Freeport-McMoRan Reviewing Options for Oil-and-Gas Business

By Tess Stynes 

Freeport-McMoRan Inc. said it is reviewing options for its oil-and-gas business, adding that the potential public offering of a minority interest in the business remains an alternative.

Phoenix-based Freeport also said it cut its board to nine members from 16 members, with five of the departing members named to an oil-and-gas board of directors and two others retiring. The oil-and-gas board is in case that business is separated.

Freeport, whose main business is still copper, has been hurt by sluggish commodities prices across the board and its mistimed bet on the energy business.

The mining company on Tuesday said other options for the oil-and-gas division include a possible spinoff, joint-venture arrangements or further cost cuts.

Freeport said the latest moves come after discussions with many of its biggest shareholders. The company has been under pressure from activist investor Carl Icahn, who has disclosed a stake of more than 8.5%, making him one of the company's biggest shareholders.

Mr. Icahn disclosed the stake in late August when Freeport announced it would slash 2016 capital spending by 29%, cut about 10% of its U.S. workforce--or more than 1,500 jobs--and reduce output. Those moves came on top of plans to cut spending in its oil-and-gas operation.

Freeport has been hurt by debt it took on to make a big bet on oil and gas with the 2013 purchases of McMoRan Exploration Co. and Plains Exploration & Production Co., for $9 billion combined. It also moved to dramatically expand copper production on four continents.

In June, Freeport-McMoRan Oil & Gas Inc. filed plans for an initial public offering of up to $100 million in common shares to fund a capital program and for other purposes.

Freeport shares, down by more than half this year through Monday's close, rose 2.5% to $11.46 in recent premarket trading.

Write to Tess Stynes at [e-mail]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

October 06, 2015 09:12 ET (13:12 GMT)

Copyright (c) 2015 Dow Jones & Company, Inc.