PHOENIX--(BUSINESS WIRE)--
Freeport-McMoRan Inc. (NYSE: FCX) announced today that it has reduced
the size of its Board from sixteen to nine members and is undertaking a
review of strategic alternatives for its oil and gas business, following
constructive discussions with many of its largest shareholders.
The reconstituted FCX Board is comprised of seven independent directors:
Gerald J. Ford (Lead Independent Director), Robert A. Day, Lydia H.
Kennard, Jon C. Madonna, Dustan E. McCoy, Stephen H. Siegele and Frances
Fragos Townsend; and two executive directors: James R. Moffett,
Chairman, and Richard C. Adkerson, Vice Chairman, President and Chief
Executive Officer. In addition, the Company will no longer have an
Office of the Chairman management structure.
Gerald J. Ford, Lead Independent Director, said: “We have discussed
as a Board our proper and most effective size and make-up, consistent
with the needs of the business going forward. We have listened to and
taken into account views and concerns from many of our largest
shareholders. Our newly reconstituted Board brings diverse and extensive
professional, financial and business experience while balancing
independence and tenure. The Board represents a strong blend of
institutional knowledge and fresh perspectives that will benefit
shareholders as we address market challenges and position the company
for long-term success.”
FCX also announced that its Board has undertaken a strategic review of
its oil and gas business (FM O&G) to evaluate alternative courses of
action designed to enhance value to FCX shareholders and achieve
self-funding of the oil and gas business from its cash flows and
resources.
FM O&G’s high quality asset base, substantial underutilized Deepwater
Gulf of Mexico infrastructure, large inventory of low risk development
opportunities and talented and experienced personnel and management team
provide alternatives to generate value. The previously announced
potential public offering of a minority interest in FCX’s oil and gas
business remains an alternative for future consideration, the timing of
which is subject to market conditions.
Other alternatives currently under consideration include a spinoff of
FCX’s oil and gas business to its shareholders, joint venture
arrangements and further spending reductions. The oil and gas strategic
review is being undertaken with an objective of improving FCX’s
financial position and enhancing long-term value for its shareholders.
In preparation of considering a separation of the oil and gas business,
five directors have left the FCX Board and have been appointed to the FM
O&G Board of Directors. James C. Flores has been named FM O&G Chairman
and remains Chief Executive Officer of FM O&G. Joining Mr. Flores on the
FM O&G Board are Robert J. Allison, Jr., Alan R. Buckwalter, III, Thomas
A. Fry, III and Charles C. Krulak.
H. Devon Graham, Jr. and Bobby Lee Lackey have retired from the FCX
Board.
James R. Moffett, Chairman of the Board, said: “On behalf of the
Board, I would like to extend our deepest gratitude to our former
directors and acknowledge their contributions, service, guidance and
counsel while serving on the FCX Board.”
FCX’s strategy will focus on its global leading position in the copper
industry. Near-term, this strategy will involve managing its production
activities, spending on capital projects and operations, and the
administration of its business to enhance cash flows and protect
liquidity.
While taking prudent near-term steps responsive to the currently weak
market conditions, FCX remains confident about the longer term outlook
for copper prices based on the global demand and supply fundamentals. A
primary objective will be a significant reduction over time of FCX’s
current debt level. With its established reserves and large scale
current production base, its significant portfolio of undeveloped
resources, and its global organization of highly qualified dedicated
workers and management, FCX is well positioned to build value for its
shareholders.
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 DRC; and
significant U.S. oil and natural gas assets in the Deepwater GOM,
onshore and offshore California and in the Haynesville natural gas
shale, and a position in the Inboard Lower Tertiary/Cretaceous natural
gas trend onshore in South Louisiana.
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 commodity prices, development and production
activities, production volumes, ability to repay debt, statements
regarding the review of strategic alternatives for FCX’s oil and gas
business, including the previously announced potential public offering
of a minority interest in FCX’s oil and gas business, a potential
spinoff of FCX’s oil and gas business to its shareholders, potential
joint venture arrangements, and potential further spending reductions.
FCX cautions readers that those statements are not guarantees of future
performance and actual results may differ materially from those
anticipated, projected or assumed in the forward-looking statements. In
particular, on August 5, 2015, we announced revisions to our oil and gas
capital expenditure and production outlook and on August 27, 2015, we
announced revisions to our mining operations capital expenditure and
production outlook.
Important factors that can cause FCX’s actual results to differ
materially from those anticipated in the forward-looking statements
include supply of and demand for, and prices of, copper, gold,
molybdenum, cobalt, crude oil and natural gas, mine sequencing,
production rates, industry risks, regulatory changes, political risks,
drilling results, potential additional oil and gas property impairment
charges, potential lower of cost or market inventory adjustments,
potential impairment of long-lived mining assets, FCX’s ability to
complete transactions with strategic investors interested in investing
capital in the development of its oil and gas and mining properties,
FCX’s ability to launch or complete the previously announced potential
initial public offering of a minority interest in Freeport-McMoRan Oil &
Gas Inc. on acceptable terms or at all, any decisions with respect to
and the timing and success of any other strategic alternatives for FCX’s
oil and gas business, the outcome of negotiations with the Indonesian
government regarding PT Freeport Indonesia’s Contract of Work, PT
Freeport Indonesia’s ability to obtain renewal of its export license
after January 28, 2016, PT Freeport Indonesia’s ability to renew its
bi-annual labor agreement expiring in September 2015, the potential
effects of violence in Indonesia, the resolution of administrative
disputes in the Democratic Republic of Congo, weather- and
climate-related risks, labor relations, environmental risks, litigation
results and other factors described in more detail in Part I, Item 1A.
“Risk Factors” of FCX’s annual report on Form 10-K for the year ended
December 31, 2014, as updated by FCX’s subsequent filings with the
Securities and Exchange Commission.
Investors are cautioned that many of the assumptions on which FCX's
forward-looking statements are based are likely to change after the
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 not be able to control. Further, FCX may make
changes to its business plans that could 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.
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Source: Freeport-McMoRan Inc.