Freeport-McMoRan 2013 Annual Report Download - page 135

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2013 ANNUAL REPORT | 133
reduced by estimated future operating costs (including production
and ad valorem taxes) and future development and abandonment
costs, all of which were based on current costs in effect at
December 31, 2013, and held constant throughout the life of the
oil and gas properties. Future income taxes were calculated by
applying the statutory federal and state income tax rate to pre-tax
future net cash flows, net of the tax basis of the respective oil and
gas properties and utilization of FCX’s available tax carryforwards
related to its oil and gas operations.
Excluding the impact of crude oil and natural gas derivative
contracts, the average realized sales prices used in FCX’s reserve
reports as of December 31, 2013, were $99.67 per barrel of
crude oil and $3.64 per one thousand cubic feet (Mcf) of natural gas.
The Standardized Measure related to proved oil and natural
gas reserves as of December 31, 2013, follows:
Future cash inflows $ 38,901
Future production expense (12,774)
Future development costs
a
(6,480)
Future income tax expense (4,935)
Future net cash flows 14,712
Discounted at 10% per year (5,295)
Standardized Measure $ 9,417
a. Included estimated asset retirement costs of $1.8 billion.
The following table summarizes the principal sources of
changes in the Standardized Measure from June 1, 2013, to
December 31, 2013:
Reserves acquired in the acquisitions of PXP and MMR $ 14,467
Sales, net of production expenses (2,296)
Net changes in sales and transfer prices, net of
production expenses (459)
Extensions, discoveries and improved recoveries 752
Changes in estimated future development costs (1,190)
Previously estimated development costs incurred during the year 578
Sales of reserves in-place (12)
Other purchases of reserves in-place —
Revisions of quantity estimates 102
Accretion of discount 701
Net change in income taxes (3,226)
Balance at December 31, 2013 $ 9,417