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Freeport-McMoRan Sells California Properties to Sentinel for $742MM

Announced Date
October 14,2016
Deal Value $
742,000,000
Transaction Type
Property
Buyer
Seller
Price Per BOE $
25,944
Source Documents:
   Source Link
Location
Region
West Coast

Country
United States

State
California

Play


Production
Production
28.6 Mbo/d


Multiples
Production ($/boe/d)
25,944

Adj. $/acre is based on production @25,944 Boe/d

Transaction Details: 

Sentinel Peak Resources, which was formed by Quantum Energy Partners, has agreed to acquire Freeport-McMoRan Inc’s onshore California assets. The price of the transaction is $592 million, which includes an additional consideration of up to $150 million payable in certain circumstances based on Brent crude oil price averaging over $70 per barrel.

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Closing Announcement - January 3, 2017

Sentinel Peak Resources has closed the acquisition of the onshore California assets of the oil and gas subsidiary of Freeport-McMoRan Inc.

The properties are operated by Sentinel Peak Resources California LLC and currently produce approximately 28,000 barrels of oil equivalent per day. With this acquisition, SPR has become the fourth largest onshore oil producer in the State of California.


Initial Announcement - October 14, 2016

Freeport-McMoRan has sold 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.

About Sentinel Peak Resources

Sentinel Peak Resources is a Denver based Quantum Energy Partners portfolio company. Sentinel Peak is focused on acquisition, development, and exploration of oil and gas assets, primarily focusing on heavy oil development in California.

Executive Team:

  • Michael Duginski – President and Chief Executive Officer
  • George Ciotti – Executive Vice President and Chief Financial Officer
  • Timothy Crawford– Executive Vice President and Chief Operating Officer
  • George Paspalof – Executive Vice President, Los Angeles Basin

Contact:

400 Inverness Parkway
Suite 350
Englewood, CO 80112

PHONE 720-749-1100

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Price History



Date Deal Headline Price$/acre
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