Freeport-McMoRan Copper & Gold Inc. To Invest $500 Million in McMoRan Exploration Co.
September 20 2010 - 7:30AM
Business Wire
Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) has agreed
to purchase $500 million of 5 3/4% Convertible Perpetual Preferred
Stock (“Preferred Stock”) of McMoRan Exploration Co. (NYSE: MMR) in
connection with MMR’s proposed oil and gas property acquisition
from Plains Exploration & Production Company (NYSE:PXP) (MMR’s
press release dated September 20, 2010 is available at
www.mcmoran.com). The Preferred Stock is convertible into MMR
common stock at a conversion price of $16 per share. A group of
institutional investors has also agreed to concurrently purchase
$400 million in convertible securities, including a portion of the
Preferred Stock, of MMR.
MMR is engaged in the exploration, development and production of
oil and natural gas in the shallow waters of the Gulf of Mexico
Shelf. MMR is currently undertaking a major capital program
involving its Davy Jones discovery and other high potential
exploration opportunities. FCX’s investment will allow it to
participate in MMR’s highly prospective North American exploration
and development activities, which have the potential to generate
significant value.
FCX’s investment was negotiated between a special committee of
independent directors of the FCX board of directors and a special
committee of independent directors of the MMR board of directors.
The special committees each engaged independent financial and legal
advisors in connection with this transaction. The FCX special
committee was advised by Lazard Frères & Co and the law firm of
Wachtell, Lipton, Rosen & Katz.
The closing of the investment is subject to the completion of
MMR’s property acquisition from PXP, MMR shareholder approval of
the issuance of securities to FCX, and other customary closing
conditions. Closing of the investment is expected to occur by
year-end 2010.
FCX is a leading international mining company with headquarters
in Phoenix, Arizona. FCX operates large, long-lived, geographically
diverse assets with significant proven and probable reserves of
copper, gold and molybdenum. FCX has a dynamic portfolio of
operating, expansion and growth projects in the copper industry and
is the world’s largest producer of molybdenum.
The company’s portfolio of assets includes the Grasberg mining
complex, the world’s largest copper and gold mine in terms of
recoverable reserves, significant mining operations in the
Americas, including the large scale Morenci and Safford minerals
districts in North America and the Cerro Verde and El Abra
operations in South America, and the Tenke Fungurume minerals
district in the Democratic Republic of Congo. Additional
information about FCX is available on FCX’s web site at
“www.fcx.com.”
Cautionary Statement: This press release contains
forward-looking statements that involve a number of assumptions,
risks and uncertainties that could cause actual results to differ
materially from those contained in the forward-looking statements.
We caution readers that those statements are not guarantees of
future performance and our actual future financial results may
differ materially from those anticipated, projected or assumed in
the forward-looking statements. Such forward-looking statements
include, but are not limited to, statements about the proposed
transactions and other statements that are not historical facts. No
assurances can be given that any of the events anticipated by the
forward-looking statements will transpire or occur, or if any of
them do so, what impact they will have on our results of operations
or financial condition. Important factors that can cause actual
results to differ materially from the results anticipated by
forward-looking statements include, but are not limited to, those
associated with general and economic business conditions,
fluctuations in commodity prices, the failure to complete the
proposed transaction, the inability to satisfy the closing
conditions to the proposed transaction, the risk of loss of some or
all of the proposed investment, and other factors described in more
detail under the heading “Risk Factors” in our 2009 Form 10-K,
filed with the Securities and Exchange Commission (SEC), as updated
by our subsequent filings with the SEC. Investors are cautioned
that many of the assumptions on which our forward-looking
statements are based are likely to change after our forward-looking
statements are made, including for example commodity prices, which
we cannot control, and production volumes and costs, some aspects
of which we may or may not be able to control. Further, during the
quarter, we may make changes to our business plans that could or
will affect our results for the quarter. We caution investors that
we do not intend to update our forward-looking statements more
frequently than quarterly, notwithstanding any changes in our
assumptions, changes in our business plans, our actual experience,
or other changes, and we undertake no obligation to update any
forward-looking statements.
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