Freeport-McMoRan Reports First-Quarter 2015 Results

Freeport-McMoRan Inc. (NYSE: FCX):

• Net loss attributable to common stock totaled $2.5 billion, $2.38 per share, for first-quarter 2015, compared with net income attributable to common stock of $510 million, $0.49 per share, for first-quarter 2014. After adjusting for net charges totaling $2.4 billion, $2.32 per share, primarily for the reduction of the carrying value of oil and gas properties and the related tax charge to establish a deferred tax valuation allowance, adjusted net loss attributable to common stock totaled $60 million, $0.06 per share, for first-quarter 2015.
• Consolidated sales totaled 960 million pounds of copper, 263 thousand ounces of gold, 23 million pounds of molybdenum and 12.5 million barrels of oil equivalents (MMBOE) for first-quarter 2015, compared with 871 million pounds of copper, 187 thousand ounces of gold, 27 million pounds of molybdenum and 16.1 MMBOE for first-quarter 2014.
• Consolidated sales for the year 2015 are expected to approximate 4.2 billion pounds of copper, 1.3 million ounces of gold, 95 million pounds of molybdenum and 52.3 MMBOE, including 960 million pounds of copper, 300 thousand ounces of gold, 25 million pounds of molybdenum and 12.9 MMBOE for second-quarter 2015.
• Average realized prices were $2.72 per pound for copper, $1,186 per ounce for gold and $56.51 per barrel for oil (including $11.97 per barrel for realized cash gains on derivative contracts) for first-quarter 2015.
• Consolidated unit net cash costs for first-quarter 2015 averaged $1.64 per pound of copper for mining operations and $20.26 per barrel of oil equivalents (BOE) for oil and gas operations.
• Operating cash flows totaled $717 million (net of $86 million in working capital uses and changes in other tax payments) for first-quarter 2015. Based on current sales volume and cost estimates and assuming average prices of $2.75 per pound for copper, $1,200 per ounce for gold, $8 per pound for molybdenum and $65 per barrel for Brent crude oil for the remainder of 2015, operating cash flows for the year 2015 are expected to approximate $4.4 billion.
• Capital expenditures totaled $1.9 billion for first-quarter 2015, including $0.6 billion for major projects at mining operations and $1.0 billion for oil and gas operations. Capital expenditures are expected to approximate $6.5 billion for the year 2015, including $2.5 billion for major projects at mining operations and $2.8 billion for oil and gas operations.
• FCX has taken actions to reduce or defer capital expenditures and other costs and is evaluating funding alternatives to advance growth projects in its oil and gas business, including consideration of a sale of public equity for a minority interest in its oil and gas subsidiary. Additional capital cost reductions, potential additional divestitures or monetizations and other actions will be pursued as required to maintain a strong balance sheet while preserving a strong resource position and portfolio of assets with attractive long-term growth prospects. FCX has a broad set of natural resource assets that provides many alternatives for future actions to enhance its financial flexibility.
• At March 31, 2015, consolidated debt totaled $20.3 billion and consolidated cash totaled $549 million.

Freeport-McMoRan Inc. (NYSE: FCX) reported a net loss attributable to common stock of $2.5 billion, $2.38 per share, for first-quarter 2015, compared with net income attributable to common stock of $510 million, $0.49 per share, for first-quarter 2014. FCX ™s net loss attributable to common stock for first-quarter 2015 included net charges totaling $2.4 billion, $2.32 per share, primarily for the reduction of the carrying value of oil and gas properties and the related tax charge to establish a deferred tax valuation allowance. The first quarters of 2015 and 2014 were also impacted by net noncash mark-to-market (losses) gains on oil and gas derivative contracts and other items described below.

James R. Moffett, Chairman of the Board; Richard C. Adkerson, Vice Chairman, and FCX President and Chief Executive Officer; and James C. Flores, Vice Chairman, and FM O&G President and Chief Executive Officer, said, "During the first quarter, we continued to focus on effective execution of our operating and capital plans and on our cost management initiatives. We are pleased to report important progress on our mining development projects and ongoing success in our oil and gas exploration and development activities that will provide future growth. We have taken actions to maintain financial strength and flexibility during this period of weak and uncertain commodity prices. We remain optimistic about our business, the long-term commodity markets for the commodities we produce and the significant values embedded in our large-scale, long-lived assets.

SUMMARY FINANCIAL DATA

SUMMARY OPERATING DATA

Consolidated Sales Volumes

First-quarter 2015 consolidated copper sales of 960 million pounds were slightly higher than the January 2015 estimate of 950 million pounds reflecting timing of shipments, and were higher than first-quarter 2014 sales of 871 million pounds reflecting higher volumes in North America, Indonesia and Africa, partly offset by lower volumes in South America primarily associated with the sale of the Candelaria and Ojos del Salado mines.

First-quarter 2015 consolidated gold sales of 263 thousand ounces were higher than the January 2015 estimate of 225 thousand ounces and first-quarter 2014 sales of 187 thousand ounces reflecting higher operating rates at PT-FI, partly offset by the impact of the sale of the Candelaria and Ojos del Salado mines.

First-quarter 2015 consolidated molybdenum sales of 23 million pounds approximated the January 2015 estimate of 23 million pounds, but were lower than first-quarter 2014 sales of 27 million pounds.

First-quarter 2015 sales from oil and gas operations of 12.5 MMBOE, including 8.4 million barrels (MMBbls) of crude oil, 21.8 billion cubic feet (Bcf) of natural gas and 0.5 MMBbls of natural gas liquids (NGLs), were lower than first-quarter 2014 sales of 16.1 MMBOE primarily reflecting the sale of the Eagle Ford properties, and were lower than the January 2015 estimate of 13.1 MMBOE reflecting a delay in initial production and ramp-up of Lucius and planned recompletions.

Consolidated sales for the year 2015 are expected to approximate 4.2 billion pounds of copper, 1.3 million ounces of gold, 95 million pounds of molybdenum and 52.3 MMBOE, including 960 million pounds of copper, 300 thousand ounces of gold, 25 million pounds of molybdenum and 12.9 MMBOE for second-quarter 2015. Projected 2015 copper sales are approximately 60 million pounds less than January 2015 estimates primarily reflecting reduced mining rates in Indonesia; projected 2015 oil and gas sales are 3.2 MMBOE less than January 2015 estimates primarily reflecting the timing of the Lucius ramp-up and the timing of maintenance activities in the Deepwater Gulf of Mexico (GOM).

Consolidated Unit Costs

Mining Unit Net Cash Costs. Consolidated average unit net cash costs (net of by-product credits) for FCX's copper mines of $1.64 per pound of copper in first-quarter 2015 were higher than unit net cash costs of $1.54 per pound in first-quarter 2014, reflecting higher costs and lower sales volumes in South America and lower by-product credits.

Assuming average prices of $1,200 per ounce of gold and $8 per pound of molybdenum for the remainder of 2015 and achievement of current sales volume and cost estimates, consolidated unit net cash costs (net of by-product credits) for copper mines are expected to be lower in the second half of 2015 and average $1.53 per pound of copper for the year 2015. Quarterly unit net cash costs vary with fluctuations in sales volumes and average realized prices (primarily gold and molybdenum prices). The impact of price changes for the remainder of 2015 on consolidated unit net cash costs would approximate $0.015 per pound for each $50 per ounce change in the average price of gold and $0.015 per pound for each $2 per pound change in the average price of molybdenum.

Oil and Gas Cash Production Costs per BOE. Cash production costs for oil and gas operations of $20.26 per BOE in first-quarter 2015 were higher than cash production costs of $18.51 per BOE in first-quarter 2014, primarily reflecting the sale of lower-cost Eagle Ford properties.

Based on current sales volume and cost estimates for the remainder of 2015, cash production costs are expected to approximate $19 per BOE for the year 2015.

MINING OPERATIONS

North America Copper Mines. FCX operates seven open-pit copper mines in North America - Morenci, Bagdad, Safford, Sierrita and Miami in Arizona, and Chino and Tyrone in New Mexico. All of the North America mining operations are wholly owned, except for Morenci. FCX records its 85 percent joint venture interest in Morenci using the proportionate consolidation method. In addition to copper, molybdenum concentrate and silver are also produced by certain of FCX's North America copper mines.

Operating and Development Activities. FCX has increased production from its North America copper mines in recent years and continues to evaluate a number of opportunities to add production capacity following positive exploration results. Future investments will be undertaken based on the results of economic and technical feasibility studies and market conditions.

The Morenci mill expansion project commenced operations in May 2014 and approached full rates in first-quarter 2015. The project expanded mill capacity from 50,000 metric tons of ore per day to approximately 115,000 metric tons of ore per day and is expected to add incremental annual production of approximately 225 million pounds of copper. Morenci's copper production is expected to average over 900 million pounds per year over the next five years. Additionally, the molybdenum circuit began production in first-quarter 2015 and is expected to reach design capacity of approximately 9 million pounds of molybdenum per year in second-quarter 2015. Remaining items associated with the project include construction of the expanded tailings storage facility, which is expected to be completed in third-quarter 2015.

Operating Data. Following is summary consolidated operating data for the North America copper mines for the first quarters of 2015 and 2014:

North America's consolidated copper sales volumes of 472 million pounds in first-quarter 2015 were higher than first-quarter 2014 sales of 371 million pounds, primarily reflecting higher milling rates and ore grades at Morenci and higher ore grades at Chino. North America sales are estimated to approximate 1.94 billion pounds for the year 2015, compared with 1.66 billion pounds of copper in 2014.

Average unit net cash costs (net of by-product credits) for the North America copper mines of $1.76 per pound of copper in first-quarter 2015 were lower than unit net cash costs of $1.79 per pound in first-quarter 2014, primarily reflecting higher sales volumes. Average unit net cash costs (net of by-product credits) for the North America copper mines are expected to approximate $1.71 per pound of copper for the year 2015, based on current sales volume and cost estimates and assuming an average molybdenum price of $8 per pound for the remainder of 2015. North America's average unit net cash costs for the remainder of 2015 would change by approximately $0.03 per pound for each $2 per pound change in the average price of molybdenum.

