This Day On The Street
Continue to site right-arrow
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Forest Oil Announces Second Quarter 2011 Results

Stocks in this article: FST LPR

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

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs