Freeport-McMoRan To Sell Onshore California Oil & Gas Properties For $742 Million

Freeport-McMoRan Inc. said Friday it has agreed to sell its onshore California oil and gas properties for $742 million. The metals and mining company said it will use the proceeds of the deal to pay down debt. The deal is expected to close in the fourth quarter. Freeport will receive a cash consideration of $592 million at closing, and receive an additional sum of $50 million a year for 2018, 2019 and 2020 if the price of Brent averages $70 a barrel or higher. Once this deal and a separate transaction involving the Deepwater Gulf of Mexico are complete, Freeport's oil and gas assets will 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. The company's oil and gas portfolio 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 in the second quarter. Shares rose almost 2% premarket before erasing some of those gains. The stock has gained 42% in the year so far, while the S&P 500 is up 4%.