This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

Freeport To Buy Plains, McMoRan Exploration

By JONATHAN FAHEY and SANDY SHORE

NEW YORK (AP) â¿¿ Mining company Freeport-McMoRan is buying a pair of oil and gas producers for $9 billion, creating a natural resources conglomerate with assets ranging from oil rigs in the Gulf of Mexico to a huge copper mine in Indonesia.

Freeport-McMoRan Copper & Gold Inc., based in Phoenix, said Wednesday it is paying $6.9 billion in cash and stock for Plains Exploration & Production Co., and $2.1 billion for McMoRan Exploration Co. The miner also will assume $11 billion in debt in the deal.

Plains Exploration, based in Houston, produces oil in California, Texas and the Gulf of Mexico, along with natural gas in Louisiana. McMoRan Exploration, based in New Orleans, is developing natural gas resources that lie deep below shallow water regions of the Gulf of Mexico.

The opportunity to buy these two companies was too good to pass up, Argus Research analyst Bill Selesky said. Freeport-McMoRan will be able to diversify into a growing global market for natural gas without losing focus on mining operations.

It also gives the company a chance to help stabilize revenue streams that largely are depending on the commodity prices of copper and, to a smaller extent, gold.

Mining companies face growing challenges in finding and developing resources around the world. Besides development costs, there are environmental issues and increased geopolitical risks such as the nationalization of assets or the requirement of loyalty payments.

With this move, Freeport-McMoRan can operate in the Gulf of Mexico and North America, which have less risk, Selesky said.

But the recent track record of miners buying oil and gas companies has been mixed.

BHP Billiton, the Australian mining giant, wrote down the value of its U.S. natural gas assets by $2.8 billion in August. The company had paid $5 billion for much of those assets in 2011 when it bought reserves in the Fayetteville Shale in Arkansas from Chesapeake Energy.

Stock quotes in this article: MMR, PXP 

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,501.65 0.00 0.00%
S&P 500 1,878.61 +3.22 0.17%
NASDAQ 4,148.3380 +21.3710 0.52%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs