  Net oil and gas revenues generated by the
producing properties acquired by MOXY totaled $0.8 million in 1997
(prior to acquisition), $1.4 million in 1996 and $0.6 million in
1995, although a single property which generated $0.7 million of
revenues in 1996 ceased production in the second quarter of 1997.

*    West Cameron Block 503 - In April 1997, MOXY sold its interest
in West Cameron Block 503 for $2.9 million, with MOXY recognizing a
$2.3 million gain ($0.12 per share).  The proceeds were used to
repay borrowings from MCN.

*    Other - During 1997 exploratory drilling on the Eugene Island
Block 19, Vermilion Block 159 and Grand Isle Block 65 fields
concluded without discovery of commercial hydrocarbons, resulting in
$5.2 million of the related costs being charged to earnings.

In the onshore Gulf Coast region MOXY owns a 25 percent
interest in a joint venture with Phillips Petroleum Company
(Phillips), as operator, and PLP which covers a project area in
south Louisiana.  In the 1997 second quarter, the North Bay Junop
well was drilled but did not encounter commercial hydrocarbons in
the primary objective zones.  The well was completed in a shallower
zone with approximately 25 feet of net gas pay.  The well began
production during the 1998 first quarter.  Because of the complexity
of salt dome geology and potentially limited reservoir size,
production performance will be required to determine the reserve
volumes associated with this completion.

RESULTS OF OPERATIONS

MOXY reported a net loss of $10.5 million ($0.56 per share) for 1997
compared with losses of $9.9 million ($0.71 per share) for 1996 and
$14.6 million ($1.06 per share) for 1995.  As a result of
anticipated future exploration expenditures, MOXY expects to
continue to report operating losses for at least the near future.

1997 Compared to 1996 - Oil and gas sales revenues for 1997
increased nearly four-fold over 1996 due to increased production 
from the Vermilion 410 field and, late in 1997, from the Vermilion
Block 160 field.  Production from the additional interests in these
fields acquired from PLP in November 1997 also contributed to the
increase.  Management fee revenue increased due to different interim
contractual arrangements with PLP prior to MOXY's acquisition of
these additional interests.  Production costs and depreciation and
amortization expenses increased consistent with increased production
volumes.  In addition, proved reserves at the Vermilion Block 410
field were revised downward in the 1997 second

[Page] 16

quarter based on production experience, resulting in additional
depreciation of $1.0 million being recognized.  Exploration expenses,
which fluctuate with the number, cost and results of exploratory
drilling projects and the volume of and extent to which seismic data
is acquired and interpreted, were similar to the prior year level
after considering a $2.1 million reimbursement of previously expensed
costs in 1996.  General and administrative expenses were substantially
the same as prior year levels, but are expected to increase, before
reimbursements, as a result of expanded drilling and development
activity.  Interest expense increased consistent with increased
borrowings from the production loan before repayment of those
borrowings from Rights Offering proceeds.

1996 Compared to 1995 - Oil and gas sales revenues decreased 11
percent in 1996 from 1995 following the formation of the MOXY/MCN
Program in mid-September 1995, which resulted in 60 percent of
MOXY's revenue interest in the Vermilion Block 160 field being
conveyed to MCN.  Production costs and depreciation and amortization
expenses also decreased accordingly.  Exploration expenses decreased
from 1995 largely as a result of the significant 1995 acquisition of
3-D seismic survey data covering the project area owned by MOXY's
joint venture with Phillips and PLP.  General and administrative
expenses declined 29 percent following cost reduction efforts taken
in the 1995 third quarter, including a reduction in the number of
employees and in the cost of consulting arrangements and
administrative and managerial services (Note 4).

CAPITAL RESOURCES AND LIQUIDITY

Upon completion of the Rights Offering in November 1997, MOXY
realized net proceeds of $92.2 million from the sale of 28.6 million
common shares, of which 3.9 million were purchased by PLP.  These
proceeds enabled MOXY to retire all indebtedness previously incurred
under the MOXY/MCN Program ($20.0 million) and acquire from PLP the
interest in the Vermilion Block 160 and Block 410 fields previously
owned by MCN which PLP had acquired in August 1997 to facilitate
completion of the Rights Offering ($24.5 million).  The remaining
cash proceeds provided MOXY with the funding necessary to
participate in the multi-year aggregate $210 million MOXY
Exploration Program, in which MOXY manages the exploration and
development of exploratory prospects primarily in the offshore Gulf
of Mexico and onshore in the Gulf Coast region.  MOXY will serve as
operator and will select all prospects and drilling opportunities,
with most exploration expenditures to be shared 37.6 percent by
MOXY, 56.4 percent by PLP and 6 percent by an individual investor 
who is a director of MOXY.  All revenues and other costs will be
shared 48 percent by MOXY, 47 percent by PLP and 5 percent by the
individual investor.

MOXY incurred $33.3 million of cash exploration and development
expenditures during 1997 consisting principally of $6.4 million for
development at Vermilion Block 160, $15.7 million for capitalized
drilling costs, $4.9 million of geological and geophysical costs
charged to expense and $6.3 million in expensed drilling and
leasehold costs.  Cash expenditures for 1996 totaled $20.7 million
consisting principally of $7.0 million for development at Vermilion
Block 410, $2.8 million for capitalized drilling costs, $5.7 million
of geological and geophysical costs charged to expense and $5.0
million in expensed drilling and leasehold costs.  Cash expenditures
for 1995 totaled $21.0 million and consisted principally of $6.7
million for development at Vermilion Block 410, $1.8 million for
development at Vermilion Block 160 and $9.8 million of geological
and geophysical costs charged to expense.  MOXY has committed
expenditures of approximately $22 million out of a total approved
capital budget of $50 millon for 1998 which will be funded by MOXY's
working capital. No payment of dividends to MOXY's stockholders is
presently contemplated.

MOXY has assessed its year 2000 information systems cost issues
and believes its current plans for system upgrades will adequately
address these issues internally at no material cost.

[Page] 17

DISCLOSURES ABOUT MARKET RISKS

MOXY's revenues are derived from the sale of crude oil and natural
gas.  MOXY's results of operations and cash flow can vary
significantly with fluctuations in the market prices of these
commodities.  At the present time MOXY does not hedge or otherwise
enter into price protection contracts for its principal products.
Based on projected annual sales volumes from both existing producing
properties and those expected to produce later in 1998, a $.10 per
mcf change in the average price realized on natural gas sales would
have an approximate $1.1 million impact on both revenues and results
of operations.  A $1 per barrel change in the average price realized
on annual crude oil sales would have an approximate $0.1 million
impact on both revenues and results of operations.

As MOXY has no outstanding debt, conducts all its operations within
the U.S. in U.S. dollars and has no investments in equity
securities, it is currently not subject to interest rate risk,
foreign currency exchange risk or equity price risk.

ENVIRONMENTAL

Through December 31, 1997 MOXY had accrued $0.6 million in
Other Liabilities of the total estimated costs of $3.9 million to
abandon its offshore oil and gas production facilities in accordance
with current regulatory requirements.  Although MOXY has no other
known environmental liabilities,  increasing emphasis on
environmental matters could result in additional costs, which would 
be charged against MOXY's operations in future periods.  Present and
future environmental laws and regulations applicable to MOXY's
operations could require substantial capital expenditures or could
adversely affect its operations in other ways that cannot be
accurately predicted at this time.

CAUTIONARY STATEMENTS

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

Important factors that could cause actual results to differ
materially from MOXY's expectations include, without limitation,
exploratory drilling results, economic and business conditions,
general development risks and hazards and risks inherent with the
production of oil and gas, such as fires, natural disasters,
blowouts and the encountering of formations with abnormal pressures,
changes in laws or regulations and other factors, many of which are
beyond the control of MOXY.  Further information regarding these and
other factors that may cause MOXY's future performance to differ
from that projected in the forward-looking statements are described
in more detail under "Cautionary Statements" in Item 1 above.

                     __________________________

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

[Page] 18

Item 8.  Financial Statements and Supplementary Data

                        REPORT OF MANAGEMENT

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

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

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

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



              REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE STOCKHOLDERS AND BOARD OF DIRECTORS OF McMoRan OIL & GAS CO.:

     We have audited the accompanying balance sheets of McMoRan Oil
& Gas Co. (a Delaware Corporation) as of December 31, 1997 and 1996
and the related statements of operations, cash flow and changes in
stockholders' equity for each of the three years in the period ended
December 31, 1997.  These financial statements are the
responsibility of the Company's management.  Our responsibility is
to express an opinion on these financial statements based on our
audits.

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

     In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of
McMoRan Oil & Gas Co. as of December 31, 1997 and 1996 and the
results of its operations and its cash flow for each of the three
years in the period ended December 31, 1997 in conformity with
generally accepted accounting principles.

                                        Arthur Andersen LLP

New Orleans, Louisiana
  January 20, 1998 

[Page] 19

<TABLE>
<CAPTION>
                        McMoRan OIL & GAS CO.
                           BALANCE SHEETS


                                                December 31,
                                          ------------------------
                                             1997          1996
                                          ----------    ----------
                                                (In Thousands)
<S>                                       <C>           <C>
ASSETS
Current assets:
Cash and cash equivalents                 $   29,149    $   10,500
Accounts receivable:
  Oil and gas sales                            3,168         1,243
  Joint interest participants                 10,070           626
  Prepaid expenses                               828           380
                                          ----------    ----------
  Total current assets                        43,214        12,749
                                          ----------    ----------
Property, plant and equipment (successful
efforts method for oil and gas
properties)                                   68,585        19,514
Less accumulated depreciation and
amortization                                 (10,880)       (1,283)
                                          ----------    ----------
                                              57,705        18,231
                                          ----------    ----------
Other assets                                     169          -
                                          ----------    ----------
Total assets                              $  101,088    $   30,980
                                          ==========    ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities:
     Trade                                $    2,766    $      980
Joint interest participants                    3,037         6,038
Accrued drilling costs and other               3,662         2,393
Current portion of production loan              -              366
                                          ----------    ----------
  Total current liabilities                    9,465         9,777
Production loan, less current portion           -           12,391
Other liabilities                                925           566
Stockholders' equity:
Preferred stock, par value $0.01,
50,000,000 shares authorized
and unissued                                    -             -
Common stock, par value $0.01,
150,000,000 shares authorized, 42,740,476
shares and 13,989,317 shares issued and
outstanding, respectively                        427           140
Capital in excess of par value of 
common stock                                 140,506        47,803
Accumulated deficit                          (50,235)      (39,697)
                                          ----------    ----------
                                              90,698         8,246
                                          ----------    ----------
Total liabilities and stockholders'
equity                                    $  101,088    $   30,980
                                          ==========    ==========
</TABLE>

The accompanying notes are an integral part of these financial
statements.

[Page] 20

<TABLE>
<CAPTION>
                       McMoRan OIL & GAS CO.
                      STATEMENTS OF OPERATIONS

                                   Years Ended December 31,
                               ---------------------------------
                                 1997         1996       1995
                               ---------    --------   ---------
                            (In Thousands, Except Per Share Amounts)
<S>                            <C>          <C>        <C>
Revenues:
Oil and gas sales              $  11,441    $  2,434   $   2,722
Management fees                    2,111       1,636         545
                               ---------    --------   ---------
  Total revenues                  13,552       4,070       3,267
                               ---------    --------   ---------
Costs and expenses:
Production and delivery,
including depreciation and
amortization                      11,251       1,500       2,623
Exploration expenses              11,966       9,818      11,756
General and administrative
expenses                           2,528       2,635       3,687
Gain on sale of oil and gas
property                          (2,289)       -           -
                               ---------    --------   ---------
  Total costs and expenses        23,456      13,953      18,066
                               ---------    --------   ---------
Operating loss                    (9,904)     (9,883)    (14,799)
Interest expense                  (1,272)       (403)       -
Other income, net                    638         424         164
                               ---------    --------   ---------
Net loss                       $ (10,538)   $ (9,862)  $ (14,635)
                               =========    ========   =========

Net loss per share, with and
without dilution               $   (0.56)   $  (0.71)  $   (1.06)
                               =========    ========   =========

Average shares outstanding        18,847      13,895      13,772
                               =========    ========   =========

</TABLE>

The accompanying notes are an integral part of these financial
statements. 

