Forest Oil Corporation (NYSE:FST) (Forest or the Company) announced today that, after receiving unsolicited proposals from third parties interested in acquiring Forest’s oil and gas assets located in the Texas Panhandle, Forest’s Board of Directors has determined that the Company will initiate a marketed process to pursue the sale of such assets. Forest has retained J.P. Morgan Securities LLC to assist in the marketing efforts. Forest intends to use any proceeds from a potential sale to reduce debt and enhance financial flexibility.
Patrick R. McDonald, President and CEO commented, “Over the last several years, drilling and completion efforts by Forest and other companies have delineated substantial oil, natural gas and natural gas liquids resources in the Texas Panhandle. Our significant acreage position, which is largely operated by Forest and held by production, presents a large-scale, low-risk development opportunity. If completed, the sale of the Texas Panhandle assets should allow us to reduce meaningfully our indebtedness and enhance our financial flexibility and ability to accelerate development of our assets. Upon successful completion of a transaction, Forest’s remaining asset portfolio will be anchored by its ongoing oil development opportunity in the Eagle Ford Shale, where oil production is projected to more than double during 2014. In addition, the Company has a position of 111,000 net acres in East Texas which is largely held by production and upon which the Company plans to continue the development of its oil and natural gas liquids properties. The Company also intends to maintain its exposure to potential natural gas development through its low-decline natural gas properties in the Ark-La-Tex region.”
This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, that address activities that Forest assumes, plans, intends, expects, believes, projects, estimates or anticipates (and other similar expressions) will, should, or may occur in the future are forward-looking statements. The forward-looking statements provided in this press release are based on management's current belief, based on currently available information, as to the outcome and timing of future events. Forest cautions that future natural gas and liquids production, revenues, cash flows, liquidity, plans for future operations, expenses, outlook for oil and natural gas prices, timing of capital expenditures, timing and terms of any divestitures, and other forward-looking statements relating to Forest are subject to all of the risks and uncertainties normally incident to the exploration for and development and production and sale of liquids and natural gas.