McMoRan Exploration to temporarily move rig from its Davy Jones prospect

Independent petroleum producer McMoRan Exploration Co. plans to move a rig from its Davy Jones prospect in the shallow-water Gulf of Mexico for several months while developing plans to use hydraulic fracturing to stimulate the well, the New Orleans-based company said Thursday.

The New Orleans-based company reported setbacks at its widely watched prospect in October. At the time, McMoRan said it had replaced heavy drilling mud in the well with clear completion fluid in order to halt the flow of natural gas while taking the final steps to reach the commercial production stage of natural gas.

McMoRan conducted flow tests of the prospect in November to assess what the well was potentially capable of producing, but the work stalled as residual drilling mud was believed to be blocking the well.

The company had limited success using a solvent to dissolve the mud and instead tried using a propellant gun to produce high-pressure shocks to help shake the substance loose. That didn't get the job done, either, McMoRan said in a Dec. 27 update.

The prospect is part of four federal offshore lease blocks, located in about 20 feet of water in the South Marsh Island area of the Gulf.

McMoRan has drilled two successful sub-salt wells in the Davy Jones field, which involves about 20,000 acres on the Outer Continental Shelf. Some analysts believe the field may show one of the largest discoveries in the Gulf's shallow waters in decades.

"All eyes are on that, as they say, but we're happy to be pioneering an improving trend like the Gulf of Mexico," McMoRan co-chairman James Moffett said about the much-anticipated flow testing in an October 2011 conference call with analysts.

Freeport McMoRan Copper & Gold Inc. announced in December that it would acquire McMoRan Exploration Co. for about $14.75 per share, or about $2.1 billion, according to filings with the U.S. Securities and Exchange Commission. The mining giant also said at the time that it will pay $6.9 billion to acquire Houston-based Plains Exploration Co.

McMoRan stock closed at $15.81 on Thursday, down 4 cents.