South America Mining. FCX operates two copper mines in South America - Cerro Verde in Peru (in which FCX owns a 53.56 percent interest) and El Abra in Chile (in which FCX owns a 51 percent interest). These operations are consolidated in FCX's financial statements. In addition to copper, the Cerro Verde mine produces molybdenum concentrate and silver.

Development Activities. Construction activities associated with a large-scale expansion at Cerro Verde are advancing toward completion in late 2015. Detailed engineering and major procurement activities are complete and construction is approximately 70 percent complete. The project will expand the concentrator facilities from 120,000 metric tons of ore per day to 360,000 metric tons of ore per day and provide incremental annual production of approximately 600 million pounds of copper and 15 million pounds of molybdenum beginning in 2016. As of March 31, 2015, $3.5 billion had been incurred for this project, with approximately $1.1 billion remaining to be incurred.

FCX continues to evaluate a potential large-scale milling operation at El Abra to process additional sulfide material and to achieve higher recoveries. Exploration results in recent years at El Abra indicate a significant sulfide resource, which could potentially support a major mill project. Future investments will depend on technical studies, economic factors and global copper market conditions.

Operating Data. Following is summary consolidated operating data for the South America mining operations for the first quarters of 2015 and 2014:

South America's consolidated copper sales volumes of 200 million pounds in first-quarter 2015 were lower than first-quarter 2014 sales of 307 million pounds, reflecting the sale of the Candelaria and Ojos del Salado mines and lower production from Cerro Verde associated with lower ore grades and recovery rates from stockpile material. Sales from South America mining are expected to approximate 935 million pounds of copper for the year 2015, compared with 1.14 billion pounds of copper in 2014 (the year 2014 included copper sales volumes of 268 million pounds from the Candelaria and Ojos del Salado mines).

Average unit net cash costs (net of by-product credits) for South America mining of $1.84 per pound of copper in first-quarter 2015 were higher than unit net cash costs of $1.42 per pound in first-quarter 2014, primarily reflecting lower sales volumes and higher mining costs at Cerro Verde mostly associated with increased repair and maintenance expense. In addition, first-quarter 2015 reflected lower by-product credits primarily because of the sale of the Candelaria mine. Average unit net cash costs (net of by-product credits) for South America mining are expected to approximate $1.72 per pound of copper for the year 2015, based on current sales volume and cost estimates and assuming average prices of $8 per pound of molybdenum for the remainder of 2015.

Indonesia Mining. Through its 90.64 percent owned and consolidated subsidiary PT-FI, FCX's assets include one of the world's largest copper and gold deposits at the Grasberg minerals district in Papua, Indonesia. PT-FI operates a proportionately consolidated joint venture, which produces copper concentrates that contain significant quantities of gold and silver.

Regulatory Matters. PT-FI is engaged in active discussions with the Indonesian government regarding its Contract of Work (COW) and long-term operating rights. The parties entered into a Memorandum of Understanding (MOU) related to an amended COW in July 2014, which was extended to July 25, 2015. Negotiations are taking into consideration PT-FI's requirement for assurance of legal and fiscal terms post-2021 for PT-FI to continue with its large-scale investment program in Papua, Indonesia.

PT-FI is advancing plans for the construction of new smelter capacity in parallel with completing negotiations on its COW and long-term operating rights. PT-FI has identified a site adjacent to the existing PT Smelting site in Gresik, Indonesia, for the construction of additional smelter capacity and is in discussions with potential partners for the project.

Under the MOU, no terms of the COW other than those relating to export duties, a smelter bond and increased royalties will be changed until the completion of an amended COW.

PT-FI is required to apply for renewal of export permits at six-month intervals and the next renewal date is July 25, 2015.

Development Activities. PT-FI has several projects in progress in the Grasberg minerals district related to the development of large-scale, long-lived, high-grade underground ore bodies. In aggregate, these underground ore bodies are expected to ramp up over several years to process approximately 240,000 metric tons of ore per day following the transition from the Grasberg open pit, currently anticipated to occur in late 2017. Development of the Grasberg Block Cave and Deep Mill Level Zone (DMLZ) underground mines is advancing to enable DMLZ to commence production in late 2015 and the Grasberg Block Cave mine to commence production in 2018. Over the next five years, estimated aggregate capital spending on these projects is currently expected to average $0.8 billion per year ($0.6 billion per year net to PT-FI). Additionally, over the next five years, estimated aggregate capital spending for processing and power facilities to optimize the handling of underground ore is expected to average $0.3 billion per year. Considering the long-term nature and size of these projects, actual costs could vary from these estimates. PT-FI may reduce or defer these activities pending resolution of negotiations for an amended COW.

Operating Data. Following is summary consolidated operating data for the Indonesia mining operations for the first quarters of 2015 and 2014:

Indonesia's first-quarter 2015 sales of 155 million pounds of copper and 260 thousand ounces of gold were higher than first-quarter 2014 sales of 109 million pounds of copper and 162 thousand ounces of gold reflecting higher operating rates, partly offset by lower ore grades. Indonesia's first-quarter 2015 copper production was approximately 20 percent below January 2015 estimates primarily because of lower mining rates, which improved throughout the quarter. Indonesia's gold production was above January 2015 estimates because of higher ore grades.

