Freeport-McMoRan 2012 Annual Report Download - page 21

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On December 5, 2012, FCX announced definitive agreements to
acquire Plains Exploration & Production Company (PXP) and McMoRan
Exploration Co. (MMR). The combined company would be a premier
U.S.-based natural resource company with a growing production
profile and an industry leading global portfolio of mineral assets
and significant oil and gas resources. The addition of a high quality,
U.S.-focused oil and gas resource base is expected to provide strong
margins and cash flows, exploration leverage and financially attractive
investment opportunities to enhance long-term returns for FCX
shareholders.
The oil and gas assets being acquired are located in attractive onshore
and offshore U.S. geologic basins. PXP’s major assets include its
established strong oil production facilities in California, a growing
production profile in the onshore Eagle Ford trend in Texas, significant
production facilities and growth potential in the Deepwater Gulf of
Mexico and large onshore resources in the Haynesville natural gas
trend in Louisiana. MMR is an industry leader in the emerging shallow
water ultra-deep gas trend with sizeable potential, located offshore
in the shallow waters of the Gulf of Mexico and onshore in South
Louisiana. The MMR portfolio is expected to provide a large, long-term
and low-cost source of natural gas production.
Completion of the transactions is subject to receipt of PXP and MMR
shareholder approval, regulatory approvals (including U.S. antitrust
clearance under the Hart-Scott-Rodino Act), and other customary
conditions. On December 26, 2012, the U.S. Federal Trade Commission
granted early termination of the Hart-Scott-Rodino waiting period with
respect to both transactions. PXP and MMR shareholder meetings to
approve the transactions will be scheduled upon the effectiveness of
the registration statements filed with the U.S. Securities and Exchange
Commission on December 28, 2012. The transactions are expected to
close in second-quarter 2013.
* Based on pricing assumptions of $3.50/lb for copper,
$1,500/oz for gold, $12/lb for molybdenum, $100/bbl Oil
(Brent) and $4.50/MMbtu natural gas.
EBITDA = Operating income before depreciation,
depletion and amortization.
ENHANCED GEOGRAPHIC AND
COMMODITY DIVERSIFICATION
FCX 2013e PRO FORMA EBITDA*
21%
South
America
74%
Mining
23%
Indonesia
26%
Oil and
Natural Gas
8%
Africa
48%
North
America
19