Freeport-mcmoran, Inc. · NYSE:FCX
Freeport-mcmoran — Howard Weil Energy Conference 2014
34 slides from Freeport-mcmoran's conference presentation, Mar 25, 2014
Slide 1: Howard Weil Energy Conference March 2014
Howard Weil Energy Conference March 2014
Slide 2: Forward Looking Statement
Forward Looking Statement Cautionary Statement This presentation contains forward-looking statements in which Freeport-McMoRan Oil & Gas (FM O&G) discusses its potential future performance. Forward-looking statements are all statements other than statements of historical facts, such as projections o
Slide 3: Brent Historical Prices / Forward Curves and Worldwide Oil Demand
Brent Historical Prices / Forward Curves Worldwide Oil Demand 35,000 WW Oil Demand 34,500 Brent Price 34,000 33,500 Demand in mmbbls 33,000 $/bbl 32,500 32,000 31,500 31,000 30,500 30,000 Source: Brent Historical Prices & Forward Curves - Goldman Sachs, NYMEX, ICE; Worldwide Oil Demand – FM O&G, EIA
Slide 4: Oil & Gas Portfolio
Oil & Gas Portfolio Chevron Chariot FM O&G Morocco Mazagan Permit Area Kosmos, BP Kosmos, BP Madden Agadir Chevron Kosmos, BP • 133 BCFE total resource potential Cairn Genel California • 107 BCFE proved reserves Cairn, Genel Genel • 434 MMBOE total resource potential • 30+ future locations • 188 MMB
Slide 5: Year End 2013 3P Reserves
Year End 2013 3P Reserves 1000 861 750 213 MMBOE 500 184 250 464 0 2013 Proved Probable Possible Note: The 3P oil and gas reserves presented were determined using the methods prescribed by the U.S. Securities and Exchange Commission, which require the use of an average price, calculated as the twelv
Slide 6: 2013 3P Reserves 861 MMBOE as of 12/31/13
2013 3P Reserves 861 MMBOE as of 12/31/13 By Commodity By Region 6:1 Ratio Haynesville/ Other 7% Oil GOM 76% 43% California Gas 41% Eagle 20% Ford 9% 4% NGLs Note: Please refer to note on slide 5. 6
Slide 7: 2013 Year in Review: Focused on Execution
2013 Year in Review Focused on Execution Strong Operating Performance - 40% Increase in pro forma production volumes compared to prior year - 125% Increase in pro forma cash flow compared to prior year Advanced Important Projects for Profitable Future Growth - Lucius deepwater GOM Development ne
Slide 8: A Strong & Focused Organization
A Strong & Focused Organization Key Strengths Strong Management of the Base Production 2013 MBOE/D 2013 Cash Operating Margins (1) - Offshore GOM 72 (2) $70 - California 39 $62 ˗ Eagle Ford 46 $67 Effective Capital Management - Focus on oil & gas cash operating margins - Manage production/invest
Slide 9: Operational Plan
Operational Plan Oil & Gas Cash Net Production Operating Margin(1)(2) 450 2013 Results $7,200 400 Significantly $6,400 350 Exceeded Plan $5,600 300 $4,800 MBOE/D 250 $4,000 MM$ 200 $3,200 150 $4,400 $4,500 $4,700 $2,400 $4,000 $4,100 100 $3,500 $1,600 $2,500 $3,000 50 $800 0 $0 PF2013 2014E 2015E 20
Slide 10: Base Oil Producing Assets
Base Oil Producing Assets California Gulf of Mexico Eagle Ford Texas Louisiana WILSON ATASCOSA KARNES San Joaquin Valley Pt Pedernales Arroyo Grande Los 72,800 BOE/D Angeles Basin 4Q 2013 Production Pt Arguello HLS Pricing 38,900 BOE/D 4Q 2013 Production 48,200 BOE/D 2,000+ Future Location
Slide 11: Per BOE Cash Operating Margin Strength by Area 4Q 2013
Per BOE Cash Operating Margin Strength by Area 4Q 2013 California Deepwater GOM Eagle Ford Cash Operating Cash Operating Cash Operating Margin Margin Margin $54 $75 $64 Cash Production Costs $35 Cash Production Costs Cash Production Costs $12 $11 Note: Cash production costs include lease operating e
