To me EXXI has just got a huge up vote as a result of the FCX buyout of MMR.
I await Dan's comments.
FCX+MMR = ? For EXXI
Re: FCX+MMR = ? For EXXI
FT Front Page Rumor: FCX To Buy McMoRan and Plains Exploration
The Financial Times is not the National Enquirer of business news. It is a highly respected purveyor of financial information. So one sits up and takes notice when the FT publishes a report , as it has on December 6th in the wee hours of the night, that suggests that Freeport McMoRan (FCX) would like to return to its roots in the oil and gas business and buy up McMoran (MMR) and another larger exploration on production company, of the size of Plains Petroleum (PXP).
FCX and MMR share a Co CEO and Chairman, the renowned geologist James R. Moffett. Decades ago, Moffett was pursuing what turned out to be the world’s largest discovery of copper and gold in Indonesia. It took years to prove his supposition right that the mineral deposits were there just awaiting discovery. In other words, Moffett likes to go hunting for elephants. He’s a big picture man with a mind like a steel trap. He remembers intricate details of just about every oil or gas well he has ever drilled in his long and fabled career. That makes him a walking encyclopedia regarding the Gulf of Mexico. It’s the reason that Chevron wanted his knowledge base as it developed its own plans for its Lineham Creek well in the Rockefeller Preserve onshore Louisiana nd offered MMR and its partners, Energy XXI and Tex Moncrief, a fifty percent interest in that well.
Moffett’s gift is his ability to see and synthesize what others cannot. That’s really true when the evaluators are Wall Street analysts with MBA’s who have never run a company in their lives or had too many original ideas either, especially of the scope of Moffett’s. Moffett’s persistent problem is he can spend money looking for whatever discovery it is he is pursuing at that moment faster than a woman shopping at Bergdorf Goodman on a gentleman’s credit card.
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Shortsellers Party Hearty After Their Cheerleader Says McMoRan Is Worth Zero
Joan Lappin
Contributor
A Little Bit Louder Now, Chevron Starts To Shout About Davy Jones And The Ultra Deep
Joan Lappin
Contributor
"Exciting Things Out of McMoran for 2012 That Are Mind Blowing," PXP's Jim Flores
Joan Lappin
Contributor
McMoran's Rocket Science in the Ultra Deep
Joan Lappin
Contributor
This time around, he has been looking for natural gas in the lower reaches of the Gulf of Mexico, a basin that was given up as exhausted just a few years ago. In not so many years, he and his partners have spent close to a billion dollars on two wells, Davy Jones #1 and Davy Jones #2. Because they were first, they have had to conquer the geology and the technical aspects of drilling in extreme pressures and temperatures.
Now what if you were the CoChair of two companies with different but offsetting problems. FCX generates cash like there is no tomorrow. And MMR, at this moment in time, uses cash faster than you can imagine. How tempting to combine the two. Where does Plains fit into this picture? It was a partner in this Shallow Water Ultra Deep drilling program in the Gulf of Mexico until its CEO, Jim Flores, was scared to death by the BP Macondo disaster and its financial impact on BP. He was afraid that a monumental blow out like Macondo could bankrupt his company. In addition, as a partner in the MMR drilling program, Flores was exposed to constant cash calls from Moffett. That, too, was a problem. Flores decided to cash out.
Moffett so believed in the enormity of the McMoRan pursuit of elephantine discoveries deep below the Gulf of Mexico that he traded MMR stock for Plains’ position in the various wells they were drilling together. That’s why MMR holds positions approaching 70% now in some of its major discoveries. Flores is on the MMR Board and holds a sizeable ownership in MMR which has hurt his recent performance at Plains. There have been concerns that he wanted to cash out his equiy position.
If you believed that you were onto something big and you were sick and tired of Wall Street analysts saying you would never raise the cash you need to go forward and that your stock was worthless, might you consider combining your cash rich activities with your cash poor ones? Of course you would.
The Financial Times article cites not a single source of its story. It believes Moffett is Chair and not co-Chair of both of these companies. It talks about the political problems FCX has had at its operations in Indonesia and also the downturn in China’s economic outlook and its impact on copper markets now and in the near future. But, it says little about the future prospects for this whole Gulf of Mexico play as a game changer for U.S. energy independence from the increasingly unsettled Middle East where so much of our oil comes from.
Moffett loves to say: “Stay Tuned!” The JP Morgan analyst who said last week that MMR was worthless, as in worth zero, might be eating crow even faster than those with a different view had hoped. For those who see the tremendous value creation that is going on here, this may turn out to be a far happier week than last week was. The focus has been on getting the Davy Jones #1 well to a successful flow test. All the while, it seems that Mr. Moffett and Co. has been simultaneously working hard to quash the talk about how he will never get the money he needs. There has never been a time in recorded memory that Jim Bob needed cash and didn’t find a way to come up with it. This story dwarfs whether or not Davy Jones will have a successful flow test this week or this month.
Joan E. Lappin CFA Gramercy Capital Mgt. Corp.
