TORONTO (miningweekly.com) – A negative oil and gas market outlook has forced US diversified miner Freeport-McMoRan (FCX) to pare the capital budget for its exploration and production arm and to defer investments in several long-term projects.

The Phoenix, Arizona-based firm would also curtail output at certain of its copper and molybdenum assets, where it was reviewing operating and capital plans to strengthen its financial position in a weak copper-price environment.

“The steps we are taking are necessary under the current market conditions to strengthen our financial position and preserve our large resource base for improved future market conditions. Our high-quality portfolio of long-lived assets, flexible operating structure and experienced management team position FCX for success,” senior management said in a statement.

FCX cut its 2016 and 2017 capital budget for its oil and gas operations by 31% to $2-billion a year.

The news sent the company’s NYSE-listed stock up more than 7% in early morning trading to $11.84 apiece.

FCX explained that its Houston, Texas-based subsidiary Freeport-McMoRan Oil & Gas (FM O&G) would move forward the start-up of initial production from its recent drilling success in the Horn Mountain to 2016 in an effort to continue to grow production and enhance cash flow in a weak oil and gas price environment. It had previously estimated start-up in 2017.

“Our ‘leaner, longer’ plan at FM O&G will enhance near-term cash flow while preserving long-term growth opportunities,” the company said.

The revised operating plans were expected to fund its oil and gas capital spending within cash flow for 2016 and, thereafter, as required, coupled with the potential initial public offering of a minority interest in FM O&G, among potential other actions.

FCX expected to complete this review swiftly and would report its revised plans during the current quarter. The miner would also continue to look for partners for its expansive mining and oil and gas portfolio.

FCX had been weighed down by excessive debt of $20.9-billion at the end of June. The company’s debt swelled in 2013 when it acquired two oil and natural gas companies, as it sought to diversify its asset portfolio.

The company's NYSE-listed stock had lost 53.12% in value since the start of the year. Investors were concerned about FCX's heavy debt burden and an oil price, which at $46.12/bl, was hovering near a ten-year low following a precipitous fall late last year.