McMoRan Exploration Co. Completes Acquisition of Plains Exploration & Production Company’s Gulf of Mexico Shallow Water She...
December 30 2010 - 3:00PM
Business Wire
McMoRan Exploration Co. (NYSE: MMR) announced today the
completion of its previously announced acquisition of Plains
Exploration & Production Company’s (NYSE: PXP) shallow water
Gulf of Mexico (GOM) shelf assets and related financings. The
transactions were approved by McMoRan’s shareholders at a special
meeting of stockholders held today. Approximately 99 percent of the
votes cast supported these transactions.
Under the terms of the PXP transaction, McMoRan issued 51
million shares of McMoRan common stock and paid $75 million in cash
to PXP for all of PXP’s interests and exploration rights in the
shallow waters of the shelf of the GOM. In addition, McMoRan paid
PXP $11 million associated with estimated revenues, expenses and
capital expenditures attributable to the properties from the August
1, 2010 effective date through the closing date.
The acquisition increases McMoRan’s scale of operations on the
GOM shelf, consolidates its ownership in core focus areas, expands
its participation in its deep gas and ultra-deep exploration and
development programs and increases current reserves and
production.
The financing transactions completed today include the
previously announced (September 20, 2010) $900 million in
equity-linked securities, including, $200 million of 4% Convertible
Senior Notes due 2017 and $700 million of 5 3/4% Convertible
Perpetual Preferred Stock. The financing included $400 million in
investments from institutional investors and $500 million of
convertible preferred stock from Freeport-McMoRan Copper & Gold
Inc.
After funding the cash portion of the acquisition, McMoRan
estimates its year-end 2010 cash position will approximate $900
million, which is available to fund future capital expenditures
associated with McMoRan’s expanded asset base and for general
corporate purposes.
McMoRan also announced today the appointment of two designees of
PXP, James C. Flores and John F. Wombwell, to McMoRan’s Board of
Directors pursuant to the agreement between McMoRan and PXP.
James R. Moffett and Richard C. Adkerson, Co-Chairmen of
McMoRan said: “We are pleased to complete this important
acquisition which enables us to effectively double our
participation in our key exploration and production projects in the
shallow waters of the GOM. Our multi-year efforts have
enabled us to define and de-risk the significant geologic potential
of this exciting new exploration frontier and develop substantial
expertise in executing our drilling and development program.
The financing transactions completed today provide McMoRan with
significant financial resources to pursue our plans as we work to
create asset values and build on our success.”
McMoRan has approximately 157 million basic shares of common
stock outstanding. Assuming conversion of McMoRan’s remaining
outstanding 8% Convertible Perpetual Preferred Stock, 5.25%
Convertible Debt due 2011 and including the newly issued 4%
Convertible Senior Notes and 5 3/4% Convertible Perpetual Preferred
Stock, McMoRan would have approximately 221 million common shares
outstanding on a fully converted basis.
McMoRan Exploration Co. is an independent public company engaged
in the exploration, development and production of natural gas and
oil in the shallow waters of the GOM Shelf and onshore in the Gulf
Coast area. Additional information about McMoRan is available on
its internet website “www.mcmoran.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 or exploration and development success, and our
actual exploration experience and 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 potential
opportunities and benefits presented by the proposed property
acquisition, including expectations regarding reserve estimates and
production rates, statements about the proposed financing
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 economic and business conditions,
variations in the market demand for, and prices of, oil and natural
gas, the closing of the property acquisition, the exercise of
preferential rights by third parties, the availability of financing
on commercially reasonable terms and the closing of such financing
transactions, each of which depends on the satisfaction of various
closing conditions, including, but not limited to, obtaining
shareholder approval of the issuances of securities as required
under New York Stock Exchange rules and obtaining regulatory
approvals, and other factors described in more detail in Part I,
Item 1A. "Risk Factors" included in our 2009 Form 10-K, as updated
by our subsequent filings with the SEC. Investors are cautioned
that many of the assumptions upon which our forward-looking
statements are based are likely to change after our forward-looking
statements are made, including for example the market prices of oil
and natural gas, 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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