Texaco and McMoRan Exploration Announce Agreement

Texaco and McMoRan Exploration Co. have signed an agreement granting McMoRan the right to explore all or parts of 90 of Texaco's Gulf of Mexico tracts in the Outer Continental Shelf (OCS), including seven leases in state waters of Louisiana. The tracts encompass a total of 391,349 gross acres and are located in water depths ranging from 10 to 2,600 ft. In addition to approximately 400 unexplored deepwater blocks in the OCS, Texaco retains its ongoing shelf producing operations as well as certain development zones not included in the agreement. Under the terms of the agreement, McMoRan will commit in excess of $100 million for exploration drilling over the next four years. McMoRan has incentives to meet the agreed upon level of activity in each of the specified time periods throughout the four year span. McMoRan will be the operator and may earn various interests in the exploration tracts. Texaco will retain rights to participate in the opportunities McMoRan elects to drill.