Mrs. Lappin, Gramercy Capital and its clients own shares in McMoRan, and
The Financial Times is not the National Enquirer of business news. It is a highly respected purveyor of financial information. So one sits up and takes notice when the FT publishes a report , as it has on December 6th in the wee hours of the night, that suggests that Freeport McMoRan (FCX) would like to return to its roots in the oil and gas business and buy up McMoran (MMR) and another larger exploration on production company, of the size of Plains Petroleum (PXP).
FCX and MMR share a Co CEO and Chairman, the renowned geologist James R. Moffett. Decades ago, Moffett was pursuing what turned out to be the world’s largest discovery of copper and gold in Indonesia. It took years to prove his supposition right that the mineral deposits were there just awaiting discovery. In other words, Moffett likes to go hunting for elephants. He’s a big picture man with a mind like a steel trap. He remembers intricate details of just about every oil or gas well he has ever drilled in his long and fabled career. That makes him a walking encyclopedia regarding the Gulf of Mexico. It’s the reason that Chevron wanted his knowledge base as it developed its own plans for its Lineham Creek well in the Rockefeller Preserve onshore Louisiana nd offered MMR and its partners, Energy XXI and Tex Moncrief, a fifty percent interest in that well.
Moffett’s gift is his ability to see and synthesize what others cannot. That’s really true when the evaluators are Wall Street analysts with MBA’s who have never run a company in their lives or had too many original ideas either, especially of the scope of Moffett’s. Moffett’s persistent problem is he can spend money looking for whatever discovery it is he is pursuing at that moment faster than a woman shopping at Bergdorf Goodman on a gentleman’s credit card.
Move up http://i.forbesimg.com t Move down
Shortsellers Party Hearty After Their Cheerleader Says McMoRan Is Worth Zero
Joan Lappin
Contributor
A Little Bit Louder Now, Chevron Starts To Shout About Davy Jones And The Ultra Deep
Joan Lappin
Contributor
"Exciting Things Out of McMoran for 2012 That Are Mind Blowing," PXP's Jim Flores
Joan Lappin
Contributor
McMoran's Rocket Science in the Ultra Deep
Joan Lappin
Contributor
This time around, he has been looking for natural gas in the lower reaches of the Gulf of Mexico, a basin that was given up as exhausted just a few years ago. In not so many years, he and his partners have spent close to a billion dollars on two wells, Davy Jones #1 and Davy Jones #2. Because they were first, they have had to conquer the geology and the technical aspects of drilling in extreme pressures and temperatures.
Now what if you were the CoChair of two companies with different but offsetting problems. FCX generates cash like there is no tomorrow. And MMR, at this moment in time, uses cash faster than you can imagine. How tempting to combine the two. Where does Plains fit into this picture? It was a partner in this Shallow Water Ultra Deep drilling program in the Gulf of Mexico until its CEO, Jim Flores, was scared to death by the BP Macondo disaster and its financial impact on BP. He was afraid that a monumental blow out like Macondo could bankrupt his company. In addition, as a partner in the MMR drilling program, Flores was exposed to constant cash calls from Moffett. That, too, was a problem. Flores decided to cash out.
Moffett so believed in the enormity of the McMoRan pursuit of elephantine discoveries deep below the Gulf of Mexico that he traded MMR stock for Plains’ position in the various wells they were drilling together. That’s why MMR holds positions approaching 70% now in some of its major discoveries. Flores is on the MMR Board and holds a sizeable ownership in MMR which has hurt his recent performance at Plains. There have been concerns that he wanted to cash out his equiy position.
If you believed that you were onto something big and you were sick and tired of Wall Street analysts saying you would never raise the cash you need to go forward and that your stock was worthless, might you consider combining your cash rich activities with your cash poor ones? Of course you would.
The Financial Times article cites not a single source of its story. It believes Moffett is Chair and not co-Chair of both of these companies. It talks about the political problems FCX has had at its operations in Indonesia and also the downturn in China’s economic outlook and its impact on copper markets now and in the near future. But, it says little about the future prospects for this whole Gulf of Mexico play as a game changer for U.S. energy independence from the increasingly unsettled Middle East where so much of our oil comes from.
Moffett loves to say: “Stay Tuned!” The JP Morgan analyst who said last week that MMR was worthless, as in worth zero, might be eating crow even faster than those with a different view had hoped. For those who see the tremendous value creation that is going on here, this may turn out to be a far happier week than last week was. The focus has been on getting the Davy Jones #1 well to a successful flow test. All the while, it seems that Mr. Moffett and Co. has been simultaneously working hard to quash the talk about how he will never get the money he needs. There has never been a time in recorded memory that Jim Bob needed cash and didn’t find a way to come up with it. This story dwarfs whether or not Davy Jones will have a successful flow test this week or this month.
Joan E. Lappin CFA Gramercy Capital Mgt. Corp.
Mrs. Lappin, Gramercy Capital and its clients own shares in McMoRan, and