Mining firm moves to buy Plains E&P, McMoRan Exploration

Freeport-McMoRan Copper & Gold Inc. reported plans Dec. 5 to acquire Plains Exploration & Production Co. and McMoRan Exploration Co. in cash-stock transactions to create what Freeport-McMoran is calling “a premier US-based natural resource company.”

The two acquisitions will create a corporation worth about $60 billion, including debt, Freeport-McMoRan said.

Terms call for Freeport-McMoRan to pay $6.9 billion in cash and stock for Plains E&P and to pay $3.4 billion in cash for McMoRan Exploration. The $3.4 billion amounts to $2.1 billion net of 36% interest in McMoRan Exploration that already is owned by Freeport-McMoRan and Plains E&P.

Upon closing, McMoRan shareholders also will receive a distribution of units in a royalty trust that will hold a 5% overriding royalty interest on future production in McMoRan’s offshore assets.

Freeport-McMoRan is regaining McMoRan Exploration, which was spun off from the mining company in 1994.

The transactions are expected to be finalized during second-quarter 2013, subject to regulatory approvals and customary closing conditions.

Freeport-McMoRan Chairman James R. Moffett said, “The combined mining and oil and gas teams have significant management and share a strong commitment to safety, community development, and environmental management.” Freeport-McMoRan is based in Phoenix.

Plains E&P is an independent oil and gas company in Houston that owns assets in California, Louisiana, and the deepwater Gulf of Mexico.

McMoRan Exploration is an independent based in New Orleans. It has assets in the gulf and onshore gulf coast.

Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now

Whitepapers

Maximizing Operational Excellence

In a recent survey conducted by PennEnergy Research, 70% of surveyed energy industry professional...

Leveraging the Power of Information in the Energy Industry

Information Governance is about more than compliance. It’s about using your information to drive ...

Reduce Engineering Project Complexity

Engineering document management presents unique and complex challenges. A solution based in Enter...

Revolutionizing Asset Management in the Electric Power Industry

With the arrival of the Industrial Internet of Things, data is growing and becoming more accessib...