Our immediate predecessor, McMoRan Oil & Gas Co., commenced operations in May 1994 following the distribution of all of its common stock to the stockholders of Freeport-McMoRan Inc., its former parent company. The purpose of that transaction was to allow McMoRan Oil & Gas to rebuild, with essentially the same management and exploration team, the oil and gas exploration business previously conducted by Freeport-McMoRan Inc.  Freeport-McMoRan Inc. and its predecessors had engaged in oil and gas exploration, development and production activities since the early 1970s, and during the 1980s it was among the most active drillers in the Gulf of Mexico . As part of an asset restructuring program to raise new capital to exploit other significant business opportunities (including the development of a world class copper and gold deposit in Indonesia discovered in 1988), Freeport-McMoRan Inc. sold numerous assets in various transactions during the late 1980s and early 1990s. These asset sales included the vast majority of its producing oil and gas properties. Sales proceeds from these properties totaled approximately $1.3 billion.

As a result, McMoRan Oil & Gas commenced operations in 1994 with an extensive geological and geophysical data base, as well as extensive technical and operational expertise, but with only a small group of exploration prospects and limited financial resources.  Following its separation from Freeport-McMoRan Inc., McMoRan Oil & Gas pursued a business plan of exploring for and producing oil and gas, primarily in the Gulf of Mexico and onshore in the Gulf Coast area.

We were created on November 17, 1998 when McMoRan Oil & Gas and Freeport-McMoRan Sulphur Inc. combined their operations. As a result, McMoRan Oil & Gas LLC and Freeport-McMoRan Sulphur LLC (Freeport Sulphur), the successors to those companies, became our wholly owned subsidiaries.  A principal purpose of the combination was to use cash flow from Freeport Sulphur as a source of funding for the expansion of our oil and gas exploration and development program. The combination of McMoRan Oil & Gas and Freeport Sulphur was treated for accounting purposes as a purchase, with McMoRan Oil & Gas as the acquiring entity. As a result, our financial information for periods prior to the combination reflect only the historical operations of McMoRan Oil & Gas. The operations of Freeport Sulphur are included on and after November 17, 1998 .