Evercore Investment Banking Pitch Book
Situation Analysis
Summary Financial Projections - Assumptions
The following financial projections summarize McMoRan's operating model (the "MMR Operating Model") as provided by
McMoRan management
The projections incorporate all activity associated with McMoRan's conventional Gulf Coast onshore and Gulf of Mexico
Shelf assets (the "Conventional Assets")
In addition, the projections incorporate the development of MMR's Ultra-Deep Assets utilizing the following assumptions:
100% success rate on exploration wells (no dry hole costs)
Gross prospect size of 2 Tcfe
To develop a 2 Tcfe discovery requires 3 development wells drilled per year following an initial discovery well up to 10
total successful wells
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200 Bcfe gross reserves per well (95% natural gas, 5% condensate)
Drilling cost per well of $100 million
Completion cost per well of $100 million
Facilities cost of $43 million per well
1 year drilling duration per well and 6 months to complete per well
Wells commence 18 months following spud date
· NYMEX strip pricing as of December 3, 2012 through 2017E and held flat thereafter
Assumed 35% U.S. Federal corporate tax rate
■ Financing for free cash flow shortfall assumed to come from a revolving credit facility with a 4.0% annualized interest rate
EVERCORE PARTNERS
MCMoRan
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Confidential
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