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Freeport-McMoRan Completes Deal for Apache GOM Interests

Freeport-McMoRan Copper & Gold Inc. subsidiary Freeport-McMoRan Oil & Gas said Monday it has completed its acquisition of a bundle of deepwater Gulf of Mexico (GOM) prospects from Apache Corp., a deal that shores up an even bigger stake in the Lucius prospect.

Following the exercise of preferential purchase rights by other working interest owners in the Lucius project, Freeport acquired from Apache 51.2% of its 11.7% working interest in the oil and gas development project, 100% of a 12.5% working interest in the Heidelberg oil development project and several exploration leases for a total of $919 million.

Apache said it received a total of $1.4 billion for the GOM interests.

Freeport now owns an approximate 25.1% working interest in Lucius, one of the biggest startups scheduled this year.

The acquisition, which was announced by Freeport in May, was funded with proceeds from the sale of Freeport's Eagle Ford Shale assets, which closed on June 20 (see Daily GPI,May 8). The estimated combined after-tax net proceeds from the transactions is approximately $1.8 billion, Freeport said.

Lucius, due to begin operations during the third quarter, is set to deliver up to 80,000 b/d of oil and 450 MMcf/d of natural gas.

Lucius is in Keathley Canyon blocks 874, 875, 918 and 919 -- one of the hottest areas of the deepwater. The Anadarko Corp.-operated Heidelberg field is in 5,000 feet of water in Green Canyon blocks 859, 903, 904 and 948. Heidelberg, designed like Lucius to produce up to 80,000 b/d and 450 MMcf/d, is scheduled for startup in 2016.

The Lucius and Heidelberg would have look-alike facilities; Heidelberg is about 85% complete and the spar is to be towed later this year. Topsides fabrication is about 25% complete. Those two prospects alone are estimated to hold proved, probable and possible reserves of 55 million boe and several hundred million boe of resource potential, according to Freeport.

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