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Freeport-McMoRan Copper & Gold Inc. to Acquire Plains Exploration & Production Company and McMoRan Exploration Co. in



  Freeport-McMoRan Copper & Gold Inc. to Acquire Plains Exploration &
  Production Company and McMoRan Exploration Co. in Transactions Totaling $20
  Billion, Creating a Premier U.S. Based Natural Resource Company

  * Adds High Quality U.S. Oil & Gas Resources to Global Mining Portfolio
  * Combined Company Will Have Portfolio of Geographically Diverse, Long-lived
    Mining and Oil & Gas Assets with Strong Current Cash Flows and Financially
    Attractive Growth Profile
  * Pro forma Company Enterprise Value of $60 Billion
  * Accretive to FCX Operating Cash Flows

Business Wire

PHOENIX & HOUSTON & NEW ORLEANS -- December 05, 2012

Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX), Plains Exploration &
Production Company (NYSE: PXP) and McMoRan Exploration Co. (NYSE: MMR)
announced today that they have signed definitive merger agreements under which
FCX will acquire PXP for approximately $6.9 billion in cash and stock and FCX
will acquire MMR for approximately $3.4 billion in cash, or $2.1 billion net
of 36 percent of the MMR interests currently owned by FCX and PXP. Upon
closing, MMR shareholders will also receive a distribution of units in a
royalty trust which will hold a 5 percent overriding royalty interest on
future production in MMR’s existing shallow water ultra-deep properties.

The combined company is expected to be a premier U.S.-based natural resource
company with an industry leading global portfolio of mineral assets,
significant oil and gas resources and a growing production profile. FCX’s
mineral assets include the world class Grasberg minerals district in
Indonesia, the large-scale Morenci minerals district in North America, the
Cerro Verde and El Abra operations in South America, the high potential Tenke
Fungurume minerals district in the Democratic Republic of Congo (DRC) and a
leading global molybdenum business. The addition of a high quality,
U.S.-focused oil and gas resource base is expected to provide exposure to
energy markets with positive fundamentals, strong margins and cash flows,
exploration leverage and financially attractive long-term investment
opportunities. The combined company’s long-lived resource base with
commodities critical to the world’s economies provides enhanced opportunities
to benefit from long-term global economic growth. On a pro forma basis for
2013, approximately 74 percent of the combined company’s estimated EBITDA
(equals operating income plus depreciation, depletion, and amortization) is
expected to be generated from mining and 26 percent from oil and gas, with 48
percent of combined EBITDA from U.S. operations.

The oil and gas assets being acquired are located in attractive onshore and
offshore U.S. geologic basins. PXP’s major assets include its established
strong oil production facilities in California, a growing production profile
in the onshore Eagle Ford trend in Texas, significant production facilities
and growth potential in the Deepwater Gulf of Mexico and large onshore
resources in the Haynesville natural gas trend in Louisiana. MMR is an
industry leader in the emerging shallow water ultra-deep gas trend with
sizeable potential, located offshore in the shallow waters of the Gulf of
Mexico and onshore in South Louisiana. The MMR portfolio is expected to
provide a large, long-term and low cost source of natural gas production.

James R. Moffett, Chairman of the Board of FCX, said: “FCX has been built
through our exploration and development capabilities, and this transaction
will enable us to add assets with exceptional exploration and development
potential to a world-class mining company to create a premier minerals and oil
and gas business focused on value creation for shareholders. The transaction
offers significant values to the MMR and PXP shareholders and will enable FCX
to build on these values through a much larger, well capitalized platform. We
are pleased to add the PXP and MMR oil and gas teams to FCX’s global family.
The combined mining and oil and gas teams have significant management depth in
operations, technical innovation, project development and financial
management, and share a strong commitment to safety, community development and
environmental management.”

Richard C. Adkerson, FCX’s President and Chief Executive Officer, said: “The
transaction will add a high quality portfolio of assets with strong current
cash flows, significant growth options and complementary exposure to markets
positioned for global growth in the developed and developing world and
reflects our positive view of the factors that will drive demand for copper
and other commodities. The oil and gas assets being acquired possess the asset
quality characteristics that we seek in our mining business - large scale
assets with long lives, low cost and geologic potential to support growth
through exploration and development. We anticipate that attractive debt
financing markets and our strong balance sheet will allow us to finance a
significant portion of the transaction using low cost debt and enable FCX
shareholders to retain the significant value we see in our existing asset
base, while enhancing future value generation opportunities. We will not
diminish our focus in our mining operations on safe and efficient production,
executing our organic growth projects, prudent capital allocation and an
entrepreneurial spirit of creating values for our shareholders.”

