The world's largest publicly-traded copper producer has announced it will buy two major oil and gas companies, Houston-based Plains Exploration & Production Co. and McMoRan Exploration Co., which is based in New Orleans and operates in the Gulf of Mexico. Freeport-McMoRan Copper and Gold will purchase the two companies for about $9 billion, The New York Times reported.
The acquisition of the companies will mean Freeport can begin oil exploration in shale formations in Texas and Louisiana and in the Gulf of Mexico, the article stated. By doing so, Freeport will once again become an oil explorer for the first time since 1994.
About 74 percent of the company's earnings next year are still expected to come from mining, with just over 25 percent coming from oil and gas operations.
"We have a situation where we have the best mining business in the world," said Freeport chairman James R. Moffett, according to the Times. "And now we think we're going to have the best oil and gas assets."
Investors are not as confident as the company on the new deal, Bloomberg reported, as the success of combining a mining company with oil and gas exploration and production "remain to be seen," as one analyst put it.