Jayapura, Jubi – Freeport-McMoRan Inc. (NYSE: FCX) today (9/12/2015) 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.
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.”
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. (Victor Mambor)
ULMWP activists in Papua express gratitude to Oxford City Council
Jayapura, Jubi – Simon B Daby, a member of the Central Board Committee of the United Liberation Movement for West Papua (ULMWP), said that West Papuans appreciate the Oxford City Council for granting the Freedom of Oxford” award to the Chairman of ULMWP Benny Wenda. Further, he said this award proves that the international community paid attention towards the efforts of the ULMWP and Wenda in fighting for Papuan self-determination.
The Freedom of Oxford is the highest honour given by the City of Oxford to people who have a significant impact on society. Benny Wenda is an internationally recognized diplomat and leader for the West Papua free movement. Since being granted political asylum in England in 2002, Wenda has fought tirelessly for the self-determination of West Papuans from his campaign office in Oxford.
Moreover, Simon B Dabby stated that this award is highly essential for all the people of West Papua. “We, the people of West Papua, congratulate Benny Wenda who received this award for his efforts to voice the calls of West Papuans for their right of self-determination to the international community,” said Daby on Wednesday (17/4/2019).
Daby continued to say that Mr Wenda has consistently declared injustice and human rights violations in West Papua since 1961 and campaigned for the right of self-determination for West Papuan. “Through this momentum, the people in West Papua convey to all state members of the United Nation to support their right of self-determination,” said Daby.
He also said the demand of West Papuan for self-determination aligned with the Indonesian Constitution 1945 in which stated in the first paragraph of the Preamble, “whereas independence is the inalienable right of all nations.” It is also following the UN General Assembly Resolution No. 1541 (XV) of 1960. The resolution stated that if a region has a geographical location and cultural ethics that are separate and different from its ruling and administrative state, this region is entitled to claim its right of self-determination.
Meanwhile, a member of the Legislative Committee of ULMWP for Anim Ha region, Pangkrasia Yeem, expressed his gratitude to the Oxford City Council for this award. He said the Freedom of Oxford award for Benny Wenda is a special gift for the Papuan people.
Furthermore, he asks all West Papuans to be united in advocating the ULMWP’s efforts for West Papuan self-determination. “With our support to ULMWP, we (will) establish our state as an independent and sovereign nation,” said Yeem on Sunday (14/7/2019). (*)
Reporter: Hengky Yeimo
Editor: Pipit Maizier
23 extra-judicial killings in West Papua last year – rights group
Papua, Jubi – A human rights group advocating for West Papuans in Indonesia says there were more than 20 extra-judicial killings by the military there last year.
Indonesian soldiers participate in a major military jungle warfare exercise in Poso, in central Sulawesi island, on March 31, 2015.
But the military has dismissed the findings, which come during an escalating conflict in Papua’s Highlands as rebels wage war on the state.
The International Coalition for Papua has documented 23 killings it claimed happened at the hands of Indonesia’s military in 2018.
The recently-released list ranges from bullet wounds to being burned alive, mostly in the troubled Central Highlands.
The rights group is demanding Indonesia launch independent investigations into all the cases, warning more deaths have been reported this year.
But a military spokesperson, Muhammad Aidi, said the report is a hoax and that some victims died from tribal violence.
He said others were rebels who died in gunfights after launching attacks on soldiers. (*)
West Papuan independence group urges primacy of TPNPB
Papua, Jubi – There’s strong opposition in West Papua to a reconfiguration of military forces in the struggle for independence from Indonesia.
The United Liberation Movement for West Papua, led by mainly exiled Papuan. claims it’s taking political leadership of a new unified military force, the West Papua Army.
The ULMWP last week said the Army was a united front between the West Papua Liberation Army, or TPNPB, and two smaller fighting forces.
Representatives of the TPNPB, and the broader Free Papua Movement, have since claimed they do not support thie unification anounced in the ‘Vanimo Border Declaration’.
This has been echoed by the West Papua National Committee, or KNPB, a pro-independence organisation focussed on peaceful campaigning.
Its international spokesman Victor Yeimo spoke to Johnny Blades about their concerns.
