Freeport-McMoRan Sells California Onshore Business
October 14 2016 - 9:32AM
Dow Jones News
By Joshua Jamerson
Freeport-McMoRan Inc. has agreed to sell its onshore California
oil and gas properties to Sentinel Peak Resources California LLC
for $592 million in cash.
The deal comes as Freeport-McMoRan has tried to refocus on
producing copper, while Denver-based Sentinel Peak plans to open
offices in Los Angeles and Bakersfield as it seeks to grow in the
state. Sentinel Peak, formed this year and backed by private-equity
firm Quantum Energy Partners, focuses on acquisitions and
development primarily in California.
Freeport-McMoRan could receive additional funds of up to $150
million from 2018 to 2020--$50 million a year -- if the price of
Brent crude, the global benchmark, averages $70 a barrel or higher
during that time. On Thursday, Brent rose to 22 cents $52.03 a
barrel on the ICE Futures Europe.
The transaction, subject to closing conditions, is expected to
close in fourth-quarter 2016 and Freeport-McMoRan doesn't expect to
record a material gain or loss on the transaction. Freeport-McMoRan
will still have offshore oil production assets in California, among
other oil and gas operations elsewhere in the U.S.
Shares rose 1% to $9.74 in premarket trading after falling 26%
in the past three months through Thursday's close.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
October 14, 2016 09:17 ET (13:17 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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