McMoRan Exploration Co. (MMR:US) declined the most in more than three months after it said it hasn’t conducted a planned flow test at the Davy Jones No. 1 natural gas well in the Gulf of Mexico.
McMoRan fell 7.8 percent to $11.76 at the close in New York, the biggest decline since July 10.
Operations at Davy Jones No. 1 to remove wellbore debris, which has hindered flow testing, took longer than expected, the New Orleans-based company said in a statement today. Testing has been delayed multiple times this year. On Oct. 9, John Schiller, chief executive officer at Energy XXI Bermuda Ltd., a partner in the well, said flow-test results may be available in November.
“I think the weakness today is on a lack of news, however, it had been pretty clearly signaled that we weren’t going to get anything new today” on the Davy Jones test, Duane Grubert, a senior energy analyst at Susquehanna Financial Group in Stamford, Connecticut, said in a telephone interview.
Some investors are committed to McMoRan in the long term, while others “are looking to just make a trade on the Davy Jones flow-test event,” said Grubert, who rates the shares the equivalent of buy and owns none.
McMoRan operates and has a 63.4 percent working interest in Davy Jones. Other partners include Energy XXI, JX Nippon Oil Exploration (Gulf) Ltd. and Moncrief Offshore LLC, according to today’s statement. McMoRan’s total investment in the Davy Jones project was $961 million as of Sept. 30, the company said.
The company also today reported a third-quarter net loss of $64 million, compared with a net loss of $9.4 million a year earlier.
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