PHOENIX--(BUSINESS WIRE)--Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) announced today that its
oil and gas subsidiary, Freeport-McMoRan Oil & Gas (FM O&G), has entered
into a definitive purchase and sale agreement to acquire certain of
Apache Corporation’s (Apache) (NYSE, Nasdaq: APA) interests in the
Deepwater Gulf of Mexico (GOM), including Apache’s interests in the
Lucius and Heidelberg oil production development projects and 11
exploration leases, for $1.4 billion.
The Deepwater GOM acquisition will be funded with proceeds from the
previously reported sale of FM O&G’s Eagle Ford Shale assets for $3.1
billion. The estimated combined after-tax net proceeds from these
transactions of approximately $1.3 billion will be used to repay
outstanding indebtedness following closing of the transactions.
James R. Moffett, Chairman of the Board; Richard C. Adkerson, Vice
Chairman, and FCX President and Chief Executive Officer; and James C.
Flores, Vice Chairman, and FM O&G President and Chief Executive Officer,
said, “Our recently announced agreement to sell our Eagle Ford assets
provides proceeds to repay debt and to acquire high-quality assets in
our Deepwater GOM focus area. These transactions are
value-accretive and the additional interests will enhance our portfolio
of assets which are characterized by strong margins, attractive growth
potential and compelling investment returns. We remain focused on
opportunities to advance our debt reduction objectives while
strengthening our portfolio of assets with strong margins and impactful
long-term growth opportunities.”
The Deepwater GOM assets being acquired, including Apache’s working
interests in the Lucius (11.7%) and Heidelberg (12.5%) oil production
development projects, have estimated proved, probable and possible
reserves of 55 million barrels of oil equivalents (BOE) and several
hundred million barrels of oil equivalents resource potential. The
Lucius unit includes Keathley Canyon Blocks 874, 875, 918 and 919 and
the Heidelberg unit includes Green Canyon Blocks 859, 903, 904 and 948.
Upon closing of this transaction, FM O&G will own a 35% working interest
in the Lucius development, which is on track to commence production in
the second half of 2014. Heidelberg, which is a large, high-quality oil
development project located in 5,000 feet of water in the Green Canyon
area, is operated by Anadarko Petroleum and is expected to commence
production in mid-2016. The hull fabrication for the 80,000-barrels of
oil per day Lucius-look-alike facility is more than 85% complete and the
spar is expected to be towed to the GOM later this year. Topsides
fabrication is currently more than 25% complete.
The 11 exploration leases to be acquired include Apache’s interests in
the Lucius Offset, Capri and Silver Fox/Parmer exploration areas with
working interests ranging from 16.67% to 60%.
The transaction has a May 1, 2014 effective date and is subject to
preferential rights and other customary closing conditions and purchase
price adjustments from the effective date until closing. The transaction
is expected to close by the end of the second quarter of 2014.
FCX is a premier U.S.-based natural resources company with an
industry-leading global portfolio of mineral assets, significant oil and
gas resources and a growing production profile. FCX is the world’s
largest publicly traded copper producer.
FCX’s portfolio of assets includes the Grasberg minerals district in
Indonesia, one of the world’s largest copper and gold deposits;
significant mining operations in the Americas, including the large-scale
Morenci minerals district in North America and the Cerro Verde operation
in South America; the Tenke Fungurume minerals district in the
Democratic Republic of Congo; and significant oil and natural gas assets
in North America, including reserves in the Deepwater GOM, onshore and
offshore California and in the Eagle Ford and Haynesville shale plays,
and an industry-leading position in the emerging Inboard Lower
Tertiary/Cretaceous natural gas trend in the shallow water of the GOM
and onshore in South Louisiana. Additional information about FCX is
available on FCX’s website at www.fcx.com.
Cautionary Statement Regarding Forward-Looking Statements: This
press release contains forward-looking statements, which are all
statements other than statements of historical facts, such as
expectations relating to completion of the pending transaction. The
words “anticipates,” “may,” “can,” “plans,” “believes,” “potential,”
“estimates,” “expects,” “projects,” “targets,” “intends,” “likely,”
“will,” “should,” “to be,” and any similar expressions are intended to
identify those assertions as forward-looking statements. FCX cautions
readers that forward-looking statements are not guarantees of future
performance and its actual results may differ materially from those
anticipated, projected or assumed in the forward-looking statements.
Important factors that can cause FCX’s actual results to differ
materially from those anticipated in the forward-looking statements
include the ability of the parties to satisfy customary closing
conditions and consummate the proposed transaction and other factors
described in more detail under the heading “Risk Factors” in FCX’s
Annual Report on Form 10-K for the year ended December 31, 2013, filed
with the U.S. Securities and Exchange Commission (SEC).
Investors are cautioned that many of the assumptions on which FCX’s
forward-looking statements are based are likely to change after its
forward-looking statements are made, including for example commodity
prices, which FCX cannot control, and production volumes and costs, some
aspects of which FCX may or may not be able to control. Further, FCX may
make changes to its business plans that could or will affect its
results. FCX cautions investors that it does not intend to update
forward-looking statements more frequently than quarterly
notwithstanding any changes in FCX’s assumptions, changes in business
plans, actual experience or other changes, and FCX undertakes no
obligation to update any forward-looking statements.
The SEC requires companies with significant oil and gas producing
activities to disclose, in their filings with the SEC, proved oil and
gas reserves that have been demonstrated by actual production or
conclusive formation tests to be economically and legally producible
under existing economic and operating conditions. The SEC also permits
the disclosure of probable and possible oil and gas reserves, as such
terms are defined by the SEC. FCX uses certain phrases and terms
in this press release, such as “resource potential,” which the SEC’s
rules prohibit FCX from including in its filings with the SEC. “resource
potential” does not take into account the certainty of resource
recovery, which is contingent on exploration success, technical
improvements in drilling access, commerciality and other factors, and is
therefore not indicative of expected future resource recovery and should
not be relied upon.
Contacts
Freeport-McMoRan Copper & Gold Inc.
Financial
Contacts:
Kathleen L. Quirk, 602-366-8016
David
P. Joint, 504-582-4203
or
Media Contact:
Eric
E. Kinneberg, 602-366-7994