Freeport Selling Gulf of Mexico Assets
The transaction has an effective date of August 1 and is expected to close in the fourth quarter of 2016, subject to customary closing conditions. Freeport is the world’s largest publicly traded copper producer and the world’s largest producer of molybdenum. Assuming completion of the sale of its Deepwater Gulf of Mexico properties, the company will continue to have established onshore and offshore oil production facilities in California, natural gas production from the Madden area in central Wyoming, and a position in the Inboard Lower Tertiary/ Cretaceous natural gas trend onshore in south Louisiana.
Commenting on the sale, Freeport President and CEO Richard C. Adkerson said, “We are pleased to announce this transaction, which brings our total 2016 asset sale transactions to more than $6 billion and reflects our commitment to debt reduction and our focus on dedicating our capital and management resources to our global-leading copper business. With our announced asset sale transactions combined with cash flows from operations and previously announced at-the-market equity transactions, we are on track to achieve our stated balance sheet objectives.”
For the 12-month period ended June 30, net daily sales volumes from Freeport’s Deepwater Gulf of Mexico properties averaged approximately 73,000 barrels of oil equivalents. Over this period, revenues totaled $1 billion, cash production costs before G&A totaled $300 million, and capital expenditures totaled $1.6 billion. Regarding the transaction, Anadarko Chairman, President and CEO Al Walker said, “This immediately accretive, bolt-on transaction strengthens our industry-leading position in the Gulf of Mexico and is a catalyst for the company’s oil-growth objectives, with quality assets being acquired at an attractive price to create significant value.”