 FCX Discussion Materials FCX Discussion Materials January 2013 January 2013 FILED BY FREEPORT-MCMORAN COPPER & GOLD INC. PURSUANT TO RULE 425 UNDER THE SECURITIES ACT OF 1933 SUBJECT COMPANY: MCMORAN EXPLORATION CO. REGISTRATION STATEMENT NO. 333-185742 www.fcx.com CONNECTING THE FUTURE ® |
 2 Cautionary Statement Regarding Forward-Looking Statements Cautionary Statement Regarding Forward-Looking Statements This presentation contains forward-looking statements concerning the proposed transaction, its financial and business impact, management’s beliefs and objectives with respect thereto, and management’s current expectations for future operating and financial performance, based on assumptions currently believed to be valid. Forward-looking statements are all statements other than statements of historical facts. The words “anticipates,” “may,” “can,” “plans,” “believes,” “estimates,” “expects,” “projects,” “intends,” “likely,” “will,” “should,” “to be,” and any similar expressions or other words of similar meaning are intended to identify those assertions as forward-looking statements. It is uncertain whether the events anticipated will transpire, or if they do occur what impact they will have on the results of operations and financial condition of FCX or of the combined company. These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those anticipated, including but not limited to the ability of the parties to satisfy the conditions precedent and consummate either or both of the proposed transactions, the timing of consummation of either or both of the proposed transactions, the ability of the parties to secure regulatory approvals in a timely manner or on the terms desired or anticipated, the ability of FCX to integrate the acquired operations, the ability to implement the anticipated business plans following closing and achieve anticipated benefits and savings, and the ability to realize opportunities for growth. Other important economic, political, regulatory, legal, technological, competitive and other uncertainties are identified in the documents filed with the Securities and Exchange Commission (the “SEC”) by FCX, Plains Exploration & Production Company and McMoRan Exploration Co. from time to time, including their Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K and other documents filed in connection with the proposed transactions. The forward-looking statements including in this presentation are made only as of the date hereof. FCX undertakes no obligation to update the forward-looking statements included in this presentation to reflect subsequent events or circumstances. The SEC requires oil and gas companies, in their filings with the SEC, to disclose proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. Beginning with year-end reserves for 2009, the SEC permits oil and gas companies, in their filings with the SEC, to disclose probable and possible reserves, as such terms are defined by the SEC. We use certain phrases and terms in this presentation, such as "gross unrisked potential” and “reserve potential," which the SEC's guidelines prohibit us from including in filings with the SEC. “Gross unrisked potential” and “reserve potential” do not take into account the certainty of resource recovery, which is contingent on exploration success, technical improvements in drilling access, commerciality and other factors, and are therefore not indicative of expected future resource recovery and should not be relied upon. We urge you to consider closely the disclosure of proved reserves included in McMoRan Exploration Co.’s Annual Report on Form 10-K for the year ended December 31, 2011. |
