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2nd Quarter 2014 Earnings Conference Call – Freeport-Mcmoran Inc.

Freeport-Mcmoran Inc. · Jul 23, 2014 · 30 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. 2nd Quarter 2014 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 1
    2nd Quarter 2014 Earnings Conference Call July 23, 2014 www.fcx.com
  2. 2nd Quarter 2014 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 2
    2Q14 Highlights Focused on Execution Strong Performance from Mining Operations in the Americas and Africa - Restricted Sales from Indonesia by Government Export Regulations Solid Contribution from O&G Business Advanced Important…
  3. 2nd Quarter 2014 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 3
    Financial Highlights (1) Sales Data 2Q14 2Q13 Copper Consolidated Volumes (mm lbs) 968 951 Average Realization (per lb) 3.16 3.17 Site Production & Delivery Unit Costs (per lb) 1.99 2.11 Unit Net Cash Costs (per lb) 1.72 1.85…
  4. 2nd Quarter 2014 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 4
    Current PT-FI Operating Status Export Shipments Restricted Since Mid-January 2Q14 Impact: Deferred Sales of 150 mm lbs Copper and 240,000 ozs Gold YTD Deferrals of 275 mm lbs Copper and 380,000 ozs Gold Completing MOU with…
  5. 2nd Quarter 2014 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 5
    Long-term Positive Partnership with Indonesia Successful Operations for Over 40 Years GOI Direct Benefits Contributed Over 60 Billion to National GDP in Total Since 1992 Last 5 Years (2009 2013) (2) Currently Over 90% of Local…
  6. 2nd Quarter 2014 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 6
    Copper Market Commentary Positive Global Demand - China Remains Key with Solid Demand - Rest of the World General Economic Recovery Mixed U.S. Economic Data Europe Gradually Strengthening from Low Base Supply Side Challenges…
  7. 2nd Quarter 2014 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 7
    2Q 2014 Mining Operating Summary 2Q14 Unit Production Costs Cash Unit Costs North South (per pound of copper) America America Indonesia Africa Consolidated (1) (1) Site Production & Delivery 1.87 1.64 3.86 1.46 1.99 By-Product…
  8. 2nd Quarter 2014 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 8
    Brownfield Development Projects Morenci Mill Expansion Cerro Verde Mill Expansion 1.6 billion 4.6 billion Construction substantially complete Detailed engineering & procurement substantially complete; construction Commissioning &…
  9. 2nd Quarter 2014 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 9
    Portfolio of World Scale Mines Positive Exploration Results Big Mines Get Bigger Mines with Potential Capacity for 1 billion lbs of copper per annum* Morenci Grasberg Tenke Cerro Verde Fungurume El Abra * Grasberg capable…
  10. 2nd Quarter 2014 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 10
    2Q 2014 Oil & Gas Operating Summary Strong Brent & HLS Crude Oil Pricing Brent and HLS Pricing per Bbl Over 90% of O&G Revenues from Oil/NGLs 150 (excluding derivatives) 125 Oil Realization: 100/bbl 100 92% Differential to Brent…
  11. 2nd Quarter 2014 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 11
    2Q 2014 Oil & Gas Transactions Sold Eagle Ford Shale Interests to Encana for 3.1 Bn Acquired 0.9 Bn Deepwater GOM Interests, Including: Lucius Oil Development (5.1% WI) Heidelberg Oil Development (12.5% WI) Complementary…
  12. 2nd Quarter 2014 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 12
    Strategic Position in Deepwater GOM Major Exploration/ Operating/ Development Exploitation Producing Assets Projects Opportunities Significant Current Oil Financially Attractive Strategic Acreage Near Production with Strong…
  13. 2nd Quarter 2014 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 13
    Deepwater Gulf of Mexico Focus Areas BOEM awarded FM O&G all 20 leases from March 2014 Lease Sale Louisiana Texas Marlin Dorado Viosca Knoll Ram Powell Horn Mississippi Canyon Mountain Holstein Deep Green Canyon East…
  14. 2nd Quarter 2014 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 14
    Lucius & Heidelberg Deepwater GOM Development Projects First Production Expected in 2H 2014 300+ MMBOE Gross Resource Potential Processing Capacity 80,000 BOPD 450,000 MCFD FM O&G 25.1% WI Lucius Water Depth: 7,200 First…
  15. 2nd Quarter 2014 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 15
    Inboard Lower Tertiary/ Cretaceous Activities Favorable Reservoir Industry Leader in Emerging New Trend Characteristics Highlander Judge Digby Field Cretaceous Discovery Type Log Tuscaloosa Trend Cumulative Production 3.1 TCF,…
