Plains Exploration & Production Company
Plains Exploration & Production — Merger or Acquisition (February 2013)
35 slides from Plains Exploration & Production's merger presentation, Feb 25, 2013
Slide 1: Filed by Freeport-McMoRan pursuant to Rule 425
FILED BY FREEPORT-MCMORAN COPPER & GOLD INC. PURSUANT TO RULE 425 UNDER THE SECURITIES ACT OF 1933 SUBJECT COMPANY: PLAINS EXPLORATION & PRODUCTION COMPANY REGISTRATION STATEMENT NO. 333-185747
Slide 2: February 25, 2013 - Connecting the Future
February 25, 2013 www.fcx.com CONNECTING THE FUTURE®
Slide 3: Cautionary Statement Regarding Forward-Looking Statements
Cautionary net earnings, purchases, “intends,” FCX’s establish readers statements. rates, administrative completion with statements aspects update undertakes molybdenum. Revenues cash the industry Board forward-looking that ofcosts, U.S. their liquidity, and which “likely,” and regarding are no Stat
Slide 4: Additional Information
Additional Form transaction. BECOME available) department respective Information and SEC documents securities shall the prospectus THE CONTAIN trust [email protected]; members officers proxy interests, available. indicated solicitation meeting royalty aexecutive and regarding be PROXY description S-4 state
Slide 5: FCX Overview
FCX Overview Strong FinancialGlobal ProfileLeader Environmentally in Production Responsible of Copper,Experienced Gold and Molybdenum Team Proposed Geographically O&G Acquisitions DiversetoSubstantial Enhance Long Long-Lived, Term Returns Low Cost 4 Reserve Position Financially Attractive Growth Pro
Slide 6: World's Leading Copper Producers
World’s Antofagasta KGHM Leading Copper RAOProducers Norilsk Copper Top 10American Copper Producers Source: Brook (2012e) Hunt (0004Q12 t) 2,000 Report. 1,800 Rankings 1,600 1,400 based1,200 on net 1,000 equity 800ownership. 600 400 200 e=estimate 0 Codelco5 FCX BHP Billiton Xstrata Southern Rio Tin
Slide 7: Metals and Oil Markets
MarketsJan-07 Jan-03 London Jan-05 Jan-06 Gold 2,500Price Jan-09 500 Oil ($/oz) Jan-12 Jan-11 Price* $2,000 Jan-13 Jan-03 ($/bbl) Molybdenum *Jan-05 $150 Metals LME Jan-07 Week Price* Copper Jan-09 – Molybdenum ($/lb) Price Jan-11 $40 2,000 Jan-13 $1,750 Dealer 400*$35 $125 Includes Oxide $1,500 Ton
Slide 8: Copper Market Commentary
Copper Challenges Imports Supply Market ?Improving Commentary 7U.S. Demand—Healthy ?China RemainsAutomotive Important Demand Sector—Recovering Driver—Economic Housing Activity Sector Improving—Potential ?European Demand Remains for Further WeakStimulus—Growing ?Increasing GlobalCopper Inventories Co
Slide 9: World Class Copper Discoveries Are Extremely Rare
World865 1200 1865 Teniente—1910 Escondida—1979 Class LosCopper Pelambres—1996 10 Morenci—1870s Discoveries 79 Escondida—1979 996 Are KGHM 70s Extremely Toquepala—1950 Polish 79 Rare Grasberg Copper—1957 Recoverable Complex—1988 50 Radomiro Copper 957 Norilsk—1935 Tomic—1952 Reserves 88 Chuquicamata
Slide 10: Highly Attractive Copper Development Projects
Highly Expansion * bln annum excludes lbs Cu** ** Attractive PT-FI’s Cerro capitalized expansion Verde Brownfield share, interest (360K) nearing average Copper Grasberg 600 completion per$4.4 annum Development •2016 Underground 1.4 9 (225 mm mm Projects ozs South Au** lbs Cu) Expansion America* • Po
Slide 11: Volume Growth from Brownfield Projects
Volume South Returns America Growth e= estimate. • with Proven See Brownfield Technology Cautionary Projects Statement. • Capital in Progress efficiency 10 Copper• Economies (billion lbs of scale per year) North2015e-2020e Risks better5.0+ • America v. 2012 understood +15%+ 4.42012 +20% 2013e-2014e
Slide 12: 2012 Highlights
2012 Highlights Attractive Positioned Brownfield for Multi-Year ?Production Development Growth Growth in Projects Copper in NorthVolumes • America Tenke Phase ?Transactions and Africa II Substantially ?Unusually to Acquire Complete Low High2012 Quality • Cerro Ore Oil Verde Grades & Gas EIS in Asset
