McMoRan Exploration Co. announced Thursday that it has conducted a successful production test on its South Marsh Island Block 223 exploratory well — referred to as “JB Mountain” — located in the shallows of the Gulf of Mexico. The test indicated a flow rate of 14.25 MMcf/d of gas and 1,056 b/d of condensate.

The company noted that further engineering analysis indicates the well has a potential of producing 61 MMcf/d and 4,900 b/d of condensate. McMoRan said it expects initial production in the second quarter with plans for a second JB Mountain well currently under development. The JB Mountain exploratory well was drilled to a measured depth of 22,000 feet.

The company also reported that the Louisiana State Lease 340 (“Mound Point Offset”) well is currently drilling below 12,000 feet. Drilling commenced during February 2003 on the well, which has a planned total depth of 18,700 feet and is located six miles northeast of JB Mountain and one mile from the McMoRan Mound Point discovery well.

McMoRan said the JB Mountain and Mound Point deep-gas prospects are located in water depths of 10 feet in an area where it is a participant in an exploration program that controls an 80,000-acre exploratory position including portions of OCS Lease 310 and portions of the adjoining Louisiana State Lease 340.

The program currently holds a 30.4% working interest in the Mound Point Offset prospect and a 21.6% net revenue interest. It also holds a 55% working interest in the JB Mountain prospect and a 38.8% net revenue interest. The operator in the projects is funding all of the costs attributable to McMoRan’s interests in four prospects, including the JB Mountain and Mound Point Offset prospects, and will own all of the program’s interests until the program’s aggregate production from the four prospects totals 100 Bcfe, at which point 50% of the program’s interests would revert to McMoRan.

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