Freeport-McMoRan Inc. (FCX) has reported a successful production test from Freeport-McMoRan Oil & Gas’s (FM O&G) Highlander discovery. The production test indicated a flow rate of roughly 43.5 million cubic feet of natural gas per day (MMcf/d), about 21 MMcf/d net to FM O&G, on a 22/64th choke with flowing tubing pressure of 11,880 pounds per square inch.
FM O&G, that operates Highlander discovery, located onshore in South Louisiana in the Inboard Lower Tertiary/Cretaceous trend, holds a 72% working interest in it, while Energy XXI LTD holds 18.0% and W. A. “Tex” Moncrief Jr. holds the remaining 10%. All of them expect production at Highlander discovery to start in 2015.
The Highlander discovery well, drilled in the first quarter of 2014, when evaluated, demonstrated favorable reservoir characteristics with approximately 150 feet of net pay. FM O&G remains optimistic and has also located various prospects in the Highlander area where it controls rights to more than 60,000 gross acres.
In May and early June of 2013, Freeport completed the acquisitions of Plains and McMoRan Exploration and formed a premier U.S. based natural resource company collectively called FM O&G, hence adding a high quality portfolio of U.S.-based oil and gas assets to its global mining business.
Freeport released its third-quarter 2014 results in Oct 2014. In the third quarter, realized revenues for oil and gas operations were $867 million ($69.08 per barrels of oil equivalents/BOE) compared with $1,333 million ($80.93 per barrels of oil equivalents/BOE) in the year ago-quarter due to lower oil prices and higher realized cash losses on derivative contracts. Cash production costs totaled $263 million ($20.93 per BOE) in the quarter. Sales volume was 8.6 million barrels of oil equivalent (MMBOE).
Freeport currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the mining space include Orbite Aluminae Inc (EORBF), Amerigo Resources Ltd. (ARREF) and Banro Corporation (BAA). All of these hold a Zacks Rank #2 (Buy).
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