Shares of McMoRan Exploration, the Louisiana-based independent oil and natural gas driller, surged over 12% on volume that was nearly five times the daily average after the company said it could add 7.5 trillion cubic feet of oil and natural gas equivalent in the Gulf of Mexico if its deep-water projects there are successful.
McMoRan (MMR) said that its share of the ultra-deep Davy Jones prospect could contain about 3.2 trillion cubic feet equivalent, according to MarketWatch. The company expects to conduct a flow test at Davy Jones by the end of this year. Official estimates on a new Davy Jones discovery have not yet been made available.
McMoRan holds a 60.4 percent working interest and a 47.9 percent net revenue interest in Davy Jones, the company said in a statement. McMoRan's results to date have indicated the potential for large accumulations of hydrocarbons at deeper depths in the shallow waters of the Gulf, which is expected to reduce the risk of future activities, the company said.
The company also said it will take a $37 million charge in the second quarter due to a Gulf that proved to not be commercially viable. Including Wednesday's trade, shares of McMoRan have jumped about 50% in the past year.