Freeport-McMoRan (FCX) subsidiary Freeport-McMoRan Oil & Gas (FM O&G) has shaken up its workforce with a reorganization that sees four top executives depart the company in a move that will reduce costs, streamline functions, and enhance capital allocation.
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Image from FCX. |
The company announced that FM O&G is being restructured as an operating division of FCX, which will result in the elimination of FM O&G executive management roles and the integration of financial and administrative roles with FCX corporate functions.
FM O&G CEO Jim Flores; Doss Bourgeois, president & COO; Winston Talbert, executive vice president & CFO; and John Wombwell, executive vice president & general counsel will leave their posts at Freeport-McMoRan. The team of four have served as executive management for the FM O&G organization since FCX’s acquisition of Plains Exploration Co. (PXP) in 2013.
Mark Kidder will lead FM O&G’s operating team, as he has been appointed executive vice president – operations of FM O&G. Kidder previously served as vice president – operations and has 36 years of operational experience in the offshore and onshore upstream energy industry, including 13 years with FM O&G and its predecessor and 23 years with major oil companies and independent energy producers.
“These changes reflect our focus on reducing costs throughout our global organization in response to a challenging commodity market environment. We appreciate Jim and his executive team’s service to Freeport and their efforts on behalf of our company,” Richard C. Adkerson, FCX’s president and CEO said.
FM O&G will also be taking further steps to reduce costs and capital expenditures, and FCX will continue to evaluate potential transactions for the sale of certain assets of FM O&G, the company said.
In January, FCX reported a net loss of US$4.1 billion in Q4 2015, which led to several cuts across the company, including deferring exploration and development activities in the Gulf of Mexico by idling its three deepwater drillships that were currently under contract.
The company’s net loss, attributable to common stock, totaled $4.1 billion for Q4 2015 and $12.2 billion for the full year 2015. After adjusting for net charges, adjusted net loss totaled $21 million for Q4 2015 and $89 million for the year 2015.
In the same report, investments for FM O&G were exepected to enable production to be increased from Q4 2015 rates of 144,000 boe/d to an average of 157,000 boe/d in 2016 and 2017, and cash production costs to decline to approximately $15/boe in 2016 and 2017.
“As we enter 2016, our clear and immediate objective is to restore FCX’s balance sheet and position the company appropriately to enhance shareholder value in the current market environment,” Richard C. Adkerson, president and CEO said in January. “We achieved several important operational milestones during the fourth quarter while taking aggressive actions to adjust our plans in response to the decline in prices for our primary products.”
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