As per the terms of the deal, Sentinel will pay $592m for the onshore California assets and additional consideration of $150m if the price of Brent crude oil averages $70 per barrel or higher.
Sentinel, which was formed by Quantum Energy Partners and Michael Duginski, a ex-COO of Berry Petroleum, will also assume $100m in future abandonment costs for the properties.
The acquisition is part Sentinel's efforts to pursue oil and gas development projects, certain real estate monetizations, and further asset acquisitions.
Duginski said: “This transaction provides the catalyst to build a world class team that can work with the various stakeholders in California in a safe, reliable and environmentally sensitive way as we develop and grow the business.”
Subject to customary closing conditions, the transaction is scheduled for closure in the fourth quarter 2016.
Quantum partners Garry Tanner and Bill Montgomery said: “We expect this will be the first of many acquisitions as we grow our California focused business together.”
The deal is part of Freeport-McMoR’s plans to refocus on production of copper, reported The Wall Street Journal.
Last month, Freeport-McMoRan signed agreement to sell its deepwater Gulf of Mexico (GOM) properties to Anadarko Petroleum for $2bn.
Upon completion of these transactions, it portfolio will include oil and natural gas production assets onshore in South Louisiana and on the Shelf of the GOM; oil production assets offshore California and natural gas production from the Madden area in Central Wyoming.