At the Grasberg mine, the sequencing of mining areas with varying ore grades causes fluctuations in quarterly and annual production of copper and gold. Sales from Indonesia mining are expected to approximate 885 million pounds of copper and 1.3 million ounces of gold for the year 2015, compared with 664 million pounds of copper and 1.2 million ounces of gold for the year 2014.

A significant portion of PT-FI's costs are fixed and unit costs vary depending on production volumes. Indonesia's unit net cash costs (including gold and silver credits) of $1.34 per pound of copper in first-quarter 2015 were lower than unit net cash costs of $1.53 per pound in first-quarter 2014, primarily reflecting higher volumes, partly offset by the impact of export duties and increased royalty rates.

Unit net cash costs (net of gold and silver credits) for Indonesia mining are expected to approximate $1.09 per pound of copper for the year 2015, based on current sales volume and cost estimates, and assuming an average gold price of $1,200 per ounce for the remainder of 2015. Indonesia mining's projected unit net cash costs would change by approximately $0.06 per pound for each $50 per ounce change in the average price of gold for the remainder of 2015. Because of the fixed nature of a large portion of Indonesia's costs, unit costs vary from quarter to quarter depending on copper and gold volumes.

Africa Mining. Through its 56 percent owned and consolidated subsidiary Tenke Fungurume Mining S.A. (TFM), FCX operates in the Tenke Fungurume (Tenke) minerals district in the Katanga province of the Democratic Republic of Congo (DRC). In addition to copper, the Tenke mine produces cobalt hydroxide.

Operating and Development Activities. TFM completed its second phase expansion project in early 2013, which included increasing mine, mill and processing capacity. Construction of a second sulphuric acid plant is under way, with completion expected in 2016. FCX continues to engage in exploration activities and metallurgical testing to evaluate the potential of the highly prospective minerals district at Tenke. These analyses are being incorporated in future plans for potential expansions of production capacity. Future expansions are subject to a number of factors, including power availability, economic and market conditions, and the business and investment climate in the DRC.

Operating Data. Following is summary consolidated operating data for the Africa mining operations for the first quarters of 2015 and 2014:

TFM's copper sales of 133 million pounds in first-quarter 2015 were higher than first-quarter 2014 copper sales of 84 million pounds primarily because of timing of shipments and higher ore grades. TFM's sales are expected to approximate 455 million pounds of copper and 34 million pounds of cobalt for the year 2015, compared with 425 million pounds of copper and 30 million pounds of cobalt for the year 2014.

Africa mining's unit net cash costs (net of cobalt credits) of $1.26 per pound of copper in first-quarter 2015 were higher than unit net cash costs of $0.89 per pound of copper in first-quarter 2014, primarily reflecting lower cobalt credits. Unit net cash costs (net of cobalt credits) for Africa mining are expected to approximate $1.26 per pound of copper for the year 2015, based on current sales volume and cost estimates and assuming an average cobalt price of $13 per pound for the remainder of 2015. Africa mining's projected unit net cash costs would change by approximately $0.07 per pound for each $2 per pound change in the average price of cobalt for the remainder of 2015.

Molybdenum Mines. FCX has two wholly owned molybdenum mines in North America - the Henderson underground mine and the Climax open-pit mine, both in Colorado. The Henderson and Climax mines produce high-purity, chemical-grade molybdenum concentrates, which are typically further processed into value-added molybdenum chemical products. The majority of molybdenum concentrates produced at the Henderson and Climax mines, as well as from FCX's North and South America copper mines, are processed at FCX's conversion facilities.

Production from the Molybdenum mines totaled 13 million pounds of molybdenum in the first quarters of 2015 and 2014. Refer to summary operating data on page 3 for FCX's consolidated molybdenum sales, which includes sales of molybdenum produced at the Molybdenum mines, and from FCX's North and South America copper mines.

Average unit net cash costs for the Molybdenum mines were $7.17 per pound of molybdenum in first-quarter 2015, compared with $6.71 per pound in first-quarter 2014. Based on current sales volume and cost estimates, unit net cash costs for the Molybdenum mines are expected to average approximately $7.50 per pound of molybdenum for the year 2015.

FCX continues to monitor market conditions and may make adjustments to its primary molybdenum production as market conditions warrant. For a reconciliation of unit net cash costs per pound to production and delivery costs applicable to sales reported in FCX's consolidated financial statements, refer to the supplemental schedules, "Product Revenues and Production Costs," beginning on page X, which is available on FCX's website, "fcx.com."

Mining Exploration Activities. FCX's mining exploration activities are generally near its existing mines with a focus on opportunities to expand reserves and resources to support development of additional future production capacity in the large minerals districts where it currently operates. Exploration results continue to indicate opportunities for significant future potential reserve additions in North and South America, and in the Tenke minerals district. The drilling data in North America also indicates the potential for significantly expanded sulfide production. Drilling results and exploration modeling in North America have identified large-scale potential sulfide resources in the Morenci and Safford/Lone Star districts, providing a long-term pipeline for future growth in reserves and production capacity in an established minerals district. Exploration spending associated with mining operations is expected to approximate $100 million for the year 2015, compared to $96 million in 2014.

