press release

Texaco Press Release - Texaco And Mcmoran Exploration Announce Gulf Of Mexico Exploration

McMoRan To Explore Outer Continental Shelf Blocks Over Four Years

FOR RELEASE: TUESDAY, DECEMBER 21, 1999.

NEW ORLEANS, Dec. 21 -- Texaco and McMoRan Exploration Co. (NYSE: MMR) announced today the signing of an agreement that will grant 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 feet. 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.

Commenting on the announcement, Robert S. Lane, Vice President of Texaco's Gulf of Mexico Producing Operations, said, "The Gulf of Mexico is an important area within Texaco's worldwide exploration and production plan, and this agreement allows us to focus on our deepwater Gulf projects while maintaining an active presence on the shelf. We are pleased to partner with McMoRan, a company with a successful track record of discovery and development that spans more than three decades in this region. Both companies enter into this venture with a vision of increased activity in the Gulf that will benefit not only Texaco and McMoRan, but also suppliers and vendors."

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.

McMoRan Co-Chairman, James R. Moffett, said, "This partnership will be the foundation of an aggressive exploration program combining Texaco's leasehold inventory and McMoRans exploration expertise. Texaco and McMoRan's will benefit from sharing expertise in one of the largest active exploration positions in the OCS, targeting potential reserve additions of significance to our respective companies."

Updated: December 1999