[Page] 21


<TABLE>
<CAPTION>
                       McMoRan OIL & GAS CO.
                      STATEMENTS OF CASH FLOW

                                                Years Ended December 31,
                                         ------------------------------------
                                            1997         1996          1995
                                         ---------    ---------     ---------
                                                    (In Thousands)
<S>                                      <C>           <C>          <C>
Cash flow from operating activities:
Net loss                                 $ (10,538)    $ (9,862)    $ (14,635)
Adjustments to reconcile net loss
to net cash provided by (used in)
operating activities:
  Depreciation and amortization             10,071          741         1,525
  Exploration expenses                      11,966        9,818        11,756
  Gain on sale of oil and gas property      (2,289)        -             -
  (Increase) decrease in working capital:
    Accounts receivable, prepaid expenses
    and other                              (11,831)        (988)       (1,347)
    Accounts payable and accrued
    liabilities                             (1,305)       6,954         1,555
                                         ---------    ---------     --------- 
Net cash provided by (used in) operating
activities                                  (3,926)       6,663        (1,146)
                                         ---------    ---------      --------

Cash flow from investing activities:
Exploration and development
expenditures                               (33,263)     (20,678)      (20,957)
Purchase of producing properties
from PLP and FMPO                          (26,005)        -             -
Proceeds from joint venture arrangements,
property sale and other                      2,382        2,059        14,472
                                         ---------    ---------     ---------
Net cash used in investing activities      (56,886)     (18,619)       (6,485)
                                         ---------    ---------     ---------

Cash flow from financing activities:
Proceeds from Rights Offering, net of
expenses                                    92,217         -             -
Proceeds from production loan               13,520       12,927           750
Payments on production loan                (26,276)        (794)         (127)
                                         ---------    ---------     --------- 
Net cash provided by financing
activities                                  79,461       12,133           623
                                         ---------    ---------     ---------
Net increase (decrease) in cash and cash
equivalents                                 18,649          177        (7,008)
Cash and cash equivalents at beginning of
year                                        10,500       10,323        17,331
                                         ---------    ---------     ---------
Cash and cash equivalents at end 
of year                                  $  29,149    $  10,500     $  10,323
                                         =========    =========     =========

Interest paid                            $   1,272    $     304     $    -
                                         =========    =========     =========

</TABLE>

The accompanying notes, which include information in Notes 2, 5 and
6 regarding noncash transactions, are an integral part of these
financial statements.

[Page] 22


<TABLE>
<CAPTION>
                       McMoRan OIL & GAS CO.
           STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                           (In Thousands)

                                                Capital in
                                                  Excess
                            Preferred   Common    of Par  Accumulated
                              Stock      Stock    Value     Deficit    Total
                            ---------  -------   -------- ---------  --------
<S>                         <C>        <C>       <C>      <C>        <C>
Balance at January
1,1995                      $  -       $   138   $ 47,219 $ (15,200) $ 32,157
  Stock payment to CLK and
   other                       -          -            83      -           83
  Net loss                     -          -          -      (14,635)  (14,635)
                            ---------  -------   -------- ---------  --------
Balance at December
31, 1995                       -           138     47,302   (29,835)   17,605
  Stock payment to
  CLK and other                -             2        501      -          503
  Net loss                     -          -           -      (9,862)   (9,862)
                            ---------  -------   -------- ---------  --------
Balance at December
 31, 1996                   $  -       $   140   $ 47,803 $ (39,697) $  8,246
     Shares issued
in Rights Offering             -           286     91,931      -       92,217
     Stock payment
 to CLK and other              -             1         77      -          773
     Net loss                  -          -          -      (10,538)  (10,538)
                            ---------  -------   -------- ---------  --------
Balance at December
31, 1997                    $  -       $   427   $140,506 $ (50,235) $ 90,698
                            =========  =======   ======== =========  ========

</TABLE>

The accompanying notes are an integral part of these financial
statements.

[Page] 23


                       McMoRan OIL & GAS CO.
                   NOTES TO FINANCIAL STATEMENTS 



1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Consolidation.  The financial statements of McMoRan Oil &
Gas Co. (MOXY) reflect investments in joint ventures and
partnerships using the proportionate consolidation method in
accordance with standard industry practice.  Certain prior year
amounts have been reclassified to conform to the 1997 presentation.

Use of Estimates.  The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts
reported in these financial statements and the accompanying notes.
The more significant estimates include useful lives for depreciation
and amortization, valuation allowances for deferred tax assets and
estimates of proved oil and gas reserves and related future cash
flows.  Actual results could differ from those estimates.

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

Property, Plant and Equipment.  MOXY follows the successful efforts
method of accounting for its oil and gas exploration and development
activities.  Costs of exploratory wells are capitalized pending
determination of whether the wells find proved reserves.  Costs of
leases, productive exploratory wells and development activities are
also capitalized.  Other exploration costs are expensed.
Depreciation and amortization is determined on a field-by-field
basis using the unit-of-production method.  Gains or losses are
included in earnings when properties are sold.  Estimated future
expenditures to restore oil and gas properties and related
facilities to a condition that complies with environmental and other
regulations are accrued over the life of the properties.  These
expenditures are estimated based on current costs, laws and
regulations.  Estimated future abandonment costs total $3.9 million,
of which $0.6 million was accrued at December 31, 1997.  These
estimates are by their nature imprecise and can be expected to be
revised over time because of changes in government regulations,
operations, technology and inflation.

     Other property, plant and equipment are carried at cost less
salvage value and are depreciated on a straight-line basis over
estimated useful lives of 5 years.