OIL AND GAS OPERATIONS

Through its oil and gas subsidiary, FCX Oil & Gas Inc. (FM O&G), FCX's portfolio of oil and gas assets includes significant oil production facilities and growth potential in the Deepwater GOM, established oil production facilities onshore and offshore California, large onshore natural gas resources in the Haynesville shale play in Louisiana, natural gas production from the Madden area in Central Wyoming, and an industry-leading position in the emerging Inboard Lower Tertiary/Cretaceous natural gas trend located in the shallow waters of the GOM and onshore in South Louisiana. During first-quarter 2015, 86 percent of FCX's oil and gas revenues, excluding the impact of derivative contracts, were from oil and NGLs.

FM O&G follows the full cost method of accounting whereby all costs associated with oil and gas property acquisition, exploration and development activities are capitalized and amortized to expense under the unit-of-production method on a country-by-country basis using estimates of proved oil and natural gas reserves relating to each country where such activities are conducted. The costs of unproved oil and gas properties are excluded from amortization until the properties are evaluated. Under the full cost accounting rules, a "ceiling test" is conducted each quarter to review the carrying value of the oil and gas properties for impairment.

At March 31, 2015, net capitalized costs with respect to FM O&G's proved U.S. oil and gas properties exceeded the ceiling amount specified by the U.S. Securities and Exchange Commission (SEC) full cost accounting rules, which resulted in the recognition of an impairment charge totaling $3.1 billion ($1.9 billion to net loss attributable to common stock) for first-quarter 2015. The twelve-month average of the first-day-of-the-month historical reference oil price required to be used under SEC full cost accounting rules in determining the March 31, 2015, ceiling amount was $82.72 per barrel (the twelve-month average was $94.99 per barrel at December 31, 2014).

FM O&G's reference price is West Texas Intermediate (WTI) for oil. Because the ceiling test limitation uses a twelve-month historical average price, if WTI oil prices remain below the twelve-month average of $82.72 per barrel, the ceiling limitation will decrease resulting in potentially significant additional ceiling test impairments of FCX's oil and gas properties during the remainder of 2015. Other factors that would also contribute to such impairments include costs transferred from unevaluated properties to the full cost pool without corresponding proved oil and natural gas reserve additions, negative reserve revisions and increased future development or production costs. The WTI oil price was $56.16 per barrel at April 22, 2015.

Financial and Operating Data. Following is summary financial and operating data for the U.S. oil and gas operations for the first quarters of 2015 and 2014:

In first-quarter 2015, FM O&G's average realized price for crude oil was $56.51 per barrel, including $11.97 per barrel of realized cash gains on derivative contracts. Excluding the impact of derivative contracts, the first-quarter 2015 average realized price for crude oil was $44.54 per barrel (81 percent of the average Brent crude oil price of $55.19 per barrel).

FM O&G has derivative contracts that provide price protection averaging between approximately $70 and $90 per barrel of Brent crude oil for more than 80 percent of estimated 2015 oil production. Assuming an average price of $65 per barrel for Brent crude oil, FCX would receive a benefit of $20 per barrel on remaining 2015 derivative contract volumes of 23.1 million barrels, before taking into account weighted-average premiums of $6.89 per barrel.

In first-quarter 2015, FM O&G's average realized price for natural gas was $2.86 per MMBtu, compared to the New York Mercantile Exchange natural gas price average of $2.98 per MMBtu for the January through March 2015 contracts.

Realized revenues for oil and gas operations of $43.71 per BOE in first-quarter 2015 were lower than realized revenues of $77.22 per BOE in first-quarter 2014, primarily reflecting lower oil prices, partly offset by the impact of higher realized cash gains on derivative contracts (realized cash gains were $100 million or $8.00 per BOE in first-quarter 2015, compared with losses of $65 million or $4.01 per BOE in first-quarter 2014).

Cash production costs for oil and gas operations of $20.26 per BOE in first-quarter 2015 were higher than cash production costs of $18.51 per BOE in first-quarter 2014, primarily reflecting the sale of lower-cost Eagle Ford properties.

Following is a summary of average oil and gas sales volumes per day by region for the first quarters of 2015 and 2014:

Daily sales volumes averaged 139 MBOE for first-quarter 2015, including 93 MBbls of crude oil, 242 million cubic feet (MMcf) of natural gas and 6 MBbls of NGLs. Oil and gas sales volumes are expected to average 143 MBOE per day for the year 2015, comprised of 67 percent oil, 29 percent natural gas and 4 percent NGLs.

Based on current sales volume and cost estimates, cash production costs are expected to approximate $19 per BOE for the year 2015.

Oil and Gas Exploration, Operating and Development Activities. FCX's oil and gas business has significant proved, probable and possible reserves, a broad range of development opportunities and high-potential exploration prospects. The business is managed to reinvest its cash flows in projects with attractive rates of return and risk profiles. Following the recent sharp decline in oil prices, FCX has taken steps to significantly reduce capital spending plans and near-term oil and gas growth initiatives and is evaluating funding opportunities for capital expenditures for its oil and gas business, including consideration of a sale of public equity for a minority interest in FM O&G.

FM O&G has a large strategic position in the Deepwater GOM with significant current oil production, strong cash margins and existing infrastructure and facilities with excess capacity. These assets, combined with FM O&G ™s large leasehold interests in an established geologic basin, provide financially attractive investment opportunities for high-impact growth in oil production and cash margins. FM O&G ™s capital allocation strategy is principally focused on drilling and development opportunities that can be tied back to existing facilities.

