Forest Oil Corporation (NYSE:FST) (Forest or the Company) today announced that its Board of Directors has approved a 2013 capital budget and provided 2013 average net sales volumes and cost guidance.
Patrick R. McDonald, President and CEO, commented, “Forest’s 2013 capital budget is designed to maximize our capital efficiency and hold the central fairway of our Eagle Ford acreage position, while allowing us to maintain balance sheet flexibility and ample financial liquidity. We have confidence in the quality of our core assets and the majority of our capital dollars will target oil projects, resulting in an expected 30% pro forma growth in oil volumes as our production mix continues to shift to a higher value liquids stream from less favorable natural gas. Importantly, we believe that our planned activity will allow us to return to growth in 2013 as second half average net sales volumes are expected to be higher than the first half on a pro forma basis. We are also looking for additional opportunities to lower drilling and completion costs to further enhance project economics in all of our operational areas. In summary, we believe that Forest is positioned to continue its liquids production and reserves growth during 2013 as we capture the oil resource potential of our Panhandle Area and Eagle Ford positions.”
The following guidance is subject to all the cautionary statements and limitations described immediately below and under the caption “Forward-Looking Statements.” Estimates for Forest's future sales volumes are based on assumptions of capital expenditure levels and the assumption that market demand, prices for liquids and gas, and the cost of required services and materials will continue at levels that allow for economic production of these products. The production, transportation, and marketing of liquids and gas are complex processes that are subject to disruption due to transportation and processing availability, mechanical failure, human error, and meteorological events (including, but not limited to severe weather, hurricanes, and earthquakes). Further, actual capital expenditures are subject to a number of factors, including economic conditions, well performance, and commodity prices, and Forest has the flexibility to reduce or increase the budget as appropriate. Therefore, Forest can give no assurance that its future results will be as estimated.