FCX Freeport McMoRan Inc

By Josh Beckerman 

Mining giant Freeport-McMoRan Inc., which has been selling assets to reduce debt, said Anadarko Petroleum Corp. will buy its deepwater Gulf of Mexico properties for $2 billion.

Freeport has been under pressure to streamline since August 2015, when activist investor Carl Icahn disclosed a stake in the company. Its cost-cutting moves have included suspending its dividend.

Freeport said last year that it would evaluate alternative courses for its oil-and-gas business. In May, it withdrew a plan to take the oil-and-gas operations public. On Monday, Freeport said the deal reflects its commitment to debt reduction and to its copper business.

Meanwhile, Anadarko said the deal, expected to close later this year, will immediately add to earnings and expand its infrastructure throughout the Gulf of Mexico.

The transaction will be funded with a stock offering potentially worth more than $2.2 billion based on current prices. Anadarko were down 3% to $55.93 in after-hours trading.

The deal includes up to $150 million of contingent payments.

Freeport said its Deepwater Gulf properties had revenue of $1 billion for the 12 months ended June 30, with cash production costs of $300 million before general and administrative costs and capital expenses of $1.6 billion.

Anadarko said the transaction will add about 80,000 net barrels of oil equivalent per day, while increasing its ownership in the Lucius development to about 49% from 23.8%.

Freeport's asset-sale transactions this year have totaled more than $6 billion. In May, it agreed to sell its stake in an African copper operation to China Molybdenum Co. for $2.65 billion.

Freeport shares were down 2 cents to $11.06 after hours.

Write to Josh Beckerman at josh.beckerman@wsj.com

(END) Dow Jones Newswires

September 12, 2016 17:46 ET (21:46 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.