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1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc.

Freeport-Mcmoran Inc. · Apr 23, 2015 · 40 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 1
    1st Quarter 2015 Earnings Conference Call April 23, 2015
  2. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 2
    Value at Our Core 2014 Annual Report Highlights Substantial Values in Long-Lived, Geographically Diverse Natural Resources - Premier Portfolio of Global Mining Assets - High-Quality, U.S.-Based Oil & Gas Assets with Attractive…
  3. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 3
    1Q15 Highlights Mining Oil & Gas Successful Ramp-up of Morenci Positive Drilling Results at Holstein Expansion Deep, Power Nap and King Significant Expansion of Record Quarterly Tenke Sales Resource Base Following Successful…
  4. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 4
    Financial Highlights Sales Data 1Q15 1Q14 Copper Consolidated Volumes (mm lbs) 960 871 Average Realization (per lb) 2.72 3.14 Site Production & Delivery Costs (per lb) 1.93 1.89 (1) Unit Net Cash Costs (per lb) 1.64 1.54 Gold…
  5. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 5
    Copper Market Commentary Market Expectations for Surpluses Have Not Materialized China Slowing Growth Rate on Larger Base; Economic Stimulus U.S. Growing at Moderate Rate Economic Stimulus in Europe and Japan Continuing Supply…
  6. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 6
    1Q 2015 Mining Operating Summary 1Q15 Unit Production Costs Cash Unit Costs North South (per pound of copper) America America Indonesia Africa Consolidated Site Production & Delivery 1.81 1.75 2.84 1.57 1.93 By-Product Credits…
  7. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 7
    Positioned for Margin & Free Cash Flow Growth Growing Copper Sales Profile Declining Unit Net Cash Cost Profile (millions of lbs) 2.00 ( per lb) 1,500 1.64 1.62 1.50 1,370 1.45 1,250 1.20 1,230 1.00 1,000 1,060 960 960 0.50…
  8. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 8
    Cerro Verde Mill Expansion Detailed engineering & major procurement activities complete To become worlds largest concentrating facility Construction advancing on schedule & approximately 70% complete Completion expected in late…
  9. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 9
    Indonesia Engaged in Active Discussions with Government to Amend COW Positive Long-term Partnership Economic Engine for Development of Papua Operations Provide Significant Benefits to Indonesian Economy All Rights Under COW to…
  10. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 10
    Grasberg BC & DMLZ Underground Mine Development Completed development of access to underground ore bodies Expect DMLZ start-up in late 2015 & Grasberg BC in 2018 Key development activities include work on ore flow systems &…
  11. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 11
    Brownfield Development Studies El Abra Bagdad Large sulfide resource 0.4% Cu Large sulfide resource 0.3% Cu supports 260 mt/d mill Resource supports potential to Potential incremental production more than double mill capacity* 750…
  12. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 12
    Oil Market Commentary 150 Brent and HLS Pricing per Bbl FM O&G 1Q 2015 Sales Volumes 125 Oil 8.4 MMBbls Natural Gas 21.8 Bcf NGLs 0.5 MMBbls Oil Equivalents 12.5 MMBOE 100 75 50 (/bbl) 2016 2018 2014 1Q15 Apr15* Strip…
  13. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 13
    FM O&G Growth Momentum 2013 2014 2015 First Production at Lucius Development Integrated Deepwater GOM Assets - Implemented Asset Rotation Strategy Marlin, Horn Mountain, Holstein - via Acquisition & Divestment Drilled Second…
  14. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 14
    145 Potential Projects in Inventory With IRRs Greater Than 20% at Strip Pricing in Deepwater GOM Number Weighted- Exploitation/Tieback Projects Facility of Potential Average Projects Pre-Tax IRR Keathley Canyon Area Lucius 15…
  15. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 15
    1Q 2015 FM O&G Highlights Production from Three Projects which Commenced in 1Q15 Totaled 25 MBOE per day at End of March Continued Steady Production Performance from California Advanced DW GOM Oil Growth Strategy Established…
  16. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 16
    Deepwater GOM Progress Report Green Canyon Area 2nd Subsea Delineation Well Logged 482 of Net Oil Pay Established Sand Continuity Across Reservoir Holstein Deep 280 MMBOE Gross Resource Potential (was 75 MMBOE Initial Discovery)…
  17. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 17
    Deepwater Gulf of Mexico Focus Areas Net Unrisked Louisiana Resource Potential 4.7 Billion BOE Dorado Marlin King Viosca Knoll Ram Powell Horn Mississippi Mountain Canyon Vito KOQV Green Canyon Power Nap Holstein Deep…
  18. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 18
    Holstein Facility Holstein Deep Development M18 Sand Structure Drilling Results To-Date Support Increased Gross Resource Potential Phase 2 (MMBOE) Development Wells (M13) (M18) 280 SS2 Development 75 Well (M18) Discovery…
  19. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 19
    Project Production Profile Holstein Deep Production Profile (Net Boe/d) By Phase 20
  20. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 20
    Vito Area-Power Nap Discovery Regional Miocene Vito North Vito MC 940 9 MMBOE* Power Nap Discovery Discovery Well 100 MMBOE* Vito Development 100 MMBOE* Deep Sleep Ravioli 185 MMBOE* 40 MMBOE* Spitfire Sun 384 MMBOE* 240…
