Boston, MA, 04/07/2014 (usastockreports) – Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) assets, which is highly concentrated in America is just about to change as the company sees Morocco as its new destination and might begin to drill the exploration wells there by the beginning of 2015.
Morocco- A prospective Destination
Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX)’s new permit area in Morocco offers the reserve potential of 3.3 billion barrels of oil coupled with brent based pricing that makes it one of the most prospective region for the company in future. Freeport entered the region last year through its acquisition of Plains Exploration & Production. As per the terms of the agreement, Plains had accepted to finance the drilling costs of two wells, upto an amount of $215 million, and so the two wells are slated to be drilled next year. And, Freeport is quick to already secure rig meant for drilling these two wells As of now, Freeport has ascertained eight exploration sites that could be drilled in the forthcoming period.
Risk Quotient Still Remains
While Plains’ farm-in agreement and rig sharing contract has eliminated much of the risk to the company in the area, there is still substantial risk left at this point of time. Reason being, the quality of the reservoir, as it happened in the case of Cairn Energy and Genel, which spot the oil but of not good quality. This implies that Freeport also faces chances of no-oil of low grade quality oil in the area. However, in spite of these fears, Morocco continues to allure oil drillers as giants like Chevron and BP have recently signed agreements for drilling in this area. Therefore, it could be concluded that Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) is venturing into risky but prospective area and its effort to spread across Africa could only be confirmed by the start of the next year, when it starts drilling.