     Statement of Financial Accounting Standards No. 121 (SFAS 121)
requires a reduction of the carrying amount of long-lived assets to
fair value when events indicate that the carrying amount may not be
recoverable.  Measurement of the impairment loss is based on the
fair value of the asset.  Generally, MOXY determines fair value
using valuation techniques such as expected future cash flows.
Since MOXY's adoption of SFAS 121 effective January 1, 1995, no
impairment losses have been incurred. 


Financial Instruments.  The carrying amounts of receivables, other
current assets and accounts payable reported in the balance sheet
approximate fair value.

Earnings Per Share.  In February 1997, the Financial Accounting
Standards Board issued SFAS 128, "Earnings Per Share," which
simplifies the computation of earnings per share (EPS).  MOXY
adopted SFAS 128 in the fourth quarter of 1997 and restated prior
years' EPS data as required by SFAS 128.

     Net loss per share of common stock was calculated by dividing
net loss applicable to common stock by the weighted-average number
of common shares outstanding during the year.  Dilutive stock
options, which represented 626,000 shares in 1997, no shares in 1996
and 36,000 shares in 1995, have been excluded from the calculation
of dilutive EPS as these options would be anti-dilutive considering
the net losses incurred during the years presented.

     Options to purchase common stock that were outstanding during
the years presented but are not included as dilutive options above
because the exercise prices were greater than the average market
price of MOXY's common shares totaled 2,139,000 options at an
average exercise price of approximately $3.66 per share in 1997,
867,000 options at an average of approximately $2.45 per share in
1996 and 1,679,000 options at an average of approximately $4.30 per
share in 1995.

[Page] 24

2.  RIGHTS OFFERING AND EXPLORATION AGREEMENTS
In November 1997, MOXY received net proceeds of $92.2 million from
the sale of a total of 28.6 million shares of common stock at $3.50
per share under the terms of a rights offering to existing
shareholders (the Rights Offering). Phosphate Resource Partners
Limited Partnership (PLP), formerly Freeport-McMoRan Resource
Partners, Limited Partnership, purchased 3.9 million of these
shares, representing approximately 9 percent of total MOXY shares
outstanding, for $13.5 million in fulfillment of its commitment to
purchase any shares relating to unexercised rights from the Rights
Offering (the Stand-By Commitment).  MOXY concurrently used $44.5
million of these proceeds, including $0.8 million of interest costs,
to acquire from PLP certain assets of, and repay MOXY's borrowings
under, the exploration program previously formed by MOXY and MCN
Energy Group Inc. (MCN) (the MOXY/MCN Program).  PLP  purchased the
assets from, and repaid the debt due, MCN in August 1997 for an
equivalent amount, before interest costs, .  The assets consisted of
MCN's interest in the Vermilion Block 160 and 410 oil and gas fields
($24.5 million), and the debt represented MOXY's borrowings to fund
its share of program costs ($20.0 million), which bore interest at
prime plus two percent.  As MOXY's financial statements only reflect
operating results of these purchased properties since the
acquisition date, the following selected unaudited pro forma
information is provided to present MOXY's results as if both this
acquisition and that described in Note 3 had occurred as of January
1, 1996.  The pro forma data are for informational purposes only and 
do not necessarily represent results which actually would have
occurred if the acquisition had taken place on this date, nor are
they indicative of future results.

Unaudited Pro Forma Data

<TABLE>
<CAPTION>
                                         1997             1996
                                        -------          -------
                                          (In Thousands, except
                                           Per Share Amounts)
<S>                                     <C>              <C>
Revenues                                $23,900          $ 9,046
Net loss                                 (9,340)          (8,784)
Net loss per share                         (.22)           (0.21)

</TABLE>

     MOXY is using a portion of the remaining net Rights Offering
proceeds to fund its share of an aggregate $210 million, multi-year
oil and gas exploration program to explore and develop prospects
primarily offshore in the Gulf of Mexico and onshore in the Gulf
Coast region (the MOXY Exploration Program) formed upon completion
of the Rights Offering to replace the MOXY/MCN Program.  MOXY and
PLP contributed their interests in all exploration properties
formerly part of the MOXY/MCN Program and their joint interests in
certain other properties to the MOXY Exploration Program.  Under
this program most exploration expenditures will be shared 56.4
percent by PLP, 37.6 percent by MOXY and 6 percent by an individual
investor who is a director of MOXY (see Note 3), with all other
costs and revenues shared 47 percent by PLP, 48 percent by MOXY and
5 percent by the individual investor.  MOXY paid PLP a $6.0 million
Stand-By Commitment fee for  acquiring and holding the MOXY/MCN
Program assets referred to above until completion of the Rights
Offering, entering into the Stand-By Commitment and agreeing to
enter into the MOXY Exploration Program.  The fee is reflected in
the accompanying financial statements as a reduction of the Rights
Offering proceeds.

     On December 22, 1997, Freeport-McMoRan Inc. (FTX), the
administrative managing general partner and owner of a 51.6 percent
interest in PLP, merged into IMC Global Inc. (IGL) (the Merger).  As
a result of the Merger, IGL acquired control of FTX and PLP and
became the administrative managing partner of PLP.  The Merger had
no impact on the terms and conditions of the MOXY Exploration
Program.

     In 1995, MOXY and Phillips Petroleum Company (Phillips) entered
into an exploration agreement covering a project area in south
Louisiana.  MOXY conveyed one-half of its interest in the area to
Phillips for $3.8 million.  In 1996, MOXY sold one-half of its
remaining 50 percent leasehold interest to PLP for $2.1 million.
This payment from PLP represented a reimbursement of previously
expensed exploration costs by MOXY in connection with this project
area and accordingly was recorded as a reduction to exploration
expenses.  MOXY sold the interest to PLP on the same proportionate
basis as the prior Phillips sale. 

[Page] 25

3.  TRANSACTIONS WITH AFFILIATES

Management Services.  FTX or its affiliate FM Services Company (FMS)
previously have provided certain management and administrative
services for MOXY.  MOXY restructured its services agreement with
FTX during 1995 to provide specified services for an annual fee of
$1.0 million and entered into a similar agreement with FMS in 1996.
Costs of services provided pursuant to these agreements, included in
general and administrative expenses, totaled $1 million in 1997 and
1996 and $1.3 million in 1995.  Effective with the Merger, MOXY and
FMS, now 25 percent owned by MOXY, implemented an amended services
agreement whereby FMS provides services on a cost reimbursement
basis.  MOXY believes that the above expenses do not (and in the
future will not) differ materially from those costs which would have
been incurred had the relevant personnel providing these services
been employed directly by MOXY.

Property Purchase.  In September 1997, MOXY purchased for $4.5
million cash all of the oil and gas interests owned by FM Properties
Inc. (FMPO), a publicly traded company affiliated with MOXY because
of common management and a common director.  These properties, which
included three exploration prospects representing $3.0 million of
the purchase price and numerous producing property interests for the
remainder, are located offshore in the Gulf of Mexico and in various
onshore areas of the United States.  The acquisition cost of the
most significant exploration property was shared 60 percent by PLP
and 40 percent by MOXY and was included in the MOXY Exploration
Program.  Oil and gas revenues generated by the producing properties
acquired by MOXY totaled $0.8 million in 1997 (prior to
acquisition), $1.4 million in 1996 and $0.6 million in 1995,
although a single property which generated $0.7 million of revenues
in 1996 ceased production in the second quarter of 1997.

Program Participant.  Effective December 15, 1997 Mr. Gerald J.
Ford, an individual investor elected to MOXY's Board of Directors in
January 1998, became an individual participant in the MOXY
Exploration Program.  At December 31, 1997 Mr. Ford has paid $0.6
million for his proportionate share of MOXY Exploration Program
costs incurred.

4.  EMPLOYEE BENEFITS

Stock Options.  MOXY's Stock Option Plan and Stock Option Plan for
Non-Employee Directors (the Plans) authorize MOXY to grant stock
options to purchase up to approximately 3.6 million shares of MOXY
stock at no less than market value at time of grant.  Generally,
stock options are exercisable in 25 percent annual increments
beginning one year from the date of grant and expire 10 years after
the date of grant. A summary of stock options outstanding (including
options to purchase approximately 1.7 million MOXY shares and
approximately 46,000 stock appreciation rights, as adjusted,
originally issued in connection with the 1994 FTX distribution of
MOXY shares) follows: 

<TABLE>
<CAPTION>
                          1997                  1996              1995
                  -------------------    -----------------  -----------------
                              Average              Average            Average
                  Number of   Option     Number of Option   Number of Option
                   Options    Price      Options   Price     Options  Price 
                  ---------- --------    --------- -------  ---------- ------
<S>                <C>          <C>      <C>         <C>     <C>        <C>
Beginning of year  2,139,694    $3.88    2,257,828   $3.92   1,829,867  $4.26
Granted            2,347,732     3.59       24,904    2.54     529,028   2.85
Adjustments          782,244                  -                   -
Exercised            (34,661)    3.28         (581)   3.03        -        -
Expired/forfeited   (128,873)             (142,457)   4.33    (101,067)  4.39
                  ----------             ---------           ---------
End of year        5,106,136     3.16    2,139,694    3.88   2,257,828   3.92
                  ==========             =========           =========

</TABLE>

     In July 1997 the MOXY Board of Directors approved, subject to
stockholder approval, certain amendments to the Plans.  These
amendments provided for a grant to non-employee directors of options
exercisable over a four-year period to purchase a total of 105,984
shares and increased the number of options to be granted to non-
employee directors in future periods.  The amendments also
authorized additional shares under the Stock Option Plan.  In July
1997 new options exercisable over a four-year period to purchase a
total of 1,954,000 shares were granted to certain officers,
employees and others providing services to MOXY. All options were
granted at the July 1997 market price  of $3.625.  MOXY's
stockholders approved the amendments and option grants in October
1997.  MOXY will record an aggregate non-cash charge against
earnings of approximately $1.3 million over the four-year exercise
period for the difference between the July 1997 price and the market
price of $4.27 following stockholder approval.  Additionally, in
October 1997 the Board of Directors approved certain adjustments to
the number of shares granted and exercise prices of previously
granted options to reflect the issuance of Rights under the Rights
Offering.  These adjustments did not result in a charge to earnings.

[Page] 26

     At December 31, 1997, options for approximately 246,000 shares
were available for new grants under the Plans.  Summary information
of fixed stock options outstanding at December 31, 1997 follows:

<TABLE>
<CAPTION>
                                Options Outstanding      Options Exercisable
                         ------------------------------- --------------------
                                     Weighted   Weighted             Weighted
                                      Average    Average              Average
                           Number    Remaining    Option    Number    Option
Range of Exercise Prices of Options    Life       Price   of Options   Price
------------------------ ----------  ----------  -------  ----------  ------- 
     <S>                  <C>         <C>          <C>     <C>          <C> 
     $1.46 to $2.11         682,387   7.9 years    $2.10     337,857    $2.11 
     $2.21 to $3.29       1,519,430   4.8 years     2.77   1,089,902     2.92
     $3.37 to $4.13       2,858,672   7.9 years     3.62     837,465     3.54
                         ----------                       ----------
                          5,060,489                        2,265,224
                         ==========                       ==========

</TABLE>

     MOXY has adopted the disclosure-only provisions of SFAS 123 and
continues to apply APB Opinion No. 25 and related interpretations in
accounting for its stock-based compensation plans.  Accordingly, no
compensation cost has been recognized for MOXY's fixed stock option
grants except as discussed above.  Had compensation cost for MOXY's
fixed stock option grants been determined based on the fair value at
the grant dates for awards under those plans consistent with SFAS
123, MOXY's pro forma net loss would have been $11.6 million ($ 0.62
per share) in 1997, $10.1 million ($0.73 per share) in 1996 and
$14.7 million ($1.06 per share) in 1995.  For the pro forma
computations, the fair values of the fixed option grants were
estimated on the dates of grant using the Black-Scholes option
pricing model.  The weighted average fair value for fixed stock
option grants was $2.89 per option in 1997, $1.69 per option in 1996
and $2.15 per option in 1995.  The weighted average assumptions used
include a risk-free interest rate of 6.6 percent in 1997 and 1996
and 6.4 percent in 1995, with expected volatility of 67 percent in
1997, 45 percent in 1996 and 60 percent in 1995 and expected lives
of 10 years.  The pro forma effects on net income are not
representative of future years because they do not take into
consideration grants made prior to 1995.  No other discounts or
restrictions related to vesting or the likelihood of vesting of
fixed stock options were applied.