U.S. Oil and Gas Capital Expenditures. First-quarter 2015 capital expenditures for U.S. oil and gas operations totaled $1.0 billion (including $0.6 billion incurred for the Deepwater GOM, $0.1 billion for the Inboard Lower Tertiary/Cretaceous natural gas trend and $0.3 billion primarily associated with prior period costs).

Capital expenditures for oil and gas operations are estimated to total $2.8 billion for the year 2015. Approximately 85 percent of the 2015 capital budget is expected to be directed to the highest return focus areas in the GOM. Capital expenditures for 2015 have been revised from the previous estimate of $2.3 billion, reflecting increased development drilling and activities following success from first-quarter 2015 exploration results.

Deepwater GOM. Multiple development and exploration opportunities have been identified in the Deepwater GOM that benefit from tieback opportunities to significant available production capacity at the FM O&G operated large-scale Holstein, Marlin and Horn Mountain deepwater production platforms. In addition, FM O&G has interests in the Lucius and Heidelberg oil fields, and in the Vito basin area.

During first-quarter 2015, FM O&G achieved several important accomplishments. Positive drilling results were achieved at the Holstein Deep and King tie-back projects and the Power Nap prospect in the Vito area. Production commenced at the Lucius facility, the Dorado development well and Highlander, with aggregate rates of approximately 25 MBOE per day by the end of March 2015. Development progressed at the Heidelberg field.

Initial production was successfully established in January 2015 at the Lucius oil facility in Keathley Canyon. The facility has a capacity of 80 MBbls of oil per day and is scheduled to ramp up to full capacity in second-quarter 2015. Lucius consists of six subsea wells tied back to a truss spar hull located in 7,200 feet of water. FM O&G has a 25.1 percent working interest in Lucius.

During first-quarter 2015, development activities advanced at Heidelberg, which is a large, high-quality oil development project located in 5,300 feet of water in the Green Canyon area. Fabrication of the main topsides module is more than 85 percent complete, and the operator plans to install the hull in second-quarter 2015. The Heidelberg truss spar was designed as a Lucius-look-alike facility with capacity of 80 MBbls of oil per day. Development drilling continues, and the project remains on track for first production in 2016. FM O&G has a 12.5 percent working interest in Heidelberg.

Following successful drilling results at the 100-percent-owned Holstein Deep delineation well in the Green Canyon area in late 2014 that logged 444 feet of net oil pay, FM O&G achieved positive results at the second delineation well in first-quarter 2015. Wireline logs indicated that the well encountered approximately 482 feet of net oil pay and established sand continuity across the primary reservoir encountered in the first delineation well. The second well, which is updip to the discovery well, was drilled to 32,260 feet in February 2015. In April 2015, FM O&G commenced drilling the third delineation well, which is the most updip in the reservoir and is currently drilling below 7,200 feet towards a proposed total depth of approximately 30,800 feet. Production from the planned three-well subsea tieback development program is expected to reach approximately 15 MBOE per day in the first half of 2016.

Drilling results, logs and accompanying other data received to date continues to support the potential for additional development opportunities at Holstein Deep to achieve production of up to 75 MBOE per day by 2020. The Holstein Deep development is located in Green Canyon Block 643, west of the Holstein platform in 3,890 feet of water. FM O&G has identified multiple additional development opportunities in the Green Canyon area that could be tied back to the Holstein facility.

Marlin, in which FM O&G has a 100 percent working interest, is located in Viosca Knoll and has production facilities capable of producing 60 MBbls of oil per day. Several tieback opportunities in the area have been identified, including the Dorado and King development projects.

In March 2015, FM O&G performed a successful production test in excess of 8 MBOE per day and established production on the first of three planned subsea tieback wells from the 100-percent-owned Dorado development project. Drilling operations for the second and third wells, which are targeting similar undrained fault blocks and updip resource potential south of the Marlin facility, are expected to begin in 2016. The Dorado development is located on Viosca Knoll Block 915 in 3,860 feet of water.

In first-quarter 2015, sidetrack drilling at the 100-percent-owned King prospect encountered the optimum oil take point in the M66 reservoir, and completion operations are under way. The well is expected to commence production in late 2015, and additional drilling is planned in the area starting in the second-half of 2015. King is located in Mississippi Canyon south of the Marlin facility in 5,200 feet of water.

Horn Mountain, in which FM O&G has a 100 percent working interest, is located in Mississippi Canyon and has production facilities capable of producing 75 MBbls of oil per day. Several tieback opportunities in the area have been identified including Kilo/Oscar/Quebec/Victory (KOQV), which are expected to commence drilling in mid-2015. This infill drilling program will target undrained fault blocks and updip resource potential just east of the Horn Mountain facility. KOQV is located in approximately 5,500 feet of water.

In first-quarter 2015, sidetrack drilling at the Power Nap exploration well in the Vito area successfully extended the known oil reservoir downdip. A second sidetrack well was drilled to a favorable position to acquire core data from the primary pay sand. The operator is preparing to drill the Deep Sleep exploration well, which is a key offset to the Vito and Power Nap discoveries. Deep Sleep is located in 4,200 feet of water approximately 5 miles south of Power Nap. FM O&G owns a 50 percent working interest in Power Nap and Deep Sleep.