James C. Flores, Chairman and Chief Executive Officer of PXP, said: “I am
proud of the accomplishments of our team who have built a strong company and
created the opportunity for our shareholders to participate in this exciting
transaction. I believe that the addition of PXP’s U.S. oil and gas assets to
FCX’s global mining business will establish a very significant, long-term
commodities business positioned to generate meaningful returns over an
extended period. We look forward to becoming part of FCX’s global team and to
the contributions of the PXP assets to the combined company, which we expect
will provide strong margins and meaningful reserve additions in the years to
come.”

TERMS OF THE TRANSACTIONS

The terms of the transactions were negotiated by and recommended to the board
of directors of each of FCX and MMR by separate special committees of
independent directors. The transactions are expected to close in the second
quarter of 2013.

Plains Exploration & Production Company

FCX has agreed to acquire PXP for per-share consideration consisting of 0.6531
shares of FCX common stock and $25.00 in cash, equivalent to total
consideration of $50.00 per PXP share, based on the closing price of FCX stock
on December 4, 2012. This represents a premium of 39 percent to the PXP
closing price on December 4, 2012, and 42 percent to its one-month average
price at that date. PXP shareholders may elect to receive cash or stock
consideration, subject to proration in the event of oversubscription, with the
value of the cash and stock per-share consideration to be equalized at
closing. Aggregate consideration to the PXP shareholders is expected to
consist of approximately $3.4 billion in cash and approximately 91 million
shares of FCX common stock.

The transaction is subject to the approval of the shareholders of PXP, receipt
of regulatory approvals and customary closing conditions.

McMoRan Exploration Co.

FCX has agreed to acquire MMR for per-share consideration consisting of $14.75
in cash and 1.15 units of a royalty trust, which will hold a 5 percent
overriding royalty interest in future production from MMR’s existing
ultra-deep exploration properties. The cash consideration of $14.75 per share
represents a premium of 74 percent to the MMR closing price on December 4,
2012, and 31 percent to its one-month average price at that date. The cash
portion of the transaction totals $2.1 billion, excluding payment for MMR
interests currently held by FCX and PXP. The cash premium, excluding interests
held by FCX and PXP, totals approximately $900 million.

The transaction is subject to the approval of the shareholders of MMR,
including the approval of an amendment to MMR’s certificate of incorporation,
receipt of regulatory approvals and customary closing conditions.

MANAGEMENT TEAM AND BOARD OF DIRECTORS

James R. Moffett, Chairman of FCX and Co-chairman and Chief Executive Officer
of MMR, will continue as Chairman of FCX. B. M. “Mack” Rankin, Jr. will
continue in his role as Vice Chairman. Richard C. Adkerson, President and
Chief Executive Officer of FCX and Co-chairman of MMR, will continue as
President and Chief Executive Officer and be appointed Vice Chairman. Upon
completion of the transaction, James C. Flores, Chairman, President and Chief
Executive Officer of PXP, will be Vice Chairman of FCX and Chief Executive
Officer of FCX’s oil and gas operations. Kathleen L. Quirk will continue as
Executive Vice President and Chief Financial Officer of FCX.

At closing, FCX will add to its board of directors James C. Flores and two
other members from PXP’s board.

The corporate headquarters of the combined company will be located in Phoenix,
Arizona, and the combined company will also maintain offices in Houston, Texas
and New Orleans, Louisiana, to support its oil and gas operations and existing
administrative functions.

FINANCING FOR TRANSACTIONS

FCX has received $9.5 billion in financing commitments from JPMorgan Chase
Bank, N.A. to fund the cash portion of the merger consideration for both
transactions and to repay debt outstanding under PXP’s existing term loans and
revolver. FCX intends to provide a guarantee for all existing PXP bonds and
PXP in turn will provide guarantees for all current and future FCX bonds and
term loans. After giving effect to the transaction, estimated pro forma total
debt at September 30, 2012, is approximately $20.0 billion, or approximately
$16.3 billion net of cash.

COMBINED CASH FLOWS

For the year 2013, assuming prices of $3.50 per pound for copper, $1,500 per
ounce for gold, $12 per pound for molybdenum, $100 per barrel for Brent crude
and $4.50 per MMbtu for natural gas and current estimates of production, the
combined company’s estimated EBITDA would approximate $12 billion and
operating cash flows would approximate $9 billion.

