By Allison Martell and Nicole Mordant
Oct 22 Freeport-McMoRan Copper & Gold Inc
reported better-than-expected third-quarter results on
Tuesday, lifting its shares 4 percent, and the company said it
was still looking at asset sales but was not under any pressure
to do them quickly.
Freeport, the world's No. 1 publicly listed copper producer,
repeated that it was considering ways to reduce its debt levels,
through asset sales, joint ventures or adjusting capital
"We are in a position where we ... don't have to do
anything," Chief Executive Officer Richard Adkerson said on a
conference call. "Anything we do ... will be done in a way to
enhance shareholder value."
The Phoenix, Arizona-based company has said it aims to cut
its debt load to $12 billion over the next three years.
Debt levels spiked after Freeport earlier this year bought
energy companies Plains Exploration & Production Co and McMoRan
Exploration Co for $9 billion. Total debt as of Sept. 30 was
$21.1 billion, little changed from $21.2 billion as of June 30.
Freeport said in July that it had started a sale process for
some of its newly acquired oil and gas projects in the Gulf of
Although the sale process was continuing, company officials
said on Tuesday, it might make more sense to not immediately
sell some of these assets, such as conventional oil and gas
assets on the shelf of the Gulf of Mexico.
"We are debating entirely whether we just might be better to
continue to operate those fields for a while and get those big
wells on and sell some at a later date," said James Flores,
chief executive and president of Freeport-McMoRan Oil & Gas.
A later date could be "within months" or "maybe next year,"
Adkerson said Freeport overnight had signed a two-year labor
agreement with workers at its massive Grasberg copper and gold
complex in Indonesia. A tentative deal at Grasberg, the world's
second-biggest copper mine, was reached earlier this
"The good news with that is that we avoided any kind of work
stoppage. The strike two years ago was a major negative for all
the stakeholders involved," Adkerson said. The company agreed to
increase base salaries by 10 percent in both 2013 and 2014, he
Adkerson said Freeport hoped that it could resolve by
year-end long-running contract talks with the Indonesian
government. Jakarta is pushing miners, especially foreign-owned
operations like Freeport's unit, to add value to Indonesian
exports by building smelters.
Freeport's current contract to operate Grasberg, in Papua
province, expires in 2021. Contract renegotiations have rumbled
on for more than a year, with the government seeking bigger
royalty payments, commitments on domestic processing, and stake
sales by foreign miners so as to increase domestic ownership.
Freeport's third-quarter earnings beat came on the back of a
good performance from its recently acquired oil and gas
operations and despite lower metals prices that weighed on
"A very big quarter for them," said Garrett Nelson, an
analyst with BB&T Capital Markets. "The beat was mainly driven
by the oil and gas segment, where sales, realizations and
production costs all came in better than what we had estimated."
Sales of copper, gold and molybdenum rose in the quarter,
but the prices of all three metals fell from a year earlier.
Net income slipped to $821 million, or 79 cents a share,
from $824 million, or 86 cents, a year earlier. Revenue rose to
$6.17 billion from $4.42 billion, boosted in part by the oil and
Analysts had expected earnings of 62 cents a share on
revenue of $5.7 billion, according to Thomson Reuters I/B/E/S.
Freeport kept its full-year sales forecasts unchanged at 4.1
billion pounds of copper and 1.1 million ounces of gold.
Freeport shares were up $1.42 to $36.46 in afternoon trade
on the New York Stock Exchange.