FM O&G has an 18.67 percent working interest in the Vito oil discovery in the Mississippi Canyon area and a significant lease position in the Vito basin in the Mississippi Canyon and Atwater Valley areas. Vito, a large, deep subsalt Miocene oil discovery made in 2009, is located in approximately 4,000 feet of water. Exploration and appraisal drilling in recent years confirmed a significant resource in high-quality, subsalt Miocene sands. Development options are under evaluation.

Inboard Lower Tertiary/Cretaceous. FM O&G has an industry-leading position in the emerging Inboard Lower Tertiary/Cretaceous natural gas trend, located on the Shelf of the GOM and onshore in South Louisiana.

The Highlander discovery, which is located onshore in South Louisiana, began production on February 25, 2015, following production testing that indicated a flow rate of 75 MMcf per day (approximately 37 MMcf per day net to FM O&G). The well has been restricted to approximately 24 MMcf per day because of limited processing facilities. FM O&G is currently developing additional processing facilities to accommodate the higher flow rates, and installation is expected by year-end 2015. A second well location has been identified and future plans are being considered. FM O&G is the operator and has a 72 percent working interest and an approximate 49 percent net revenue interest in Highlander. FM O&G has identified multiple prospects in the Highlander area where it controls rights to more than 50,000 gross acres.

The Farthest Gate West onshore exploration prospect was drilled to a total depth of approximately 22,000 feet in March 2015, and wireline logs indicated the well encountered hydrocarbon bearing sands in the Eocene section. FM O&G plans to complete and flow test the well in second-quarter 2015. FM O&G is the operator and has a 90 percent working interest in Farthest Gate West, which is located onshore in Cameron Parish, Louisiana.

California. FM O&G's California assets benefit from an established oil production base with a stable production profile and access to favorably priced crude markets. Development plans are principally focused on maintaining stable production levels through continued drilling in the long-established producing fields onshore in California. FM O&G ™s position in California is located onshore in the San Joaquin Valley and Los Angeles Basin and offshore in the Point Arguello and Point Pedernales fields.

Haynesville. FM O&G has rights to a substantial natural gas resource, located in the Haynesville shale play in North Louisiana. Drilling activities in recent years have been reduced to maximize cash flows in a low natural gas price environment and to benefit from potentially higher future natural gas prices.

International Exploration (Morocco). FM O&G has a farm-in arrangement to earn interests in exploration blocks located in the Mazagan permit area offshore Morocco. The exploration area covers 2.2 million gross acres in water depths of 4,500 to 9,900 feet. FM O&G expects to commence drilling the MZ-1 well associated with the Ouanoukrim prospect in May 2015. First-quarter 2015 capital expenditures for international oil and gas exploration activities in Morocco totaled $15 million.

CASH FLOWS, CASH and DEBT

Operating Cash Flows. FCX generated operating cash flows of $717 million (net of $86 million in working capital uses and changes in other tax payments) for first-quarter 2015.

Based on current sales volume and cost estimates and assuming average prices of $2.75 per pound of copper, $1,200 per ounce of gold, $8 per pound of molybdenum and $65 per barrel of Brent crude oil for the remainder of 2015, FCX's consolidated operating cash flows are estimated to approximate $4.4 billion for the year 2015. The impact of price changes for the remainder of 2015 on operating cash flows would approximate $250 million for each $0.10 per pound change in the average price of copper, $30 million for each $50 per ounce change in the average price of gold, $95 million for each $2 per pound change in the average price of molybdenum and $80 million for each $5 per barrel change in the average Brent crude oil price.

Capital Expenditures. Capital expenditures totaled $1.9 billion for first-quarter 2015, including $0.6 billion for major projects at mining operations and $1.0 billion for oil and gas operations.

Capital expenditures are currently expected to approximate $6.5 billion for the year 2015, including $2.5 billion for major projects at mining operations (primarily for the Cerro Verde expansion and underground development activities at Grasberg) and $2.8 billion for oil and gas operations. FCX has taken actions to reduce or defer capital expenditures and other costs and is evaluating funding alternatives to advance growth projects in its oil and gas business, including consideration of a sale of public equity for a minority interest in its oil and gas subsidiary. Additional capital cost reductions, potential additional divestitures or monetizations and other actions will be pursued as required to maintain a strong balance sheet while preserving a strong resource position and portfolio of assets with attractive long-term growth prospects. FCX has a broad set of natural resource assets that provide many alternatives for future actions to enhance its financial flexibility.

Cash. Following is a summary of cash available to the parent company, net of noncontrolling interests' share, taxes and other costs at March 31, 2015 (in millions):

Debt. FCX remains committed to a strong balance sheet and will take prudent actions in response to market conditions. FCX has taken steps to sell assets, defer capital spending and reduce dividends on its common stock. FCX will continue to evaluate its portfolio for potential future actions. Following is a summary of total debt and related weighted-average interest rates at March 31, 2015 (in billions, except percentages):

At March 31, 2015, FCX had $985 million of borrowings outstanding and $44 million in letters of credit issued under its $4 billion revolving credit facility. FCX also has uncommitted and short-term lines of credit with certain financial institutions that are unsecured, which have terms and pricing that are generally more favorable than our revolving credit facility. At March 31, 2015, there was $350 million of borrowings drawn under these lines of credit.