5.  INCOME TAXES

MOXY has $30.2 million of net deferred tax assets as of December 31,
1997 resulting from temporary differences related to MOXY's
exploration activities.  MOXY has provided a valuation allowance
equal to these tax assets because of the expectation of incurring
tax losses for at least the near future, resulting in no tax
benefits for the periods presented.  The components of MOXY's
deferred taxes follow (in thousands):

<TABLE>
<CAPTION>
                                                December 31,
                                          ------------------------
                                             1997          1996
                                          ----------    ----------
  <S>                                     <C>           <C>
  Net operating loss carryforwards
  (expire 2006-2017)                      $   21,559    $   17,976
  Capital losses (expire 1999)                 5,511         5,511
  Other tax carryforwards                        371           303
  Oil & gas properties                         2,111         2,272
  Other                                          613           453
  Less valuation allowance                   (30,165)      (26,515)
                                          ----------    ----------
    Net deferred tax assets               $     -       $     - 
                                          ==========    ==========

</TABLE>

6.  COMMITMENTS AND CONTINGENCIES

Commitments.  MOXY has drilling and related expenditure commitments
of approximately $22 million in 1998.  In addition, MOXY has minimum
committed expenditures under a multi-year agreement with a
geophysical services company to purchase 3-D seismic surveys which
totaled $1.5 million at December 31, 1997.  MOXY also has a contract
with CLK Company LLC (CLK), a company independently owned by its
employees, to provide geological and geophysical services to MOXY on
an exclusive basis.  The contract was amended during 1997 to provide
for an annual retainer fee of $2.2 million ($0.5 million of the
annual fee paid in MOXY common stock, recorded at fair market
value), plus certain expenses and an overriding royalty interest in
prospects accepted by MOXY.  Costs of services provided by CLK,
included in exploration expenses, totaled $3.0 million in 1997, $3.1
million in 1996 and $3.5 million in 1995.

[Page] 27

Environmental.  Although MOXY has no known environmental liabilities
other than the estimated costs of abandoning its offshore oil and
gas production facilities in accordance with current regulatory
requirements (Note 1), increasing emphasis on environmental matters
could result in additional costs, which would be charged against
MOXY's operations in future periods.  Present and future
environmental laws and regulations applicable to MOXY's operations
could require substantial capital expenditures or could adversely
affect its operations in other ways that cannot be accurately
predicted at this time.

7. SUPPLEMENTARY OIL AND GAS INFORMATION

MOXY's oil and gas exploration, development and production
activities are conducted in the offshore Gulf of Mexico and onshore
Gulf Coast areas of the United States.  Oil and gas production are
sold to various U.S. purchasers, including one gas purchaser
comprising over 90 percent of total revenues.  Supplementary
information presented below is prepared in accordance with
requirements prescribed by SFAS 69.

<TABLE>
<CAPTION>
Oil and Gas Capitalized Costs

                                   Years Ended December 31,
                                ----------------------------
                                    1997             1996
                                ----------        ----------
                                        (In Thousands)
<S>                             <C>               <C>
Unevaluated  properties         $   14,856        $    2,173
Proved properties                   53,229            17,341
Less accumulated depreciation
and amortization                   (10,880)           (1,283)
                                ----------        ----------
Net oil and gas properties      $   57,205        $   18,231
                                ==========        ========== 

</TABLE>

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

<TABLE>
<CAPTION>
                                       Years Ended December 31,
                                  -----------------------------------
                                     1997         1996          1995
                                  ----------   ----------    --------
                                                 (In Thousands)
<S>                               <C>          <C>           <C>
Acquisition of properties:
  Proved                          $   26,005   $     -       $    -
  Unproved                             3,332        2,499         863
Exploration costs                     20,137       11,672      13,928
Development costs                      9,794        6,507       6,166
                                  ----------   ----------    --------
                                  $   59,268   $   20,678    $ 20,957
                                  ==========   ==========    ========

</TABLE>

Proved Oil and Gas Reserves (Unaudited).  Proved oil and gas
reserves at December 31, 1997, have been estimated by independent
petroleum engineers in accordance with guidelines established by the
Securities and Exchange Commission (SEC).  Thus, the following
reserve estimates are based upon existing economic and operating
conditions; they are only estimates and should not be construed as
being exact.  MOXY's 1997 proved reserves are located in offshore
United States waters.  Oil, including condensate and plant products,
is stated in thousands of barrels and natural gas is in millions of
cubic feet.

[Page] 28

<TABLE>
<CAPTION>
                                    Oil                      Gas
                          ---------------------     ------------------------  
                          1997    1996     1995      1997     1996    1995
                          ----    ----     ----     ------   ------   ------
<S>                        <C>     <C>      <C>     <C>      <C>      <C> 
Proved reserves:
  Beginning of year        168      94      262     16,054    8,521    9,714
  Revisions of previous
  estimates                  1      31       54         38    1,155       88
  Discoveries and
  extensions               195      72       -      21,481    7,009    4,999
  Production               (34)    (29)     (45)    (4,061)    (631)  (1,093)
  Transfer to MCN           -       -      (177)      -        -      (5,187)
  Sale of reserves         (17)     -        -      (3,307)    -        -
  Purchase of reserves
  from PLP                 150      -        -      10,029     -        -
                          ----    ----     ----     ------   ------   ------ 
  End of year              463     168       94     40,234   16,054    8,521
                          ====    ====     ====     ======   ======   ====== 
Proved developed reserves:
  Beginning of year         58      20               7,530      799
                          ====    ====     ====     ======   ======   ======
  End of year              383      58       20     23,086    7,530      779
                           ===    ====     ====     ======   ======   ======

