Freeport-McMoRan finds more oil in deepwater Gulf of Mexico

9/29/2015

PHOENIX, Arizona -- Freeport-McMoRan has announced positive drilling results from Freeport-McMoRan Oil & Gas' (FM O&G) wholly owned Horn Mountain Deep well in the deepwater Gulf of Mexico.

Initial production from this well, which will be tied back to existing facilities, is expected in the first half of 2017. This well, combined with two follow on development wells at Horn Mountain Deep, may be capable of producing an aggregate of 30,000 boed.

During September 2015, the Horn Mountain Deep well was drilled to a total depth of approximately 16,925 ft. Logging while drilling logs indicated that the well encountered a total of approximately 142 ft (net) of Middle Miocene oil pay with excellent reservoir characteristics. In addition, these results indicate the presence of sand sections deeper than known pay sections in the field.

The wholly owned Horn Mountain production facilities in FM O&G’s Mississippi Canyon area are capable of processing 75,000 bopd. The positive results at Horn Mountain Deep and the geophysical data support the existence of prolific Middle Miocene reservoir potential for several additional opportunities in the area, including the wholly owned Sugar, Rose, Fiesta, Platinum and Peach prospects. FM O&G controls rights to over 55,000 acres associated with these prospects.

Horn Mountain

Since commencing development activities in 2014 at its three wholly owned production platforms in the deepwater Gulf of Mexico, FM O&G has drilled 12 wells, all with positive results. Three of these wells have been brought on production, and FM O&G plans to complete and place the remaining additional wells on production in late 2015, 2016 and 2017.

The success at Horn Mountain Deep follows the positive drilling results announced in July from three wells drilled in the Horn Mountain area, including the Quebec/Victory (QV), Kilo/Oscar (KO) and Horn Mountain Updip tieback prospects. In aggregate, these wells may be capable of producing over 27,000 boed, with initial production expected in mid-year 2016.

Also during the third quarter of 2015, FM O&G drilled its second successful development well at its wholly owned King field, located in Mississippi Canyon south of the wholly owned Marlin facility in 5,200 ft of water. A third development well is in progress. In aggregate, these wells may be capable of producing 20,000 boed, with initial production expected to commence in the fourth quarter of 2015. FM O&G’s Marlin production facilities in the Mississippi Canyon focus area are capable of processing 60,000 bopd.

Completion activities of the previously drilled three well programs at the wholly owned Holstein Deep field are progressing on schedule with first production expected by mid-year 2016. In aggregate, the three wells are estimated to commence production at approximately 24,000 boed. A fourth well is being planned as part of the second phase of the Holstein Deep program. FM O&G’s Holstein production facilities in the Green Canyon focus area are capable of processing 113,000 bopd.

FM O&G will continue the successful strategy to focus on its high return, low-risk tieback projects using its existing deepwater Gulf of Mexico infrastructure (total processing capacity of approximately 250,000 bopd) and large deepwater Gulf of Mexico project inventory (over 150 undeveloped locations). FM O&G will carefully managing capital during this challenging market environment.

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