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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version on businesswire.com: http://www.businesswire.com/news/home/20151006005982/en/
Freeport-McMoRan 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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