What are the key reserve figures reported for the Highlander discovery?

The company reported initial estimates of proved reserves totaling approximately 38 billion cubic feet (Bcf) of natural gas (19 Bcf net to FM O&G) for the initial well. Additionally, proved, probable, and possible reserves for the initial well are estimated at approximately 197 Bcf gross (97 Bcf net to FM O&G).

What is the potential resource upside identified at Highlander?

Independent reserve engineers estimate additional gross resources for the Highlander field exceeding 2 trillion cubic feet (Tcf), with over 1 Tcf net to FM O&G. However, investors are cautioned that 'gross resources' do not account for the certainty of recovery and are not indicative of expected future recovery.

Has production commenced at the Highlander well?

Yes, FM O&G commenced production from the Highlander well in late February 2015, following a February 2015 production test that indicated a flow rate of approximately 75 million cubic feet of natural gas per day (MMcf/d) gross.

What is Freeport-McMoRan's working interest and what are the next steps?

FM O&G is the operator and holds a 72.0 percent working interest in the Highlander well, with an approximate 49 percent net revenue interest. A second well location has been identified, and future plans will depend on the performance of the first well. The company controls over 50,000 gross acres in the area.

FCX 8-K: Regulation FD — Mar 16, 2015

Summary

Freeport-McMoRan Inc. (FCX) has announced significant updates regarding its oil and gas subsidiary, FM O&G, and its Highlander discovery in South Louisiana. The company reported initial estimates of proved reserves from the Highlander discovery well totaling approximately 38 billion cubic feet (Bcf) of natural gas, with a net to FM O&G of 19 Bcf. More broadly, estimates for proved, probable, and possible reserves for this initial well reached approximately 197 Bcf gross, or 97 Bcf net to FM O&G. This development is coupled with an estimated discovery of over 2 trillion cubic feet (Tcf) of gross additional resources for the Highlander field, representing more than 1 Tcf net to FM O&G. The Highlander discovery well has commenced production following a successful February 2015 test that indicated a flow rate of approximately 75 million cubic feet of natural gas per day (MMcf/d) gross (37 MMcf/d net). FM O&G is actively working to expand its processing capacity to handle these higher rates. The company also holds rights to over 50,000 gross acres in the Highlander area, suggesting substantial future exploration and development potential. Investors should note that while the company is providing these reserve and resource estimates, the 'gross resources' figure should be viewed with caution as it represents potential and not guaranteed recovery.

Key Highlights

1Highlander discovery well shows initial proved reserves of approximately 38 Bcf gross (19 Bcf net).
2Proved, probable, and possible reserves for the initial well estimated at 197 Bcf gross (97 Bcf net).
3Estimated additional gross resources for the Highlander field exceed 2 Tcf (over 1 Tcf net).
4Commenced production from the Highlander well in late February 2015.
5Production testing indicated a gross flow rate of approximately 75 MMcf/d.
6FM O&G plans to install additional amine processing facilities to support higher production rates.
7Company controls rights to over 50,000 gross acres in the Highlander area, indicating significant future potential.

FREEPORT-MCMORAN INC 8-K Report, Regulation FD Disclosure (Mar 16, 2015)

Summary

Key Highlights

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