Freeport-McMoRan 2014 Annual Report Download - page 18

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OPERATIONAL OVERVIEW
OIL AND GAS OPERATIONS
rough its wholly owned subsidiary, FCX Oil & Gas Inc.
(FM O&G), FCX has a portfolio of oil and gas assets that includes
oil production facilities and growth potential in the Deepwater Gulf
of Mexico (GOM), established oil production facilities onshore
and oshore California, large onshore natural gas resources in the
Haynesville shale in Louisiana, natural gas production from the
Madden area in central Wyoming and an industry-leading position
in the emerging Inboard Lower Tertiary/Cretaceous natural gas
trend located in the shallow waters of the GOM and onshore in
South Louisiana.
During 2014, FM O&G completed the sale of the Eagle Ford shale
assets and acquired additional interests in the Deepwater GOM.
FCX’s oil and gas business has signicant proved, probable and possible
reserves, a broad range of development opportunities and high-
potential exploration prospects. e business is managed to reinvest its
cash ows in projects with attractive rates of return and risk proles.
Following the recent sharp declines in oil prices, FCX has taken steps
to signicantly reduce capital spending plans and near-term oil and
gas growth initiatives in order to preserve cash ows and resources for
anticipated improved market conditions in the future.
Oil and gas sales volumes totaled 56.8 MMBOE (156 MBOE per day)
at an average realized price of $71.83 per BOE for 2014 and
38.1 MMBOE (178 MBOE per day) at an average realized price of
$76.87 per BOE for the seven-month period ending December 31,
2013. FCX expects 2015 sales volumes from its oil and gas operations
to approximate 55.5 MMBOE and average 152 MBOE per day,
comprised of approximately 67 percent oil, 28 percent natural gas and
5 percent natural gas liquids.
During fourth-quarter 2014, FM O&G achieved several positive
results in its exploration and development program, including positive
well results at Holstein Deep, Power Nap and Dorado in
the Deepwater GOM. FM O&G also completed
successful ow tests and commenced production in early
2015 at Highlander onshore in South Louisiana.
FM O&G’s strong
resource position
and productive
operations in the
highly prospective
Deepwater Gulf
of Mexico provide
an attractive
platform for long-
term growth.
OIL AND GAS SALES
in MMBOE
60
45
15
30
2014
* For the seven-month period ending
December 31, 2013.
2013*
16