Freeport unloads California onshore oil assets for $592 million 

Freeport-McMorRan (NYSE:FCX) has divested another portion of its substantial oil and gas assets as the number one publicly-held copper producer continues on a path of debt reduction.

The Phoenix-based company announced today that it completed the previously announced sale of its onshore California properties to Sentinel Peak Resources California LLC for $592 million in cash, before closing adjustments. Under the agreement, FCX has the right to receive additional proceeds of $50 million per year in each of 2018, 2019 and 2020 if the price of Brent crude oil averages $70 per barrel or higher in that calendar year.

Like many of its peers Freeport has been struggling to get its debt load under control which ballooned to $20 billion following the ill-timed acquisition of the oil and gas assets three years ago not long before the price of crude started its descent from $100+ a barrel levels.

The news follows an earlier, even larger divestment of some of Freeport's offshore oil and gas properties covered in September by MINING.com. In that transaction, finalized mid-December, Anadarko Petroleum bought Freeport's deepwater Gulf of Mexico assets for $2 billion.

The company says that following completion of the deepwater Gulf of Mexico and onshore California sales, its oil and gas assets includes onshore oil and natural gas production in South Louisiana and on the Gulf of Mexico shelf, oil production from offshore California, and natural gas production from the Madden area in Central Wyoming.

Like many of its peers Freeport has been struggling to get its debt load under control which ballooned to $20 billion following the ill-timed acquisition of the oil and gas assets three years ago not long before the price of crude started its descent from $100+ a barrel levels. This past year, FCX has sold a whopping $6.6 billion in assets.

In February Freeport sold a 13% stake in its Morenci mine, in Arizona, for $1 billion to Japan's Sumitomo. Freeport is also locked in negotiations with the Indonesian government to sell an additional 10% in the iconic Grasberg mine, but the company hasn't been able to narrow the gap with the Asian nation on a price.

In May FCX announced the sale of its Tenke Fungurume copper mine in the Democratic Republic of the Congo to China Molybdenum (CMOC) for up to $2.65 billion. However Gecamines, a DRC state-owned mining company, is taking Freeport and Canada’s Lundin Mining (TSX:LUN) — which through a Bermuda-based company indirectly owns 24% of Tenke — to international courts. Gecamines is demanding, among other things, that any amendments to the indirect ownership of Tenke be blocked unless authorized by the state miner.

Tenke, which cost $3 billion to build, holds one of the world’s largest known copper resources.