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After getting pummeled for two days, shares of Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) are getting a bit of boost today following an announcement from Moody’s that the proposed $9 billion deal ($20 billion including assumed debt) for two energy companies would not downgrade Freeport’s debt ratings. Moody’s has maintained its investment grade ‘Baa3’ ratings on Freeport’s senior unsecured debt.

The ratings agency did lower Freeport’s outlook from ‘positive’ to ‘stable’. Freeport said Wednesday that it will pay $6.9 billion for Plains Exploration & Production Co. (NYSE: PXP) and $2.1 billion for McMoRan Exploration & Production Co. (NYSE: MMR).

Freeport’s stock has taken a beating over the fact that investors don’t think that a mining company can also become an energy company. Freeport spun off McMoRan in 1994, so the company at least has some history there.

The one thing that Freeport may bring to the acquisitions is its experience at running low-cost operations. Moody’s notes:

[Freeport’s] ‘s Baa3 senior unsecured rating reflects the company’s significant reserve profile in copper, gold and molybdenum, and the low cost nature of its mining operations — particularly its operations in Indonesia, which allows the company to continue to generate solid earnings and cash flow despite volatility in the metal prices.

Freeport’s relatively low leverage before the acquisitions contributed to Moody’s rating, but it is still possible that the investments required to bring in some of the better prospects that belong to Plains and McMoRan are going to be very large and cash flow from copper and gold mines won’t entirely do the trick. More debt or dilution could well be in Freeport’s future.

Freeport’s shares are up 3% today at $31.73 in a 52-week range of $30.54 to $48.96. Shares traded above $38 on Tuesday, before the acquisitions were announced.

Paul Ausick