</TABLE>

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

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

<TABLE>
<CAPTION>
                                                December 31,
                                           -----------------------
                                             1997          1996
                                           ---------     ---------
                                                (In Thousands)
<S>                                        <C>           <C>
Future cash flows                          $ 111,655     $  66,260
Future costs applicable to future cash flows:
  Production costs                           (20,984)       (7,805)

  Development and abandonment costs          (31,211)      (12,874)
                                           ---------     --------- 
Future net cash flows before income taxes     59,460        45,581
Future income taxes                             -             -
                                           ---------     --------- 
Future net cash flows                         59,460        45,581
Discount for estimated timing of net cash
flows (10% discount rate)                    (13,837)      (10,240)
                                           ---------     --------- 
                                           $  45,623     $  35,341
                                           =========     =========

</TABLE>

     Because MOXY has sufficient tax deductions and losses to
utilize against estimated future taxable income, in accordance with
SFAS 69 no deductions for future income taxes have been made above.

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

<TABLE>
<CAPTION>
                                                Years Ended December 31,
                                           ----------------------------------
                                              1997         1996       1995
                                           ---------    ---------    -------- 
                                                        (In Thousands)
<S>                                        <C>          <C>          <C>
Beginning of year                          $  35,341    $   8,330    $  6,413
Revisions:
  Changes in prices                          (13,869)      12,894       7,815
  Accretion of discount                        3,534          833         641
  Other changes, including revised
  estimates of development costs and rates
  of production                               (6,040)      (2,863)     (3,083)
Discoveries and extensions, less related
costs                                         15,502       10,837       3,368
Development costs incurred during the year     6,630        6,985       1,750
Revenues, less production costs              (10,193)      (1,675)     (1,589)
Sale of reserves                              (3,437)        -            -
Transfer to MCN                                 -            -         (6,985)
Purchase of reserves from PLP                 18,155         -           -
                                           ---------    ---------     -------
End of year                                $  45,623    $  35,341     $ 8,330
                                           =========    =========     =======
</TABLE>

[Page] 29

<TABLE>
<CAPTION>

8.  QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

                                        Operating        Net        Net Income
                                         Income         Income       (Loss)
                           Revenues      (Loss)         (Loss)      Per Share
                          ----------    --------      ---------     --------
                                  (In Thousands, Except Per Share Amounts)
<S>                       <C>           <C>           <C>             <C>
1997
  1st Quarter             $    2,773    $ (2,260)     $  (2,489)      $(0.18)
  2nd Quarter                  2,248      (1,192)a       (1,395)a      (0.10)a
  3rd Quarter                  2,688      (6,274)b       (6,545)b      (0.46)b
  4th Quarter                  5,843        (178)          (109)         -
                          ----------    --------      ---------
                          $   13,552    $ (9,904)     $ (10,538)       (0.56)
                          ==========    ========      =========
1996
  1st Quarter             $    1,073    $ (4,453)     $  (4,330)      $(0.31)
  2nd Quarter                    949         418c           525c        0.04c
  3rd Quarter                    919      (2,087)        (2,148)       (0.15)
  4th Quarter                  1,129      (3,761)        (3,909)       (0.28)
                          ----------    --------      ---------
                          $    4,070    $ (9,883)d    $  (9,862)       (0.71)
                          ==========    ========      ========= 
</TABLE>

a.   Includes a gain of $2.3 million ($0.16 per share) resulting
from the sale of the West Cameron Block 503 property and $1.0
million ($0.07 per share) of additional depreciation from downward
revisions to reserve estimates for the Vermilion Block 410 property.
b.   Includes $3.9 million ($0.21 per share) of non-productive
exploratory drilling costs on the Grand Isle Block 65, Eugene Island
18/19 and Vermilion Block 159 prospects.
c.   Includes a reduction to exploration expense of $2.1 million
($0.15 per share) resulting from the reimbursement of previously
expensed costs.
d.   Foreign exploration costs totaled  $0.4 million in 1996.


Item 9.  Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure

Not applicable.

                                 PART III

Item 10.  Directors and Executive Officers of the Registrant

The information regarding executive officers required by Item 10 may
be found following Item 4 of this report.  Information concerning
the Company's directors required by Item 10 is incorporated by
reference from the Company's definitive proxy statement for its 1998
Annual Meeting of Stockholders.

Item 11.  Executive Compensation

Information concerning the compensation of the Company's executives
required by Item 11 is incorporated by reference from the Company's
definitive proxy statement for its 1998 Annual Meeting of
Stockholders.

Item 12.  Security Ownership of Certain Beneficial Owners and
Management

Information concerning security ownership of certain beneficial
owners and management required by Item 12 is incorporated by
reference from the Company's definitive proxy statement for its 1998
Annual Meeting of Stockholders.

Item 13.  Certain Relationships and Related Transactions

Information concerning certain relationships and related
transactions required by Item 13 is incorporated by reference from
the Company's definitive proxy statement for its 1998 Annual Meeting
of Stockholders.

[Page] 30

                              PART IV 


Item 14.  Exhibits, Financial Statement Schedules, and Reports on
Form 8-K

(a)(1).   Financial Statements.  Reference is made to Item 8 hereof.

(a)(2).   Financial Statement Schedules.  Schedules have not
been included because they are not  required, not applicable or
the information required has been included elsewhere herein.

(a)(3).   Exhibits.  Reference is made to the Exhibit Index
beginning on page E-1 hereof.

(b). Reports on Form 8-K.   During the last quarter of the period
covered by this report the Company filed current reports on Form 8-K
under Item 5 dated as of October 3, 1997  and October 9, 1997.

[Page] 31


                             SIGNATURES

Pursuant to the requirements of Section 13 of the Securities
Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly
authorized on March 27, 1998.

                                             McMoRan OIL & GAS Co.

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

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf
of the registrant and the capacities indicated, on March 27, 1998.

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

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

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

          *    
  ----------------------     Director
     Robert A. Day

          *
  ----------------------     Director
     Gerald J. Ford

          *
  ----------------------     Director
    B.M. Rankin, Jr.


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


[Page] S-1




                                McMoRan Oil & Gas Co.
                                    Exhibit Index

            Exhibit Number

               2.1      Distribution Agreement  dated as of
                        May   1,  1994  between   Freeport-
                        McMoRan   Inc.  and  the   Company.
                        Incorporated   by    reference   to
                        Exhibit  2.1 to Amendment No. 2  to
                        Form   10   as   filed   with   the
                        Commission   on    May   16,   1994
                        ("Amendment No. 2").

               3.1      Amended  and  Restated  Certificate
                        of  Incorporation  of the  Company.
                        Incorporated   by    reference   to
                        Exhibit   3.1   to  the   Company's
                        Annual  Report for  the year  ended
                        December  31,  1994  on  Form  10-K
                        (the "1994 10-K").

               3.2      Bylaws of  the  Company.
                        Incorporated   by    reference   to
                        Exhibit  3.2 to the Company's  1994
                        10-K.

               4.1      Form  of the Company's  Certificate
                        of   Designation    of   Series   A
                        Participating  Cumulative Preferred
                        Stock.   Incorporated by  reference
                        to Exhibit 4.1 to Amendment No. 2.

               4.2      Rights  Agreement dated  as of  May
                        19,  1994 between  the Company  and
                        Mellon  Securities  Trust  Company,
                        as  Rights  Agent. Incorporated  by
                        reference  to  Exhibit 4.2  to  the
                        Company's 1994 10-K.

               4.3      Amendment  No.  1  dated  July  14,
                        1997 to the  Rights Agreement dated
                        as of May 19,  1994 between McMoRan
                        Oil   &   Gas    Co.   and   Mellon
                        Securities   Trust    Company,   as
                        Rights  Agent.     Incorporated  by
                        reference  to Exhibit  10.7 to  the
                        Company's  Current  Report on  Form
                        8-K dated as of July  14, 1997 (the
                        "July 14, 1997 8-K").

               10.1     Master  Agreement  dated  July  14,
                        1997 between McMoRan Oil  & Gas Co.
                        and    Freeport-McMoRan    Resource
                        Partners, Limited  Partnership, now
                        named  Phosphate Resource  Partners
                        Limited     Partnership    ("PLP").
                        Incorporated   by    reference   to
                        Exhibit  10.1 to the July 14,  1997
                        8-K.

               10.2     Purchase  and Sale Agreement  dated
                        July  11, 1997  by  and among  PLP,
                        MCNIC  Oil & Gas Properties,  Inc.,
                        MCN   Investment  Corporation   and
                        MOXY.    Incorporated by  reference
                        to  Exhibit 10.4  to  the July  14,
                        1997 8-K.
    
               10.3     Agreement  for  Purchase  and  Sale
                        dated as of August 1, 1997  between
                        FM  Properties  Operating  Co.  and
                        McMoRan Oil & Gas Co.  incorporated
                        by reference  to  Exhibit  10.1  to
                        the  Company's  Current  Report  on
                        Form 8-K  dated  as of September 2,
                        1997.

               10.4     Participation   Agreement   between
                        McMoRan  Oil  &  Gas  Co.  and  PLP
                        dated as of April 1, 1997.

               10.5     Amendment      to     Participation
                        Agreement  between  McMoRan  Oil  &
                        Gas Co. and PLP  dated December 15,
                        1997.

               10.6     Participation   Agreement   between
                        McMoRan  Oil & Gas  Co. and  Gerald
                        J.  Ford dated as  of December  15,
                        1997.

[Page] E-1

               10.7     Amended   and   Restated   Services
                        Agreement, dated as of December 23,
                        1997,  between FM Services Company
                        and the Company.

               10.8     Exploration  Agreement dated as  of
                        June  13,  1995, between  MOXY  and
                        Phillips     Petroleum     Company.
                        Incorporated  by  reference to  the
                        Company's Quarterly  Report on Form
                        10-Q  for the  quarter ending  June
                        30, 1995.

               10.9     Exploration   Agreement   effective
                        July  1,  1996, between MOXY  and
                        PLP.  Incorporated  by reference to
                        the  Company's Quarterly Report  on
                        Form  10-Q for  the quarter  ending
                        June 30, 1996.

                        Executive     Compensation    Plans
                        and Arrangements
                        (Exhibits 10.10 through 10.14)

               10.10    McMoRan  Oil  &  Gas  Co.  Adjusted
                        Stock Award Plan, as amended.

               10.11    McMoRan  Oil & Gas  Co. 1994  Stock
                        Option Plan, as amended.

               10.12    McMoRan  Oil & Gas  Co. 1994  Stock
                        Option   Plan    for   Non-Employee
                        Directors, as amended.

               10.13    McMoRan  Oil & Gas Co.  Performance
                        Incentive   Awards    Program,   as
                        amended.         Incorporated    by
                        reference  to Exhibit  10.5 to  the
                        Company's 1995 10-K.

               10.14    Financial   Counseling    and   Tax
                        Return        Preparation       and
                        Certification  Program  of  McMoRan
                        Oil  &  Gas Co.    Incorporated  by
                        reference  to Exhibit  10.6 to  the
                        Company's 1995 10-K.

               23.1     Consent of Arthur Andersen LLP.

               23.2     Consent of Ryder Scott Company.

               24.1     Certified  resolution of the  Board
                        of   Directors   of   the   Company
                        authorizing   this  report  to   be
                        signed on behalf of  any officer or
                        director  pursuant  to a  Power  of
                        Attorney.

               24.2     Powers  of   Attorney  pursuant  to
                        which  this report has been  signed
                        on  behalf of certain officers  and
                        directors of the Company.

               27.1     Financial Data Schedule.

               27.2     Restated Financial Data Schedule.

               99.1     Description  of  matters  submitted
                        to   a   vote  of   the   Company's
                        stockholders  at a special  meeting
                        held on October 9, 1997.

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