Boston, MA 10/09/2014 (wallstreetpr) – Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) experiences liquidity pressure due to increasing debt on its balance sheet. So, the company is now focusing on debt reduction and talking to potential buyers to sell the onshore operations in California.
The operation includes the San Joaquin Basin in 16,000 net acres of land and controls the oil-producing property (Arroyo Grande Field) at San Luis Obispo County.
Hostile bidder
The oil and gas wildcatter, Aubrey McClendon, CEO of American Energy Partners LP, is now exploring the option to purchase Freeport-McMoRan’s California operations for $5 billion.
In the past, McClendon used American Energy to purchase pipeline networks and shale basins from Appalachia to the Great Plains. In June 2014, McClendon agreed to purchase the land in the three basins at Permian, Marcellus and Utica for a total value of $4.25 billion. So, the purchase of oil and gas fields in California will be the largest acquisition for American Energy.
People having knowledge on the matter said that McClendon is raising capital to fund the deal with Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX). They also said that American Energy already raised ~$13 billion since April 2013, and expected to buy out the assets to function it as a new operating unit.
The deal is not yet finalized and spokesman from American Energy, Charlie Rexford and representative from Freeport-McMoRan refused to give any comment on the proposed deal.
Sell or keep a good asset
The largest copper producer Freeport, on the other end, is selling its assets to reduce the debt burden that incurred from the acquisition of McMoRan Exploration Co. and Plains Exploration & Production Co.
Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX)’s CFO Kathleen Quirk also said that the company is still evaluating the option to sell or keep the California operation to support future growth as it is one of the good assets that provides stable cash flow.
