Freeport-McMoRan Inc.’s (FCX) lofty goal to expand its oil and natural gas exploration unit has fallen to earth with a thud after the company announced another piece of its portfolio is being sold: the onshore California oil and natural gas properties.

Sentinel Peak Resources California LLC, backed by private equity Quantum Energy Partners, agreed to pay FCX $742 million, with $592 million cash paid at closing and $50 million/year in 2018, 2019 and 2020 if Brent crude oil prices average $70/bbl or higher in each calendar year. Sentinel also would assume future abandonment obligations, which had a book value of $1 million at the end of June.

For the one-year period ending June 30, the properties being sold produced on average 28,600 b/d net, with revenue of $4 million, cash production costs totaling $3 million and capital spending of $400 million.

The sale is expected to be completed by the end of the year, with net proceeds used by FCX to repay debt. No material gain or loss is expected to be recorded.

The global mining conglomerate, the world’s largest publicly traded copper producer, put its entire U.S. oil and gas portfolio on the market under pressure from shareholders, less than four years after paying $9 billion in a friendly deal to buy U.S. producers Plains Exploration & Production Co. and McMoRan Exploration Co. (see Daily GPI, April 27; Dec. 6, 2012).

The huge transaction at the time created the fifth largest U.S.-based natural resource company by enterprise value after ExxonMobil Corp., Chevron Corp., ConocoPhillips and Occidental Petroleum Corp.

However, the bet to build its portfolio never proved a winner with shareholders, and the commodity price plunge sealed its fate. The biggest divestiture was announced last month, when Anadarko Petroleum Corp. agreed to pay $2 billion-plus for FCX’s prized Gulf of Mexico (GOM) deepwater leaseholds (see Daily GPI, Sept. 13).

Once the Sentinel divestiture is completed, FCX would have three prime U.S. leaseholds: production onshore in South Louisiana, the GOM Outer Continental Shelf and Central Wyoming’s Madden field. During 2Q2016, the properties combined produced an average 8,600 b/d of oil and liquids, with 78 MMcf/d of gas.