  21. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 21
    Dynamic Production Growth Estimated 5-Year Reserve Replacement: Estimated Finding & Development Cost: 137% 5-Year 26/BOE 10-Year 21/BOE 22
  22. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 22
    O&G Funding Considerations Current Plan Without Additional Funding (1) Significant Inventory of Development 173 Projects 4.7 Billion BOE of Net 143 151 2.1 Unrisked Resource Potential 1.4 1.2 Activities Over Last 2 Years have…
  23. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 23
    IPO Alternative for Freeport-McMoRan Oil & Gas Provides Alternative Form of Equity Capital to Fund O&G Business Highlights Standalone Value of O&G Business Achieve Corporate Objective of Funding O&G Business with O&G Cash Flows,…
  24. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 24
    2015e Outlook Sales Outlook Unit Cost Copper: 4.2 Billion lbs. 1.53/lb(2) of Copper Gold: 1.3 Million ozs. 19/BOE Molybdenum: 95 Million lbs. Oil Equivalents(1): 52.3 MMBOE (67% Oil) Operating Cash Flows (3) Capital…
  25. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 25
    Sales Profile Copper Sales (billion lbs) Gold Sales (million ozs) 3 6 2 2.4 1.9 5.4 1 1.25 1.3 5.0 0 2014 2015e 2016e 2017e 4 4.2 3.9 Note: Consolidated gold sales include 123k ozs in 2014, 120k ozs in 2015e, 175k ozs in…
  26. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 26
    2015e Quarterly Sales Gold Sales (thousand ozs) Copper Sales (million lbs) 400 1,250 300 375 365 300 1,230 200 263 100 1,000 1,060 0 960 960 1Q15 2Q15e 3Q15e 4Q15e Note: Consolidated gold sales include approximately 24k ozs in…
  27. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 27
    2015e Operating Estimates 2015e Unit Production Costs (per pound of copper) North South America America Indonesia Africa Consolidated Cash Unit Costs (1) Site Production & Delivery (2) 1.74 1.58 2.28 1.67 1.81 By-product Credits…
  28. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 28
    EBITDA and Cash Flow at Various Copper Prices Average EBITDA (1,200 Gold, 8 Molybdenum & 70 Oil) 15 (US billions) 10 5 2016e/2017e Average 0 Cu 2.50/lb Cu 3.00/lb Cu 3.50/lb Average Operating Cash Flow (excluding…
  29. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 29
    Sensitivities (US millions) 2016e/2017e Operating Change EBITDA Cash Flow Copper: +/- 0.10/lb 500 350 Molybdenum: +/- 1.00/lb 100 80 Gold: +/- 50/ounce 100 60 Oil Sales: +/- 5/bbl(1) 215 170 Oil Sales Net of Diesel…
  30. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 30
    Capital Expenditures (1) (US billions) 8 7.2 6.5 6 5.6 Oil & Gas 5.1 3.2 2.8 4 2.9 Major 2.9 Projects TOTAL 2.5 (2) 2 2.9 MINING 3.7 1.5 1.2 4.0 2.7 2.2 Other Mining 1.2 1.2 1.0 1.1 0 2014 2015e 2016e 2017e (1)…
  31. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 31
    Committed to Balance Sheet Management Strong Track Record 3/31/2015 Balances Large Resource Base with Strong Cash ( in bns) Flows and Capital Discipline Have Taken Steps to Reduce Cost & CAPEX, Complete Asset Sales and Reduce…
  32. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 32
    Key Priorities Strong Balance Sheet Manage Operations and CAPEX to Maximize Cash Flow in Weak Market Environment Obtain O&G Funding to Accelerate Growth Complete Near-term Mining Projects Generate Values from Large Resource…
  33. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 33
    Freeport-McMoRan History 1981 1988 1990s 1995 2007 2013 Freeport Discovery of Developed FCX Spun Off Acquired Phelps Acquired PXP & Minerals Grasberg & MP Grasberg from Parent Dodge MMR merged with 299 Oil/Sulphur Sold Non-core 6 Bn in…
  34. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 34
    Reference Slides
  35. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 35
    PT-FI Mine Plan PT-FIs Share of Metal Sales, 2015e-2022e 2015e 2019e PT-FI Share Total: 5.65 billion lbs copper Copper, billion lbs Annual Average: 1.13 billion lbs Gold, million ozs 2015e 2019e PT-FI Share Total: 7.7 million ozs…
  36. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 36
    PT Freeport Indonesia Grasberg Minerals District Life-of-Mine Production Sequencing* Plan View Grasberg Open Pit 179mm mt (includes stockpiled ore) 0.96% Cu & 1.06 g/t Au 146mm mt Grasberg & DOZ 0.54% Cu & 0.69 g/t Au Kucing…
  37. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 37
    Quarterly Oil & Gas Operating Summary 1Q 2015 Oil & Gas Margins by Region Haynesville/ Operating Margin Madden/ California Other GOM Consolidated Realized Revenue per BOE 38.74 17.18 40.65 43.71 Cash Production Costs per BOE 31.70…
  38. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 38
    2015e Oil & Gas Operating Estimates Madden & Operating Cost: 2.10/Mcfe California Haynesville Pricing: NYMEX Operating Cost: 32/bbl Gulf of Mexico Operating Cost: 15/bbl Pricing: HLS/NYMEX 2015e Oil & Gas Sales by Region…
  39. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 39
    FCX Debt Maturities as of 3/31/15 10 (US billions) Total Debt & Cash at 3/31/15 (US billions) FCX Revolver & Term Loan 4.0 8 FCX & FMC Sr. Notes 12.2 FM O&G Senior Notes 2.6 6.9 Other 1.5 FM O&G Total Debt 20.3 6.875% 6 Sr. Notes…
  40. 1Q 2015 EARNINGS CONFERENCE CALL – Freeport-Mcmoran Inc. – slide 40
    Adjusted EBITDA Reconciliation (in millions) 12-Month Q1 2015 Trailing Net loss attributable to common stock (2,474) (4,292) Interest expense, net 146 615 Income tax benefit (695) (728) Depreciation, depletion and amortization 939 3,836…

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