 3 Additional Information about the Proposed Transactions and Where to Find It Additional Information about the Proposed Transactions and Where to Find It PXP Transaction In connection with the proposed transaction, FCX has filed with the SEC a registration statement on Form S-4 that includes a preliminary proxy statement of PXP that also constitutes a prospectus of FCX. FCX and PXP also plan to file other relevant documents with the SEC regarding the proposed transaction. INVESTORS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IF AND WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. You may obtain a free copy of the definitive proxy statement/prospectus (if and when it becomes available) and other relevant documents filed by FCX and PXP with the SEC at the SEC’s website at www.sec.gov. You may also obtain these documents by contacting FCX’s Investor Relations department at (602) 366-8400, or via e-mail at IR@fmi.com; or by contacting PXP’s Investor Relations department at (713) 579-6291, or via email at investor@pxp.com. FCX and PXP and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information about FCX’s directors and executive officers is available in FCX’s proxy statement dated April 27, 2012, for its 2012 Annual Meeting of Stockholders. Information about PXP’s directors and executive officers is available in PXP’s proxy statement dated April 13, 2012, for its 2012 Annual Meeting of Stockholders. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the definitive proxy statement/prospectus and other relevant materials to be filed with the SEC regarding the merger when they become available. Investors should read the definitive proxy statement/prospectus carefully when it becomes available before making any voting or investment decisions. You may obtain free copies of these documents from FCX or PXP using the sources indicated above. This document shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended. MMR Transaction In connection with the proposed transaction, the royalty trust formed in connection with the transaction has filed with the SEC a registration statement on Form S-4 that includes a preliminary proxy statement of MMR that also constitutes a prospectus of the royalty trust. FCX, the royalty trust and MMR also plan to file other relevant documents with the SEC regarding the proposed transaction. INVESTORS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IF AND WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. You may obtain a free copy of the proxy statement/prospectus (if and when it becomes available) and other relevant documents filed by FCX, the royalty trust and PXP with the SEC at the SEC’s website at www.sec.gov. You may also obtain these documents by contacting FCX’s Investor Relations department at (602) 366-8400, or via e-mail at IR@fmi.com; or by contacting MMR’s Investor Relations department at (504) 582-4000, or via email at IR@fmi.com. FCX and MMR and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information about FCX’s directors and executive officers is available in FCX’s proxy statement dated April 27, 2012, for its 2012 Annual Meeting of Stockholders. Information about MMR’s directors and executive officers is available in MMR’s proxy statement dated April 27, 2012, its 2012 Annual Meeting of Stockholders. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the definitive proxy statement/prospectus and other relevant materials to be filed with the SEC regarding the merger when they become available. Investors should read the definitive proxy statement/prospectus carefully when it becomes available before making any voting or investment decisions. You may obtain free copies of these documents from FCX or MMR using the sources indicated above. This document shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended. |
