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Decision comes as Freeport-McMoRan faces falling oil, gas and copper prices

U.S. mining company Freeport-McMoRan (ticker: FCX) is exploring potentially selling its oil and gas assets as the company faces lower profits from both oil and gas, as well as copper, which was responsible for 60% of the company’s profits in 2014. People familiar with the matter said Freeport-McMoRan has retained investment bank Lazard to advise on a possible sale of the company’s entire oil and gas interests, which could be worth more than $3 billion, reports Reuters.

Freeport purchased its oil and gas assets in 2013 with the acquisitions of Plains Exploration and McMoRan Exploration for $19 billion, including debt. With the price of Brent crude oil standing at just 32% of its value in June of 2014, the low return on production, along with the heavy debt-load shouldered in the acquisition, have left Freeport-McMoRan in a tight spot.

The company’s assets include deepwater Gulf of Mexico, onshore and offshore assets in California and in the Haynesville natural gas shale formation, along with other natural gas assets in Louisiana. Oil and gas accounted to 20% of the company’s $21 billion of revenue in 2014.

In a press release issued on December 9, Freeport-McMoRan said the company was “engaged in a strategic review of its oil and gas business to evaluate alternative courses of action designed to improve FCX’s financial position.” The company is also pursuing other options, and the sources familiar with the deal said a proposed sale may not go through, but would help Freeport-McMoRan value the assets.

The company also announced earlier this month that it would suspend its annual dividend and made cuts to capital spending and copper production as the company’s primary commodity faces its fifth straight year of lower prices.

Freeport-McMoRan non-executive chairman Gerald J. Ford

Freeport-McMoRan non-executive chairman Gerald J. Ford

Gerald J. Ford to become non-executive chairman

Freeport-McMoRan announced today that James Moffett, Chairman of the Board and co-founder would step down from his position. Moffett has been named Chairman Emeritus, and has agreed to become a consultant to the FCX Board.

Moffett served as chief executive of the company and its predecessors between 1984 and 2003. He co-founded McMoRan Oil & Gas Co. in 1969 and led its eventual merger with Freeport Minerals. He will receive $16.1 million in severance pay and will make $1.5 million annually in his new consulting position, reports The Wall Street Journal.

Gerald J. Ford, who is the company’s lead independent director, will become non-executive chairman. Ford has been involved in several mergers and acquisitions in the past 35 years, primarily involving private and public sector financial institutions. Ford is also the General Partner of Ford Financial Fund L.P. and Ford Financial II, L.P., both private equity firms.

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