McMoRan's Ultra-Deep Well Is Stuck in the Mud

Jim Bob Moffett’s billion-dollar bet on an ultra-deep natural gas well in the Gulf of Mexico is looking shakier by the day. The chief executive officer of McMoRan Exploration announced on Nov. 26 that a test to determine the productive capacity of the Davy Jones No. 1 well, where drilling began in June 2009, had proved inconclusive.

It was the latest in a yearlong series of delays in verifying the well’s potential. “I would have thought that they would have certainly been producing at least some gas at this point,” says Leo Mariani, an analyst at RBC Capital Markets. The news sent company shares tumbling 34 percent in two days and cast doubt about McMoRan’s goal of unlocking vast new stores of oil and gas in the shallow waters of the Gulf of Mexico.