 4 Recent Acquisitions – Why Now? Recent Acquisitions – Why Now? Positive Long-Term Global Economic Outlook Limited Opportunities to Invest in Copper Beyond Brown Field Expansions Attractive Opportunity to Acquire High Quality Assets • Strong Margins and Cash Flows (Self-funding Growth) • Financially Attractive Growth Options • Enhances Diversification – Commodity/Geographic • Enhances Exploration Leverage – Multiple High Quality Targets • Attractive Entry Point for Long Term Natural Gas Business • Opportunity for Stronger Long Term Returns for Shareholders Management Capabilities to Execute Enhanced Size and Scale to Compete Globally Access to Low Cost Debt Financing |
 5 2012e Copper Production World Class Copper Discoveries Are Extremely Rare World Class Copper Discoveries Are Extremely Rare Recoverable Copper Reserves Million metric tons Thousand metric tons Source: Brook Hunt e=estimate 0 200 400 600 800 1000 1200 Escondida - 1979 Chuquicamata - 1910 Antamina - 1996 El Teniente - 1910 Los Pelambres - 1996 Los Bronces - 1867 Collahuasi - 1979 Norilsk - 1935 Grasberg Complex - 1988 Morenci - 1870s 0 5 10 15 20 25 30 Grasberg Complex - 1988 KGHM Polish Copper - 1957 Escondida - 1979 Cananea - 1926 Collahuasi - 1979 Andina - 1865 El Teniente - 1910 Chuquicamata - 1910 Oyu Tolgoi - 2001 Cerro Verde - 1860s |
 Positive Exploration Results – “Big Mines Get Bigger” Mines with Potential Capacity for 1 billion lbs of copper per annum* Morenci Morenci Grasberg Grasberg Tenke Fungurume Tenke Fungurume Cerro Verde Cerro Verde El Abra El Abra * Grasberg currently producing over 1 bln lbs/annum, Morenci (100%) & Cerro Verde in development to produce 1 bln lbs/annum and El Abra & Tenke have potential to produce 1 bln lbs/annum * Grasberg currently producing over 1 bln lbs/annum, Morenci (100%) & Cerro Verde in development to produce 1 bln lbs/annum and El Abra & Tenke have potential to produce 1 bln lbs/annum 6 Attractive Portfolio of Brownfield Copper Expansions Attractive Portfolio of Brownfield Copper Expansions |
 575 MMBOE California 38% California 38% 4% 4% Eagle Ford 6% 6% Haynesville 22% Haynesville 22% Other Deepwater GOM 25% Deepwater GOM 25% 5% GOMS helf Proved Reserves (1) Transaction Adds High Quality U.S. Oil & Gas Portfolio Transaction Adds High Quality U.S. Oil & Gas Portfolio 7 (1) PXP Reserves as of 12/31/11 except for reserves purchased in deepwater acquisitions which are as of 9/30/12; MMR reserves are mid-year 2012 pro forma for 2H12 divestitures. (2) Based on pricing assumptions of $100/bbl Oil (Brent) and $4.50/MMbtu natural gas. Natural Gas Oil e = estimate. See Cautionary Statement. Strong Margins and Cash Flows to Fund Growth O&G EBITDA Margins of ~75% (2) CAPEX Targeted to be Self-funded |
 Enhanced Geographic & Commodity Diversification 8 2013e EBITDA (1) North America North America Indonesia Indonesia 31% 31% 29% 29% South America 29% Africa 11% 11% Mining 100% Mining 100% Oil & Gas 26% Oil & Gas 26% Mining 74% Mining 74% North America North America Indonesia Indonesia 23% 23% 48% 48% South America 21% Africa 8% 8% Existing (1) Based on pricing assumptions of $3.50/lb Cu, $1,500/oz Au, $12/lb Mo, $100/bbl Oil (Brent) and $4.50/MMbtu natural gas. Pro forma e = estimate. See Cautionary Statement. |
 Enhanced Exploration Leverage with Multiple Near-term Catalysts Enhanced Exploration Leverage with Multiple Near-term Catalysts 9 Near-term Net Potential of 995 MMBOE • Phobos (~300 MMBOE) Spud in 4Q12 • On Lease Exploration from BP: 300+ MMBOE • Each 100 MM Barrels = PV-10 of ~$2.5 Billion Pre-tax (1) 3 Wells Drilling Recent Positive Results on Lineham Creek Onshore High Potential Prospect Inventory ~50 Tcfe of Net Potential, Including ~30 Tcfe from Near-term Prospects Each 2 Tcfe Net = PV-10 of ~$2.5 Billion Pre-tax (2) Eagle Ford – 71 MMBOE Haynesville – ~1 Tcfe California – +100 MMBOE Deepwater GOM Shallow Water Ultra-Deep Onshore U.S. (1) Based on $100.00/bbl LLS oil (2) Based on $4.50/MMbtu natural gas |