  16. 2nd Quarter 2014 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 16
    2014e Outlook Sales Outlook Unit Cost Copper(1): 4.1 Billion lbs. 1.50/lb(3) of Copper Gold(1): 1.3 Million ozs. 20/BOE Molybdenum: 98 Million lbs. Oil Equivalents(2): 58.4 MMBOE (70% Oil) Operating Cash Flows (4) Capital…
  17. 2nd Quarter 2014 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 17
    Sales Profile Gold Sales (million ozs) Copper Sales (billion lbs) 3 3.1 6 2 5.7 1 1.3* 1.3 1.2 0 4.9 2013 2014e 2015e 2016e ____________________ Note: Consolidated gold sales include 123k ozs in 2013, 135k ozs 4 4.1 4.1 * in…
  18. 2nd Quarter 2014 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 18
    2014e Quarterly Sales Gold Sales (thousand ozs) Copper Sales (million lbs) 700 1,250 525 550 350 445 1,170 175 187 159 1,000 1,065 0 1Q14 2Q14 3Q14e* 4Q14e* 968 ____________________ 871 Note: Consolidated gold sales include…
  19. 2nd Quarter 2014 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 19
    2014e Operating Estimates 2014e Unit Production Costs (per pound of copper) North South America America Indonesia(2) Africa Consolidated(2) Cash Unit Costs (1) Site Production & Delivery (3) 1.86 1.67 2.83(4) 1.56 1.95(4) By-product…
  20. 2nd Quarter 2014 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 20
    EBITDA and Cash Flow at Various Copper Prices Average EBITDA (1,300 Gold, 12 Molybdenum & 110 Oil) (US billions) 20 15 10 5 2015e/2016e Average 0 Cu 3.00/lb Cu 3.50/lb Cu 4.00/lb Average Operating Cash Flow (excluding…
  21. 2nd Quarter 2014 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 21
    Capital Expenditures (1) (US billions) 8 7.6 7.5 6.6 6 Oil & Gas 3.5 3.4 4.0 4 Major Projects TOTAL 2.6 (2) 2 3.2 MINING 4.0 1.4 4.2 2.6 Other Mining 1.4 1.2 1.0 0 2014e 2015e 2016e (1) Capital expenditure estimates…
  22. 2nd Quarter 2014 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 22
    Committed to Balance Sheet Management Strong Track Record Debt Target: 12 bn by YE 2016 6/30/2014 Balances ( in bns) Large Resource Base with Strong Cash Flows and Capital Discipline Completed Attractive Eagle Ford 19.7…
  23. 2nd Quarter 2014 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 23
    Summary A Strong & Focused Organization Maximize Total Shareholder Returns Strong Management of the Base Operational Excellence Achieve Production Targets Effective Cost and Capital Management Manage HS&E and Other Inherent…
  24. 2nd Quarter 2014 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 24
    Reference Slides
  25. 2nd Quarter 2014 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 25
    Quarterly Oil & Gas Operating Summary 2Q 2014 Oil & Gas Margins by Region Haynesville/ Operating Margin Eagle Madden/ California Ford* Other GOM Consolidated Realized Revenue per BOE 94.37 81.52 27.59 87.49 77.53 Cash Production…
  26. 2nd Quarter 2014 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 26
    2H 2014e Oil & Gas Operating Estimates Madden & Operating Cost: 2.30/Mcfe California Haynesville Pricing: NYMEX Operating Cost: 35/bbl Pricing: Brent Based Gulf of Mexico Operating Cost: 17/bbl Pricing: HLS/NYMEX 2H 2014e…
  27. 2nd Quarter 2014 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 27
    Oil & Natural Gas Hedging Positions Oil Hedges Indexed to Brent 2H 2014 100% Hedged 2015 Puts Unhedged 75 MBbls/d 30 MBbls/d 21% 90 floor 95 floor 70 limit 75 limit 5.74 ADP 6.09 ADP Puts 5 MBbls/d 100 floor 84 MBbls/d 80…
  28. 2nd Quarter 2014 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 28
    PT-FI Mine Plan PT-FIs Share of Metal Sales, 2014e-2021e* 2014e 2018e PT-FI Share Total: 5.4 billion lbs copper Copper, billion lbs Annual Average: 1.1 billion lbs Gold, million ozs 2014e 2018e PT-FI Share Total: 8.0 million ozs…
  29. 2nd Quarter 2014 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 29
    PT Freeport Indonesia Grasberg Minerals District Life-of-Mine Production Sequencing* Plan View 206mm mt Grasberg Open Pit 0.95% Cu & 1.08 g/t Au 152mm mt Grasberg & DOZ 0.56% Cu & 0.73 g/t Au Kucing Liar Grasberg Big Gossan…
  30. 2nd Quarter 2014 Earnings Conference Call – Freeport-Mcmoran Inc. – slide 30
    Sensitivities (US millions) 2015e/2016e Operating Change EBITDA Cash Flow Copper: +/- 0.10/lb 520 370 Molybdenum: +/- 1.00/lb 90 70 Gold: +/- 50/ounce 100 60 Oil Sales: +/- 5/bbl(1) 225 190 Oil Sales Net of Diesel Costs:(1,2)…

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