FINANCIAL POLICY

FCX has an established financial policy of maintaining a strong financial
position, investing in projects with attractive rates of return and returning
excess capital to shareholders. Following the transaction, FCX intends to use
cash flows to invest in development projects and to repay debt. FCX currently
expects to continue its regular annual common dividend of $1.25 per share. FCX
is committed to its long-standing tradition of maximizing value for
shareholders.

WEBCAST INFORMATION

Management will host a webcast for investors at 11:00 a.m. Eastern Time,
Wednesday, December 5, 2012, to discuss the details of the transaction. The
conference call will be broadcast on the Internet along with slides.
Interested parties may listen to the conference call live and view the slides
by accessing "www.fcx.com." A replay of the webcast will be available through
Friday, January 4, 2013.

ADVISORS AND COUNSEL

Credit Suisse Securities (USA) LLC acted as financial advisor to the special
committee of the FCX board of directors and rendered fairness opinions in
connection with both transactions. Wachtell, Lipton, Rosen & Katz acted as
legal advisor to the special committee of the FCX board of directors. Evercore
Partners acted as financial advisor to the special committee of the MMR board
of directors and rendered a fairness opinion in connection with the
transaction. Weil, Gotshal & Manges LLP served as legal advisor to the special
committee of the MMR board of directors. Barclays served as financial advisor
to PXP and rendered a fairness opinion in connection with the transaction.
Latham & Watkins LLP served as legal advisor to PXP.

ABOUT FREEPORT-McMoRan COPPER & GOLD

FCX is a leading international mining company with headquarters in Phoenix,
Arizona. FCX operates large, long-lived, geographically diverse assets with
significant proven and probable reserves of copper, gold and molybdenum. FCX
has a dynamic portfolio of operating, expansion and growth projects in the
copper industry and is the world's largest producer of molybdenum.

FCX's portfolio of assets includes the Grasberg minerals district in
Indonesia, the world’s largest copper and gold mine in terms of recoverable
reserves; significant mining operations in the Americas, including the
large-scale Morenci minerals district in North America and the Cerro Verde and
El Abra operations in South America; and the Tenke Fungurume minerals district
in the Democratic Republic of Congo. Additional information about FCX is
available on FCX's website at "www.fcx.com."

ABOUT PLAINS EXPLORATION & PRODUCTION COMPANY

PXP is an independent oil and gas company primarily engaged in the activities
of acquiring, developing, exploring and producing oil and gas in California,
Texas, Louisiana, and the Deepwater Gulf of Mexico. PXP is headquartered in
Houston, Texas.

ABOUT McMoRan EXPLORATION CO.

McMoRan Exploration Co. is an independent public company engaged in the
exploration, development and production of natural gas and oil in the shallow
waters of the Gulf of Mexico Shelf and onshore in the Gulf Coast area.
Additional information about MMR is available on its internet website
“www.mcmoran.com”.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements concerning the proposed
transaction, its financial and business impact, management’s beliefs and
objectives with respect thereto, and management’s current expectations for
future operating and financial performance, based on assumptions currently
believed to be valid. Forward-looking statements are all statements other than
statements of historical facts. The words “anticipates,” “may,” “can,”
“plans,” “believes,” “estimates,” “expects,” “projects,” “intends,” “likely,”
“will,” “should,” “to be,” and any similar expressions or other words of
similar meaning are intended to identify those assertions as forward-looking
statements. It is uncertain whether the events anticipated will transpire, or
if they do occur what impact they will have on the results of operations and
financial condition of FCX, MMR, PXP or of the combined company. These
forward-looking statements involve significant risks and uncertainties that
could cause actual results to differ materially from those anticipated,
including but not limited to the ability of the parties to satisfy the
conditions precedent and consummate either or both of the proposed
transactions, the timing of consummation of either or both of the proposed
transactions, the ability of the parties to secure regulatory approvals in a
timely manner or on the terms desired or anticipated, the ability of FCX to
integrate the acquired operations, the ability to implement the anticipated
business plans following closing and achieve anticipated benefits and savings,
and the ability to realize opportunities for growth. Other important economic,
political, regulatory, legal, technological, competitive and other
uncertainties are identified in the documents filed with the Securities and
Exchange Commission (the “SEC”) by FCX, MMR and PXP from time to time,
including their respective Annual Reports on Form 10-K, Quarterly Reports on
Form 10-Q, and Current Reports on Form 8-K. The forward-looking statements
including in this press release are made only as of the date hereof. Neither
FCX, MMR nor PXP undertakes any obligation to update the forward-looking
statements included in this press release to reflect subsequent events or
circumstances.