Slide 12: Cash Operating Margin Leader Quarter Ending December 31, 2013
Cash Operating Margin Leader Quarter Ending December 31, 2013 $70.00 $/BOE $60.00 $50.00 $40.00 $30.00 $20.00 $10.00 $0.00 FM O&G Note: Sources: public filings, Barclays. Companies referenced in this chart: Apache, Anadarko, Chesapeake, Chevron, ConocoPhillips, Devon, EOG, Exxon, Marathon and Occide
Slide 13: Dynamic Production Growth
Dynamic Production Growth Operating Development Exploration 350 300 Keathley Canyon Mississippi Pliocene-Miocene 250 Inboard Lower Canyon Area GreenTertiary/Cretaceous MBOE/D Inboard Lower Canyon Area Keathley Canyon Tertiary/Cretaceous Mississippi Lower Tertiary 200 Green Canyon Area Inboard Lower
Slide 14: Exploration/Development Growth Areas
Exploration/Development Growth Areas Louisiana Inboard Lower Tertiary/Cretaceous 1 Viosca 5 Knoll 2 Morocco Mississippi Canyon Mississippi Canyon Area Green Canyon Area 3 Atwater Valley Morocco Garden Banks Green Canyon Africa Walker Ridge Lund Keathley Canyon 4 Keathley Canyon Pliocene-Miocene 14
Slide 15: Conceptual Model Inboard Lower Tertiary/Cretaceous
Conceptual Model Inboard Lower Tertiary/Cretaceous Recognized as Industry Leader in This New Exploration Frontier Drilling activities to date have successfully confirmed geologic model and have indicated the potential for a major new geologic trend spanning 200 miles in the shallow waters of the GOM
Slide 16: Inboard Lower Tertiary/Cretaceous
Inboard Lower Tertiary/ Cretaceous 1 Texas Louisiana Highlander Lineham Creek England Davy Jones Blackbeard Area Exploration Development Assets Approximately 15 identified exploration and development projects Spud dates starting May 2014 with net resource potential for the initial program of 2.5
Slide 17: Highlander Discovery – Cretaceous Tuscaloosa
Highlander Discovery – Cretaceous Tuscaloosa Highlander Discovery FM O&G Jeanerette Minerals #1 Proposed Location Cretaceous Tuscaloosa Trend Cumulative Production 3.1 TCF, 121 mmbc Tuscaloosa Trend Gross Pay Highlander Discovery LOUISIANA Economics: Highlander 20 – 30% ROR $0.5 - $1.0 B Net PV10% D
Slide 18: Highlander Discovery – Cretaceous Tuscaloosa
Highlander Discovery – Cretaceous Tuscaloosa Highlander Discovery FM O&G Judge Digby Field Type Log Jeanerette Minerals #1 3.0 TCF Gross Resource Potential Tusc 1 Tusc 2 Tusc 3 Proposed Location Cretaceous Tuscaloosa Trend Cumulative Production 3.1 TCF, 121 mmbc Tuscaloosa Trend Highlander Discovery
Slide 19: Deepwater Gulf of Mexico
Deepwater Gulf of Mexico Louisiana Texas Ram Powell Marlin Viosca Knoll Horn Mountain Mississippi Canyon Green Canyon Atwater Valley East Breaks Garden Banks Holstein Diana Hoover Alaminos Canyon Keathley Canyon Walker Ridge Lucius Discoveries FM O&G Leases Phobos 19
Slide 20: Deepwater Gulf of Mexico Exploration & Development
Deepwater Gulf of Mexico Exploration & Development Net Installed Oil Net Resource Production Capacity Net Leasehold Production Area Potential Capacity Utilization Acreage (MMBOE) (BOE/D) Mississippi Canyon 68,000 286 Horn Mountain 75,000 12% Marlin 60,000 45% Green Canyon 58,000 995 Holstein 113,500
Slide 21: 2014 Central GOM Lease Sale
2014 Central GOM Lease Sale Area Blocks Net Acreage Facility Shelf 4 14,224 Mississippi Canyon 9 51,840 Horn Mountain Viosca Knoll 2 11,520 Marlin Green Canyon 2 11,520 Holstein Atwater Valley 3 17,280 Total 20 106,384 Total Net Resource Potential 1.1 Billion BOE Total Bid $330 MM Note: The Company
Slide 22: Mississippi Canyon Area