 Grasberg Development & Expansion Grasberg Development & Expansion The discovery of Grasberg in 1988 transformed PT-FI into one of the world’s largest operations Mill Rate 10 March 1988 $1.07 $444 1989 – 1997 $1.09 $369 1998 – 2004 $0.84 $315 2005 – 2012 $3.06 $1,008 Copper ($/lb) Gold ($/oz) Grasberg Discovered Expansion Expansion Expansion Expansion 0 50 100 150 200 250 |
 Gross Unrisked Potential*: Shelf Prospects: ~100 Tcfe; Onshore Prospects: ~30 Tcfe 11 MMR’s Ultra-Deep Play Grasberg of the Gulf of Mexico? MMR’s Ultra-Deep Play Grasberg of the Gulf of Mexico? BONNET ENGLAND DRAKE HOOK CAPTAIN BLOOD BARATARIA CALICO JACK DAVY JONES BLACKBEARD EAST BLACKBEARD WEST (#2 in progress) MMR Wilcox/Cretaceous Play MMR Miocene/Wilcox Play MMR Oligocene/Frio Play BARBOSA MORGAN QUEEN ANNE’S REVENGE LAFITTE LINEHAM CREEK (in progress) HIGHLANDER (in progress) ONSHORE PROSPECT “B” Ultra-Deep Prospects Ultra-Deep Discoveries McMoRan Acreage Onshore Ultra-Deep Prospects DAVY JONES WEST MMR’s WI & NRI will vary on a per prospect basis based on unitization and parties’ participation. NOTE: We use certain phrases and terms in this presentation, such as "gross unrisked potential” and “reserve potential” which the SEC's guidelines prohibit us from including in filings with the SEC. See Cautionary Statement. |
 Energy – A Significant Component of Mining Cost 2012e Materials Materials Energy Energy Manpower Manpower Other Acid 30% 30% 21% 21% 30% 30% 13% 6% Site Operating Costs by Category (Consolidated) 2012e Diesel 255 mm gallons Diesel 255 mm gallons Coal: 700k mt & Natural Gas: 1MMBTU Purchased Power 6,900 GWh Purchased Power 6,900 GWh 36% 36% 6% 6% 58% 58% Components of Energy (Total of $1.6 Billion) 12 e = estimate. See Cautionary Statement. |
 Proven Management Team Proven Management Team Complementary Management Teams with Substantial Experience and Track Record of Success in Mining and Oil & Gas Exploration and Development Global Industry Leading Capabilities: - Operational Excellence - Major Project Development - Technological Innovation - Exploration/Engineering - Prudent Environmental Management History of Prudent Financial Management and Execution in Varying Market Environments 13 Established Track Record of Capital Discipline and Focus on Value Creation for Shareholders |
 Phelps Dodge Case Study Highly Successful Transformational Transaction Phelps Dodge Case Study Highly Successful Transformational Transaction 14 $17.6 $7.2 $3.5 $0 $5 $10 $15 $20 Rapid Delevering Consolidated Cash $3.4 $1.6 $3.7 Net Debt/(Cash) $14.2 $5.6 $(0.2) At Time of PD Acquisition in March 2007 9/30/12 ($ in bns) Debt * Based on estimated proven & probable reserve additions as of 12/31/11 before production. December 2007 Asset & Geographic Diversification Significant Reserve Additions • +46 billion lbs Cu* Developed World-Class Copper Portfolio • Recognized Industry Leader • Strong Current Production with Substantial Growth Profile • Large Resource Position Successful Integration Effective Management During 2008/09 Economic Crisis |
 $91 $69 $57 $52 $44 $40 $31 $29 $0 $25 $50 $75 $100 $125 $150 XOM CVX COP OXY PF FCX APC APA EOG CHK MRO ($Bn) Pro forma FCX will be the 5 th largest U.S. domiciled natural resource company and the 5 th largest global mining company by enterprise value Source: Company filings, FactSet. Market data as of 1/7/2013. * Includes U.S.-based E&P, mining and coal companies, including integrated companies. Midstream and downstream companies are excluded. ** Excludes precious metal companies $405 $209 $138 $127 $122 $57 $55 $35 $26 $21 $21 $0 $25 $50 $75 $100 $125 $150 BHP RIO VALE GLEN/ XTA PF FCX AAL SCCO TCK AA ANTO ($Bn) $223 Top US Domiciled Resource Companies* Top US Domiciled Resource Companies* Top Global Mining Companies** Top Global Mining Companies** A Premier U.S. Based Natural Resource Company A Premier U.S. Based Natural Resource Company 15 |
 Pro Forma Review |
 Grasberg (90.64%) Reserves Cu 31.6 bn lbs Au 32.2 mm ozs Sales Cu 1.1 bn lbs Au 1.3 mm ozs Reserves Cu 40.6 bn lbs Mo 2.71 bn lbs Oil & Gas 575 mm bbls Sales Cu 1.45 bn lbs Mo 90 mm lbs³ Oil & Gas 175 MBOE/d FCX’s Global Footprint FCX’s Global Footprint Copper Copper/Gold/Silver Molybdenum Cobalt Oil/Natural Gas Reserves Cu 8.4 bn lbs Co 0.86 bn lbs Sales Cu 400 mm lbs Co 30+ mm lbs Tenke (56.0%) Tenke (56.0%) South America 4 South America 4 Reserves Cu 39.1 bn lbs Au 1.3 mm ozs Mo 0.71 bn lbs Sales Cu 1.35 bn lbs Au 0.1 mm ozs 17 Note: FCX consolidated reserves and annual sales; reserves as of December 31, 2011. Sales figures are based on 2013e. 1 Cu operations: Morenci (85%), Sierrita (100%), Bagdad (100%), Tyrone (100%), Safford (100%), Miami (100%) and Chino (100%); Primary Mo: Henderson (100%) and Climax (100%); Oil & Gas operations: onshore/offshore CA, Madden, Eagle Ford, Haynesville, GOM shelf & Deepwater 2 PXP Reserves as of 12/31/11 except for reserves purchased in deepwater acquisitions which are as of 9/30/12; MMR reserves are mid-year 2012 pro forma for 2H12 divestitures 3 Includes moly sales from South America 4 Cu operations: Candelaria/Ojos del Salado (80%), Cerro Verde (53.6%) and El Abra (51%) Major Operations & Development Projects All major mining assets majority-controlled and operated Major Operations & Development Projects All major mining assets majority-controlled and operated North America 1 North America 1 e = estimate. See Cautionary Statement. 2 |
 Reserves (a) (recoverable copper) Reserves (a) & Mineralized Material (b) at $2.00 Cu price (billion lbs of copper) at $2.20 Cu price Reserves Mineralized Material (b) (contained copper) 115 billion lbs Combined Reserves and Resources Combined Reserves and Resources 18 2P Reserves (c) Reserves & Resource Potential Proved: 575 ~7,900 923 (million barrels of oil equivalents) Probable: 348 Possible: 658 Near-term Potential: ~6,300 120 235 (a) Estimated recoverable proven and probable copper reserves as of 12/31/11 using a long-term average copper price of $2.00/lb; 96 billion pounds net to FCX’s interest. (b) Estimated consolidated contained copper resources as of 12/31/11 using a long-term copper price of $2.20/lb. Mineralized Material is not included in reserves and will not qualify as reserves until comprehensive engineering studies establish their economic feasibility. Accordingly, no assurance can be given that the estimated mineralized material will become proven and probable reserves. See Cautionary Statement. (c) Includes PXP reserves as of 12/31/11 except for reserves purchased in deepwater acquisitions which are as of 9/30/12 and MMR reserves as of mid-year 2012 pro forma for 2H12 divestitures. Excludes results from GOM shelf ultra-deep activities. |
 19 19 North America* * excludes restarts currently in progress; incremental copper per annum ** PT-FI’s share, average per annum * excludes restarts currently in progress; incremental copper per annum ** PT-FI’s share, average per annum 19 Highly Attractive Brownfield Copper Development Projects Highly Attractive Brownfield Copper Development Projects South America* South America* Tenke Fungurume Grasberg Grasberg • 150mm lbs Cu/yr oxide expansion nearing completion • Potential sulfide expansions • Morenci Expansion (225 mm lbs Cu) under way • Potential sulfide expansions (~800 mm lbs Cu) Mill Expansions (t/d) Cerro Verde (360K) 600 $4.4 2016 Morenci (115K) 225 1.4 2014 Tenke (14K) 150 0.9 2013 TOTAL 975 $6.7 Expansion Projects in Progress Incr. Cu (mm lbs/yr) Capital* ($ blns) Achieve Full Rates * excludes capitalized interest • Cerro Verde Expansion (600 mm lbs Cu) under way • Potential El Abra Mill (600 mm lbs Cu) Underground development under way 1.1 bln lbs Cu** 1.4 mm ozs Au** |
