Freeport-McMoRan Reviewing Options for Oil-and-Gas Business
October 06 2015 - 09:27AM
Dow Jones News
By Tess Stynes
Freeport-McMoRan Inc. said it is reviewing options for its
oil-and-gas business, adding that the potential public offering of
a minority interest in the business remains an alternative.
Phoenix-based Freeport also said it cut its board to nine
members from 16 members, with five of the departing members named
to an oil-and-gas board of directors and two others retiring. The
oil-and-gas board is in case that business is separated.
Freeport, whose main business is still copper, has been hurt by
sluggish commodities prices across the board and its mistimed bet
on the energy business.
The mining company on Tuesday said other options for the
oil-and-gas division include a possible spinoff, joint-venture
arrangements or further cost cuts.
Freeport said the latest moves come after discussions with many
of its biggest shareholders. The company has been under pressure
from activist investor Carl Icahn, who has disclosed a stake of
more than 8.5%, making him one of the company's biggest
shareholders.
Mr. Icahn disclosed the stake in late August when Freeport
announced it would slash 2016 capital spending by 29%, cut about
10% of its U.S. workforce--or more than 1,500 jobs--and reduce
output. Those moves came on top of plans to cut spending in its
oil-and-gas operation.
Freeport has been hurt by debt it took on to make a big bet on
oil and gas with the 2013 purchases of McMoRan Exploration Co. and
Plains Exploration & Production Co., for $9 billion combined.
It also moved to dramatically expand copper production on four
continents.
In June, Freeport-McMoRan Oil & Gas Inc. filed plans for an
initial public offering of up to $100 million in common shares to
fund a capital program and for other purposes.
Freeport shares, down by more than half this year through
Monday's close, rose 2.5% to $11.46 in recent premarket
trading.
Write to Tess Stynes at tess.stynes@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
October 06, 2015 09:12 ET (13:12 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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