This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Forest Oil Announces Second Quarter 2011 Results

Exploration and Development Capital Expenditures

Forest Remainco invested $193 million in exploration and development activities (excluding capitalized interest, capitalized stock-based compensation, asset retirement obligations incurred, and acquisitions) for the three months ended June 30, 2011, compared to $135 million in the corresponding 2010 period. The increase in exploration and development capital expenditures for the three months ended June 30, 2011, was a result of increased liquids-focused drilling in 2011 compared to the corresponding 2010 period.

Leasehold Acquisitions

Forest Remainco invested $52 million and $106 million in leasehold acquisitions for the three and six months ended June 30, 2011, respectively, compared to $19 million and $57 million in the corresponding 2010 periods, respectively. The increase in leasehold acquisition spending is a result of Forest Remainco’s strategic decision to focus development efforts in prospective liquids areas. The addition of 137,500 gross acres (125,000 net) in the Eagle Ford Shale, the Wolfcamp Shale, the Texas Panhandle, and other prospective liquids areas during the six months ended June 30, 2011, bolsters Forest Remainco’s inventory of potential liquids drilling locations.


As of August 1, 2011, Forest Remainco had natural gas, natural gas liquids, and oil derivatives in place for the remainder of 2011 and for 2012 covering the aggregate average daily volumes and with the weighted average prices shown below. The NYMEX derivatives in place provide price protection on an estimated 64% and 54% of the midpoint of guidance for the last six months of 2011 natural gas and liquids net sales volumes, respectively.

Natural gas swaps:
Contract volumes (Bbtu/d) 150.0 105.0
Weighted average price (per MMBtu) $ 5.48 $ 5.30
Natural gas liquids swaps:
Contract volumes (MBbls/d) 5.0 2.0
Weighted average price (per Bbl) $ 38.15 $ 45.22
Oil swaps:
Contract volumes (MBbls/d) 1.0 -
Weighted average price (per Bbl) $ 85.00 $ -
Oil collars:
Contract volumes (MBbls/d) 3.0 -
Weighted average ceiling price (per Bbl) $ 90.20 $ -
Weighted average floor price (per Bbl) $ 75.00 $ -

In connection with several natural gas derivatives detailed in the table above, Forest Remainco granted option instruments to counterparties in exchange for receiving premium hedged prices on natural gas swaps. The table below sets forth the outstanding options as of August 1, 2011:

                2012                 2013
Natural gas swaptions:
Contract volumes (Bbtu/d) - 50.0 -
Weighted average price (per MMBtu) $ - $ 5.28 $ -
Oil swaptions:
Contract volumes (MBbls/d) - 3.0 2.0
Weighted average price (per Bbl) $ - $ 90.00 $ 120.00
Oil call options:
Contract volumes (MBbls/d) 1.0 - -
Weighted average price (per Bbl) $ 90.00 $ - $ -


The following unaudited statements of operations present a) the operating results of Forest Remainco, giving pro forma effect to the spin-off of Lone Pine at the beginning of each reported period, and b) the consolidated total Company operating results including Lone Pine, each for the three months ended June 30, 2011 and 2010.

5 of 12

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.64 -0.11%
FB $118.57 0.84%
GOOG $698.21 0.75%
TSLA $241.80 0.43%
YHOO $36.53 -0.19%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs