Freeport-McMoRan Sells California Properties to Sentinel for $742MM
Multiples
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 $0.04 billion.
Net cash proceeds will be used for debt repayment. FCX does not expect to record a material gain or loss on the transaction.
About Sentinel Peak Resources
Sentinel Peak Resources is a Denver based Quantum Energy Partners portfolio company. Sentinel Peak is focused on acquisition, development, and exploration of oil and gas assets, primarily focusing on heavy oil development in California.
Executive Team:
- Michael Duginski – President and Chief Executive Officer
- George Ciotti – Executive Vice President and Chief Financial Officer
- Timothy Crawford– Executive Vice President and Chief Operating Officer
- George Paspalof – Executive Vice President, Los Angeles Basin
Contact:
400 Inverness Parkway
Suite 350
Englewood, CO 80112
PHONE 720-749-1100
West Coast Deal Activity In Last 12 Months
Announced Date | Buyer | Seller | Deal Value($mm) | Location | Category |
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Feb-07-2024 | - | - | Click here | California | E&P |
May-19-2022 | - | - | Click here | California | E&P |
Jul-23-2019 | - | - | Click here | California | E&P |
May-21-2019 | - | - | Click here | California | E&P |
May-01-2018 | - | - | Click here | California | E&P |
Date | Deal Headline | Price | $/acre |
---|---|---|---|
May-21-2019 | Yuma Energy Sells California Assets as it Looks to Pay Down Debt | - | - |
Apr-10-2018 | California Resources Acquires San Joaquin Assets from Chevron | - | - |
Aug-05-2013 | Warren Eyes Position in Oily Monterey Project | - | - |
Announced Date | Buyer | Seller | Deal Value($mm) | Location | Category |
---|---|---|---|---|---|
Jan-04-2017 | - | - | Click here | Wyoming | E&P |
Sep-12-2016 | - | - | Click here | E&P | |
Jul-26-2016 | - | - | Click here | E&P | |
Jul-26-2016 | - | - | Click here | Louisiana | E&P |
May-08-2014 | - | - | Click here | E&P |