 20 Copper Sales (billion lbs) Gold Sales (million ozs) Diverse Production Profile with Strong Growth Diverse Production Profile with Strong Growth 0 1 2 3 4 5 2012e 2013e 2014e 2015e 1.0 1.4 1.8 1.8 0 1 2 2012e 2013e 2014e 2015e Molybdenum Sales (million lbs) ____________________ Note: Consolidated copper sales include approximately 705 mm lbs in 2012e, 800 mm lbs in 2013e, 770 mm lbs in 2014e and 875+ mm lbs in 2015e for noncontrolling interest; excludes purchased copper. * Includes Cerro Verde expansion (2016 full rates) & Morenci mill expansion, targeted for 2014. e = estimate. See Cautionary Statement. Includes Projects Currently Under Way* 3.6 5.0+ 4.5 4.3 0 25 50 75 100 2012e 2013e 2014e 2015e Oil & Gas Sales (MMBOE) ____________________ Note: Consolidated gold sales include approximately 105k ozs in 2012e, 140k ozs in 2013e, 180k ozs in 2014e and 175k ozs in 2015e for noncontrolling interest. ____________________ Note: 2012e includes sales from GOM acquisition beginning on December 1, 2012. Oil & Gas sales estimates include approximately 13.3 MMBOE in 2014e, and 22.6 MMBOE in 2015e from potential success from ultra-deep Shelf exploration and development. Ultra-Deep Expl./Dev. Ultra-Deep Expl./Dev. 46 64 78 94 82 90 90 100 0 25 50 75 100 2012e 2013e 2014e 2015e |
 2013e 2014e 2015e $0 $5 $10 $15 $20 $25 $3.00 $3.50 $4.00 FCX Pro forma EBITDA, Cash Flows & Capital Expenditures FCX Pro forma EBITDA, Cash Flows & Capital Expenditures 21 $3.00 $3.50 $4.00 Operating Cash Flow* EBITDA CAPEX Copper Prices $1,500 Au/$12 Mo/$100 Oil/$4.50 Gas** Copper Prices $1,500 Au/$12 Mo/$100 Oil/$4.50 Gas** * Excludes working capital changes ** See impacts of prices changes for gold, molybdenum, oil and gas on slide 32. 2015/ 2016 Avg. 2013/ 2014 Avg. (Brent) (Brent) 2015/ 2016 Avg. 2013/ 2014 Avg. Mining 65% O&G 35% 60% 40% 48% 52% ~45% Increase ~45% Increase |
 22 Focused and Disciplined Capital Allocation Philosophy Focused and Disciplined Capital Allocation Philosophy Maintain Strong Balance Sheet & Credit Profile Allocate Capital to Low Cost, Long-lived, Expandable Assets Focus on Largest Resources Ensure Potential is Well Understood Establish Short, Medium and Long Term Potential for Primary Assets Quantify Risks Technical, Political, Social, Economic, Market Rigorous Economic Analysis Under Range of Assumptions Protect Downside, Leverage to Upside Prioritize & Rank Opportunities Highest Returns/NPV per $ Invested Manageable Risks Overall Portfolio Balance/Strategic Fit Limit Number of Projects – Focused Management Attention Repay Debt Return Excess Capital to Shareholders |
 23 Capital Expenditures (1) Capital Expenditures (1) (US$ billions) Other Mining Major Mining Projects Oil & Gas 3.0 1.6 1.4 1.0 2.5 3.0 2.0 3.3 2.9 $0 $2 $4 $6 $8 2013e 2014e 2015e (1) Capital expenditure estimates include projects in progress. Project spending will continue to be reviewed and revised subject to market conditions. (2) Primarily includes Cerro Verde expansion, Morenci mill expansion and Grasberg underground development. Note: Includes capitalized interest. e= estimate. See Cautionary Statement. $7.1 $7.3 $6.3 (2) (2) |
 Oil & Gas Cash Flows – Targeted to be Self-funding Oil & Gas Cash Flows – Targeted to be Self-funding 24 $0.0 $1.0 $2.0 $3.0 $4.0 2013e 2014e 2015e Operating Cash Flow CAPEX NOTE: Assumes pricing of $100/bbl Brent crude for oil and $4.50/MMbtu for natural gas e= estimate. See Cautionary Statement. (US$ billions) |
