UPDATE 4-Freeport looks to return to mining roots with oil, gas review

Tue Oct 6, 2015 2:04pm EDT
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(Recasts; adds shareholder, investment banker comment, background)

By Euan Rocha and Nicole Mordant

Oct 6 (Reuters) - Freeport-McMoRan Inc, under pressure from activist shareholder Carl Icahn and weak commodity prices, said on Tuesday it is slashing its board size and exploring a return to its roots as a copper-focused mining company.

Freeport, the biggest listed U.S. copper producer, said it is looking at separating its oil and gas business from its mining operations - potentially unraveling an expensive oil and gas acquisition made in 2013 that has proved unpopular with shareholders.

Splitting the Phoenix-based company could be done through a spin-off of the oil and gas business to shareholders, Freeport said. It repeated that it was also considering joint ventures or an initial public offering for the business.

Freeport's shares rose 4.1 percent to $11.65 in New York.

Splitting up the company "is definitely what shareholders want," said Adrian Day, chief executive of Maryland-based Adrian Day Asset Management, which owns shares in Freeport.

"As a copper company it is a world-leading copper company. It is definitely not a world-leading oil and gas company. They should focus on what they are doing best," Day said.

Freeport's energy unit includes assets in the 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.   Continued...