FCX Announces Positive Drilling Results at the Holstein Deep and Dorado Development Projects in the Gulf of Mexico

Category: Front Page News Front Page News
Published: 04 December 2014 04 December 2014

PHOENIX, AZ, December 4, 2014 – Freeport-McMoRan Inc. (NYSE: FCX) announced today positive drilling results from the Freeport-McMoRan Oil & Gas (FM O&G) 100-percent-owned Holstein Deep and Dorado development wells in the Deepwater Gulf of Mexico (GOM). Production from these projects is expected to total approximately 30,000 barrels of oil equivalents (BOE) per day in 2016.

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, "The results from the Holstein Deep and Dorado development wells are excellent examples of investments in low risk, high return development opportunities utilizing existing infrastructure in the Gulf of Mexico. As we work to manage capital in a challenging market environment, we will continue to prioritize development projects in our core focus areas."

During the fourth quarter of 2014, the Holstein Deep delineation well in the Green Canyon area reached a total depth of approximately 31,100 feet. Recent wireline logs and core data combined with previously reported interim results confirmed that the well encountered a total of approximately 234 net feet of Miocene oil pay with excellent reservoir characteristics and good correlation to the discovery well and previous confirmation sidetrack penetration.

Production from the planned three-well development program is expected to reach approximately 15,000 BOE per day in 2016 and will be tied back to the existing Holstein production facility. Based on the results from the Holstein Deep delineation well, FM O&G has increased the net unrisked resource potential of the Holstein Deep field to more than 250 MMBOE from the previous estimate of approximately 140 MMBOE. The data also supports the potential for additional development opportunities at Holstein Deep to achieve production of up to 75,000 BOE 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 acquired the acreage associated with this development in a 2013 lease sale held by the Bureau of Ocean Energy Management.
FM O&G has identified multiple additional development opportunities in the Green Canyon area that could be tied back to the Holstein facility.

The company also reported positive drilling results at the 100-percent-owned Dorado development project which commenced drilling in October 2014. In December 2014, the well reached a total depth of approximately 14,600 feet and encountered approximately 245 net feet of Miocene pay with excellent reservoir characteristics and good correlation to offset productive wells. This well is the first of three planned subsea tieback wells to the Marlin facility targeting undrained fault blocks and updip resource potential south of the Marlin facility.

Production from the planned three-well Dorado development is expected to reach approximately 15,000 BOE per day in 2016 and will be tied back to the existing Marlin production facility. The Dorado development is located on Viosca Knoll Block 915 in 3,860 feet of water. FM O&G has a 100 percent working interest in Marlin.
FM O&G has multiple development opportunities in the Marlin area that could be tied back to the Marlin facility.

These projects were previously incorporated in the company's estimates of production and capital expenditures. The company is conducting a review of capital expenditures and other costs in response to the recent decline in oil prices. The review includes evaluation of opportunities to reduce or defer expenditures and potential partnership arrangements.

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