Slide 13: Operating Outlook and Unit Net Cash Costs
Update year-end Net 2012 average 2013e-2016e consolidated Cash 2013e- on is2013; Costs** 1.2 Grasberg 2011 financial averages Cucurrent &(billion 2011 2.0 • Unusually statements, because rate: Au, 2016e lbs50K 2012 Cu -2011 oflow t/d & is lower refer million 0.7 ?Mine 2016e metal to Cu gold “Product
Slide 14: FCX Acquisitions of PXP and MMR
FCX Acquisitions Opportunity Exploration Track RecordLeverage to&Acquire Capabilities of PXP – High Multiple & MMR to Quality Execute High –Transaction Assets Quality ?Enhanced • Strong Targets Rationale Size Margins • Attractive and?Positive Scale and Cash Entry toLong-Term Compete Flows Point •for
Slide 15: Phelps Dodge Acquisition Experience
Phelps• Large Reserve Debt Debt/(Cash) Dodge Additions $14.2 Resource Case$15 $5.6 Study Position •$(0.2) +46 ?$26 billion 2008/09 Billion $0 Atlbs Time Acquisition Economic Cu*of?Developed PD Crisis December in 2007 *World-Class Based ?Rapid 12/31/12 onDelevering estimated Copper Acquisition $10 pr
Slide 16: Track Record in Oil & Gas Industry
Long Track Discovery Operating Effective O&G Industry Management ?Phelps &Record ?Financial Political Dodge of Generating of Risks Discipline ?Senior Resource ?Broaden Management Value ?Achieving ?Balance Portfolio for Shareholders Sheet Production and of Management ?Understanding Investment Explora
Slide 17: FCX's Global Footprint
FCX’s Gas ozs mm Sierrita CA, 1Q13Sales 688 ozs Madden, divestitures Global (100%), Cu mm Cu410 bbls2 1.1 Eagle Footprint mm Bagdad bn 3Copper/Gold/Silver Includes lbs Ford, lbsAu Co Major (100%), Haynesville, 1.2 30moly mm Operations Tyrone sales ozs lbs Note: South GOM Sales from (100%), & FCX Dev
Slide 18: Combined Reserves and Resources
Combined $2.20 (b) consolidated comprehensive Cautionary of NGLs (a)Cu Estimated and price Reserves Statement. contained $2.76/MMbtu 688 engineering recoverable Reserves and(c) copper Resources Reserves studies ofProbable: proven natural resources establish (billion are and gas, 213 asas probable of
Slide 19: Attractive Portfolio of Brownfield Copper Expansions
Attractive Grasberg have potential Fungurume Portfolio to produce ofCerro Brownfield 1 bln Verde lbs/annum El Copper Abra 18 Expansions * Grasberg currently Positive Exploration producing over Results 1 bln– lbs/annum, “Big MinesMorenci Get Bigger” (100%) Mines & Cerro with Potential Verde in Capaci
Slide 20: High Quality Oil & Gas Portfolio
High Haynesville 34% 21% Statement. 9% Quality Eagle 19U.S. Ford (1) Oil2013e 2P &Reserves Gas Production Portfolio including by Proved Region Proved & Probable 175 of MBOE/d 475 MMBOE Reserves 2013e(1) and Production Natural Probable Gas Mix of688 213 Other MMBOE MMBOE; 3% GOM (81% Reserves Shelf O
Slide 21: Enhanced Geographic and Commodity Diversification
Enhanced 8% $12/lb Indonesia Mo,Geographic $100/bbl Africa Africa Oil & (Brent) Commodity 23% and Mining $4.50/MMbtu Diversification EBITDA Margin: natural 2013egas. 74% EBITDA eMining = estimate. (1)Mining: Existing See ~ Cautionary Pro 50%forma 100%South Statement. Oil &North Gas: 20America ~75% O
Slide 22: Enhanced Exploration Prospect Inventory
Enhanced of Prospect PV-10 1,000+ of from ~$2.5 MMBOE Exploration BP: Billion 300+ ?Recent Leverage Pre-tax(2) MMBOEPositive with (1) Inventory Results Based Multiple on•on Each Near-term $100.00/bbl ?Haynesville 100 MM Catalysts LLS Barrels – ~5 oilTcfe Deepwater (2) = ?~50 Based • Phobos Tcfe on G
Slide 23: Diverse Production Profile with Strong Growth
Diverse include 2012 copper 2014e 2012. exploration 2013e Oil 2015e sales approximately Production &and 2014e Gas include * Includes development. sales 2015e Profile approximately estimates 102k Cerro Oil with ozs &Verde Gas Strong include in 2012, 717 Sales expansion Growth mm approximately 140k (M
