Freeport-McMoRan to acquire deepwater GoM interests

Offshore staff

PHOENIX, ArizonaFreeport-McMoRan Copper & Gold Inc. (NYSE: FCX) says that its oil and gas subsidiary, Freeport-McMoRan Oil & Gas, has entered a definitive purchase and sale agreement to acquire for $1.4 billion certain of Apache Corp.’s (NYSE, Nasdaq: APA) interests in the deepwater Gulf of Mexico, including Apache’s interests in the Lucius and Heidelberg oil production developments and 11 exploration leases.

The deepwater GoM acquisition will be funded with proceeds from the previously reported sale of FM O&G’s Eagle Ford shale assets for $3.1 billion. The estimated combined after-tax net proceeds from these transactions of $1.3 billion will repay outstanding debts.

The assets, including Apache’s working interests in the Lucius (11.7%) and Heidelberg (12.5%) oil production projects, have estimated proved, probable and possible reserves of 55 Mboe and several hundred million barrels of oil equivalents resource potential. The Lucius unit includes Keathley Canyon blocks 874, 875, 918, and 919, and the Heidelberg unit includes Green Canyon blocks 859, 903, 904, and 948.

Upon closing of this transaction, FM O&G will own a 35% working interest in the Lucius, which is on track to begin production in 2H 2014. Heidelberg, in 5,000 ft (1,524 m) of water in the Green Canyon area, is operated by Anadarko Petroleum and is expected to begin production in mid-2016. The hull fabrication for the 80,000-b/d Lucius-look-alike facility is more than 85% complete and the spar is expected to be towed to the GoM later this year. Topsides fabrication is currently more than 25% complete.

The 11 exploration leases to be acquired include Apache’s interests in the Lucius Offset, Capri, and Silver Fox/Parmer exploration areas with working interests ranging from 16.67% to 60%. The transaction has a May 1 effective date and is expected to close by the end of 2Q 2014.



Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now


Logistics Risk Management in the Transformer Industry

Transformers often are shipped thousands of miles, involving multiple handoffs,and more than a do...

Secrets of Barco UniSee Mount Revealed

Last year Barco introduced UniSee, a revolutionary large-scale visualization platform designed to...

The Time is Right for Optimum Reliability: Capital-Intensive Industries and Asset Performance Management

Imagine a plant that is no longer at risk of a random shutdown. Imagine not worrying about losing...

Going Digital: The New Normal in Oil & Gas

In this whitepaper you will learn how Keystone Engineering, ONGC, and Saipem are using software t...