Freeport-McMoRan Copper & Gold Inc.’s (FCX) subsidiary – Freeport-McMoRan Oil & Gas (“FM&OG”) – announced that it has completed the acquisition of some of Apache Corporation’s (APA) interests in the Deepwater Gulf of Mexico (“GOM”).
After the exercise of preferential purchase rights by other working interest owners in the Lucius project, FM O&G bought 51.2% of Apache’s 11.7% working interest in the oil and gas development project, 100% of Apache’s 12.5% working interest in the Heidelberg oil development project along with several exploration leases for $919 million in aggregate. FM O&G now owns about 25.1% working interest in Lucius.
The acquisition, which Freeport announced in May, was financed with proceeds from the sale of FM O&G’s Eagle Ford Shale assets, which closed on Jun 20. According to Freeport, the estimated combined after-tax net proceeds from the transactions are roughly $1.8 billion.
In Apr 2014, Freeport reported earnings of 49 cents per share for first-quarter 2014, a decline of roughly 27.9% from the year-ago earnings of 68 cents. Profit fell 21.3% year over year to $510 million, hurt by lower copper and gold pricing.
The results include net non-cash mark-to-market gains of a penny per share associated with crude oil and natural gas derivative contracts. Barring that impact, earnings were 48 cents a share in the first quarter, surpassing the Zacks Consensus Estimate of 42 cents.
Revenues rose roughly 8.8% year over year to around $4.99 billion in the first quarter, but missed the Zacks Consensus Estimate of $5.12 billion.
Freeport currently retains a Zacks Rank #3 (Hold).