Slide 24: Pro Forma EBITDA and Cash Flows
FCX Avg. Avg. capital Pro changes Forma $0 $3.00 eEBITDA = estimate. $3.50 $4.00 & Cash See$3.00 Cautionary Flows $3.50 EBITDA $4.00 Statement. Operating Copper 23 Prices CashCopper Flow* Prices $25 $20$1,500 ~45%Au/$12 $15 Increase Mo/$ (Brent) 2015e/ 100 2016e Oil/$4.50 billionsGas Avg.$1,500 ~45%
Slide 25: Disciplined Capital Allocation Philosophy
Focused Long-lived, Downside, Limit Number and Analysis Largest Disciplined of Repay is Under Well Return Capital Leverage TermExcess Allocation Potential to Capital Upside for Philosophy Expandable to Range Projects ofMaintain Assumptions –Assets Focused Strong Resources Management Prioritize Balan
Slide 26: Capital Expenditures
Capital Expenditures expenditure expansion and estimates Grasberg (1) include underground (2) Oil projects & Gasdevelopment. inMajor progress. Mining Project Note: Projects Includes spending Othercapitalized will Mining continue (US$ interest. tobillions) be e= reviewed estimate. $8 $7.1 andSee $7.3
Slide 27: Oil & Gas Cash Flows
Oil & and $4.50/MMbtu Gas Cash Flows for natural –Targeted gas to e=be estimate. Self-funding See Cautionary OperatingStatement. Cash Flow26 CAPEX (US$ billions) $4.0 $3.0 $2.0 $1.0 $0.0 2013e 2014e 2015e NOTE: Assumes pricing of $100/bbl Brent crude for oil
Slide 28: Significant Debt Reduction
Significant Debt/’13-’16 income plusDebt depreciation, Avg.Reduction EBITDA depletion, Year-End 0.6x 0.1xand Net N/Aamortization Debt Pro Forma at Varying e= Proestimate. Copper Forma YE Prices See2016e Cautionary (US$ Note: billions) Sensitivity Statement. $20 $16.3 assumes 27 $15 $12 $10 Molybdenu
Slide 29: Financial Policy Basis
Financial Projects Basis ?Committed with Policy Strong ?Maintain toFinancial Long-standing Strong Returns/Capital Balance Tradition Sheet of Discipline Maximizing & Liquidity ?Anticipate Value Position forContinuing ?Reduce Shareholders Debt Current 28 Incurred Common in Acquisitions Stock Dividend
Slide 30: Combined Company Highlights
Combined Company Significant Long-termHighlights Natural Gas ?Creates Resources A Premier ?Strong U.S. Margins Based & Natural Cash Flows Resources ?HighProducer Quality,?World’s Long-lived Largest and Geographically Publicly TradedDiverse CopperAssets Producer 29 ?Significant Producer of Oil, Gold
Slide 31: Reference Slides
Reference Slides
Slide 32: 2013e Operating Estimates
2013e $1.65 $1.35 lbs 1,600/oz change (4) Includes mm2013e $2.27 Operating vary ozs 2012 mm $1.32 gold significantly Sales would lbs Estimates produced $1.89 by 2012e for Region By-product gold, in2012e in 2013e molybdenum. North North change 2012 Unit America America. Credits $13/lb eProduction 201
Slide 33: 2013e Oil & Gas Operating Estimates
2013e Deepwater Mtns/Other 6 MBOE/d Oil &Operating of 56 Gas NGLs (3)Operating 127 NOTE: Cost: 125 40 $15/bbl Estimates e (1) = estimate. 31Eagle (2) Rocky 36See Ford Oil Mtns. Cautionary Gas Pricing: &MBOE/D Operating LLS Statement. Operating MMcfe/d Cost:32$1.65/Mcfe Cost: CA Eagle $10/bbl For Cal
Slide 34: Oil & Natural Gas Hedging Positions
Oil & limit $70 Hub PXP.limit 2013 $70 See Natural Unhedged limit Cautionary 2014Gas $$ 2015 570 Hedging $90 Statement. Swaps .74floor limit Positions – $100 110/d ADPfloor @ $$ Oil $4.27 675 Unhedged Indexed .09 Swaps limit to$6.90 Brent –ADP 100/d ADP Unhedged 2013 @ 15% $4.09 2014$70 @2015 No$109
Slide 35: Energy - A Significant Component of Mining Cost
Energy29% GWh – ADiesel Significant 36% Component 255 mm gallons of Mining Other Cost 59% Acid Site Operating 13% Energy Costs 5%by6% Category 21% Coal: Components 700k mt &ofNatural EnergyGas: (Consolidated) 2012 2012 (Total 1 million of $1.6 MMBTU Billion) 34 Materials Purchased Manpower Power 32%
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