Mississippi Canyon Area 2 VK0868 VK0869 VK0870 VK0871 VK0872 VK0873 Marlin 19 identified exploration and Ram Powell development projects targeting VK0912 VK0913 VK0914 VK0915 Dorado VK0916 VK0916 8 stacked, high quality Miocene MMBOE reservoir sands VK0956 VK0957 VK0958 VK0959 VK0960 VK0961 286
Slide 23: Mississippi Canyon King M63
Mississippi Canyon King M63 King Field Composite Type Log 80 MMBOE Net Resource Potential Prop M63 #1 NW Fault Block A’ Prop #3 Prop M63 #1ST1 Prop #2 Prop D3ST M63 Sand Attic Prop D9 D3 M63 Sand Producer A 23
Slide 24: Mississippi Canyon Horn Mountain Deep
Mississippi Canyon Horn Mountain Deep Horn Mountain Composite Type Log 47 MMBOE Net Resource Potential Deeper pool test below proven J&M Sand field pays targeting the M56 Sand which has been found productive in several nearby exploration prospects Large structural closure with numerous offset opport
Slide 25: Green Canyon Area
Green Canyon Area 3 Holstein Tungsten Deep 599 598 600 601 602 603 14 identified exploration and 25 65 MMBOE development projects targeting MMBOE Holstein highly productive Miocene and 642 643 94644 645 646 647 MMBOE 568 Wilcox sands MMBOE 995 MMBOE net resource 686 687 688 689 690 691 potential
Slide 26: Green Canyon Holstein Deep Development
Green Canyon Holstein Deep Development Miocene Type Log 141.5 MMBOE Net Resource Potential GC 643 OCS-G 16772 #1 & 1ST2 Oil Proposed Wells 26
Slide 27: Keathley Canyon Area Pliocene Miocene
Keathley Canyon Area 4 Pliocene Miocene 1 identified development East Breaks Garden Banks project and 4 identified exploration projects targeting highly productive Pliocene and Diana Miocene sands Hoover Keathley Canyon Lucius, the development project, is currently in Lucius completion Alaminos
Slide 28: Lucius Spar Installation
Lucius Spar Installation • 300+ MMBOE gross resource • World-class reservoir quality and deliverability • First oil in second-half 2014 28
Slide 29: Keathley Canyon Lucius Development
Keathley Canyon Lucius Development 82 MMBOE Net Resource Potential Pliocene Lucius 1 Lucius 3 Lucius 6 Lucius 2 Lucius 4 Lucius 5 919 Miocene Completion Miocene Oil Gas Planned Producer 29
Slide 30: Morocco Miocene and Cretaceous Exploration
Morocco 5 Miocene and Cretaceous Exploration Approximately 8 identified exploration projects Spud dates starting January 2015 Net resource potential of 1.7 Billion BOE for the first 3 prospects (Toubkal, Jbel Musa and Amtoudi) 30
Slide 31: Freeport-McMoRan Oil & Gas Today
Freeport-McMoRan Oil & Gas Today High Value Production With Superior Margins + High Impact Development Projects Directed Around Producing Assets + Emerging Exploration From Inboard Lower Tertiary/Cretaceous, International and Deepwater Gulf of Mexico = High Growth Oil Production with Industry Leadin
Slide 32: Addendum
EXPANDING RESOURCES Addendum
Slide 33: Reconciliation of Cash Operating Margin (Non-GAAP) to Gross Profit (GAAP)
Reconciliation of Cash Operating Margin (Non-GAAP) to Gross Profit (GAAP) The following table reconciles cash operating margin, a non-GAAP measure, to gross profit (GAAP) for the seven months ended December 31, 2013. Management believes this presentation may be useful to investors. FM O&G management
Slide 34: Reconciliation of Cash Operating Margin (Non-GAAP) to Gross Profit (GAAP)
Reconciliation of Cash Operating Margin (Non-GAAP) to Gross Profit (GAAP) The following table reconciles cash operating margin, a non-GAAP measure, to gross profit (GAAP) for the three months ended December 31, 2013. Management believes this presentation may be useful to investors. FM O&G management
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