UPDATE 1-Freeport to sell U.S. Gulf assets to Anadarko for $2 bln

09/12/2016 16:55

(Adds details, analyst comment)

Sept 12 (Reuters) - Freeport McMoRan Inc agreed to sell its deepwater Gulf of Mexico assets to Anadarko Petroleum Corp for $2 billion as it looks to cut its heavy debt load.

The sale to Anadarko comes after earlier attempts by Freeport to sell all or part of its oil and gas business failed. In May, it withdrew plans to launch an initial public offering for that business.

Following the deal, the company's total 2016 asset sale will be over $6 billion, Freeport Chief Executive Richard Adkerson said in a statement.

Freeport, the world's biggest publicly listed copper miner, said in July it was confident of cutting its $18.8 billion of net debt to as low as $10.5 billion by the end of 2017 on the back of asset sales and cash earned.

The transaction comes as something of a surprise after Freeport failed to find a buyer for all or part of its oil assets last year and earlier this year, said Clarksons Platou Securities analyst Jeremy Sussman.

"It was probably a combination of stronger oil prices and better operational results that ultimately led to a transaction that was frankly better than expected," Sussman said.

The deal, which is effective Aug. 1 and is expected to close in the fourth quarter, will help Anadarko add about 80,000 net barrels of oil equivalent per day.

Anadarko said it expected to increase its 2016 full-year capital guidance, not including the acquisition, to a range of $2.8 to $3.0 billion, primarily reflecting the increased activity in the Delaware and DJ basins. (Reporting by Rachit Vats in Bengaluru and Nicole Mordant in Vancouver; Editing by Anil D'Silva)

09/12/2016 16:55