 $16.3 $7.7 $2.0 ($3.5) -$5 $0 $5 $10 $15 $20 Significant Debt Reduction Significant Debt Reduction Year-End Net Debt at Varying Copper Prices Pro Forma YE 2016e (US$ billions) e= estimate. See Cautionary Statement. ’13-’16 Avg. Copper Price Net Debt/’13-’16 Avg. EBITDA $3.00 0.6x $3.50 0.1x $4.00 N/A 9/30/12 Pro Forma 25 Note: Sensitivity assumes $12 Molybdenum, $1,500 Gold, $100 Oil and $4.50 Natural Gas; EBITDA equals operating income plus depreciation, depletion, and amortization |
 26 Maintain Strong Balance Sheet & Liquidity Position Reduce Debt Incurred in Acquisitions Using Substantial Cash Flows Generated from Combined Business Invest in Projects with Strong Financial Returns/Capital Discipline Anticipate Continuing Current Common Stock Dividend Rate: $1.25/Share per Annum Board to Review Financial Policy on an Ongoing Basis Committed to Long-standing Tradition of Maximizing Value for Shareholders Financial Policy Financial Policy |
 Reference Slides |
 Transaction Summary Price FCX to acquire PXP for: 0.6531 shares of FCX common stock and $25.00 in cash, equivalent to total consideration of $50.00 per PXP share based on FCX closing price on December 4, 2012 FCX to acquire MMR for: $14.75 cash plus 1.15 Ultra-Deep Royalty Trust Units per MMR share Premium 39% to PXP’s closing price on December 4, 2012 Cash portion represents 74% to MMR’s closing price on December 4, 2012 Structure 50% stock / 50% cash $3.4 billion cash; 91 million new FCX common shares 100% cash plus Ultra-Deep Royalty Trust Units (2) Transaction Value $17.2 billion (includes assumed debt) $2.4 billion (includes assumed debt) Key Conditions Shareholders’ approval Customary regulatory approvals and conditions Shareholders’ approval Customary regulatory approvals and conditions Timing Closing expected in 2Q 2013 FCX Pro Forma Enterprise Value: $60 billion 1,041 million shares outstanding Total Debt of $20.0 billion (1) Prior to the transaction, FCX and PXP collectively own 36% of MMR (2) Creation of Royalty Trust provides MMR shareholders 5% ORRI for continued participation in potential shallow water, ultra-deep GOM success 28 PXP PXP MMR MMR (1) (1) |
 (1) Includes ~ 7 MMcfe/d of natural gas (2) Includes ~ 4 MBOE/d of NGLs (3) Includes ~ 6 MBOE/d of NGLs 2013e Oil & Gas Operating Estimates 2013e Oil & Gas Operating Estimates 29 NOTE: e = estimate. See Cautionary Statement. Oil MBOE/D 40 (1) California Haynesville/ Rocky Mtns/Other 127 GOM Eagle Ford 31 (2) 36 56 (3) 125 2013e Oil & Gas Sales by Region 2013e Oil & Gas Sales by Region Operating Cost: $27/bbl Pricing: Brent Based Operating Cost: $15/bbl Pricing: LLS Operating Cost: $10/bbl Pricing: LLS/NYMEX Operating Cost: $1.65/Mcfe Pricing: NYMEX Gas MMcfe/d Rocky Mtns. & Haynesville Rocky Mtns. & Haynesville California California Eagle Ford Eagle Ford Gulf of Mexico Shelf/ Deepwater Gulf of Mexico Shelf/ Deepwater |
 Oil & Natural Gas Hedging Positions 30 Oil Indexed to Brent Swaps Swaps Puts Collars 15% Unhedged Puts 15% Unhedged Puts 84k bbls/d $90 floor $70 limit $6.90 ADP 43% Unhedged Natural Gas Indexed to Henry Hub 2013 2014 2015 Swaps – 100/d @ $4.09 117k bbls/d* 129k bbls/d* 147k bbls/d* 2013 2014 2015 40k bbls/d @ $109.23 40k bbls/d @ $109.23 30k bbls/d $95 floor $75 limit $6.09 ADP 75k bbls/d $90 floor $70 limit $5.74 ADP 5k bbls/d $100 floor $80 limit $7.11 ADP 25k bbls/d $100 floor $80 limit $124 Ceiling 5k bbls/d $90 floor $70 limit $126 Ceiling 13k bbls/d $100 floor $80 limit $6.80 ADP 17k bbls/d $90 floor $70 limit $6.25 ADP Swaps – 110/d @ $4.27 No Hedges NOTE: As of October 19, 2012; ADP = average deferred premium. * Estimated annual production for MMR & PXP. See Cautionary Statement. |