A day after Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) announced it was selling core Eagle Ford holdings to bulk up in the Gulf of Mexico (GoM), the company headed for the coast and did just that.

Freeport-McMoRan announced May 8 that its oil and gas subsidiary, Freeport-McMoRan Oil & Gas (FM O&G), will acquire Apache Corp.’s (NYSE: APA) nonoperated interests in the deepwater GoM for $1.4 billion.

The deal includes Apache’s interests in the Lucius and Heidelberg oil production development projects and 11 exploration leases.

FCX’s acquisition will be funded with proceeds from the May 7 sale of its Eagle Ford assets to Encana Corp. (NYSE: ECA, TO: ECA.TO) for $3.1 billion. (That money, in turn, came from deals by Encana to sell Wyoming and East Texas properties for $2.3 billion.)

FCX estimates its combined after-tax net proceeds from the transactions will be about $1.3 billion, which will be used to repay outstanding debt.

James C. Flores, president and CEO of FCX’s subsidiary FM O&G, said that the Eagle Ford divestiture was part of a plan to monetize about $4 billion in energy assets to provide “meaningful proceeds for debt repayment” and simultaneously allow for strategic GoM growth.

Bill Herbert, managing director and co-head of securities for Simmons & Co. International, said Apache’s sale price was in line with his firm’s estimates of $1.36 billion.

“Overall, we believe this announcement will be an upside surprise for APA shareholders,” he said.

Apache reported first-quarter 2014 oil production of 309.6 thousand barrels per day (Mbbl/d), driven by strong U.S. onshore volumes which were 6% ahead of Simmons’ estimates.

Apache's GoM deepwater region averaged 10,763 barrels of oil equivalent per day (boe/d) in first-quarter 2014, up from 9,167 boe/d in the previous quarter. None of the company's producing GoM operations are involved in the announced sale.

David Tameron, a senior analyst for Wells Fargo Securities LLC, said Wall Street’s focus for Apache remains on its North American execution.

“To that end, Permian production grew 12% on quarter while Central was down 4%” due to weather, he said.

Thomas E. Voytovich, Apache’s executive vice president and COO for offshore and international operations, said the company has combined deepwater and shelf technical teams to focus on subsalt and other deeper exploration opportunities in depths of less than 1,000 feet, which have been relatively untested by industry.

“Discoveries on the shelf have quicker cycle times, require less capital and provide more options to bring oil and gas to market. Apache has working interests in approximately 650 blocks in the Gulf of Mexico,” he said. “In addition to the exploration and development of properties in shallower water, Apache continues to pursue joint venture and/or monetization opportunities for its deepwater prospects."

Apache's working interest in the 11 leases to be acquired includes interests in the Lucius Offset, Capri and Silver Fox/Parmer exploration areas, with working interests ranging from 16.67% to 60%.

The Lucius unit comprises Keathley Canyon blocks 874, 875, 918 and 919, and Apache’s working interest is 11.7%. The Heidelberg unit includes Green Canyon blocks 859, 903, 904 and 948 and the company holds a 12.5% working interest.

At closing, FM O&G will own a 35% working interest in the Lucius development, which is on track to commence production in the second half of 2014.

Heidelberg, a large scale oil development project located in 5,000 feet of water in the Green Canyon area, is operated by Anadarko Petroleum Corp. (NYSE: APC) and is expected to commence production in mid-2016. The Heidelberg hull fabrication is more than 85% complete and the spar is expected to be towed to the GoM later this year. The 80,000 bbl/d facility is similar to the Lucius development.

To make the deal, FCX parted with about 45,500 net Eagle Ford acres in Karnes, Wilson and Atascosa counties in South Texas. The acreage, widely recognized as the core of the play, produced about 53,000 boe/d in the first-quarter of 2014 and has an estimated drilling inventory of more than 400 locations.

The FCX/Apache deal is expected to close by June 30 and has an effective date of May 1.

Latham & Watkins LLP advised FM O&G on the transaction with an oil and gas transactions team led by Houston partner Jeff Muñoz. He was assisted by associates Stephen Szalkowski, Chris Bennett, David Yellow Robe and James Robertson.