PHOENIX–(BUSINESS WIRE)–
Freeport-McMoRan Inc. (NYSE: FCX) today announced additional actions in
response to market conditions, including further revisions to its oil
and gas capital spending plans, additional curtailments in copper and
molybdenum production and the suspension of its common stock dividend.

Oil & Gas Review. As previously reported on August 5, 2015,
Freeport-McMoRan Oil & Gas (FM O&G) is deferring investments in several
long-term projects in response to oil and gas market conditions.
Following an ongoing review, capital expenditures for 2016 and 2017 have
been reduced further from $2.0 billion per year in 2016 and 2017 to $1.8
billion in 2016 and $1.2 billion in 2017, including idle rig costs. The
revised plans, together with initiatives to obtain third party financing
or other strategic alternatives, will be pursued with the goal of
achieving funding for oil and gas capital spending within its cash flows
and resources.

The revised plans incorporate a reduction in rig utilization from three
Deepwater Gulf of Mexico drillships to one drillship while increasing
production from third quarter 2015 rates of 150 barrels of oil
equivalents per day (MBOE/d) to an average of 159 MBOE/d in 2016 and
2017. FM O&G expects to bring eight wells on line in late 2015 and 2016
from its successful tie back drilling operations at the Holstein Deep,
Horn Mountain and King Projects in the Deepwater Gulf of Mexico. These
projects, combined with other initiatives, are expected to add low cost
oil production, enabling cash production costs to decline from $19 per
barrel of oil equivalents (BOE) in 2015 to less than $16 per BOE in 2016
and 2017. Under the revised plans, FM O&G’s cash flows would
substantially fund its capital expenditures at $45 per barrel of Brent
crude oil in 2017.

FM O&G is engaged in ongoing discussions with its rig vendors and other
service providers to obtain reductions in costs and to evaluate
opportunities to market idled equipment to third parties.

As previously reported on October 6, 2015, the FCX Board is engaged in a
strategic review of its oil and gas business to evaluate alternative
courses of action designed to improve FCX’s financial position, enhance
value to FCX shareholders and achieve self-funding of its oil and gas
business from its cash flows and resources. FM O&G’s high quality asset
base, its substantial underutilized Deepwater Gulf of Mexico
infrastructure, its large inventory of low risk development
opportunities and its talented and experienced personnel and management
team provide alternatives to generate value.

Mining Review. FCX continues to review its capital projects and
costs to maximize cash flow in a weak commodity price environment and to
preserve its resources for anticipated improved future market
conditions. FCX previously announced a 25 percent reduction in its
capital spending for its mining business for 2016 (from $2.7 billion to
$2.0 billion, including $0.6 billion in sustaining capital) and
announced curtailments at its North America and South America mines
totaling 250 million pounds of copper and 20 million pounds of
molybdenum per year. FCX is undertaking further actions involving plans
for a full shut-down of its Sierrita mine in Arizona and adjustments to
its operating plans from its primary molybdenum mines, which will
increase its curtailments to approximately 350 million pounds of copper
and 34 million pounds of molybdenum per annum. FCX is continuing to
evaluate its mining operating plans in response to market conditions and
will make further adjustments as required.

FCX is also evaluating other financing alternatives, the potential sale
of minority interests in certain mining assets and other actions to
provide additional proceeds for debt reduction. FCX has a broad set of
natural resource assets that provide alternatives for future actions to
enhance its financial flexibility.

Dividend on Common Stock. FCX also announced today that its Board
has suspended its annual common stock dividend of $0.20 per share. This
action will provide cash savings of approximately $240 million per annum
and further enhance FCX’s liquidity during this period of weak market
conditions. FCX’s Board will review its financial policy on an ongoing
basis and authorize cash returns to shareholders as market conditions
improve.

Assuming prices of $2.00 per pound for copper and $45 per barrel Brent
crude oil for 2016, FCX estimates consolidated operating cash flow would
exceed capital expenditures by more than $600 million.

James R. Moffett, FCX’s Chairman of the Board and Richard C.
Adkerson, Vice Chairman, President and Chief Executive Officer said, “We
are taking further actions to strengthen our financial position during a
period of weak and uncertain market conditions. While copper prices have
weakened in recent weeks and the near-term copper outlook is uncertain,
we view the medium and longer term outlook positively, supported by
copper’s important role in the global economy and limitations on global
supplies. As we approach 2016, we are positioning the company for free
cash flow generation in a weak commodity price environment and remain
focused on actions to reduce debt. Our high quality portfolio of
long-lived assets, flexible operating structure and experienced
management team provide a solid base to address the current market
conditions while maintaining an attractive portfolio of assets
positioned for long-term success.”

