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Forestar Group Inc. (NYSE: FOR):
Accelerating Value Realization By Increasing Oil Production and Growing Net Asset Value By Capitalizing on Strategic Growth Opportunities
“During first quarter, oil and natural gas revenues continued to gain momentum, driven primarily by increased oil production in the Upper Wilcox formation located in Beauregard Parish, Louisiana. Residential lot sales activity continued to reflect year-over-year improvement due to low finished lot inventories and relatively stable demand in the major markets of Texas. We also closed the previously announced sale of our interest in the Palisades West commercial venture in Austin, Texas for $32 million. In addition, we completed the previously announced acquisition of the entire interest in 17 projects from the CL Realty and TEMCO ventures with Cousins Properties. These results are consistent with our Triple in FOR strategic initiatives to accelerate value realization and grow net asset value through strategic and disciplined investments,” said Jim DeCosmo, president and chief executive officer of Forestar Group.
First Quarter Significant HighlightsMinerals – Oil & Gas
Oil production up over 115% compared with first quarter 2011 and up almost 40% from fourth quarter 2011
Four new oil and gas wells completed; 534 active wells producing oil and natural gas operated by exploration and production lessees at quarter-end
Sold 285 finished residential lots, a 33% increase compared with first quarter 2011 – Almost 1,200 lots under option contracts
Sold seven acres of impervious cover development rights in Texas for over $1 million, resulting in over $900,000 in segment earnings; leaving about 90 acres available for sale
Closed the previously announced sale of our 25% interest in Palisades West for $32.0 million, generating a gain on sale of $11.7 million.
Completed the previously announced acquisition of the entire interest in 17 real estate assets from the CL Realty and TEMCO ventures, two ongoing ventures with Cousins Properties, for a net investment of approximately $23.5 million.
Forestar Group Inc. (NYSE: FOR) today reported first quarter 2012 net income of approximately $2.8 million, or $0.08 per diluted share, compared with a first quarter 2011 net loss of ($2.5) million, or ($0.07) per share outstanding.