Freeport-McMoRan Announces Agreement to Sell Eagle Ford Interests for $3.1 Billion
07 Mai 2014 - 12:00PM
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 sell its Eagle Ford Shale assets for $3.1 billion to a
subsidiary of Encana Corporation (Encana) (TSX, NYSE: ECA). FCX
estimates after tax net proceeds from the transaction of
approximately $2.5 billion. Approximately half of the proceeds will
be used to repay outstanding indebtedness and the balance is
expected to be used for investments in additional assets in the
Deepwater Gulf of Mexico to accelerate the company’s growth
initiatives.
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, “This transaction represents an important
step in our ongoing debt reduction plan while providing additional
capital to enhance our portfolio of assets with superior margins
and growth characteristics.”
Mr. Flores continued: “Our team built a solid position in the
Eagle Ford which will enable Encana to build on our success.
The transaction is part of our plan to monetize approximately $4
billion in energy assets to provide meaningful proceeds for debt
repayment while enabling us to refocus our asset base and capital
allocation on our strategic growth areas in the Gulf of Mexico,
which we believe provide industry leading margins, high impact
long-term growth opportunities and superior investment
returns.”
The Eagle Ford assets include all of FM O&G’s interests on
approximately 45,500 net acres with estimated net proved reserves
totaling 59 million barrels of oil equivalents (BOE) and estimated
net proved and probable reserves of 69 million BOE at year-end
2013. Production from the field averaged 53,000 BOE per day in the
first quarter of 2014.
The transaction effective date is April 1, 2014 and is expected
to close by the end of the second quarter of 2014, subject to
customary closing conditions and purchase price adjustments from
the effective date until closing.
No gain or loss is expected to be recorded on the
transaction.
Barclays Capital Inc. provided financial advisory services to FM
O&G in connection with this transaction.
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 shallow water Inboard
Lower Tertiary/Cretaceous natural gas trend on the Shelf 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.
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.
Freeport-McMoRan Copper & Gold Inc.Financial
Contacts:Kathleen L. Quirk,
602-366-8016orDavid P. Joint,
504-582-4203orMedia Contact:Eric E. Kinneberg,
602-366-7994
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