Freeport-McMoRan Announces Agreement to Sell Onshore California Oil & Gas Properties for $742 Million, Including Contingent C...
October 14 2016 - 8:00AM
Business Wire
Freeport-McMoRan Inc. (NYSE: FCX) announced today a purchase and
sale agreement to sell its onshore California oil and gas
properties to Sentinel Peak Resources California LLC for total
consideration of $742 million, including contingent
consideration.
Under the terms of the agreement, FCX will receive cash
consideration of $592 million at closing and additional
consideration of $50 million per annum in each of 2018, 2019 and
2020 if the price of Brent crude oil averages $70 per barrel or
higher in that calendar year. The purchasers will also assume
future abandonment obligations associated with the properties,
which had a book value of approximately $0.1 billion at June 30,
2016.
The transaction has an effective date of July 1, 2016, and is
expected to close in fourth-quarter 2016, subject to customary
closing conditions.
For the twelve month period ended June 30, 2016, net daily sales
volumes from these properties averaged 28.6 thousand barrels of oil
per day. Over this period, revenues totaled $0.4 billion, cash
production costs (before G&A) totaled $0.3 billion and capital
expenditures totaled $0.04 billion.
Net cash proceeds will be used for debt repayment. FCX does not
expect to record a material gain or loss on the transaction.
Following completion of this transaction and the previously
announced Deepwater Gulf of Mexico (GOM) sale, FCX’s portfolio of
oil and gas assets would include oil and natural gas production
onshore in South Louisiana and on the Shelf of the GOM, oil
production offshore California and natural gas production from the
Madden area in Central Wyoming. In the second quarter of 2016,
these properties produced an average of 8.6 thousand barrels of oil
and natural gas liquids per day and 78 million cubic feet of
natural gas per day.
FCX is a premier U.S.-based natural resources company with an
industry-leading global portfolio of mineral assets. FCX is the
world's largest publicly traded copper producer.
FCX's portfolio of assets includes the Grasberg minerals
district in Indonesia, one of the world's largest copper and gold
deposits; significant mining operations in the Americas, including
the large-scale Morenci minerals district in North America and the
Cerro Verde operation in South America. Additional information
about FCX is available on FCX's website at "fcx.com."
Sentinel Peak Resources is a private energy company focused on
acquisitions and development primarily in California. Sentinel Peak
Resources is backed by Quantum Energy Partners, a leading provider
of equity capital to the energy industry.
Cautionary Statement Regarding Forward-Looking
Statements: This press release contains forward-looking
statements, which are all statements other than statements of
historical facts, such as expectations related to completion of the
pending transaction. The words “anticipates,” “may,” “can,”
“plans,” “believes,” “estimates,” “expects,” “projects,” "targets,"
“intends,” “likely,” “will,” “should,” “to be,” ”potential" and any
similar expressions are intended to identify those assertions as
forward-looking statements. FCX cautions readers that
forward-looking statements are not guarantees of future performance
and actual results may differ materially from those anticipated,
projected or assumed in the forward-looking statements. Important
factors that can cause FCX's actual results to differ materially
from those anticipated in the forward-looking statements include
the ability of the parties to satisfy closing conditions and
consummate the pending transaction and other factors described in
more detail under the heading “Risk Factors” in FCX's Annual Report
on Form 10-K for the year ended December 31, 2015, filed with the
U.S. Securities and Exchange Commission (SEC) as updated by FCX's
subsequent filings with the SEC.
Investors are cautioned that many of the assumptions upon which
FCX's forward-looking statements are based are likely to change
after the forward-looking statements are made, including for
example commodity prices, which FCX cannot control, and production
volumes and costs, some aspects of which FCX may not be able to
control. Further, FCX may make changes to its business plans that
could affect its results. FCX cautions investors that it does not
intend to update forward-looking statements more frequently than
quarterly notwithstanding any changes in its assumptions, changes
in business plans, actual experience or other changes, and FCX
undertakes no obligation to update any forward looking
statements.
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version on businesswire.com: http://www.businesswire.com/news/home/20161014005298/en/
Freeport-McMoRan Inc.Financial Contacts:Kathleen L. Quirk,
602-366-8016orDavid P. Joint, 504-582-4203orMedia Contact:Eric E.
Kinneberg, 602-366-7994
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