Additional Information about the Proposed Transactions and Where to Find It

PXP Transaction

In connection with the proposed transaction, FCX intends to file with the SEC
a registration statement on Form S-4 that will include a proxy statement of
PXP that also constitutes a prospectus of FCX. FCX and PXP also plan to file
other relevant documents with the SEC regarding the proposed transaction.
INVESTORS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT
DOCUMENTS FILED WITH THE SEC IF AND WHEN THEY BECOME AVAILABLE, BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION. You may obtain a free copy of the proxy
statement/prospectus (if and when it becomes available) and other relevant
documents filed by FCX and PXP with the SEC at the SEC’s website at
www.sec.gov. You may also obtain these documents by contacting FCX’s Investor
Relations department at (602) 366-8400 or via e-mail at ir@fmi.com; or by
contacting PXP’s Investor Relations department at (713) 579-6291, or via email
at investor@pxp.com.

FCX and PXP and their respective directors and executive officers and other
members of management and employees may be deemed to be participants in the
solicitation of proxies in respect of the proposed transaction. Information
about FCX’s directors and executive officers is available in FCX’s proxy
statement dated April 27, 2012, for its 2012 Annual Meeting of Stockholders.
Information about PXP’s directors and executive officers is available in PXP’s
proxy statement dated April 13, 2012, for its 2012 Annual Meeting of
Stockholders. Other information regarding the participants in the proxy
solicitation and a description of their direct and indirect interests, by
security holdings or otherwise, will be contained in the proxy
statement/prospectus and other relevant materials to be filed with the SEC
regarding the merger when they become available. Investors should read the
proxy statement/prospectus carefully when it becomes available before making
any voting or investment decisions. You may obtain free copies of these
documents from FCX or PXP using the sources indicated above.

This document shall not constitute an offer to sell or the solicitation of an
offer to buy any securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such
jurisdiction. No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the U.S. Securities Act
of 1933, as amended.

MMR Transaction

In connection with the proposed transaction, the royalty trust formed in
connection with the transaction will file with the SEC a registration
statement on Form S-4 that will include a proxy statement of MMR that also
constitutes a prospectus of the royalty trust. FCX, the royalty trust and MMR
also plan to file other relevant documents with the SEC regarding the proposed
transaction. INVESTORS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND
OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IF AND WHEN THEY BECOME AVAILABLE,
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. You may obtain a free copy of
the proxy statement/prospectus (if and when it becomes available) and other
relevant documents filed by FCX, the royalty trust and PXP with the SEC at the
SEC’s website at www.sec.gov. You may also obtain these documents by
contacting FCX’s Investor Relations department at (602) 366-8400, or via
e-mail at ir@fmi.com; or by contacting MMR’s Investor Relations department at
(504) 582-4203, or via email at ir@fmi.com.

FCX and MMR and their respective directors and executive officers and other
members of management and employees may be deemed to be participants in the
solicitation of proxies in respect of the proposed transaction. Information
about FCX’s directors and executive officers is available in FCX’s proxy
statement dated April 27, 2012, for its 2012 Annual Meeting of Stockholders.
Information about MMR’s directors and executive officers is available in MMR’s
proxy statement dated April 27, 2012, for its 2012 Annual Meeting of
Stockholders. Other information regarding the participants in the proxy
solicitation and a description of their direct and indirect interests, by
security holdings or otherwise, will be contained in the proxy
statement/prospectus and other relevant materials to be filed with the SEC
regarding the merger when they become available. Investors should read the
proxy statement/prospectus carefully when it becomes available before making
any voting or investment decisions. You may obtain free copies of these
documents from FCX or MMR using the sources indicated above.

This document shall not constitute an offer to sell or the solicitation of an
offer to buy any securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such
jurisdiction. No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the U.S. Securities Act
of 1933, as amended.

Contact:

Media Contacts:
Freeport-McMoRan Copper & Gold
Eric E. Kinneberg, 602-366-7994
OR
Plains Exploration & Production Company
Hance Myers, 713-579-6291
OR
McMoRan Exploration Co.
David P. Joint, 504-582-4203
OR
Investor Contacts:
Freeport-McMoRan Copper & Gold
Kathleen L. Quirk, 602-366-8016
or
David P. Joint, 504-582-4203
or
Plains Exploration & Production Company
Hance Myers, 713-579-6291
or
McMoRan Exploration Co.
David P. Joint, 504-582-4203
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