Forest Oil Corporation (NYSE:FST) (Forest or the Company) today announced financial and operational results for the third quarter of 2013.
For the three months ended September 30, 2013, Forest reported net earnings of $2 million, or $0.02 per diluted share, compared to $33 million, or $0.28 per share in the second quarter of 2013. Net earnings for the third quarter of 2013 included the following items:
- Unrealized losses on derivative instruments of $7 million ($4 million net of tax)
- Rig stacking costs of $2 million ($1 million net of tax)
- Decrease in the valuation allowance of deferred tax assets, net of non-deductible stock based compensation costs of $1 million ($1 million net of tax)
Without the effect of these items, Forest’s results for the third quarter were as follows:
- Adjusted net earnings of $7 million, or $0.06 per diluted share, compared to adjusted net earnings of $7 million or $0.06 per share, in the second quarter of 2013
- Adjusted EBITDA of $85 million compared to adjusted EBITDA of $88 million in the second quarter of 2013
- Adjusted discretionary cash flow of $54 million compared to adjusted discretionary cash flow of $58 million in the second quarter of 2013.
Patrick R. McDonald, President and CEO, stated, “The third quarter saw us make meaningful strides in development of the Eagle Ford Shale as we increased drilling activity by adding a fourth rig to the field. This resulted in a 67% increase in gross production volumes from the Eagle Ford during the quarter.
Our drilling focused on delineating the field and continuing the acreage holding phase of the program. We are working in conjunction with our partner to design and implement additional technological refinements and enhancements to our drilling and completion process as we continue efforts to improve well results, productivity, recoveries, and cost efficiencies. We also are evaluating reservoir performance and characteristics in regard to the determination of the optimal drilling density and downspacing for each area of the field with the goal of maximizing oil recovery. Among the tangible benefits of the Eagle Ford joint venture, we realized a 10% sequential decrease in average well costs during the third quarter to $5.75 million per well.