In addition, Cerro Verde has a $1.8 billion facility to fund a portion of its expansion project and for its general corporate purposes. At March 31, 2015, there was $847 million of borrowings and no letters of credit issued under Cerro Verde's credit facility.

FINANCIAL POLICY

FCX has a long-standing tradition of seeking to build shareholder value through investing in projects with attractive rates of return and returning cash to shareholders through common stock dividends and share purchases. FCX paid common stock dividends of $327 million in first-quarter 2015.

In response to the impact of lower commodity prices, in March 2015, the annual dividend rate for FCX's common stock was reduced to $0.20 per share from the previous rate of $1.25 per share. On March 24, 2015, FCX's Board of Directors (the Board) declared a regular quarterly dividend of $0.05 per share, which will be paid on May 1, 2015. The declaration of dividends is at the discretion of the Board and will depend upon FCX's financial results, cash requirements, future prospects and other factors deemed relevant by the Board.

FCX intends to continue to maintain a strong financial position, with a focus on reducing debt while continuing to invest in attractive growth projects and providing cash returns to shareholders. The Board will continue to review FCX's financial policy on an ongoing basis and anticipates increasing cash returns to shareholders as market and business conditions warrant.

OTHER MATTERS

On April 7, 2015, the Delaware Court of Chancery approved the settlement of FCX ™s stockholder derivative litigation and awarded the plaintiffs ™ legal fees and expenses. In accordance with the settlement terms, FCX expects the net proceeds to be released from escrow in May 2015. As a result, FCX expects the Board to declare a special dividend of approximately $115 million ($0.11 per share) that would be payable in early August 2015, corresponding with the timing of FCX ™s next regular quarterly dividend.

WEBCAST INFORMATION

A conference call with securities analysts to discuss FCX's first-quarter 2015 results is scheduled for today at 10:00 a.m. Eastern Time. The conference call will be broadcast on the Internet along with slides. Interested parties may listen to the conference call live and view the slides by accessing "fcx.com." A replay of the webcast will be available through Friday, May 22, 2015.

-----------------------------------------------------------------------------------------------------------

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, including reserves in the Deepwater GOM, onshore and offshore California and in the Haynesville natural gas shale, and an industry-leading position in the emerging shallow water Inboard Lower Tertiary/Cretaceous natural gas trend on the Shelf of the GOM and onshore in South Louisiana. Additional information about FCX is available on FCX's website at "fcx.com."

Cautionary Statement and Regulation G Disclosure: This press release contains forward-looking statements in which FCX discusses its potential future performance. Forward-looking statements are all statements other than statements of historical facts, such as projections or expectations relating to ore grades and milling rates, production and sales volumes, unit net cash costs, cash production costs per BOE, operating cash flows, capital expenditures, exploration efforts and results, development and production activities and costs, liquidity, tax rates, the impact of copper, gold, molybdenum, cobalt, crude oil and natural gas price changes, the impact of derivative positions, the impact of deferred intercompany profits on earnings, reserve estimates, future dividend payments, debt reduction and share purchases. The words anticipates, may, can, plans, believes, estimates, expects, projects, "targets," intends, likely, will, should, to be, potential" and any similar expressions are intended to identify those assertions as forward-looking statements. The declaration of dividends is at the discretion of the Board and will depend on FCX's 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 its 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, industry risks, regulatory changes, political risks, drilling results, the outcome of ongoing discussions with the Indonesian government regarding an amendment to PT-FI's COW, PT-FI's ability to obtain renewal of its export license after July 25, 2015, the potential effects of violence in Indonesia, the resolution of administrative disputes in the DRC, labor relations, weather- and climate-related risks, environmental risks, litigation results and other factors described in more detail under the heading Risk Factors in FCX's Annual Report on Form 10-K for the year ended December 31, 2014, filed with the U.S. Securities and Exchange Commission (SEC) as updated by FCX's subsequent filings with the SEC.

Investors are cautioned that many of the assumptions on which FCX's forward-looking statements are based are likely to change after its 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 or may not be able to control. Further, FCX may make changes to its business plans that could or will affect its results. FCX cautions investors that it does not intend to update forward-looking statements more frequently than quarterly notwithstanding any changes in its assumptions, changes in business plans, actual experience or other changes, and FCX undertakes no obligation to update any forward-looking statements.

This press release also contains certain financial measures such as unit net cash costs per pound of copper and molybdenum, oil and gas realized revenues, cash production costs and cash operating margin, which are not recognized under U.S. generally accepted accounting principles. As required by SEC Regulation G, reconciliations of these measures to amounts reported in FCX's consolidated financial statements are in the supplemental schedules of this press release, which are also available on FCX's website, "fcx.com."

Freeport-McMoRan Inc.
Financial Contacts:
Kathleen L. Quirk, 602-366-8016
or
David P. Joint, 504-582-4203
or
Media Contact:
Eric E. Kinneberg, 602-366-7994