Equity Transactions. Since commencing its $2 billion
at-the-market equity programs in August 2015, FCX has sold a total of
154.6 million shares of common stock, generating gross proceeds of $1.6
billion through December 4, 2015. Approximately $0.4 billion remains
available under the programs. As of December 4, 2015, FCX had 1.19
billion common shares outstanding.

Amendment to Bank Credit Facility. Following recent declines in
prices for its primary products, FCX has reached agreement with its bank
group to amend the Leverage Ratio (Net Debt/EBITDA) under its $4 billion revolving
credit facility and term loan from the previous limit of
4.75x to 5.5x at December 31, 2015, 5.9x for the first half of 2016, and
stepping down to 5.0x by year-end 2016 and 4.25x in 2017. The Leverage
Ratio is unchanged at 3.75x thereafter.

FCX is a premier U.S.-based natural resources company with an
industry-leading global portfolio of mineral assets, significant oil and
gas resources and a growing production profile. FCX is the world’s
largest publicly traded copper producer.

FCX’s portfolio of assets includes the Grasberg minerals district in
Indonesia, one of the world’s largest copper and gold deposits;
significant mining operations in the Americas, including the large-scale
Morenci minerals district in North America and the Cerro Verde operation
in South America; the Tenke Fungurume minerals district in the DRC; and
significant U.S. oil and natural gas assets in the Deepwater GOM,
onshore and offshore California and in the Haynesville natural gas
shale, and a position in the Inboard Lower Tertiary/Cretaceous natural
gas trend onshore in South Louisiana.

Cautionary Statement Regarding Forward-Looking Statements: This
press release contains forward-looking statements, which are all
statements other than statements of historical facts, such as
expectations relating to commodity prices, development and production
activities, production volumes, ability to repay debt, statements
regarding the review of strategic alternatives for FCX’s oil and gas
business, including the previously announced potential public offering
of a minority interest in FCX’s oil and gas business, a potential
spinoff of FCX’s oil and gas business to its shareholders, potential
joint venture arrangements, and potential further spending reductions,
future dividend payments, debt reduction and share purchases and sales.
The declaration of dividends is at the discretion of the Board and will
depend on our financial results, cash requirements, future prospects,
and other factors deemed relevant by the Board.

FCX cautions readers that forward-looking statements are not
guarantees of future performance and actual results may differ
materially from those anticipated, projected or assumed in the
forward-looking statements. Important factors that can cause FCX’s
actual results to differ materially from those anticipated in the
forward-looking statements include supply of and demand for, and prices
of, copper, gold, molybdenum, cobalt, crude oil and natural gas, mine
sequencing, production rates, drilling results, potential effects of
cost and capital expenditure reductions and production curtailments on
financial results and cash flow, the outcome of FCX’s strategic review
of its oil and gas business, potential additional oil and gas property
impairment charges, potential inventory adjustments, potential
impairment of long-lived mining assets, the outcome of ongoing
discussions with the Indonesian government regarding PT Freeport
Indonesia’s (PT-FI) Contract of Work, PT-FI’s ability to obtain renewal
of its export license after January 28, 2016, the potential effects of
violence in Indonesia, the resolution of administrative disputes in the
Democratic Republic of Congo, industry risks, regulatory changes,
political risks, weather- and climate-related risks, labor relations,
environmental risks, litigation results and other factors
described in more detail in Part I, Item 1A. “Risk Factors” of FCX’s
annual report on Form 10-K for the year ended December 31, 2014, as
updated by FCX’s subsequent filings with the Securities and Exchange
Commission.

Investors are cautioned that many of the assumptions on which FCX’s
forward-looking statements are based are likely to change after the
forward-looking statements are made, including for example commodity
prices, which FCX cannot control, and production volumes and costs, some
aspects of which FCX may not be able to control. Further, FCX may make
changes to its business plans that could affect its results. FCX
cautions investors that it does not intend to update forward-looking
statements more frequently than quarterly notwithstanding any changes in
FCX’s assumptions, changes in business plans, actual experience or other
changes, and FCX undertakes no obligation to update any forward-looking
statements.

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Source: Freeport-McMoRan Inc.