Victor Yeimo: We still struggle for independence, for our liberation. We need a liberation army. As you know, historically, this organisation (TPNPB) exist since 1961 and until today they exist, fighting on the ground. And the two other ones (the West Papuan National Army and the West Papua Revolutionary Army) separated from TPNPB. But in reality as West Papuans know, as well as colonial (power) knows, these two organisations never have an action on the ground. It’s not a competition between one organisation and another organisation, but in the unity, to liberate the West Papuan demand for self-determination, to go for our goal of freedom, we need one military organisation only. We don’t need many organisations. It wil make confusion in west Papua people. and it will make it difficult for us to make a solution; And it’s very dangerous for the guerillas and all the soldiers of the West Papua army on the ground because if there are three commands, three shystems going on in the ground, it will be difficult, because it will create problems within our military, and it will confuse. How can we attack the enemy through three systems of military organisations? In the revolution history, as you know, we need only one organisation of military.
Johnny Blades: But isn’t that what the ULMWP is trying to achieve, that they are all uniting?
Victor Yeimo: There are concerns in the constitution of the OPM (Free Papua Movement). As you know on the 1st of July 1971 when OPM declared proclamation of independence of the republic of West Papua, they have their own constitution. And this military, TPNPB, is under the constitution of the proclamation. Yes, it is important for us to unite, but in a military… they (West Papuan National Army and the West Papua Revolutionary Army) already split from the main organisation, the TPNPB. So I think now, in reality, the people of West Papua, we want to be free. So please if you want to unite, don’t degradate the existing organisation, the TPNPB, because today as you know on the ground TPNPB is still fighting with arms on the ground.
Johnny Blades: You’re saying that everything should be done under the auspices of the TPNPB, that it shouldn’t be a new united command; you’re saying it should be done under the rules and the constitution of the TPNPB because that’s the main military?
Victor Yeimo: Yes, the military has its own discipline of military. The constitution is something that we can discuss and unite. But the military is a tool for revolution. We need only one military and one discipline. So if they (the West Papuan National Army and the West Papua Revolutionary Army) if they have their own discipline of military, please bring it to the TPNPB. we have to strengthen the exist one. So then, what we want… we have one goal. So please use the existing one as our strength to attack the enemy. That’s the solution for KNPB. We are supporting the ULMWP but we encourage them to only recognise the TPNPB as the one and only military defence.
Johnny Blades: There’s been some criticism from people in the OPM, or TPNPB, about the way this (declaration) has been done. What do you think about the reaction?
Victor Yeimo: Yes, in the ground the reaction is negative. The other headquarters of each commander, like in Lanny Jaya, also in Puncak Jaya, also in Paniai, also in Yahukimo, also in Nduga, they are not involved in this declaration. So I believe that they are opposed to that declaration.
Johnny Blades: The KNPB has generally been a peaceful organisation. What do you believe in, does the military have a role in the struggle?
Victor Yeimo: Yes we support them in resistance as a defence force, as they have the same aim: to go for self-determination. But we have a different method. We organise people in West Papua through the peaceful means (including civil resistance and demonstrations). Until today KNPB believe in peaceful means. We don’t even hope the military action will give more influence inside our struggle because today people around the world, the solidarity just becomes bigger and bigger because our peaceful action in the ground. But it will not stop them fighting, because this is the reality in every struggle, a liberation army. We want our own military. It’s something that always happens in every struggle. So we want them to fight in accordance to their method.
Johnny Blades: The political leadership of the struggle, is it accurate to say that (ULMWP chairman) Benny Wenda is the head of that movement?
Victor Yeimo: I say that ULMWP should become co-ordinating body, not become a state or acting like a state. because we have too many factions and too many history. So we want today the organisations can unite all of the factions, all of the movements in West Papua through the co-ordination mechanism… like three years ago (at ULMWP’s inception). This is something important. We will have our own nation state after independence. So what we want today is to unite, co-ordinating the agenda and organisation, everything we can discuss. So, it’s not like now, everything comes from outside, from Benny Wenda, from outside. It’s not good for the unity. It will kill the unity because in our history there are too many people claiming they are the president, who claimed they have their own constitution and everything. We don’t want that. What we want today is freedom from Indonesian occupation. (*)
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